"Early" retirement and have a portfolio that last in perpetuity.

[PristineSound]

So this perpetuity goal means that you want to pass down your retirement fund to your children, and that it will have grown during your retirement, and then you expect your children to do the same and pass it on to the next generation?

Not necessarily, it just feels good to have more than I can use and have surpluses and never ever have to worry about money. I was just using that quote because people are getting hung up on my goal and is questioning the necessity of it. I guess the short of it is "because I can."

The purpose of my post was more asking about those who are doing it, to comment, how is it working out for them. Really rather not pontify any further on the idea of perpetuity.

 

[SecondCor521]

I wouldn't be able to do a WDR that will prevent my portfolio from evergrowing. I grew up poor, so I've been scarred from financial insecurity. Having a portfolio that can sustain me forever even if I don't live forever is a must for me, the portfolio after we are gone will have a purpose anyway.

I know you wrote in a later post that this is non-negotiable for you, but I'll say it anyway: I think you'll have a much better life if you do the personal work to get over the scars and trauma rather than create such a defensive financial setup.

For one thing, you'll never have enough money. You're already very conservative but it's always possible to come up with scenarios where the money fails you - theft, scam, divorce, death, addictions, bad investments, market failure, zombies, asteroids, dementia, societal failure, kids go to super expensive schools or fail to launch, etc.

On the other hand, if you have personal resiliency then you can navigate anything that comes your way. Not to mention that personal resiliency helps in all areas of life, not just financial: it could improve your health, relationships, and overall life enjoyment. Life is more fun when you're relaxed and confident rather than stressed and anxious.

But I am more curious to know if there are others who has executed exactly (or close to) what my plan/goals are, with their portfolio lasting them in perpetuity as the key objective. I would love to here from these individuals.

I retired 10 years ago at 46 with three kids who were in high school or early college at the time. I've had approximately a 1% to 2% withdrawal rate during the past decade, and I'm currently sitting at about 1% for my general expenses. My portfolio has grown about 3x even after a decade of expenses (including the private high school and college for my three kids).

There are plenty of other folks here who have done what you're asking, either on purpose or by accident. Most people here are conservative enough and their portfolios have grown since retirement even if that has not been their primary goal.

Many of us, myself included, have ended up in this position simply because of conservative planning (like you're doing), decent market performance, and a general feeling that we don't need to spend any more even though we could.

As to your most recent post, it's working out fine for me, although personally I'm trying to find good ways to spend and/or give away more rather than build a stronger financial moat. I've spent quite a bit of time learning to manage my assets because I believe I have a responsibility to do so. I also have an ongoing project of preparing the next generation (my kids) for the money they'll likely inherit.

 

[PristineSound]

Many of us, myself included, have ended up in this position simply because of conservative planning (like you're doing), decent market performance, and a general feeling that we don't need to spend any more even though we could.

As to your most recent post, it's working out fine for me, although personally I'm trying to find good ways to spend and/or give away more rather than build a stronger financial moat. I've spent quite a bit of time learning to manage my assets because I believe I have a responsibility to do so. I also have an ongoing project of preparing the next generation (my kids) for the money they'll likely inherit.

Very glad to hear this and that I am not chasing a unicorn. It sounds like you have achieved my goal (intentionally or not), except 12 years earlier!

 

[HarveyS]

If I were in your shoes I would not have a mortgage. If I was scarred from financial insecurity, I would not plan on having my housing paid for by a plan (social security) that you agree might or might not be around. I would own my home and not have to worry about investment return to pay for it. I also would not plan on ACA. There can be a great many changes in a decade or more.
Having your portfolio last in perpetuity is pretty simple. Earn X% on your investments, spend less than X% on living expenses, including taxes. Arbitrage your housing cost seems to add risk with little benefit.
Having an ever-growing portfolio may put your family in the position of paying 40% or more estate tax (federal and state) when you and your DW pass. You'll want to consider how best to address this. The sooner the better.

 

[SecondCor521]

Very glad to hear this and that I am not chasing a unicorn. It sounds like you have achieved my goal (intentionally or not), except 12 years earlier!

I'm far from the only one. The particulars differ - kids, married/single, housing value - but I'd guess there are easily dozens and dozens of folks here who will end up growing their portfolio in perpetuity.

Again, often it's semi-accidental as a consequence of good returns and conservative planning. I planned very conservatively and ended up retiring at a good time for the markets (2016).

46 might be a tad on the early side but many have done it in their 50s. 46 wasn't a goal per se; that's just when everything lined up for me numbers- and job satisfaction-wise.

 

[RetiredHappy]

The first words that came to my mind were "What's the problem?" We have a portfolio that we know that will grow in perpetuity. It is invested mainly in equities and around 25% in investments that are not tied in directly to market performance. We set aside a large sum of money (7 figure) initially to tide us through the first few years of retirement. Now our withdrawal rate is around 2.75% and will drop to 2.5% in a couple of years and expect it to continue to drop as the portfolio grows. We have moved twice since we retired, including to more expensive homes, not because of the value of the home, but to a home that suited our wants at that particular point in time. We live on about a quarter million dollars a year, including SS.

 

[ShokWaveRider]

I want mine to last to pertuity, pertuity being when DW carcs it. Assuming I carc it first, or visa versa.

 

[engineernerd]

FYI, the historical data in FIRECalc (and another similar calculator called FI Calc) show that for a stock-heavy portfolio the worst year to retire was back in 1966, and for a portfolio with mostly fixed-income assets the worst time to retire was back around 1941. Nobody who retired in either of those years is likely to still be on this forum.

 

[Koolau]

I know you wrote in a later post that this is non-negotiable for you, but I'll say it anyway: I think you'll have a much better life if you do the personal work to get over the scars and trauma rather than create such a defensive financial setup.

For one thing, you'll never have enough money. You're already very conservative but it's always possible to come up with scenarios where the money fails you - theft, scam, divorce, death, addictions, bad investments, market failure, zombies, asteroids, dementia, societal failure, kids go to super expensive schools or fail to launch, etc.

On the other hand, if you have personal resiliency then you can navigate anything that comes your way. Not to mention that personal resiliency helps in all areas of life, not just financial: it could improve your health, relationships, and overall life enjoyment. Life is more fun when you're relaxed and confident rather than stressed and anxious.



I retired 10 years ago at 46 with three kids who were in high school or early college at the time. I've had approximately a 1% to 2% withdrawal rate during the past decade, and I'm currently sitting at about 1% for my general expenses. My portfolio has grown about 3x even after a decade of expenses (including the private high school and college for my three kids).

There are plenty of other folks here who have done what you're asking, either on purpose or by accident. Most people here are conservative enough and their portfolios have grown since retirement even if that has not been their primary goal.

Many of us, myself included, have ended up in this position simply because of conservative planning (like you're doing), decent market performance, and a general feeling that we don't need to spend any more even though we could.

As to your most recent post, it's working out fine for me, although personally I'm trying to find good ways to spend and/or give away more rather than build a stronger financial moat. I've spent quite a bit of time learning to manage my assets because I believe I have a responsibility to do so. I also have an ongoing project of preparing the next generation (my kids) for the money they'll likely inherit.

Very good advice from SecondCor521.

DO invest in a way that lets you sleep at night but w*rk on whatever "personal issues" are interfering with your confidence in your ability to retire early.

Sorry, if "we" are sounding like "counselors" or something but that's where I see you needing some attention - Thinking perpetuity is achievable. Once you are "gone" perpetuity is out of your control AND it won't be something you'll have to worry about anymore.

Good luck.

 

[PristineSound]

I'm far from the only one. The particulars differ - kids, married/single, housing value - but I'd guess there are easily dozens and dozens of folks here who will end up growing their portfolio in perpetuity.

Again, often it's semi-accidental as a consequence of good returns and conservative planning. I planned very conservatively and ended up retiring at a good time for the markets (2016).

46 might be a tad on the early side but many have done it in their 50s. 46 wasn't a goal per se; that's just when everything lined up for me numbers- and job satisfaction-wise.

What do you and your family do for health insurance? Assuming you life in the US where medicare doesn't kick in until 65.

 

[scrabbler1]

When I retired in late 2008 at age 45, my goal was to get to age ~60 intact using only the taxable part of my portfolio. That turned out to be far easier than I thought it would be. I am 62 now and still use only the taxable part of my portfolio (which is at an ATH) even though I now have unfettered access to my IRA and could begin collecting SS if I wanted to. Only my small, frozen company pension remains inaccessible until I turn 65. I entered my data into Fidelity's RIP program and it shows me with even more than I could even need at age 92. I am set and can do basically whatever I want.

 

[RetiredHappy]

What do you and your family do for health insurance? Assuming you life in the US where medicare doesn't kick in until 65.

I am not the person whom you are asking. We retired when I was 53 and I bought health insurance from outside of the ACA exchange because I did not qualify for subsidies. The plan that I have has better doctors than the plans offered by ACA. My health insurance cost about $15K to $20K a year including premiums, co-pay and drugs. My spouse was already on Medicare when we retired, so his health insurance was relatively cheap. I have 2 more years to go before I get on Medicare.

 

[imjustawarrior]

What do you and your family do for health insurance? Assuming you life in the US where medicare doesn't kick in until 65.

There are just a few options for health insurance before medicare. I use retiree health insurance. When I retired, the premiums were a little higher than ACA. I will compare soon to see how it stacks up now.

Most would buy from the ACA exchange. You should go on your state's exchange and get a feel for the cost and subsidies. You may want to wait until Nov 1. That way all the states will have the 2026 numbers available. I think.

The other option is to buy off exchange policies. RetiredHappy does that.

 

[SecondCor521]

What do you and your family do for health insurance? Assuming you life in the US where medicare doesn't kick in until 65.

For me, I use an ACA Bronze HSA plan, $68.54 subsidized premium per month for 2026. $8K annual deductible. I contribute to an HSA each year.

Two of my adult children have health insurance through their jobs. The third is a small business owner who chooses to go uninsured; yes, we've had the conversations.

 

[pb4uski]

There was a member here who use the term "inter-generation retirement" or something like that. Whether you give that money away or not, it's a good feeling to have. Again, this is non-negotiable for me and no one, not even God, can change my mind about this. So let's just not further discuss if a portfolio lasting in perpetuity is a good or bad thing.

Question, who here is living this retirement plan where their portfolio can last them in perpetuity?

Well, since you asked, here is a sure-fire way to have your portfolio last in perpetuity.

Keep working.

 

[mrfeh]

But I am more curious to know if there are others who has executed exactly (or close to) what my plan/goals are, with their portfolio lasting them in perpetuity as the key objective. I would love to here from these individuals.

What exactly do you want to know? I haven't seen a question posted.

Our current WR is less than 2%, so we probably meet your definition, although having a portfolio that grows forever was not a goal or requirement.

Also, nothing is guaranteed. Looking at the past, you can probably say a given WR will allow a portfolio to grow forever, but the future may not reflect the past.

 

[TheWizard]

One way to have a growing portfolio in retirement is to have more than enough retirement income from pensions, annuities, and SS such that you don't need to withdraw from portfolio for routine expenses.

I have over $150k of such income without including my RMDs, hence a negative withdrawal rate. It works for me...

 

[pb4uski]

What exactly do you want to know? I haven't seen a question posted.

Our current WR is less than 2%, so we probably meet your definition, although having a portfolio that grows forever was not a goal or requirement.

Also, nothing is guaranteed. Looking at the past, you can probably say a given WR will allow a portfolio to grow forever, but the future may not reflect the past.

+1 Once I start SS our WR will be 0.2% so I think our portfolio will be perpetual unles we really open the spigots. Similarly, never was the goal. And the nice part is that it doesn't matter what the portfolio is invested in.

 

[Diogenes]

OP, welcome to the "perpetuity" club. "Perpetual", to me, means outlasting the collision of the Milky Way and Andromeda galaxies, the decay of protons, the extinction of black holes from Hawking radiation and so on. Perpetual in financial terms is an even stronger condition: it means that the portfolio grows, relative to inflation. It means that the rate of return minus the withdrawal rate (if any) has to exceed taxes and inflation. And that, for a "balanced" portfolio, puts the SWR at around 2.5%, maybe slightly less.

As for circumstances, well... I'm a few years older, don't have kids or a spouse, and likely have a combination of much lower earnings but perhaps larger portfolio (some of us are loathe to post numbers). This means a smaller opportunity cost if one chooses to retire right away, and also more margin to cut expenses if that becomes necessary. But it also means less capacity to grow the portfolio through additional savings.

Our circumstances are all different, but our objectives/values can indeed align!

 

[engineernerd]

[snip]
Conservative SWR of 2% to 2.5% where the portfolio will grow in perpetuity; long after we are dead. My wife and I have financial anxiety, so this is very important for us to keep us sane, the goal must be an ever-growing portfolio until the end of time. Portfolio projection is conservative at bottom 75 percentile using 3.5% inflation rate. [snip]

Just want to mention that no portfolio will grow EVERY YEAR in real inflation-adjusted spending power no matter how low your withdrawal rate. What you can get with your proposed 2% withdrawal rate is a very low probability that your portfolio will ever dip down to zero value.

If you invest exclusively in things like CDs and money market accounts, your portfolio will grow every year in nominal dollars, which could make you FEEL safe if you don't think about inflation, but your portfolio will do less well in inflation-adjusted terms than if you hold a decent proportion of stocks.

Take a look at the FIRECalc output, the graphical display will show you what I mean about dips as you go along.

 

[GrayHare]

Perpetual sustenance is standard operating procedure for many charitable foundations.

 

[Koolau]

Perpetual sustenance is standard operating procedure for many charitable foundations.

Most of those have inputs of new money from contributors. Most of us have only SS and maybe a pension.

But properly structured, no reason a portfolio can't outlast all our needs, including passing remainders to kids or charities.

 

[Gumby]

I have written before about growing up in poverty and how it made me more conservative with managing money and planning for retirement. So, for example, we waited to retire until our income from pensions and social security was adequate to cover our expenses. We also waited until our portfolio could cover our expenses at a 4% withdrawal rate if that ever became necessary. Or, if you will, a 100% margin of error.

I never want to worry about running out of money, and when the young wife survives me (which is most likely), I want to ensure that she never has to worry about running out of money. Based on our current situation, I don't worry about those things. But after we are both gone, I won't care. It seems baffling to want your portfolio to survive to the heat death of the universe (maximum entropy). Your lifetime should be good enough.

 

[PristineSound]

The first words that came to my mind were "What's the problem?" We have a portfolio that we know that will grow in perpetuity. It is invested mainly in equities and around 25% in investments that are not tied in directly to market performance. We set aside a large sum of money (7 figure) initially to tide us through the first few years of retirement. Now our withdrawal rate is around 2.75% and will drop to 2.5% in a couple of years and expect it to continue to drop as the portfolio grows. We have moved twice since we retired, including to more expensive homes, not because of the value of the home, but to a home that suited our wants at that particular point in time. We live on about a quarter million dollars a year, including SS.

Quarter million a year is very comfortable. That is our projection at 58 as well for a 2.5% WR assuming 50 percentile portfolio performance, which is in all likelihood, but even if it does underperform significantly, we are looking at a 2.5% WR to cover current lifestyle of $150k/year for a family of 4 (we are thrifty people). This does not include SS and my wife's small pension, which at the moment, we are looking to collect at 64YO, but again, we are planning everything without SS, who knows what will happen with it.

Are you on medicare yet? If not, what do you do for health insurance?

 

[mrfeh]

Quarter million a year is very comfortable. That is our projection at 58 as well for a 2.5% WR assuming 50 percentile portfolio performance, which is in all likelihood, but even if it does underperform significantly, we are looking at a 2.5% WR to cover current lifestyle of $150k/year for a family of 4 (we are thrifty people). This does not include SS and my wife's small pension, which at the moment, we are looking to collect at 64YO, but again, we are planning everything without SS, who knows what will happen with it.

Are you on medicare yet? If not, what do you do for health insurance?

Not on topic, but I couldn't let this pass...I would never call $150K per year "thrifty".