|
Post by Chahta on Sept 12, 2021 13:26:06 GMT
LINK
Sorry if this is a pay wall (Be sure to click the "X" to clear the ads.), but the title and first few words say it all. But I have to admit that this hit home a little. Who else feels this way? As a 2 1/2 year retiree I am doing fine using only SS for expenses. Sure I am tapping my taxable account for now as needed but pretty sparingly since my expenses are low. I don't think this is necessarily a good thing.
|
|
|
Post by FD1000 on Sept 12, 2021 14:33:31 GMT
The article has several good points but... I could still continue working, I had the best job ever, but when I hit my number, I quit. It was carefully planned for years in advance. I don't have a problem spending money since we have enough. Soon (Oct) going on vacation in TN,MO,AR since we don't want to fly anywhere. If my 14 years vehicle starts giving me trouble, I would buy a new one, but it still drives nicely with only 101K miles. I don't worry about overvalue or a big loss. Our portfolio daily volatility is +-0.2 over 80-85%, and it's mostly positive daily. When markets get crazy, I'm out. I also don't need stocks/CEFs to meet our goals either, and why I only trade them short term for fun.
|
|
|
Post by Chahta on Sept 12, 2021 14:54:46 GMT
Stop in Knoxville, area, I'll put on a mask and have lunch.
|
|
|
Post by steelpony10 on Sept 12, 2021 16:52:08 GMT
Chahta , Well we used an income method with our parents never giving a thought to spend down. These were their instructions so I learned from scratch. Gradually I found this solved many problems mostly psychological but opened up others. First of all determine the amount you need to invest in income type investments to fill the monthly gap when combined with SS. I’m assuming you have a good handle on your average expenses just to get by and a pretty good handle on your personal inflation rate. From what you stated SS pays for most of your bills so far and remember they probably average a 2.1% raise per year although it has been higher recently. If you have 3% PIR you only need about 1% to spend down to stay even. So you seem pretty good there. You have to address your longevity in a realistic fashion. Check the SS morbidity index. Most pass between 75-85. You also have to address what you would do with any extra money now. As I worked through our parents retirement years from 1982-2017 I saw the real life issues I could face managing a retirement portfolio and came around to delaying spend down as long as possible and getting ahead of the curve as much as possible if monthly expenses suddenly and permanently doubled for example. So you already know we went way out on the risk limb starting before retirement starting as early as possible. Now that we have reasonably achieved those above goals I started cutting back risk slowly as well as yearly income. We’re projected out to age 90 so spend down could be started then and with one survivor it is even easier. You do not want to be taking on more risk when a problem occurs. This all leaves us with money to spend on the extras knowing we’re covered for a worse case scenario until past 85 or longer.* * I do the opposite of FD. So maybe between the two? 👌🏻
|
|
bf22
Commander
Posts: 135
|
Post by bf22 on Sept 12, 2021 18:00:17 GMT
For myself, not much in this article applies (other than seeing my portfolio grow and an around 3% WD). SS only covers about 20% of my living expenses, and I'm done working. So, income needs to come from somewhere else... Also, I always expected to spent some $$ in retirement. I do have longevity in the family (parents in mid 90s and over 100).
|
|
|
Post by jongaltiii on Sept 12, 2021 18:36:03 GMT
Summary of the Barrons story boils down to:
“ So I’m keeping half my portfolio in stocks despite deep concerns about equity valuations. Over the next 30 years, I still expect stocks to outperform bonds. Thus, I believe the safest long-term retirement portfolio should include stocks. Which is another way of saying the safest long-term portfolio is inherently volatile.
One way to offset portfolio volatility is to slow the burn rate on that portfolio. And that is exactly what I’m doing for now by continuing to cover a big chunk of my expenses by working.
It’s a good thing I like the work. “
ADD: Enjoyed reading this as well:
”I believe we’ll have another brutal drop or two in stock prices during my lifetime. I have no idea when they will come. The market could start tumbling tomorrow or continue rising for another decade. Timing markets is a mug’s game.”
|
|
|
Spending
Sept 12, 2021 19:07:21 GMT
via mobile
Post by Chahta on Sept 12, 2021 19:07:21 GMT
The issue is not volatility or corrections or bear markets. It is getting motivated to want to spend more. It’s more fun right now wanting to get growth over income. Now once Covid is truly contained or handled I can see cruises returning for me.
|
|
|
Post by bb2 on Sept 12, 2021 19:33:45 GMT
I feel the the way the author, Neal does. I finally got myself to buy first class plane tickets. I'm 63, 6'5" and should have been flying first for a long time. My wife is 5'4", so she's still in coach. (Just kidding.)
|
|
|
Post by bb2 on Sept 12, 2021 19:43:00 GMT
When young, I'd convert dollars to gallons of gas, because that's what was important to me. Driving somewhere. Now I convert money to the charities I support, like animal rescue. So when I buy an expensive plane ticket, it kills me.
|
|
|
Post by steelpony10 on Sept 13, 2021 0:17:53 GMT
The issue is not volatility or corrections or bear markets. It is getting motivated to want to spend more. It’s more fun right now wanting to get growth over income. Now once Covid is truly contained or handled I can see cruises returning for me. Well in that instance we’re all in that boat. If watching a portfolio grow until it doesn’t is more fun great. I won’t change even after Covid is replaced by the next big thing. Problem solving was my reason to investment. Since the problem is solved I’m done. As far as spending my wife takes care of that part. I can still live out of a backpack if medicated at this point. Lol.
|
|
|
Post by FD1000 on Sept 13, 2021 1:00:05 GMT
The issue is not volatility or corrections or bear markets. It is getting motivated to want to spend more. It’s more fun right now wanting to get growth over income. Now once Covid is truly contained or handled I can see cruises returning for me. I think it's part of it. If this guy knew that he will lose no more than 5-10% in stocks, he would 1) maybe invest more in stocks 2) he wouldn't worry about spending.
|
|
|
Post by Chahta on Sept 13, 2021 11:56:32 GMT
The issue is not volatility or corrections or bear markets. It is getting motivated to want to spend more. It’s more fun right now wanting to get growth over income. Now once Covid is truly contained or handled I can see cruises returning for me. Well in that instance we’re all in that boat. If watching a portfolio grow until it doesn’t is more fun great. I won’t change even after Covid is replaced by the next big thing. Problem solving was my reason to investment. Since the problem is solved I’m done. As far as spending my wife takes care of that part. I can still live out of a backpack if medicated at this point. Lol. It's a GF so she has her own money.
|
|
|
Post by steelpony10 on Sept 13, 2021 12:19:04 GMT
Chahta , Being raised by Depression era parents money only means security to me. I spend only as the need arises. I understand I’m way outside mainstream culture, always have been and will be. Every once in awhile I do something atypical breaking the pattern for entertainment though. 😜
|
|
|
Post by Chahta on Sept 13, 2021 12:39:05 GMT
Me too. My 91 YO mom was born on her grandfather's farm in Nebraska. The farm was lost in the depression so I got my frugality from her. But unlike you did for your parents, I don't need to manage money for her. She does just fine.
|
|
|
Post by richardsok on Sept 13, 2021 13:46:55 GMT
Let me tell you a story.
Pension and Soc Sec were more than enough for my wife and I to live almost lavishly -- for us. We took an overseas trip annually. However my daughter was struggling, so about six years ago I bought her a ritzy little condominium in downtown Philadelphia and gave it to her as a surprise Christmas present (the condo is in my name, not hers). She lives free.
Well that had an enormous difference in her life -- removed all her money stresses. Though it now required me taking a little bit of money out of my portfolio every year, I didn't regret my choice.
Then came events -- one after another.
1.) My daughter ran her credit cards up to nauseating levels and I was furious.
2.) She then got engaged to a very nice young doctor. (She's a former model and a beauty. Never a problem attracting men.) I bitterly determined I would quietly pay off her credit cards before she got married. I didn't want him discovering her foolish debt to become a pre-wedding issue between them. (Was I dumb? Debatable.)
3.) Matters progressed to their wedding plans. I anticipated selling the condo at a nice profit (hooray!), using the gain to pay for all/most of her wedding (depending how lavish it was to be). Also, expecting the cash windfall to come my way, I determined it was time to buy a second home for my wife & me in Florida. At the time, Florida real estate was rising, so I figured I should waste no time. As my lovely little Colombian wife is 22 years my junior, I'd long thought I should buy her some little place near her Latina-mafia gal-pals and put it in her name in case the worst should happen to me. I'd seen what contested wills have done to families and wanted my wife to be secure. 4) So I went ahead, withdrew a pot of money from my portfolio, and paid cash for a nice little 3-bdrm place with a modest pool and nice view in a gated community in Stuart Florida. Low HOA. Mission accomplished. We became snowbirds.
5) Then the surprise. To my chagrin, daughter and doctor fiance quarrel and -- you guessed it. They broke up. Daughter promptly forgets her role in the catastrophe and -- in total victim mode -- spends the next months wailing in rivers of tears..... in the condo I'm still paying off.
6) I'm now paying taxes on three properties (my home, the Phila condo and the Fla place). Rental income: zero -- and even with my investment gains, the portfolio isn't growing because of my new living costs. To demand my daughter help with her condo's mortgage would cause a major battle. (Wife takes daughter's side. Says I bought the condo for my daughter's comfort and should not change the terms now.)
7) A year passes. Daughter now happily involved with a heavy-hitting political operative in Washington DC. (Tony lifestyle, but his net worth? Unknown. ) (Will romance lead to something? Also unknown.) She loses her job (no fault of hers) then finds another one in Carolina offered at $115,000, but DECLINES the offer (AGGGH!) b/c "it's too much travel".
Now I'm waiting. Waiting. Greatest bull market of my lifetime and my net worth is stagnant.
Moral: Play the ponies. Go to Vegas and put it all on Red. But don't have daughters.
|
|
|
Spending
Sept 13, 2021 14:08:21 GMT
via mobile
Post by Chahta on Sept 13, 2021 14:08:21 GMT
You da man Richard. Sometimes parents, no matter how hard they try, cannot get ahead. Kids are just oblivious at times.
Now I understand all your furious trading. 😀
Edit: now you and steelpony are my favorite storytellers.
|
|
|
Post by rhythmmethod on Sept 13, 2021 15:07:37 GMT
richardsok, You're a good man! Wishing you the best in the way this plays out. Sometimes people grow up a bit late. At least your daughter didn't take up with a drummer!
|
|
|
Post by steelpony10 on Sept 13, 2021 15:08:21 GMT
richardsok , I just told my kids (we had 4 teens at one time) at 18 you have two years to leave. Since you know it all consider this a gift. I helped my parents all the way to the end with no complaints ever, until 2017. I couldn’t wait for my kids to leave which was terrible. Now I just laugh because they all have that deer in the headlights look just like the rest of us. I think I’ll just help out the grands depending …………
|
|
|
Post by xray on Sept 13, 2021 18:33:59 GMT
Time to write a book [will go to #1 in the charts]. You are living it while we are reading it.... Good Luck with the continuing saga [with the hope that it will "end" well]....
Live Long and Prosper....
|
|
|
Post by FD1000 on Sept 13, 2021 22:10:14 GMT
richardsok, good story. We played it differently. One kid gave us all the troubles(credit cards, over spending, car speeding). We let him suffer just to save him before the big fall. The kid had to feel the pain. Suddenly, at age 30, his attitude changed, something clicked. I convinced him to buy a condo instead of renting in 2014. We helped him with several thousands after he proved ha can save money for about a year. He had a renter for a couple of years but finally got better jobs with better pay and now is doing OK without renters. We don't buy any real estate for anybody.
There is a saying in my old country "one father can take care of 10 kids, but 10 kids can't take care of one father". We control all the money, all the time because we know we can do it. My wife and I are united in most cases. We are really equal at making decisions and married happily since our early 20". Another saying "more assets, more worries" and why we have only one house and the rest is all invested in funds.
|
|
|
Post by bb2 on Sept 13, 2021 22:41:32 GMT
Guy I was playing golf with a couple years ago asked me if I had kids. No. He loudly exclaimed, "You must be rich!"
|
|
|
Post by FD1000 on Sept 13, 2021 23:22:42 GMT
Guy I was playing golf with a couple years ago asked me if I had kids. No. He loudly exclaimed, "You must be rich!" Kids don't make you poor, in many cases marriage and kids make you save more for the future. Divorce is worse.
|
|
|
Post by anovice on Sept 14, 2021 11:29:18 GMT
Guy I was playing golf with a couple years ago asked me if I had kids. No. He loudly exclaimed, "You must be rich!" Kids don't make you poor, in many cases marriage and kids make you save more for the future. Divorce is worse. FD: Divorce is worse. That depends on if you are the payee or payer. I was the payee and went from a saver to a spender.
|
|
hondo
Commander
Posts: 145
|
Post by hondo on Sept 14, 2021 15:46:49 GMT
I can somewhat relate to Mr. Templin's article. I have been retired 18 years, my wife 28 years, and we have yet to tap our nest egg. We have been able to easily live on our pensions. We make a couple of QCDs from our IRA each year, but we then replace them by putting an equal amount of dollars, from checking, into our taxable account. Like the author, I admit that I do get some pleasure when the investment totals grow a little each month. It is not because we are tight that we do not spend from the investments. We have everything we need or want. We have always lived modestly. We have never vacationed in foreign countries as some do, nor do we do very much traveling at all any more, because of health reasons. I expect to use a great deal of our saving to pay for home care expense someday in order to stay out of nursing homes or moving in with children. I do have some extended care insurance, but my wife does not. No one would accept her because of health.
|
|
|
Spending
Sept 14, 2021 16:05:44 GMT
via mobile
Post by FD1000 on Sept 14, 2021 16:05:44 GMT
I can somewhat relate to Mr. Templin's article. I have been retired 18 years, my wife 28 years, and we have yet to tap our nest egg. We have been able to easily live on our pensions. We make a couple of QCDs from our IRA each year, but we then replace them by putting an equal amount of dollars, from checking, into our taxable account. Like the author, I admit that I do get some pleasure when the investment totals grow a little each month. It is not because we are tight that we do not spend from the investments. We have everything we need or want. We have always lived modestly. We have never vacationed in foreign countries as some do, nor do we do very much traveling at all any more, because of health reasons. I expect to use a great deal of our saving to pay for home care expense someday in order to stay out of nursing homes or moving in with children. I do have some extended care insurance, but my wife does not. No one would accept her because of health. The guy in the article doesn't have a pension. If you have a pension and SS that cover all your expenses (maybe more) you are in a great condition. It's highly predictable that your portfolio will keep growing. Most retirees don't have this luxury.
|
|
hondo
Commander
Posts: 145
|
Post by hondo on Sept 14, 2021 16:35:45 GMT
I can somewhat relate to Mr. Templin's article. I have been retired 18 years, my wife 28 years, and we have yet to tap our nest egg. We have been able to easily live on our pensions. We make a couple of QCDs from our IRA each year, but we then replace them by putting an equal amount of dollars, from checking, into our taxable account. Like the author, I admit that I do get some pleasure when the investment totals grow a little each month. It is not because we are tight that we do not spend from the investments. We have everything we need or want. We have always lived modestly. We have never vacationed in foreign countries as some do, nor do we do very much traveling at all any more, because of health reasons. I expect to use a great deal of our saving to pay for home care expense someday in order to stay out of nursing homes or moving in with children. I do have some extended care insurance, but my wife does not. No one would accept her because of health. The guy in the article doesn't have a pension. If you have a pension and SS that cover all your expenses (maybe more) you are in a great condition. It's highly predictable that your portfolio will keep growing. Most retirees don't have this luxury. When you are right, you are right. He didn't actually say that he doesn't have a pension, but if you say he doesn't, then he doesn't. Your right.
Yes, I suppose a pension is a luxury, so you are right again, however I feel this luxury was earned by working 45 years for it. Putting that money into a pension fund for 45 years was an investment for the future just as putting the money into a S&P mutual fund is an investment. Actually, if I had put the same money into a S&P index fund for 45 years, maybe I would be better off now.
|
|
|
Post by FD1000 on Sept 14, 2021 20:28:41 GMT
Hondo, the main point isn't your investment in the pension, the main point is that you have a pension, most don't. Many don't need to invest anything in it. I just learned recently of someone who worked as a teacher and was able to BUY another 10 years for peanuts more for his teacher pension. In increased his pension from 15 years to 25 years. He also has 2 other pensions from 2 other jobs, both are not from private companies. That always gets me going because his 3 pensions are coming mostly from other taxpayers.
I'm all for pensions by private companies, but against gov/state/public schools/universities pensions.
|
|
|
Post by bb2 on Sept 14, 2021 20:33:20 GMT
Deleted. Sorry.
|
|
hondo
Commander
Posts: 145
|
Post by hondo on Sept 14, 2021 23:30:09 GMT
Hondo, the main point isn't your investment in the pension, the main point is that you have a pension, most don't. Many don't need to invest anything in it. I just learned recently of someone who worked as a teacher and was able to BUY another 10 years for peanuts more for his teacher pension. In increased his pension from 15 years to 25 years. He also has 2 other pensions from 2 other jobs, both are not from private companies. That always gets me going because his 3 pensions are coming mostly from other taxpayers. I'm all for pensions by private companies, but against gov/state/public schools/universities pensions. FD1000: Well you certainly have a right to your opinion and you stated it very well, however I will not apologize for having earned a pension. Just because you are against pensions doesn't make them bad. Perhaps if you had one, you would like them. I will not get into a running argument with you on this subject and I will not respond to any followup you post. Good investing to you FD1000. I wish you all of the luck you deserve.
|
|
|
Post by bb2 on Sept 15, 2021 0:09:09 GMT
I think the guy was just expressing some individual frustration. He'd just bought his son a farm in Indonesia. I met the son; he's a nice guy.
Wait. Out of sequence. Didn't get this placed within the thread as I'd hoped.
|
|