The longer we live, the more money is left?

[audreyh1]

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.

You’re good. Live your life.

Agreed!

 

[marko]

I think people hit a critical mass around age 70 or 75 where portfolio growth and longevity (time left) cross.

When that happens, you simply cannot live long enough to spend it all.

The trick is, if you spent more earlier, you wouldn't be in this position and now, it's too late to start spending more now.

It's always been about threading that needle 30 years ago where, under or over spending by a mere few percent is the difference between dying with millions or being destitute at age 85. For most, it seems this scenario is locked in....just the way the math works.

 

[COcheesehead]

I think people hit a critical mass around age 70 or 75 where portfolio growth and longevity (time left) cross.

When that happens, you simply cannot live long enough to spend it all.

The trick is, if you spent more earlier, you wouldn't be in this position and now, it's too late to start spending more now.

It's always been about threading that needle 30 years ago where, under or over spending by a mere few percent is the difference between dying with millions or being destitute at age 85. For most, it seems this scenario is locked in....just the way the math works.

62 and we’re there.

 

[Koolau]

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.

My NW continues to grow but I can't even imagine my income exceeding my expenses (on a yearly basis). It's never happened in retirement (unless I count unrealized gains in my portfolio).

Yeah, I guess you need to spend more in retirement.

Strictly out of curiosity, if you feel comfortable sharing, how much does your income exceed your expenses (and, again, just being nosey) what are your sources of income? Feel free to simply ignore this question. No need to respond to it.

 

[RetiredHappy]

My NW continues to grow but I can't even imagine my income exceeding my expenses (on a yearly basis). It's never happened in retirement (unless I count unrealized gains in my portfolio).

Yeah, I guess you need to spend more in retirement.

Strictly out of curiosity, if you feel comfortable sharing, how much does your income exceed your expenses (and, again, just being nosey) what are your sources of income? Feel free to simply ignore this question. No need to respond to it.

My income does not exceed my expenses. It is growth in assets that results in stash getting larger the longer we live.

 

[Koolau]

My income does not exceed my expenses. It is growth in assets that result in stash getting larger the longer we live.

Okay, gotcha.

Same situation here. Thanks for clarification.

 

[Koolau]

I think people hit a critical mass around age 70 or 75 where portfolio growth and longevity (time left) cross.

When that happens, you simply cannot live long enough to spend it all.

The trick is, if you spent more earlier, you wouldn't be in this position and now, it's too late to start spending more now.

It's always been about threading that needle 30 years ago where, under or over spending by a mere few percent is the difference between dying with millions or being destitute at age 85. For most, it seems this scenario is locked in....just the way the math works.

This is an interesting take. Thanks for helping me explore it. I've occasionally "feared" the situation where DW and I both end up in LTC for the remainder of our lives. Right now, that would be a minimum of $25K/month. I'm sure those costs will increase over time.

My "plan" expires when I'm 99 so that's 21 years. Assuming my income and my stash and guessing inflation in LTC, the good news is that I would still die with money left over!!

I think I can begin to relax a bit now. Thanks for making me think about it (and forcing me to do a back of the envelope calculation).

 

[marko]

This is an interesting take. Thanks for helping me explore it. I've occasionally "feared" the situation where DW and I both end up in LTC for the remainder of our lives. Right now, that would be a minimum of $25K/month. I'm sure those costs will increase over time.

My "plan" expires when I'm 99 so that's 21 years. Assuming my income and my stash and guessing inflation in LTC, the good news is that I would still die with money left over!!

I think I can begin to relax a bit now. Thanks for making me think about it (and forcing me to do a back of the envelope calculation).

Also remember that LTC, especially for both of you, isn't in addition to your current expenses but in replacement of them.

Even in cases where only one is in LTC, I've seen the spending of the healthy spouse drop dramatically. No more big nights out, second car/house, sell the boat, expensive travel etc. Instead their days are spent at the nursing home, sharing a sandwich and a coke.

 

[marko]

My income does not exceed my expenses. It is growth in assets that results in stash getting larger the longer we live.

Yes. While our dividend income alone exceeds our spending, our portfolio growth overall is also increasing organically.

 

[COcheesehead]

Yes. While our dividend income alone exceeds our spending, our portfolio growth overall is also increasing organically.

Same.
Our income today stands at 2.6X our annual expenses. The portfolio recently hit a new all time high.
We spend on what we want, you sometimes just reach a point of happiness and spending more is foolish. I feel good in knowing our assets will someday help others get an education. We established and will fund two scholarships upon our death. All the money left at the end will go a long way in helping others.

 

[marko]

This is an interesting take. Thanks for helping me explore it. I've occasionally "feared" the situation where DW and I both end up in LTC for the remainder of our lives. Right now, that would be a minimum of $25K/month. I'm sure those costs will increase over time.

My "plan" expires when I'm 99 so that's 21 years. Assuming my income and my stash and guessing inflation in LTC, the good news is that I would still die with money left over!!

I think I can begin to relax a bit now. Thanks for making me think about it (and forcing me to do a back of the envelope calculation).

I've advocated for doing a SHTF FireCalc analysis by cutting one's portfolio in half and seeing how you fare.

In addition, I think a good LTC analysis is helpful. One/both parties, 6 months, 1, 3 and 5 years of care based upon your age/time left. And then one where LTC starts now and a few others starting 3 and 5 years out.

Nothing like understanding your envelope of risk/safety for a good night's sleep. A nice rainy day project.

 

[Dtail]

I've advocated for doing a SHTF FireCalc analysis by cutting one's portfolio in half and seeing how you fare.

In addition, I think a good LTC analysis is helpful. One/both parties, 6 months, 1, 3 and 5 years of care based upon your age/time left. And then one where LTC starts now and a few others starting 3 and 5 years out.

Nothing like understanding your envelope of risk/safety for a good night's sleep. A nice rainy day project.

An alternative analysis on Firecalc is to set the success ratio to a desired number and see what the minimum portfolio is necessary to hit that success rate.

 

[COcheesehead]

An alternative analysis on Firecalc is to set the success ratio to a desired number and see what the minimum portfolio is necessary to hit that success rate.

I have that number hard coded into my financial dashboard spreadsheet. It’s a good reminder of even when things are bad, we are in great shape.

 

[aja8888]

I have that number hard coded into my financial dashboard spreadsheet. It’s a good reminder of even when things are bad, we are in great shape.

I have to believe everyone who is posting on this forum is in good shape or else they wouldn't be here.

Heck, I'm going to be 82 in a couple of months and have to struggle on what to buy that I don't already have. I did buy 4 pairs of gym shorts this week, though! And my portfolio income is 2+ times my expenses.

So I am gifting my money to my daughter and her husband. Last year, I paid for the remodel of their bathroom and a few other things. They have no debts at this point too. He (her husband) has been diagnosed with early Alzheimer's disease and will need special care in the future and that's what I will set up a fund for now.

 

[freedomatlast]

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

Thanks for posting that. I don't feel so much like an oddball now.

 

[Dtail]

Thanks for posting that. I don't feel so much like an oddball now.

There is even a few 300+ posted spenders.

 

[Time2]

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.

Oh sure aja8888, one of those rich guys that thinks they are middle class! All in jest We live middle class, but have a large net worth, that will get bigger as we age.

 

[disneysteve]

I think a lot of people here have this “problem”. Due to some combo of low spending, large portfolio, and good investment returns, you can easily end up having your money grow faster than you spend it.

We spent about 120K last year. We finished the year with our portfolio up 450K.
This year we'll probably spend 170K (remodeling the kitchen). YTD our portfolio is up 160K.
If the market behaves, even with the increased spending, we may well finish 2025 with more money than we started with.

It's a good "problem" to have.

 

[Koolau]

Also remember that LTC, especially for both of you, isn't in addition to your current expenses but in replacement of them.

Even in cases where only one is in LTC, I've seen the spending of the healthy spouse drop dramatically. No more big nights out, second car/house, sell the boat, expensive travel etc. Instead their days are spent at the nursing home, sharing a sandwich and a coke.

Good point. Life would typically revolve around the one in LTC. Other "routines" would likely fall by the wayside. Hobbies? Probably much less important. Sad, but with the advantage of burning less cash.

 

[TheWizard]

My NW continues to grow but I can't even imagine my income exceeding my expenses (on a yearly basis). It's never happened in retirement (unless I count unrealized gains in my portfolio).

Yeah, I guess you need to spend more in retirement.

Strictly out of curiosity, if you feel comfortable sharing, how much does your income exceed your expenses (and, again, just being nosey) what are your sources of income? Feel free to simply ignore this question. No need to respond to it.

I'll play.
My income, from largest to smallest, consists of pension/annuity income, age 70 SS income, RMDs, and taxable dividends.
The annual total is up around where NIIT kicks in ($200k) but it's a bit fuzzy due to small Roth conversions (which add to AGI) and QCDs (which subtract from it).

Of that income, I move excess into my taxable investment account each month, totalling as much as $50k per year depending on things like a new vehicle purchase during the year.
So the remainder gets spent on stuff, including income taxes...

 

[athena53]

Yep. I'm in that situation and I'm not complaining. Net worth has gone up by 3%/year on average after withdrawals. I give generously to charity and between their 529 accounts and some small UGTMA accounts I'm using to teach them to invest, my 3 grandchildren have a collective net worth of about $300,000.

I am well aware of the need to provide for my own long-term care if I need it but since I'm single, I don't have to consider the scary scenario of one spouse in LTC, one in the home.

My son and his family will likely be left with a lot of money, including a large 401(k) they'll have to liquidate over 10 years (under current laws) with disastrous tax consequences but we're OK with that.

 

[RetiredHappy]

We both have LTC, mine being more generous, about $10K a month currently, with 3% inflation rider and pays 5 years at maximum amount or stretched if maximum is not claim. We can use on home care of facility care and they are all covered.

 

[Koolau]

I am well aware of the need to provide for my own long-term care if I need it but since I'm single, I don't have to consider the scary scenario of one spouse in LTC, one in the home.

I'm pretty sure we can handle one person in LTC and one staying in our home. My fear has been both of us ending our days in LTC. I think we'd still survive but it would be frightening.