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kywildcatfanone
Kentucky Fan
Wildcat Country!
Member since Oct 2012
63686 posts

Retirement spending plan
So, if you assume you don't need to leave money to family, what would be your retirement spending plan?

IF you assume the 4% growth model, what would be your spending?

Assuming retire at 60, would you do 6-8% in the first 5 years, then back off to 5-6%, something like that?

Thoughts?


Fat Bastard
Boston College Fan
Member since Mar 2009
42646 posts

re: Retirement spending plan
meh. i am leaving my whole empire to daughter so i guess this is a N/A for me.


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30
RoyalWe
LSU Fan
Prairieville, LA
Member since Mar 2018
568 posts
 Online 

re: Retirement spending plan
Uhhh it would probably depend on how much money I had.


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TigerintheNO
LSU Fan
New Orleans
Member since Jan 2004
31995 posts

re: Retirement spending plan
I'm going to travel until I'm too old to continue.


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40
white perch
Northwestern St. Fan
the bright, happy side of hell
Member since Apr 2012
5496 posts

re: Retirement spending plan
Of you take out 4% per year and leave the rest in s and p 500 mutual fund you should be set for life.


jralspanky
Fargo
Member since Apr 2009
836 posts
 Online 

re: Retirement spending plan
quote:

I'm going to travel until I'm too old to continue.


I'm with this guy and it starts in 2.5 years


kywildcatfanone
Kentucky Fan
Wildcat Country!
Member since Oct 2012
63686 posts

re: Retirement spending plan
quote:

I'm with this guy and it starts in 2.5 years


I think that is great, but I'm wondering about everyone's strategies on spending.

If you assume 4% return, do you spend 5-8% which should technically get you 25 years of retirement income?

Also, do you need a lot once you get to 80+, seems you could spend it all prior, and live on govt the rest of the time (I'm sort of joking, sort of not).

And remember, my original premise was not planning to leave money for others when you die.


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baldona
Auburn Fan
Florida
Member since Feb 2016
10435 posts

re: Retirement spending plan
quote:

If you assume 4% return, do you spend 5-8% which should technically get you 25 years of retirement income?


This seems like a terrible idea. The moment you say its okay to eat into your principle, where do you stop? The last thing you want is to be 78 and can't afford some cancer treatment for your wife because you spent 8% instead of 4-5% and didn't eat into your principle. I get where you are coming from and its not the idea of having money left over, its that I think saying its okay is a bad behavioral idea to start with.

quote:

And remember, my original premise was not planning to leave money for others when you die.


Do you not have kids? Unless your kids are shiteheads, even if they are wealthy it still shows them that you were wise and educated to die with money.

Imo if you can't live off of not eating your nest egg, then you should continue working or reduce your lifestyle. Its really not that hard to live in a cheaper smaller house, work 10-20 hours a week at Bass Pro or Ace hardware, and live within your means.


UpstairsComputer
LSU Fan
Prairieville
Member since Jan 2017
680 posts

re: Retirement spending plan
quote:

baldona




This whole line of thinking is backwards. Why assume 4% growth? That seems pretty conservative if the plan is to draw down all your assets and live on the government teat at 80.

Once you get to 80+, yes, your travel will slow down, but your medical will pick up. Have you ever been to a Medicaid nursing home? You should visit one BEFORE you retire.


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20
Jjdoc
Columbia Fan
Cali
Member since Mar 2016
24299 posts

re: Retirement spending plan
When you say plan, I assume you mean what amount of money do I want and need as an income.

For me that means being diverse, and not just in stock.

1- money from SS.
2- Stocks:

- Divi-- monthly, quarterly, and annual
- mutal funds
- long term holds
- mix in some plays after retirement for fun.

3- rental properties. Don't need a tone of these but do want enough to leave each kid 2.

Goal is to live and have fun and to leave the kids with a great start in life.


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kywildcatfanone
Kentucky Fan
Wildcat Country!
Member since Oct 2012
63686 posts

re: Retirement spending plan
quote:

Do you not have kids?


I do not have kids. My will is setup to sell my possessions and split the money between my family and our local humane society. That alone should be a significant amount of money. Any money left will be included ultimately.

I view my retirement resources differently and would like to enjoy as much of it as possible I guess.

quote:

Imo if you can't live off of not eating your nest egg


I guess I'm back to not needing to leave this to anyone generally.


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nctiger71
LSU Fan
North Carolina
Member since Oct 2017
523 posts

re: Retirement spending plan
quote:

what would be your retirement spending plan? IF you assume the 4% growth model

Assuming retire at 60


quote:

kywildcatfanone wrote in another post
quote:

I'm hoping to retire in 5 years, and I will feel good about it with 1.7M. Will still do it at 1.5. As long as I have everything paid off, I don't need a lot, and I don't have expensive hobbies


I think you need to forget about theoretical models and just do a budget and learn about your retirement benefits; government and from your company. Then develop a plan based on your actual numbers.

I'm inferring from your posts that you are 55. It is common for working people to begin to look at retirement benefits when they turn 60, cause we know something is available soon after that but we're not sure what.

The earliest you can draw SS is 62 (unless you're disabled); Medicare is usually 65.

Will you have a pension at 60 or will you just be living off of your savings? How much money do you need to live? 4% of $1.7 million is $68k. Is $68k enough or do you need more, or less.

Where will you get medical insurance between 60 and 65? Also, Medicare is not free; the premium is currently ~$135/month for most retirees. Supplements or Advantage Plans are an additional ~$60 to I don't know maybe $150/month.

Are your retirement savings in pre-tax accounts or Roth. You will have to pay federal, and maybe state, income tax on the pre-tax funds when you withdraw them.

I have been retired 5 years and I can tell you that there will be surprises; both good and bad. But, if you have a plan based on your personal financial situation you can more easily adjust to any changed circumstances.




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Ace Midnight
LSU Fan
Between sanity and madness
Member since Dec 2006
69457 posts

re: Retirement spending plan
quote:

Assuming retire at 60, would you do 6-8% in the first 5 years, then back off to 5-6%, something like that?


Should be the opposite - your biggest risk in retirement is your first 3 years of spending AND if there is a market downturn.

After the first year or two, you can kind of go with what the yield was the year before (real data instead of projections).


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Popths
LSU Fan
Baton Rouge
Member since Aug 2016
1974 posts

re: Retirement spending plan
My goal is not to spend what I have but use what I need. I was planning to start withdrawing at 60 but will now push that back until my cash reserves reduce quite a bit. There is no predicting what health emergency may arise. I would love to leave my kids more than my parents left me. I don’t have lazy freeloading kids. Hopefully they will pay it forward.


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