A note about retirement found on Fidelity Investments website

[davidsonj73]

It is recommended that in retirement one should only spend 4% to 5% of their savings and investments per year. What do you think of this?

 

[Scaramouche]

It is recommended that in retirement one should only spend 4% to 5% of their savings and investments per year. What do you think of this?

So How long is a piece of string?

 

[BackInTheGame78]

Most people save far too much money money for days they never live

 

[RickTheToad]

Most people save far too much money money for days they never live

Quite the opposite, young padawan.

 

[FlirtLife]

Back in 1998, the Trinity Study concluded someone has a reasonable chance of not going broke if they withdraw 4% per year. I believe the research studied mixes of stocks and bonds, the most common being 60% stocks and 40% bonds (a traditional retirement portfolio). It wouldn't apply to someone with 100% cash in a savings account.

Trinity study - Wikipedia

en.wikipedia.org

What Is the 4% Rule for Withdrawals in Retirement: How Much Can You Spend?

The 4% rule is a guideline for withdrawing money from a retirement account regularly. It is designed to sustain your retirement without depleting your funds.

www.investopedia.com

 

[BackInTheGame78]

Quite the opposite, young padawan.

Most people think they will live far longer than they actually do, and think they will "be able" to do far more than they actually can in retirement. Health problems, old age, inability to walk much without pain, etc...people end up far more limited most times than they think they will be.

In fact, it was found that there was a significant percentage of people who died barely touching their actual 401K balances at all in retirement, saving for a time that will never come.

Be smart, but don't save a bunch of money for all the things you never get a chance to do when you could be out doing them while you are younger, healthier and can enjoy them far more today either.

 

[Divorced w 3]

It’s accurate but because it’s an average it cannot be used by itself. You need to take into consideration the acceleration of one’s spending in earlier healthy retirement, the major slowdown when elderly, and then account for the very high likelihood the long term care community would need to be brought into the process.

 

[EyeBRollin]

It’s accurate but because it’s an average it cannot be used by itself. You need to take into consideration the acceleration of one’s spending in earlier healthy retirement, the major slowdown when elderly, and then account for the very high likelihood the long term care community would need to be brought into the process.

One philosophy I’ve heard is to spend it all before long term care so that the government foots the bill.

 

[jaygreenb]

One philosophy I’ve heard is to spend it all before long term care so that the government foots the bill.

The problem with this is that nobody knows how long they have left and what costs there will be associated with that. The last 10-20yrs can be very expensive to live a decent quality of life. If you run out of money and do need care or assistance, the options can be horrific if you do not have someone to take you in. I own a business related to healthcare and aging and see it all the time.

 

[RickTheToad]

Most people think they will live far longer than they actually do, and think they will "be able" to do far more than they actually can in retirement. Health problems, old age, inability to walk much without pain, etc...people end up far more limited most times than they think they will be.

In fact, it was found that there was a significant percentage of people who died barely touching their actual 401K balances at all in retirement, saving for a time that will never come.

Be smart, but don't save a bunch of money for all the things you never get a chance to do when you could be out doing them while you are younger, healthier and can enjoy them far more today either.

Medical and house expenses are only going up chief. I've seen several couples and widows have little money because they spent it like it was going out of style. Being broke when you're young is one thing. It's a whole other level when you are living your final years dude.

 

[BackInTheGame78]

Medical and house expenses are only going up chief. I've seen several couples and widows have little money because they spent it like it was going out of style. Being broke when you're young is one thing. It's a whole other level when you are living your final years dude.

Smart people don't have house expenses in retirement other than taxes, insurance and maintenance.

Medical expenses are always going up, but most people don't treat their health with too much importance until it's too late. Who's fault is that?

Obviously everyone will have something that goes wrong with them eventually, but most people have far too many things going wrong far too early and unnecessarily.

When you expect a doctor to be responsible for keeping you healthy and accept none of that responsibility yourself, that's what happens. Far too common in this country.

Either way, I plan on bouncing when I retire and living as an expat in one of the inexpensive European countries like Portugal, Spain, Italy or Greece so I'll be just fine.

 

[Divorced w 3]

Smart people don't have house expenses in retirement other than taxes, insurance and maintenance.

Medical expenses are always going up, but most people don't treat their health with too much importance until it's too late. Who's fault is that?

Obviously everyone will have something that goes wrong with them eventually, but most people have far too many things going wrong far too early and unnecessarily.

When you expect a doctor to be responsible for keeping you healthy and accept none of that responsibility yourself, that's what happens. Far too common in this country.

Either way, I plan on bouncing when I retire and living as an expat in one of the inexpensive European countries like Portugal, Spain, Italy or Greece so I'll be just fine.

That’s the way to do it. You go to Thailand or somewhere that has nationalized healthcare and the dollar is strong and you fade away there.

 

[jaygreenb]

That’s the way to do it. You go to Thailand or somewhere that has nationalized healthcare and the dollar is strong and you fade away there.

A couple things with this.

From your name, assume you have kids and have the potential to have future grandkids. With limited funds you are not going to be able to shuttle back and forth, you wouldn't want to physically involved in your genetic lines lives?

20 plus years from now not sure you can assume the dollar will have the same purchasing power internationally. It may but would not consider that a lock and bank a long stretch of your most vulnerable years on it. With medical advancements, very possible it may become the norm to live I00 plus by the time we get there too.

If you google "expats going broke..." in any of the low cost popular countries, it so common it is practically a meme. If you have bad money habits those do not disappear in a cheaper foreign country.

 

[RickTheToad]

Smart people don't have house expenses in retirement other than taxes, insurance and maintenance.

Medical expenses are always going up, but most people don't treat their health with too much importance until it's too late. Who's fault is that?

Obviously everyone will have something that goes wrong with them eventually, but most people have far too many things going wrong far too early and unnecessarily.

When you expect a doctor to be responsible for keeping you healthy and accept none of that responsibility yourself, that's what happens. Far too common in this country.

Either way, I plan on bouncing when I retire and living as an expat in one of the inexpensive European countries like Portugal, Spain, Italy or Greece so I'll be just fine.

If you live in NY/NJ/CT/MA/CA. you would know the upkeep for a home is very expensive. The insurance and property taxes go up every year. I think you underestimate the true cost of home ownership. One could try to avoid that by renting, but the landlord pushes that cost onto you. It's expensive to live. If you think you can live off of around 2k a month (average SS "benefit); then you are severely kidding yourself. Yes, you will have Medicare; but that doesn't include part D, which is another few hundred dollars per month. Eventually, you will get in your 80's - 90's and you may need some LTC. This isn't cheap either.

If you think your kids/offspring or family are going to help, they may from time to time, but they have their own lives and family to take care of, too. The bottom line is unless you are very poor or very rich, you are screwed without significant retirement.

 

[BackInTheGame78]

If you live in NY/NJ/CT/MA/CA. you would know the upkeep for a home is very expensive. The insurance and property taxes go up every year. I think you underestimate the true cost of home ownership. One could try to avoid that by renting, but the landlord pushes that cost onto you. It's expensive to live. If you think you can live off of around 2k a month (average SS "benefit); then you are severely kidding yourself. Yes, you will have Medicare; but that doesn't include part D, which is another few hundred dollars per month. Eventually, you will get in your 80's - 90's and you may need some LTC. This isn't cheap either.

If you think your kids/offspring or family are going to help, they may from time to time, but they have their own lives and family to take care of, too. The bottom line is unless you are very poor or very rich, you are screwed without significant retirement.

As of right now if my income only stays the same and doesn't increase I will be getting around $3500 a month in SSI.

Again...I don't plan to live in the US in retirement, I plan to make the US dollars work for me in places where it's very cheap to live in comparison.

 

[RickTheToad]

As of right now if my income only stays the same and doesn't increase I will be getting around $3500 a month in SSI.

Again...I don't plan to live in the US in retirement, I plan to make the US dollars work for me in places where it's very cheap to live in comparison.

That's you; not most. Rest assured, the $3500 you will receive will be worth much less than you think due to inflation. Also, you should know that as the rest of the world's quality of life increases, so will those costs for you. I do not think your dollar will go as far as you think in 20+ years dude.

 

[BackInTheGame78]

That's you; not most. Rest assured, the $3500 you will receive will be worth much less than you think due to inflation. Also, you should know that as the rest of the world's quality of life increases, so will those costs for you. I do not think your dollar will go as far as you think in 20+ years dude.

Guess we will find out. Either way, I will have far more than that to rely on between selling a house, inheritance of another house and money and other investments/401K and crypto/forex trading.

 

[RickTheToad]

Guess we will find out. Either way, I will have far more than that to rely on between selling a house, inheritance of another house and money and other investments/401K and crypto/forex trading.

I hope you are very well off in your later years.