what is the hardest financial decision?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills

what is hardest finanial choice to make?

How much to save
36
24%
Social security-when do I collect
10
7%
Insurance-long term care, how much life insurance , SPIA
19
12%
AA -too much stocks could be risky, too much bonds inflation.could hit
24
16%
Withdraw rate-i want to spend my money but not go broke
20
13%
Security selection-tilt,s, REITs, assets to hold
9
6%
Taxes-Roth vs traditional, taxable investments, other tax choices
5
3%
Other -please explain
30
20%
 
Total votes: 153

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Johm221122
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what is the hardest financial decision?

Post by Johm221122 » Sat May 10, 2014 12:56 pm

what is hardest financial descion?

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nisiprius
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Re: what is hardest financial descion?

Post by nisiprius » Sat May 10, 2014 1:05 pm

I checked off "How much to save," but I'd say, more generally, that overall process of deciding on the balance between income, spending, savings, and debt throughout life.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: what is hardest financial descion?

Post by VictoriaF » Sat May 10, 2014 1:08 pm

I think buying an SPIA is the most difficult decision. You get used to seeing some number on your balance sheet, you get emotionally attached to that number, and losing a large part of that number is heart wrecking.

Victoria
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pennstater2005
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Re: what is hardest financial descion?

Post by pennstater2005 » Sat May 10, 2014 1:13 pm

I chose "how much to save" for similar reasons as nisi.
“If you think nobody cares if you're alive, try missing a couple of car payments.” – Earl Wilson

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Re: what is hardest financial descion?

Post by Johm221122 » Sat May 10, 2014 1:13 pm

VictoriaF wrote:I think buying an SPIA is the most difficult decision. You get used to seeing some number on your balance sheet, you get emotionally attached to that number, and losing a large part of that number is heart wrecking.

Victoria
I never thought about this, good point
nisiprius wrote:I checked off "How much to save," but I'd say, more generally, that overall process of deciding on the balance between income, spending, savings, and debt throughout life.
That was second choice for me
John

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6miths
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Re: what is hardest financial descion?

Post by 6miths » Sat May 10, 2014 1:15 pm

When to retire for me. Hard to turn off that spigot!
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Re: what is hardest financial descion?

Post by linenfort » Sat May 10, 2014 1:16 pm

I chose Other because I think the hardest choice is deciding to stay the course and not tinker. It's very easy to talk the talk and quietly go on tinkering.
Everyone knows the 3-fund portfolio would be fine for every member of this forum, rich or poor, and yet look at all these posts about modifications, timing, and straying.

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Re: what is hardest financial descion?

Post by Tanelorn » Sat May 10, 2014 1:18 pm

Security selection. If you get that right, you can afford the rest.

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Re: what is hardest financial descion?

Post by earlyout » Sat May 10, 2014 1:24 pm

6miths wrote:When to retire for me. Hard to turn off that spigot!
+1
This was by far the hardest decision for me. The extra money I could accumulate by working 10 more years or just retire and see what happens. 15 years later I don't miss the extra money.

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Re: what is hardest financial descion?

Post by Zabar » Sat May 10, 2014 1:29 pm

I checked off "How much to save." But for me, the toughest part is its complement: "How much to spend." It can be difficult for me to allow myself to make a significant purchase that's an indulgence rather than a potentially rewarding investment even after I run the numbers.

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Re: what is hardest financial descion?

Post by gerrym51 » Sat May 10, 2014 2:05 pm

based on postings on this site i'd say either when to take SS or to buy ltc insurance.

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Re: what is hardest financial descion?

Post by Fallible » Sat May 10, 2014 2:07 pm

I went with "How much to save" because it's a continual decision, a constant striving to find the right balance between saving and spending, a balance dependent on a future we can't know. It's also a decision that forces introspection, never easy and often not much fun, to know when or whether we should spend rather than save, to know what we need vs. what we want, or think we want.
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Re: what is hardest financial descion?

Post by ajcp » Sat May 10, 2014 2:29 pm

Was surprised I'm the first withdraw rate response, but then again many bogleheads plan to leave money for children so I guess it makes sense. For me how much to save is pretty easy. I do have my vices, but for the most part don't like the flashy things that really break the budget (like a huge house, etc.), so saving just "what's left" is a really good amount. Of course, being single also helps keep the budget down, so if life events are different in 10 years I could see my answer changing.

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Re: what is hardest financial descion?

Post by Phineas J. Whoopee » Sat May 10, 2014 2:37 pm

Even among we Bogleheads, which you didn't specify, it seems to me as if the most difficult thing is how much to save, and based on breathless media reports about the upcoming retirement crisis, it seems to be even more so on average for much of the rest of the population.

It's hard not to spend income, especially when so many other people are demonstrating the superiority of their own by spending and spending and spending. Some of them don't even have superior income. They're just faking it until they're making it, if I may paraphrase certain Amway distributors.

I voted for that as hardest not only because it's very much an emotional issue, but also because with respect to retirement, in today's world, it's the first decision most of us face, and for 20 - 30 - 40 years it's an ongoing decision, plus it's the biggest decision, and even in our USian society it's one that if chosen to be a lot causes others to deride us.

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stickman731
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Re: what is hardest financial descion?

Post by stickman731 » Sat May 10, 2014 2:57 pm

Telling your adult children no when they ask for a loan.

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Re: what is hardest financial descion?

Post by livesoft » Sat May 10, 2014 3:05 pm

Another "when to retire" vote from me.
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Re: what is the hardest financial decision?

Post by BTDT » Sat May 10, 2014 3:26 pm

When to leave a great paying job that I enjoy for retirement. Pulled the rip cord Wednesday at 67, and time will tell :oops:
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Re: what is the hardest financial decision?

Post by Grt2bOutdoors » Sat May 10, 2014 3:38 pm

How much to save and it's partner - how much to spend. Temptation is all around.
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Re: what is the hardest financial decision?

Post by SGM » Sat May 10, 2014 4:22 pm

When to retire is the hardest decision. I finally did make a decision. I worked part time over the last two years and that has been helpful. I have created a plan and am happy with it. For me though it is not so much a financial decision as a psychosocial decision. I have a good handle on withdrawals and will delay SS. Timing for an SPIA is a question that I am wrestling a little with but that is 4 to 14 years after retirement.

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Re: what is the hardest financial decision?

Post by jginseattle » Sat May 10, 2014 7:35 pm

Withdrawal rate. A lot of people don't even want to think about it. It's a big issue.

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Re: what is the hardest financial decision?

Post by peppers » Sat May 10, 2014 7:46 pm

When to retire. I have looked at it 3 times in the last 10 years and just when it looks like the finish line is within striking distance, another issue arises.
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Re: what is the hardest financial decision?

Post by Lafder » Sat May 10, 2014 8:55 pm

When to move money and where to, rebalancing. Or, where to put future contributions when work plans change.

I try to save as much as I can, and I am not close to retiring yet. My answer may change with time.

Lafder

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Re: what is the hardest financial decision?

Post by poker27 » Sat May 10, 2014 9:02 pm

I would imagine it would depend on the current lifestyle of the person. Currently, I'm lucky enough to have enough to put some loot away, so I worry about what I put it into. Years back when I wasn't making as much, I was worried about how much I was saving.

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Re: what is the hardest financial decision?

Post by beyou » Sat May 10, 2014 9:16 pm

"When to retire" and "how much to save" are very closely related !

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Re: what is the hardest financial decision?

Post by heyyou » Sat May 10, 2014 10:54 pm

because it's a continual decision, a constant striving to find the right balance between saving and spending
especially when so many other people are demonstrating the superiority of their own by spending and spending and spending.
In retirement, continuing to Live Within Your Means is a remaining vestige of your working years. No commute, no job, no boss, no paycheck, but LWYM endures.

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Re: what is the hardest financial decision?

Post by VictoriaF » Sat May 10, 2014 11:12 pm

heyyou wrote:In retirement, continuing to Live Within Your Means is a remaining vestige of your working years. No commute, no job, no boss, no paycheck, but LWYM endures.
It's not necessarily true. When you work, you don't have time to go out and travel a lot. When you don't work, all kinds of previously restricted adventures become available, and some of them are not cheap.

Victoria
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Re: what is the hardest financial decision?

Post by GerryL » Sat May 10, 2014 11:32 pm

I chose Other, although some might say Withdraw rate would be what I am angsting over.

I am now constantly looking for information to help me understand the best way to create a "paycheck" for myself from my investments now that my employment paycheck is about to stop showing up. It's not really about the rate, though, it's about the mechanics and how to do it in an intelligent (e.g., tax efficient, simple) way. I expect to get most of the money I need to live on from SS and an annuity (eventually), but I need to figure out how to create an adequate flow of funds from investments into cash for when I do want/need to dip into my savings.

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Re: what is the hardest financial decision?

Post by William4u » Sun May 11, 2014 1:45 am

I said "other," since the most important and most difficult financial decision is also a non-financial one: the choice to marry and stay married to the same person until you die. This one decision impacts so many financial and non-financial aspect of life, and it is a complicated decision that is quite difficult.

Evidence of this decision's difficulty is all around us, and evidence of its financial impacts are just as apparent. Most major decisions after that one are made as a team, and the efficacy of this team dominates the rest of one's life.

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Re: what is the hardest financial decision?

Post by dumbbunny » Sun May 11, 2014 2:09 am

"Other" - Staying in your home that you have raised a family in or shop for an assisted living care center.
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Re: what is the hardest financial decision?

Post by obgyn65 » Sun May 11, 2014 4:41 am

Withdrawal rate is the most important. In my view, all the other options depend on it e.g. when to take SS, AA, how much to pay for an SPIA, etc.
"The two most important days in someone's life are the day that they are born and the day they discover why." -John Maxwell

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Re: what is the hardest financial decision?

Post by IowaFarmBoy » Sun May 11, 2014 5:02 am

For me, deciding whether to buy long term care and which product was the hardest I have had to make. I was buying a product that I hopefully wouldn't use for 30+ years out, if ever. Really hard to project what I might need at that point. On the other hand, I might need it tomorrow if something unfortunate happened.

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Re: what is the hardest financial decision?

Post by DaleMaley » Sun May 11, 2014 8:04 am

For me, staying the course through the Tech Crash of 2000 and the Sub-Prime Crash of 2008 were tough. I also find it hard to annually rebalance when the stock market is really doing well.

For other people, I have seen it tough to decide how to invest money received from the death of a family member. I have a family member who struggles with this one. I have also seen co-workers way too much over-weighted in their company's stock versus diversifying.
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Re: what is the hardest financial decision?

Post by vested1 » Sun May 11, 2014 8:28 am

I would imagine "When to retire" would have been #1 if listed. For me and my wife that means weighing a deep dissatisfaction with our current employers against the very real disadvantages of pulling the pin early and having fewer options. If either of our employers treated their employees well it would be a lot easier to stick with our plan. Retirement in your early 60's is complicated by critical decisions concerning SS claiming strategies, how much to save, AA decisions, age discrimination in finding another job, and all of the others listed in this poll. A wrong choice concerning any one of these has the potential to derail a well made plan.

It helps to remind oneself that failing to save would have made the consequences much worse.

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Re: what is the hardest financial decision?

Post by Johm221122 » Sun May 11, 2014 8:30 am

When to retire should have been there but I'm not there yet so I missed it :oops:
John

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Re: what is the hardest financial decision?

Post by midareff » Sun May 11, 2014 8:37 am

You missed my hardest..... Do I have enough to tell the boss it's been fun but ......... on xyz date I'm retiring.

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Re: what is the hardest financial decision?

Post by VictoriaF » Sun May 11, 2014 8:41 am

midareff wrote:You missed my hardest..... Do I have enough to tell the boss it's been fun but ......... on xyz date I'm retiring.
In my case, it's a bit different. I work for a really good guy, but I can't tell him that I am retiring until I am ready to make the "announcement."

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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Re: what is the hardest financial decision?

Post by Achelois » Sun May 11, 2014 9:00 am

I put "other". Agree with some of the other posters: zeroing in on a definite retirement date.

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Re: what is the hardest financial decision?

Post by midareff » Sun May 11, 2014 9:23 am

VictoriaF wrote:
midareff wrote:You missed my hardest..... Do I have enough to tell the boss it's been fun but ......... on xyz date I'm retiring.
In my case, it's a bit different. I work for a really good guy, but I can't tell him that I am retiring until I am ready to make the "announcement."

Victoria

I gave them (a semi-paralyzed municipal government) a few years lead time prior to a 64 y/o retirement after 29 years of service. It was a highly specialized function requiring unusual skill and knowledge sets. My right arm got my chair, as planned, but had to do both jobs for over a year to get his chair filled. It's two years now and he is still struggling to get his right arm (the new guy) up to speed. It takes a few years of on the job specialized training and experience. My right arm was/is a great guy and deserved much better transition support than he got.

placeholder
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Re: what is the hardest financial decision?

Post by placeholder » Sun May 11, 2014 11:51 am

For much of my life I was afraid of my money that is afraid that I would make mistakes and all that I had worked for would vanish so I did nothing for a long time so the hardest was to overcome that at and get it out of the bank accounts and CDs and get it into a diversified portfolio.

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pjstack
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Re: what is the hardest financial decision?

Post by pjstack » Sun May 11, 2014 6:49 pm

I checked Asset Allocation. It's really just a guess, isn't it? At least it was for me.
pjstack

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dratkinson
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Re: what is the hardest financial decision?

Post by dratkinson » Mon May 12, 2014 2:52 pm

Other: how to invest wisely.

Everything else I had already figured out, or comes later as a subset of wise investing.
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Re: what is the hardest financial decision?

Post by irishbear99 » Mon May 12, 2014 7:50 pm

I chose "other." The most difficult financial decision I'm facing currently is how to balance current needs/wants with future needs/wants, especially when I don't make enough yet to be able to throw as much money as I'd like into each category. So, I have to prioritize, and hope the decisions I'm making are the right ones.

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Re: what is the hardest financial decision?

Post by john94549 » Mon May 12, 2014 8:38 pm

The hardest financial decision is always that which looms. Forty years ago, the hardest financial decision involved purchasing a home. Twenty years ago, the hardest decision was whether to strike off on my own and become a solo practitioner. Today, the hardest decision is how to manage assets in retirement.

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Re: what is the hardest financial decision?

Post by Ged » Mon May 12, 2014 9:06 pm

For me the hardest decision has been how to handle Roth conversion in early retirement. There are a lot of moving parts and it's not clear how best to do it. It's not like it's a single decision - it's more like coming up with a strategy where each step involves a decision.

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Re: what is the hardest financial decision?

Post by JonnyDVM » Mon May 12, 2014 9:28 pm

I would say :

1) How much to save. We are saving a lot compared to others. We still have a lot to spend but maybe we should be saving more? Maybe I'll get hit by a bus in 6 years and really really regret not spending more. Maybe I'll live to 120 (scientific breakthrough to retard the aging process?) and have grossly underestimated how much to save. What's everyone else going to do to retire? If you look around you can clearly see most people aren't saving enough or aren't saving at all. Heck many people my age can barely make their monthly student loan payments. That's a huge looming problem. I have a feeling the end result is going to be higher tax rates down the road therefore maybe we should figure that into our saving equation? Also, one wants to live a life free of regret and over saving will lead to missed opportunities. Moral of the story: toughest to reconcile.

2) insurance. I feel like we are overinsured. Life, disability, umbrella, it adds up. Do we really need all of it? I'm not so sure. I have it because I'm told we should. Most people don't have it. Disability insurance in particular is really really expensive. I'm not getting rid if it. It just irks me to see a huge chunk of money pulled out of our checking every month for insurance that I'll probably never use.
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Go Blue 99
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Re: what is the hardest financial decision?

Post by Go Blue 99 » Wed May 14, 2014 10:05 am

For us, it's been how to allocate our leftover savings. Pay off mortgage? Pay off auto loan? Pay off student loan? Keep in cash? Invest in taxable accounts? Invest in 529? etc.

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Re: what is the hardest financial decision?

Post by The Wizard » Wed May 14, 2014 10:25 am

Late to the thread and yes, When To Retire was the hardest decision for me. Original date was October, 2012 (I posted a sign on the door from my garage to the house to remind me!). But work was too interesting as that date approached, so I put it off.
Second attempt in March 2013 succeeded. :)

Oddly, I had no qualms about annuitizing around half of my tax-sheltered accumulation to generate a decent monthly income stream. But I had been planning this approach for years and was eager to get on with it...
Attempted new signature...

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Re: what is the hardest financial decision?

Post by Bustoff » Wed May 14, 2014 11:00 am

I chose Withdraw rate-i want to spend my money but not go broke.

Now that I think about it I should have chosen "other" because it's more of combination of things like trying to figure out if relocating to San Diego would put too much stress on our nest egg.

If anyone has ever seen Lost in America, where Julie Haggerty loses the entire nest egg in Vegas, you can appreciate the importance of the nest egg:
David: Maybe I didn’t explain the nest egg to you. If you had understood … You know it’s a very sacred thing, the nest egg, and if you had understood the Nest Egg Principle, as we will now call it in the first of many lectures that you will get, because if we are ever to acquire another nest egg, we both have to understand what it means. The nest egg is a protector, like a god, and we sit under the nest egg and we are protected by it. Without it, no protection. Want me to go on? It pours rain. Hey! The rain hits the egg and pours off the side. Without the egg? Wet. It’s over. But you didn’t understand it and that’s why we’re where we are.

Linda: I understood the nest egg …

David: Please do me a favor. Don’t use the word. You may not use that word. It is off-limits to you. Only those in this house that understand the nest egg may use it. And don’t use any part of it either. Don’t use “nest.” Don’t use “egg.” You’re out in the forest, you can point - the bird lives in a round stick. And … and … you have "things" over easy with toast.

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Re: what is the hardest financial decision?

Post by harrychan » Wed May 14, 2014 11:47 am

Figuring out when I die.
This is not legal or certified financial advice but you know that already.

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Alskar
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Re: what is the hardest financial decision?

Post by Alskar » Thu May 15, 2014 5:08 pm

Hardest for me: Do I have enough money to retire?
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