Your Savings Are Worthless If You Don't Do This In Retirement

[Time2]

Here's a great video that explains what we are doing wrong with our accumulated money. I'm sure many of us are going to see we are in exactly the mindset he discusses. The tax advice is from a British prospective, but that is little of the info.

 

[TheWizard]

It's a 20 minute video; I watched the first third of it.
It's the standard refrain about retirees being unable to spend down their accumulated wealth.

We've had numerous threads on this.
Some of us spend plenty of $$$ in retirement and yet our portfolios continue to grow, at least nominally. I think that's absolutely fine...

 

[Ronstar]

I came to the realization a few months ago that investments are just numbers that are worthless until they are spent on something that produces happiness.

 

[tulak]

Spend what makes you happy. If there's some leftover, no big deal.

 

[disneysteve]

How about a summary of the video for all who don't care to spend time watching it?

From the couple of replies so far, it sounds like it addresses under-spending. If so, sure, that's always a risk. It would be so much easier if I just knew when my wife and I would die so I could plan accordingly. And also what unforeseen medical and long term care expenses we will face in the future.

 

[Gumby]

I don't see "underspending" as a risk. We spend what we want. If our wants are less than our assets and there is some left when we die, I don't care.

 

[Dtail]

Stated it many times. Many/most folks on this site got there by LBYM vs extreme career earnings levels.
Thus they will not come close to spending it down too much.

 

[TheWizard]

The video gets into the psychology of hoarding your assets going back to the caveman era, when, if you didn't horde enough during warm weather, you wouldn't survive the winter.

So he says that concept still applies mentally today, which is mostly baloney.

There are extreme examples of this asset hording, we all know that. But wealthier retirees generally don't plan on spending their assets down to a fraction of their high point by age 99.
I certainly don't...

 

[Lewis Clark]

If we plan for worst case scenarios, and they do not materialize, we are likely to have a lot left at the end.

Most folks who retired in the last couple of decades have not experienced a near-worst-case sequence of returns.

 

[Dtail]

If we plan for worst case scenarios, and they do not materialize, we are likely to have a lot left at the end.

Most folks who retired in the last couple of decades have not experienced a near-worst-case sequence of returns.

True. Last bad starting sequence was 1966, although the 1999 retiree is still not totally out of the woods.

 

[disneysteve]

I don't see "underspending" as a risk. We spend what we want. If our wants are less than our assets and there is some left when we die, I don't care.

Yeah, risk wasn’t the right word.

We certainly don’t plan or expect to die with zero. If all goes well, I hope to die with millions more than we started with. Firecalc has us ending with as much as $29 million if our current spending continues.

 

[Jerry1]

I'm sure that if I wanted to die with nothing, I could accomplish that but I really feel like I'm doing what I want and I don't know that I can ask for more than that. I don't have the travel bug, I'm happy with my living arrangements, I drive the vehicles I want, I eat good. I'm good. I also don't mind if my kids end up with an inheritance. Feeling blessed and I saved twenty minutes to watch something different.

 

[TheWizard]

I have no idea what's going to be happening twenty years from now when I'm Really Old.
So having decent financial assets building up to then suits me fine...

 

[pb4uski]

It's hard to change your stripes after close to a lifetime of looking for a good value proposition, but I'm trying. Just today bought some things we didn't "need" at Costco while hardly looking at price, but hardly enough to make a dent.

 

[old medic]

We worked to a pension income stream, and our saved nest egg is a buffer for whatever...

 

[audreyh1]

True. Last bad starting sequence was 1966, although the 1999 retiree is still not totally out of the woods.

Yeah, the 1999 sequence was probably the worst recent one since 1966, especially with the high 2021 through 2022 post Covid inflation. But we won’t really know until the end of 2029. I can easily imagine scenarios that really hurt a retiree, and of course there were tons of working folks who suddenly found their stock options way underwater, or their exercised stock options close to worthless.

Somehow I got through it OK.

 

[Diogenes]

Here's a great video that explains what we are doing wrong with our accumulated money. I'm sure many of us are going to see we are in exactly the mindset he discusses. ...

Definitely thought provoking and worthy of rumination. Let my note a few points by way of objection:

1. Not all of us have family (children, parents, siblings, spouse, cousins, etc.). Those of us who don't, don't have bequests to make. We don't have memories with toddler grandkids to make. We don't have fishing trips, whose eschewal would mean lost memories in the kids' formative years. Three out of the five main regrets-of-not-spending noted in the video, have to do with family experiences, family memories, family joys, family obligations. Sure, I get it! But what if we don't have family?

2. Call us vapid, unimaginative or dull, but for some of us, the money is itself the primary joy.

3. Two words: Ronald Read.

 

[disneysteve]

I have no idea what's going to be happening twenty years from now when I'm Really Old.
So having decent financial assets building up to then suits me fine...

Plan for the worst and hope for the best.

Of course, the worst rarely happens, but better to be prepared than to run out of money.

 

[disneysteve]

1. Not all of us have family (children, parents, siblings, spouse, cousins, etc.). Those of us who don't, don't have bequests to make.

We have one daughter and I hope we leave her set for life. Beyond that, I hope we're able to make significant donations to charities that we care about. The sort of donations where they name things after the donors, not that I care about that at all, but that level of support.

 

[GenXguy]

We have one daughter and I hope we leave her set for life. Beyond that, I hope we're able to make significant donations to charities that we care about. The sort of donations where they name things after the donors, not that I care about that at all, but that level of support.

Thanks, I was about to chime in that their are plenty of charities in need for those with large stashes that they aren't spending down.

 

[target2019]

Die with Zero plus a few million?

 

[RetiredHappy]

Die with Zero plus a few million?

That works for me!

 

[target2019]

"Audience and Tone
The channel is aimed at people in their 50s and 60s approaching or navigating retirement, particularly in the UK context (pension rules, inheritance tax, etc.) "

I don't qualify.

 

[Car-Guy]

I came to the realization a few months ago that investments are just numbers that are worthless until they are spent on something that produces happiness.

Well that would say I'm ecstatic.

 

[marko]

I came to the realization a few months ago that investments are just numbers that are worthless until they are spent on something that produces happiness.

I like to spend on things that make me happy.

Sometimes though, just looking at those worthless numbers make me pretty happy. Really.