The longer we live, the more money is left?

[RetiredHappy]

I use Fidelity Retirement Planning tool and it seems to show that the longer the life expectancy that I put in for my husband and me, the higher is the amount remaining. Does it mean that we are not spending enough and that growth in our investments is out pacing our spending? I think that is the reason, but I want to check to make sure I am interpreting correctly.

 

[Dtail]

I use Fidelity Retirement Planning tool and it seems to show that the longer the life expectancy that I put in for my husband and me, the higher is the amount remaining. Does it mean that we are not spending enough and that growth in our investments is out pacing our spending? I think that is the reason, but I want to check to make sure I am interpreting correctly.

Is your Fidelity score 150+?

 

[RetiredHappy]

Is your Fidelity score 150+?

We are already retired, there is not a score.

 

[Dtail]

We are already retired, there is not a score.

You can "fool;" the system by putting your retirement date 1 year later than your age and thus the retirement score can be used in conjunction with other retirement scores or success rates like Firecalc.

 

[RetiredHappy]

You can "fool;" the system by putting your retirement date 1 year later than your age and thus the retirement score can be used in conjunction with other retirement scores or success rates like Firecalc.

I am sure it is 150 if I try to fool it. But my original question remains.. the longer we live, the greater the amount is left at the end of our lives.

 

[Dtail]

I am sure it is 150 if I try to fool it. But my original question remains.. the longer we live, the greater the amount is left at the end of our lives.

If your score would be 150 or 150+, then I would say that the interpretation of the score would be that you are generating more income than spending and thus not spending enough for the balances to decrease.
Thus that is why I was asking for the score to offer a response.

 

[RetiredHappy]

If your score would be 150 or 150+, then I would say that the interpretation of the score would be that you are generating more income than spending and thus not spending enough for the balances to decrease.
Thus that is why I was asking for the score to offer a response.

I did the quick 6 questions thing on the website and it is 150+.

Get Your Retirement Score With This Retirement Planning Tool - Fidelity

Learn just how prepared for retirement you are by using Fidelity's retirement score tool, which assess your retirement savings and monthly contributions to help keep you on track to meet your financial goals.

www.fidelity.com

So, basically it is a good problem to have since we do want to leave money behind.

 

[audreyh1]

I am sure it is 150 if I try to fool it. But my original question remains.. the longer we live, the greater the amount is left at the end of our lives.

Are you aggressively invested and underspending? Could be simple market returns.

 

[Dtail]

I did the quick 6 questions thing on the website and it is 150+.

Get Your Retirement Score With This Retirement Planning Tool - Fidelity

Learn just how prepared for retirement you are by using Fidelity's retirement score tool, which assess your retirement savings and monthly contributions to help keep you on track to meet your financial goals.

www.fidelity.com

So, basically it is a good problem to have since we do want to leave money behind.

Yes indeed. You had mentioned that in other posts for your son IIRC.

 

[Kings over Queens]

I am sure it is 150 if I try to fool it. But my original question remains.. the longer we live, the greater the amount is left at the end of our lives.

Yes, you are aren't plugging in sufficient spending, or, you might be using too high an interest assumption.

 

[RetiredHappy]

Are you aggressively invested and underspending? Could be simple market returns.

We are aggressively invested but also have about 20% in fixed income. We spend so much that we make many folks cringe on this forum and I don't think we can spend more. OK, good problem to have.

 

[imjustawarrior]

I use Fidelity Retirement Planning tool and it seems to show that the longer the life expectancy that I put in for my husband and me, the higher is the amount remaining. Does it mean that we are not spending enough and that growth in our investments is out pacing our spending? I think that is the reason, but I want to check to make sure I am interpreting correctly.

Let's think in real dollars.

If your portfolio is growing, then your portfolio is earning more than you are spending. People address it in several ways:
1. spend more
2. reduce risk of portfolio and the growth should slow
3. leave money behind

 

[audreyh1]

We are aggressively invested but also have about 20% in fixed income. We spend so much that we make many folks cringe on this forum and I don't think we can spend more. OK, good problem to have.

Well underspending is relative to your nest egg of course!

 

[RetiredHappy]

Thanks. I think it confirms my thinking that we are spending less than the growth, so we are good with that. We are focused on (3) leave money behind, so it aligns with our objective.

 

[imjustawarrior]

The Fidelity tool shows 3 outcomes (significantly below average, below average, and average). If your significantly below average is doubling or more, then you probably are way under spending.

I think my average condition is about 5x what my current portfolio is. Our significantly below is basically flat. I am comfortable with that. I think we still have 45 years on the plan, so it is just a guess for what things will be like in 45 years.

 

[RetiredHappy]

The Fidelity tool shows 3 outcomes (significantly below average, below average, and average). If your significantly below average is doubling or more, then you probably are way under spending.

I think my average condition is about 5x what my current portfolio is. Our significantly below is basically flat. I am comfortable with that. I think we still have 45 years on the plan, so it is just a guess for what things will be like in 45 years.

My significantly below average is more than what we have now, and the longer we live, the higher the numbers go.

 

[TheWizard]

I'm in a similar situation due mostly to a high level of lifetime annuity income.
I'm not with Fidelity so can't comment on their scoring method.

I have a negative withdrawal rate amounting to a few thousand dollars a month, on average, of excess retirement income being added into my investments (taxable account).

One way of looking at it is that I'm recouping the principal hit back in 2013 when I annuitized a large chunk of tax-deferred for lifetime income.
Regardless, I fully expect to see increasing portfolio size year after year, depending of course on the broad stock market...

 

[Gumby]

FIREcalc will show the same thing --- if your income exceeds your expenses, the longer you live, the higher your expected ending balance.

 

[RetiredHappy]

FIREcalc will show the same thing --- if your income exceeds your expenses, the longer you live, the higher your expected ending balance.

Thanks. I don't like FIRECalc's user interface and it's harder to enter data compared to the Fidelity Retirement Planner. But it's good to know that longevity does not negatively impact residual assets.

 

[aja8888]

As low as I am on the totem pole of wealth, I am spending way less than what is coming in from my portfolio. And when I die, there will be more in the pot than I have right now. And I don't have a pension or any inheritance.

You don't have to be wealthy to have this situation happen, you just need a good plan.

 

[COcheesehead]

My significantly below average is more than what we have now, and the longer we live, the higher the numbers go.

We’re similar. It’s just math. We withdraw 2% ish. Portfolio grows by more than that. We will live a happy life spending as we please and leave likely 2X -3X what we retired on to charity, mostly college scholarships. We have no problem with that. Part of our plan was to create a legacy in perpetuity.

 

[pb4uski]

I use Fidelity Retirement Planning tool and it seems to show that the longer the life expectancy that I put in for my husband and me, the higher is the amount remaining. Does it mean that we are not spending enough and that growth in our investments is out pacing our spending? I think that is the reason, but I want to check to make sure I am interpreting correctly.

Yes. Ya gotta start spending, gifting or donating more.

 

[RetiredHappy]

Yes. Ya gotta start spending, gifting or donating more.

We are spending $240k to $300k a year, including gifting and donating. Don't think we can or should do more.

 

[MarieIG]

We are spending $240k to $300k a year, including gifting and donating. Don't think we can or should do more.

You're absolutely fine. You're enjoying what you are doing, and leaving a legacy for your DS.

I don't see the point of spending just to spend.

 

[COcheesehead]

We are spending $240k to $300k a year, including gifting and donating. Don't think we can or should do more.

You’re good. Live your life.