Retired Boglehead obsession with money- devil's advocate

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
afan
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Re: Retired Boglehead obsession with money- devil's advocate

Post by afan » Wed Aug 16, 2017 8:35 am

Stagflation that reduces the real value of the portfolio by 50% or worse.
Large increase in expenses: medical costs not covered by Medicare, increases in Medicare premiums, higher costs to have people do for you things you used to do for yourself. THEN you head for a nursing home with a quarter of that tidy portfolio.

Or... Work longer, save more money, have a shorter retirement.

I find no comfort in the notion that I have only a few percent chance of outliving my assets. I would like to drive that chance to as close to zero as I can. I want a conservative plan that has me a net saver throughout retirement. Plan to touch none of the capital and reinvest a significant share of the after tax income.

I.would rather work at 71, when my calculations say I don't need to, than discover at 91 that I am out of money.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

freebeer
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Re: Retired Boglehead obsession with money- devil's advocate

Post by freebeer » Wed Aug 16, 2017 9:03 am

afan wrote:
Wed Aug 16, 2017 8:35 am
...
I.would rather work at 71, when my calculations say I don't need to, than discover at 91 that I am out of money.
This is the key point. But to rephrase it in terms of OP's statistics (assuming a male) this effectively is the same as saying:

"I would rather keep working into my 70's, wherein I have over 50% chance of dying, when my calculations say I don't need to, than discover, in the highly unlikely event (approx 5%) chance) that I'm still around at 91 AND my calculations proved overly optimistic so I'm out of money (say 5% chance, so compound chance of not being alive and broke would have been 99.75%)"

The point being that driving the chances of running out of money at a point in life where one is also highly unlikely to be alive from "highly unlikely" to "as close to zero as possible" at the expense of continued drudgery during those precious remaining years where one IS likely to be alive... is arguably irrational.

It is of course a personal decision (and for some of us work isn't drudgery) but OP is I think doing us all a service by pointing out that some of us may be a bit obsessive about "safety".

wrongfunds
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Re: Retired Boglehead obsession with money- devil's advocate

Post by wrongfunds » Wed Aug 16, 2017 11:48 am

But 99.75% is still not 100%! Funny thing is when it comes to future, one can never be 100% certain. Even if you had $100M, the raunaway inflation or fraud could make it worthless. chances of that happening is close to zero BUT NEVER ZERO.

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VictoriaF
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Re: Retired Boglehead obsession with money- devil's advocate

Post by VictoriaF » Wed Aug 16, 2017 3:04 pm

protagonist wrote:
Mon Aug 14, 2017 3:34 pm
I'm playing devil's advocate here.

I'm addressing this to what I think is representative of many self-proclaimed retired "Bogleheads" who have won the game.

And by winning the game, I don't mean the extremely rich. But rather those, after working hard all their lives for a happy retirement, shouldn't worry much about money anymore.

Example: a 70 y o male with $1 million in assets and $30K annual income. That is probably vaguely representative of many who frequent this site.
...
I would have replied but it's for men only.

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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protagonist
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Re: Retired Boglehead obsession with money- devil's advocate

Post by protagonist » Wed Aug 16, 2017 3:48 pm

VictoriaF wrote:
Wed Aug 16, 2017 3:04 pm
protagonist wrote:
Mon Aug 14, 2017 3:34 pm
I'm playing devil's advocate here.

I'm addressing this to what I think is representative of many self-proclaimed retired "Bogleheads" who have won the game.

And by winning the game, I don't mean the extremely rich. But rather those, after working hard all their lives for a happy retirement, shouldn't worry much about money anymore.

Example: a 70 y o male with $1 million in assets and $30K annual income. That is probably vaguely representative of many who frequent this site.
...
I would have replied but it's for men only.

Victoria
haha....

Sorry for not using a female example. We die sooner. So the numbers better emphasize my point.

Maybe you women should worry more about money because you live longer. Feel free to run the numbers.
Last edited by protagonist on Wed Aug 16, 2017 4:03 pm, edited 1 time in total.

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protagonist
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Re: Retired Boglehead obsession with money- devil's advocate

Post by protagonist » Wed Aug 16, 2017 4:02 pm

afan wrote:
Wed Aug 16, 2017 8:35 am
Stagflation that reduces the real value of the portfolio by 50% or worse.
If you have enough (like the hypothetical example I gave), you can comfortably invest quite conservatively and mitigate much of that risk. The portion of your portfolio that remains in the stock market is always at risk of falling 50% or worse (potentially 99% plus). I keep enough money invested conservatively (I-bonds, long-term CDs with generous EWPs, etc) as I feel I will, under most scenarios, possibly need to maintain my lifestyle, or at least not suffer much in most foreseeable scenarios. The rest I gamble in the stock market. So my worry level is low.



afan wrote:
Wed Aug 16, 2017 8:35 am
I find no comfort in the notion that I have only a few percent chance of outliving my assets.....I.would rather work at 71, when my calculations say I don't need to, than discover at 91 that I am out of money.
And if you enjoy working as much as you would being retired, and if you are still alive at 71, that is an excellent option. But you never really know what the "percent chance" is of you outliving your assets. The future is....well....the future. The world of 2037 is pretty much unknowable today. We are all bozos on this bus, and you just have to do what you hope will work out best for you.

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VictoriaF
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Re: Retired Boglehead obsession with money- devil's advocate

Post by VictoriaF » Wed Aug 16, 2017 4:11 pm

protagonist wrote:
Wed Aug 16, 2017 3:48 pm
VictoriaF wrote:
Wed Aug 16, 2017 3:04 pm
protagonist wrote:
Mon Aug 14, 2017 3:34 pm
I'm playing devil's advocate here.

I'm addressing this to what I think is representative of many self-proclaimed retired "Bogleheads" who have won the game.

And by winning the game, I don't mean the extremely rich. But rather those, after working hard all their lives for a happy retirement, shouldn't worry much about money anymore.

Example: a 70 y o male with $1 million in assets and $30K annual income. That is probably vaguely representative of many who frequent this site.
...
I would have replied but it's for men only.

Victoria
haha....

Sorry for not using a female example. We die sooner. So the numbers better emphasize my point.

Maybe you women should worry more about money. Feel free to run the numbers.
I have run my numbers and have not found any reasons to worry. Here are some of my observations after 2 years and 11 months in retirement:
1. I am pleased with my financial planning and expect to do well in the majority of foreseeable situations.
2. In my spreadsheets I have created a nice sustainable annual budget, but I underspend it.
3. I have conditioned myself to travel whenever I want to travel, but I can't bring myself to do middle class travel. I travel like a student.
4. Occasionally, I waste a lot of time chasing minute savings, e.g., trying to find a better CD rate or opening a bank account to get a bonus.
5. Occasionally, I am reluctant to spend on a product or service that would save my time.
6. The Bogleheads Forum is a great resource for establishing a prudent investment strategy. BUT it's a dangerous place in its tendency to suggest unnecessary activities which seem prudent.
7. My challenge is not earning, spending or saving. My main challenge is finding an "interrupt signal" that would remind me that I have the money to spend on activities I don't want to do myself, and not to game banks and credit cards for minor gains.

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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bertilak
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Re: Retired Boglehead obsession with money- devil's advocate

Post by bertilak » Wed Aug 16, 2017 4:17 pm

Let's not confuse obsession with prudent management.

It's probably a sliding scale but there is a difference.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet

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protagonist
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Re: Retired Boglehead obsession with money- devil's advocate

Post by protagonist » Thu Aug 17, 2017 8:43 am

VictoriaF wrote:
Wed Aug 16, 2017 4:11 pm
protagonist wrote:
Wed Aug 16, 2017 3:48 pm
VictoriaF wrote:
Wed Aug 16, 2017 3:04 pm
protagonist wrote:
Mon Aug 14, 2017 3:34 pm
I'm playing devil's advocate here.

I'm addressing this to what I think is representative of many self-proclaimed retired "Bogleheads" who have won the game.

And by winning the game, I don't mean the extremely rich. But rather those, after working hard all their lives for a happy retirement, shouldn't worry much about money anymore.

Example: a 70 y o male with $1 million in assets and $30K annual income. That is probably vaguely representative of many who frequent this site.
...
I would have replied but it's for men only.

Victoria
haha....

Sorry for not using a female example. We die sooner. So the numbers better emphasize my point.

I have run my numbers and have not found any reasons to worry. Here are some of my observations after 2 years and 11 months in retirement:
1. I am pleased with my financial planning and expect to do well in the majority of foreseeable situations.
Fantastic! Congratulations!
2. In my spreadsheets I have created a nice sustainable annual budget, but I underspend it.
I haven't. Too much work. I just wing it and hope for the best..
3. I have conditioned myself to travel whenever I want to travel, but I can't bring myself to do middle class travel. I travel like a student.
Old habits die hard. That said, there is a sort of richness involved in student travel that is lost when you stay in hotels and the like. I struck up quite a few friendships, one or two which still persist, and a budding romance or two as well, when I used to routinely stay in hostels and tents. Comfort has its price. These days, I am willing to pay it, to an extent.
4. Occasionally, I waste a lot of time chasing minute savings, e.g., trying to find a better CD rate or opening a bank account to get a bonus.
FWIW, so do I. I started this thread partly as a tool for self-examination. As above, old habits die hard.
5. Occasionally, I am reluctant to spend on a product or service that would save my time.
Me too. Part of that is pride. For example, now that I have time on my hands, I feel lazy hiring people to do home projects that I can do myself. And I take pride in the results if I am successful. Plus I learn skills, which is rewarding. The flip side is self-flagellation when I fail.
6. The Bogleheads Forum is a great resource for establishing a prudent investment strategy. BUT it's a dangerous place in its tendency to suggest unnecessary activities which seem prudent.
That's an excellent observation.

7. My challenge is not earning, spending or saving. My main challenge is finding an "interrupt signal" that would remind me that I have the money to spend on activities I don't want to do myself, and not to game banks and credit cards for minor gains.
Ditto. In fact, I haven't opened another credit card or gone for another bank bonus in about a year, despite the ease of acquiring cash and points. I have points up the wazoo. I figure I have enough for quite awhile. Yeah, it's easy money, but it is still work, and expenditure of energy, for something that I don't need. He who dies with the most toys does not necessarily win.

And thanks for not calling me a sexist pig for using a male example.

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VictoriaF
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Re: Retired Boglehead obsession with money- devil's advocate

Post by VictoriaF » Thu Aug 17, 2017 9:29 am

protagonist wrote:
Thu Aug 17, 2017 8:43 am
And thanks for not calling me a sexist pig for using a male example.
You redeemed yourself by endorsing my idiosyncratic money obsessions.

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: Retired Boglehead obsession with money- devil's advocate

Post by Strayshot » Thu Aug 17, 2017 10:13 am

In answering the question posed by this thread, I will throw out a favorite Buffet quote:

"There seems to be some perverse human characteristic that likes to make easy things difficult. It's likely to continue that way."

When you have won the game, it's easy. People who have won the game probably don't like "easy" and will therefore try to find a way to make things more difficult. If not difficult, certainly more complex. In the case of retirement, the difficulty may be in letting go of the obsession to wonder if there is enough and run and re-run the numbers. Or as some have mentioned in this thread, finding the fortitude to buy that condo.

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protagonist
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Re: Retired Boglehead obsession with money- devil's advocate

Post by protagonist » Thu Aug 17, 2017 6:35 pm

VictoriaF wrote:
Thu Aug 17, 2017 9:29 am
protagonist wrote:
Thu Aug 17, 2017 8:43 am
And thanks for not calling me a sexist pig for using a male example.
You redeemed yourself by endorsing my idiosyncratic money obsessions.

Victoria
keep the change.

heybro
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Re: Retired Boglehead obsession with money- devil's advocate

Post by heybro » Fri Aug 18, 2017 1:26 am

I will say that I do get frustrated at the inability to define 'enough.'

The answer to 'how much should I save for retirement' is often 'as much as you can!'
But you are talking to a boglehead here. Most of the population needs to be told 'as much as you can' but I actually need to be told when I should start spending money because I really only pay off all debts and save or invest it all.

I understand we cannot know the future but we should be able to know when we are reasonably close to winning.

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protagonist
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Re: Retired Boglehead obsession with money- devil's advocate

Post by protagonist » Wed Nov 13, 2019 10:41 am

9-5 Suited wrote:
Mon Aug 14, 2017 4:45 pm

I'm lucky to have a spouse who is more oriented to spending today since I'm more geared toward saving for tomorrow. The yin and yang keeps us a nice equilibrium, and like you said the odds that we'll ever completely fail financially are incredibly low.
Interesting thought! For a compulsive saver, an extravagant partner may not be a problem (as one might first assume), but rather may be an asset to create balance in your lives. As long as you are both comfortable with the idea of compromise and letting go and don't fight over money.

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protagonist
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Re: Retired Boglehead obsession with money- devil's advocate

Post by protagonist » Wed Nov 13, 2019 11:04 am

Will do good wrote:
Mon Aug 14, 2017 9:12 pm
livesoft wrote:
Mon Aug 14, 2017 4:18 pm
This thread needs some music. The only question is whether you listen to Pink Floyd's Time first or Money first. Not a bad album with the eclipse happening soonish.
Pink Floyd – Time
Ticking away the moments that make up a dull day
Fritter and waste the hours in an offhand way.
Kicking around on a piece of ground in your home town
Waiting for someone or something to show you the way.

Tired of lying in the sunshine staying home to watch the rain.
You are young and life is long and there is time to kill today.
And then one day you find ten years have got behind you.
No one told you when to run, you missed the starting gun.

So you run and you run to catch up with the sun but it's sinking
Racing around to come up behind you again.
The sun is the same in a relative way but you're older,
Shorter of breath and one day closer to death.

Every year is getting shorter; never seem to find the time.
Plans that either come to naught or half a page of scribbled lines
Hanging on in quiet desperation is the English way
The time is gone, the song is over,
Thought I'd something more to say.

Home
Home again
I like to be here
When I can

When I come home
Cold and tired
It's good to warm my bones
Beside the fire

Far away
Across the field
The tolling of the iron bell
Calls the faithful to their knees
To hear the softly spoken magic spell
The writer of that song, Roger Waters, is 76 years old now. He was 29 when he wrote it.
I'd be very curious to ask him if he re-wrote it today, how (if at all) he would change it.

Fortunately, I feel like I escaped the fate of Waters' protagonist in his song, perhaps in part by being exposed to warnings like his while young.

Same with Bob Dylan's "My Back Pages"...."I was so much older then, I'm younger than that now". etc. written at age 22.

I completely identified with Dylan's lyrics when I was 22, which makes me sort of laugh today.

Paul McCartney's friends must get a good laugh out of "When I'm 64", now that he is 77.

As David Bowie said, "Aging is a remarkable process whereby we become the person we always should have been."
Last edited by protagonist on Wed Nov 13, 2019 12:02 pm, edited 3 times in total.

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protagonist
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Re: Retired Boglehead obsession with money- devil's advocate

Post by protagonist » Wed Nov 13, 2019 11:13 am

lightheir wrote:
Mon Aug 14, 2017 11:35 pm


No, but the cold, hard reality of it now is that elders with financial resources can easily burn through $250k+ in nursing home fees in the last two years of their lives in a nursing home, so unless your parents have a lot more than that, you should adjust your inheritance expectations to account for it.
10%: The percentage of people who enter a nursing home who will stay there five or more years.

65%: The percentage of people who entered a nursing home who died within one year of admission.

Five months: The typical length of nursing-home stay for patients who eventually died in the nursing home.

$1,831: Average annual premium for long-term care policy purchased by person age 55 or younger, at coverage start date. (Policy provides a daily benefit of $150, four to five years of coverage in home and institutional settings with a 90-day waiting period, and 5% automatic compound inflation protection.)

$3,421: Average annual premium for same policy purchased by an individual age 70-74.

$162,425: Annual cost of nursing home care, Manhattan, N.Y.

$60,773: Annual cost of nursing home care, Des Moines, Iowa.

$86,140: Annual cost of nursing home care, Tampa, Fla.
https://www.morningstar.com/articles/56 ... -term-care
(The quoted stats are from 2012....thus somewhat outdated....)

It seems odd that a 70-74 y.o. could purchase a LT care policy for only $3421/year. But actually I suppose not, if 65% of people who enter a nursing home die within a year (average 5 months).

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protagonist
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Re: Retired Boglehead obsession with money- devil's advocate

Post by protagonist » Wed Nov 13, 2019 11:39 am

afan wrote:
Wed Aug 16, 2017 8:35 am
Stagflation that reduces the real value of the portfolio by 50% or worse.
Which is why, if I was that hypothetical 70 y o with $1M in assets and $30K/yr income, I would put at least half of it in CDs with generous EWPs, I-bonds etc. that should pretty much keep up with inflation, and would never buy more stock. With half in the stock market if the market lost 99% or more of its value day one and never recovered , and if that person lived to 90 he/she would have about $55K/year pretty much guaranteed in real terms to live off, regardless of what happened to the stock market. If he/she lived to 100 that number would be about $47K/year guaranteed. And that is given the most dire market conditions that could be imagined and half his/her assets in the market. With only 20% in the market the numbers would increase to $70K/yr to age 90. With a less catastrophic 50% crash day one that never recovered and 50% in the market it would more or less guarantee $67,500/year to age 90.

And all that assumes he/she has no home equity to tap into or desire to sell their home and downsize with age. The examples above are extreme in terms of financial collapse (day one) and presuppose unusual longevity. In other words, unless the person was foolish, there would be very, very little cause for concern, even under the most dire financial conditions it may be cause for some lifestyle compromise but would hardly leave them destitute.
Last edited by protagonist on Wed Nov 13, 2019 12:10 pm, edited 1 time in total.

financiallycurious
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Re: Retired Boglehead obsession with money- devil's advocate

Post by financiallycurious » Wed Nov 13, 2019 12:02 pm

By this logic, in my mid-thirties I could stop saving in my 401k, because assuming 3-4% real growth on the existing balance, I would have well over $1m in today's dollars when I turn 70. Even if I only saved 5% in my 401k to get my employer match instead of $19,000 per year, that might mean the difference between family trip to a foreign country every summer and Hawaii every winter break, instead of national parks in the summer and a local ski trip in the winter. Is that advisable? Because my gut says no, keep saving while the money is rolling in, but it would sure be fun to spend it now.

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Re: Retired Boglehead obsession with money- devil's advocate

Post by protagonist » Wed Nov 13, 2019 12:14 pm

financiallycurious wrote:
Wed Nov 13, 2019 12:02 pm
By this logic, in my mid-thirties I could stop saving in my 401k, because assuming 3-4% real growth on the existing balance, I would have well over $1m in today's dollars when I turn 70.
Nope. Because you are assuming 3-4% real growth on the existing balance. You can't assume anything over the course of the next 35 years....anything can happen. Job loss, divorce, health issues, financial collapse or stagnation or just overestimating growth.
The only thing you know is how much money you have today.
Last edited by protagonist on Wed Nov 13, 2019 12:18 pm, edited 1 time in total.

goblue100
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Re: Retired Boglehead obsession with money- devil's advocate

Post by goblue100 » Wed Nov 13, 2019 12:17 pm

protagonist wrote:
Wed Nov 13, 2019 11:04 am
Will do good wrote:
Mon Aug 14, 2017 9:12 pm
livesoft wrote:
Mon Aug 14, 2017 4:18 pm
This thread needs some music. The only question is whether you listen to Pink Floyd's Time first or Money first. Not a bad album with the eclipse happening soonish.
Pink Floyd – Time
Ticking away the moments that make up a dull day
Fritter and waste the hours in an offhand way.
Kicking around on a piece of ground in your home town
Waiting for someone or something to show you the way.

Tired of lying in the sunshine staying home to watch the rain.
You are young and life is long and there is time to kill today.
And then one day you find ten years have got behind you.
No one told you when to run, you missed the starting gun.

So you run and you run to catch up with the sun but it's sinking
Racing around to come up behind you again.
The sun is the same in a relative way but you're older,
Shorter of breath and one day closer to death.

Every year is getting shorter; never seem to find the time.
Plans that either come to naught or half a page of scribbled lines
Hanging on in quiet desperation is the English way
The time is gone, the song is over,
Thought I'd something more to say.

Home
Home again
I like to be here
When I can

When I come home
Cold and tired
It's good to warm my bones
Beside the fire

Far away
Across the field
The tolling of the iron bell
Calls the faithful to their knees
To hear the softly spoken magic spell
The writer of that song, Roger Waters, is 76 years old now. He was 29 when he wrote it.
I'd be very curious to ask him if he re-wrote it today, how (if at all) he would change it.
So, this has been my favorite Pink Floyd song for the last 15 years. Meant little to me when I listened to it in my teens. I've been amazed over the last 10 years that 29 year old Roger Watters had the foresight to feel this:
"So you run and you run to catch up with the sun but it's sinking
Racing around to come up behind you again.
The sun is the same in a relative way but you're older,
Shorter of breath and one day closer to death. "

I personally didn't "get" it until I was about 50.

To the OP, as others have stated, you don't get to a 7 figure portfolio on a moderate income without planning and "worrying" about money. Hard to turn it off, but I'm trying.
Financial planners are savers. They want us to be 95 percent confident we can finance a 30-year retirement even though there is an 82 percent probability of being dead by then. - Scott Burns

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Re: Boglehead obsession with money- devil's advocate

Post by Starper » Wed Nov 13, 2019 12:22 pm

Lucky Lemon wrote:
Mon Aug 14, 2017 3:47 pm
livesoft wrote:
Mon Aug 14, 2017 3:37 pm
My 18-year-old wife has to worry, doesn't she?
No, but your current wife's future 24 year old husband does :twisted:
His wife's boyfriend doesn't like that he spends their future inheritance.

dcabler
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Re: Retired Boglehead obsession with money- devil's advocate

Post by dcabler » Wed Nov 13, 2019 12:23 pm

goblue100 wrote:
Wed Nov 13, 2019 12:17 pm
protagonist wrote:
Wed Nov 13, 2019 11:04 am
Will do good wrote:
Mon Aug 14, 2017 9:12 pm
livesoft wrote:
Mon Aug 14, 2017 4:18 pm
This thread needs some music. The only question is whether you listen to Pink Floyd's Time first or Money first. Not a bad album with the eclipse happening soonish.
Pink Floyd – Time
Ticking away the moments that make up a dull day
Fritter and waste the hours in an offhand way.
Kicking around on a piece of ground in your home town
Waiting for someone or something to show you the way.

Tired of lying in the sunshine staying home to watch the rain.
You are young and life is long and there is time to kill today.
And then one day you find ten years have got behind you.
No one told you when to run, you missed the starting gun.

So you run and you run to catch up with the sun but it's sinking
Racing around to come up behind you again.
The sun is the same in a relative way but you're older,
Shorter of breath and one day closer to death.

Every year is getting shorter; never seem to find the time.
Plans that either come to naught or half a page of scribbled lines
Hanging on in quiet desperation is the English way
The time is gone, the song is over,
Thought I'd something more to say.

Home
Home again
I like to be here
When I can

When I come home
Cold and tired
It's good to warm my bones
Beside the fire

Far away
Across the field
The tolling of the iron bell
Calls the faithful to their knees
To hear the softly spoken magic spell
The writer of that song, Roger Waters, is 76 years old now. He was 29 when he wrote it.
I'd be very curious to ask him if he re-wrote it today, how (if at all) he would change it.
So, this has been my favorite Pink Floyd song for the last 15 years. Meant little to me when I listened to it in my teens. I've been amazed over the last 10 years that 29 year old Roger Watters had the foresight to feel this:
"So you run and you run to catch up with the sun but it's sinking
Racing around to come up behind you again.
The sun is the same in a relative way but you're older,
Shorter of breath and one day closer to death. "

I personally didn't "get" it until I was about 50.

To the OP, as others have stated, you don't get to a 7 figure portfolio on a moderate income without planning and "worrying" about money. Hard to turn it off, but I'm trying.
Indeed! And if you also grew up in a family with very modest means, that also ends up having an impact. Perhaps not as much as somebody such as my father who grew up during the Great Depression, but it has an impact nonetheless.

InvestingGeek
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Re: Retired Boglehead obsession with money- devil's advocate

Post by InvestingGeek » Wed Nov 13, 2019 12:49 pm

To add to this, as you age and especially as you each retirement, apparently strength and extent of your social circles play an equally important role in life satisfaction as money, if not more. Studies show that mental and physical health as well as longevity are directly tied to social engagement (possibly a reason women live longer). That's what I'd focus on improving and expanding as worries about money abate.
Last edited by InvestingGeek on Wed Nov 13, 2019 12:53 pm, edited 1 time in total.

The Outsider
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Re: Retired Boglehead obsession with money- devil's advocate

Post by The Outsider » Wed Nov 13, 2019 12:52 pm

Happiness is positive cashflow

Pigeon
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Re: Retired Boglehead obsession with money- devil's advocate

Post by Pigeon » Wed Nov 13, 2019 2:47 pm

Having had a number of relatives and in-laws live well into their 90s, I worry far more about living too long than dying too young. Two spent a couple of years in nursing homes and I agree with the sentiment that the price of the nursing home doesn't necessarily correlate to the quality of care given. Being a caregiver in a nursing home is a dreadful, underpaid job no matter the monthly fees charged the resident.

On the other hand, another relative spent her final year in a memory care facility that was stellar, although very expensive. Money does provide some options, but unfortunately, it can't make you younger.

Pu239
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Re: Retired Boglehead obsession with money- devil's advocate

Post by Pu239 » Thu Nov 14, 2019 12:07 am

Worrying about money sure beats worrying about politics, world news, weather, natural disasters and what not. We are the lead actors in our own reality show. It's currently warm and sunny but the icy cold breath of the bear is ever near.

TresBelle65
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Re: Retired Boglehead obsession with money- devil's advocate

Post by TresBelle65 » Thu Nov 14, 2019 7:08 am

My 98 year old grandmother died last year, in a nursing home. She spent the last 6 years of her life there, a reasonably pleasant facility (as pleasant as these places can be), in a low cost area of the country, where nearby nursing students performed their internships and entertained the residents.

She outlived her money. The last asset to go was her home, sold off and the assets transferred to the nursing home (or the state, I do not really know which)...I believe after that, Medicaid or Medicare took over her expenses during her final years (?) . All I know is that she lived in her final years as reasonably comfortable as possible for someone her age, with her frailty.

Is this not typical in these situations? in the end, if there is nothing left, public assistance is the provider of last resort?

Topic Author
protagonist
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Re: Retired Boglehead obsession with money- devil's advocate

Post by protagonist » Thu Nov 14, 2019 9:21 am

goblue100 wrote:
Wed Nov 13, 2019 12:17 pm


So, this has been my favorite Pink Floyd song for the last 15 years. Meant little to me when I listened to it in my teens. I've been amazed over the last 10 years that 29 year old Roger Watters had the foresight to feel this:
"So you run and you run to catch up with the sun but it's sinking
Racing around to come up behind you again.
The sun is the same in a relative way but you're older,
Shorter of breath and one day closer to death. "

I personally didn't "get" it until I was about 50.

The 29 y o Waters had a rather dismal view of aging. (Not to fault him, I did as well. In fact, when I was 20 I doubted if I would live to 50).
At 67, I find my life is quite the opposite. I have never been this content. Rather than running to catch up with a sinking sun, I just live for today, thankful for what I have and not worrying about controlling factors that are beyond my control. I was so much older then. I'm younger than that now.

I would love to speak with Waters to see how, if at all, he would revise those lyrics through his 76 year old eyes.

But I digress. Further discussion of this should probably be in a Pink Floyd thread.

rich126
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Re: Retired Boglehead obsession with money- devil's advocate

Post by rich126 » Thu Nov 14, 2019 10:35 am

I'm glad some of the older threads get bumped up, otherwise I doubt I would have ever seen them.

Like many here, as I get closer to retirement, I look at the numbers frequently and ponder the possibilities. When I was in my 20s/30s/40s, I never cared. As one person recently posted, I never thought I'd live to retirement. Fortunately I did a decent job of saving but also tried to enjoy my money within limits. Spending on the smaller stuff but more careful on larger items such as avoiding expensive cars (I'd rather save the extra $20K+ and instead spend $1-2K a year for the next 10 years on ski trips or a trip to Europe).

Maybe it is being pessimistic but I still doubt I'll be one that lives happily to 80+. I think my fear is getting so close to retirement but then passing away before enjoying a single day of it. Most likely I'll retire in a bit over 3 years at 60. While I'm fortunate in that I can get health care whenever I want to start a small pension, the penalty for starting it before 60 is a bit high. I might retire at 59 and use COBRA for a year until I can get my benefits penalty free.

I don't have any needs to leave an inheritance since I don't have any children so that helps. I also never factor in receiving any inheritance from any relative. I'm guessing I'll get something from my father and it will be a nice bonus but the number won't be anything life changing and I would never ask about it.

People do as they gotta do. It is hard to change a young person much less one nearing retirement. (I'm not a music person but thanks for those lyrics.)

dbr
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Re: Boglehead obsession with money- devil's advocate

Post by dbr » Thu Nov 14, 2019 10:49 am

jebmke wrote:
Mon Aug 14, 2017 3:37 pm
Could be that the worriers are the minority who post about their worries. Maybe the rest are just finance junkies.
I agree. We don't worry about money and never have, and that is not because we are fabulously rich while supporting a miserly lifestyle. It is because we have and do use common sense to live beneath our means without being extreme about it. I suspect we are probably middle of the road relative to this forum.

I participate a lot here because some of it is an interesting intellectual problem, some of it is a pastime, and some of it is a genuine attempt to be helpful. The outcome of most of the debates here has no practical application to me at all. I mean things like tilting, LMP, withdrawal schemes, nuances of portfolio theory and so on. I don't care what the latest rate on CDs is or how much cash I have. We are a bit of frequent flyer miles junkies, but we just travel and don't worry about all the games that much. I own a Subaru and my wife owns a 16 year old something else, and I think people are fine driving whatever they want. Etc., etc.

delamer
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Re: Retired Boglehead obsession with money- devil's advocate

Post by delamer » Thu Nov 14, 2019 11:12 am

TresBelle65 wrote:
Thu Nov 14, 2019 7:08 am
My 98 year old grandmother died last year, in a nursing home. She spent the last 6 years of her life there, a reasonably pleasant facility (as pleasant as these places can be), in a low cost area of the country, where nearby nursing students performed their internships and entertained the residents.

She outlived her money. The last asset to go was her home, sold off and the assets transferred to the nursing home (or the state, I do not really know which)...I believe after that, Medicaid or Medicare took over her expenses during her final years (?) . All I know is that she lived in her final years as reasonably comfortable as possible for someone her age, with her frailty.

Is this not typical in these situations? in the end, if there is nothing left, public assistance is the provider of last resort?
My friend’s MIL is currently self-paying for an assisted-living apartment in a facility. She lives in her own one bedroom/one-bath apartment with a small living room.

She is going to run out of savings pretty soon and will then have to go on Medicaid (public assistance), because her Social Security and small pension alone won’t cover the monthly rent. At that time, she’ll be moved to a one room/one bath efficiency apartment that she’ll share with another resident.

So while she won’t be out in the street, she’ll lose any semblance of privacy and personal space. She’s old and a bit frail, but she is mentally alert.

I don’t have a problem with the policy; she’s fortunate to have the Medicaid backstop and her fellow taxpayers don’t have an obligation to keep her in the style that she’s accustomed to.

But is that the way any of us would want to spend our last days? Money isn’t the answer to all of life’s problems, but it gives you options, which in turn give you freedom to live the way you want to.

So, to answer your question, it doesn’t work out as well for everyone as it did for your grandmother.

michaeljc70
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Re: Retired Boglehead obsession with money- devil's advocate

Post by michaeljc70 » Thu Nov 14, 2019 11:55 am

From people I know, it seems people that have way more saved and planned for retirement worry about it more than people that have saved or planned little.

As an early retiree, my (minimal) worry is focused on the 18 years until my FRA. Or at least when I can collect SS at age 62. Once I have a regular check rolling in, I am sure I will be fine if disaster hasn't struck to that point. Social security should cover more than 50% of my expenses. I have to rely on investments though for 18 years.

Topic Author
protagonist
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Re: Boglehead obsession with money- devil's advocate

Post by protagonist » Thu Nov 14, 2019 10:45 pm

dbr wrote:
Thu Nov 14, 2019 10:49 am
jebmke wrote:
Mon Aug 14, 2017 3:37 pm
Could be that the worriers are the minority who post about their worries. Maybe the rest are just finance junkies.
I agree. We don't worry about money and never have, and that is not because we are fabulously rich while supporting a miserly lifestyle. It is because we have and do use common sense to live beneath our means without being extreme about it. I suspect we are probably middle of the road relative to this forum.

I participate a lot here because some of it is an interesting intellectual problem, some of it is a pastime, and some of it is a genuine attempt to be helpful. The outcome of most of the debates here has no practical application to me at all. I mean things like tilting, LMP, withdrawal schemes, nuances of portfolio theory and so on. I don't care what the latest rate on CDs is or how much cash I have. We are a bit of frequent flyer miles junkies, but we just travel and don't worry about all the games that much. I own a Subaru and my wife owns a 16 year old something else, and I think people are fine driving whatever they want. Etc., etc.
+1

Finridge
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Re: Retired Boglehead obsession with money- devil's advocate

Post by Finridge » Sat Nov 16, 2019 2:54 am

fsrph wrote:
Tue Aug 15, 2017 3:57 pm
A snippet from the article.

"Imagine spending a lifetime acquiring habits that offer the promise of a longer, happier and more fulfilling life. Then imagine that to have that fulfilling life, you suddenly must abandon all those habits."

http://www.marketwatch.com/story/how-yo ... 2017-05-09
Imagine you find that these habits (frugality, living within your means, focusing on what is truly important, avoiding the hedonistic treadmill, avoiding materialism, being proactive and planning for the future, etc.) don't just provide the *promise* of a longer, happier and fulfilling life in the future--but they create a longer, happier and fulfilling life right here and right now. That by following these habits you are happier than if you were not....

Well, I think that is me. And probably others here.

I'm not scrimping now so I can live like a drunken sailor later. I'm living the life that I want to live here and now.

IowaFarmBoy
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Re: Retired Boglehead obsession with money- devil's advocate

Post by IowaFarmBoy » Sat Nov 16, 2019 7:22 am

Ok, I'll play. I fit your generalization to some degree. I will probably retire next year at 62 with a pension, SS later and savings. Two of these three streams should be enough to cover our expenses so in some ways we are way over-saved and you seem to be advocating we expand our lifestyle but DW and I really don't feel a need to do so- we feel we are living a good life now. At some point, we may start giving away more but for now a cushion lets us sleep at night because of the unexpected things that are out there that can affect us over the rest of our lives. There is a reasonable chance that one of us will live into our 90s so that means we are planning for a 30 year period. Thirty years is a long time.

Here are some of what I perceive as the long-term risks that I want reserves for:
  • The OP implies that since it is unlikely that you will live to an old age, why plan for it? But many or us will live long lives. I don't want to live a long life and find I have run out of money.
  • Long term care- especially if it results in a situation where one of us is in LTC and the other is living an independent life. Our expenses would likely double.
  • Inflation- my pension is not indexed so there is so its value gradually declines. Our investments may or may not keep up with inflation.
  • Market performance/Sequence of Returns risk- If the market tanks or goes into a long period of poor performance, especially early on, our savings may not generate the income they have in the past.
  • Other market/political risks- will SS continue as it is currently planned or might benefits need to be adjusted in some ways? Will tax rates/structures stay the same? My pension is solid now but will it be in 30 years? Etc.....
After reading this list, maybe I am one of the worriers you talk about. But I would rather try to address these issues at this end when I have some ability to plan for them than to be caught by them at an advanced age with little ability to deal with them. As I said, we are fortunate in that we can plan for a reserve to deal with these and maintain our current lifestyle. We likely will die with a lot left but given the risks I don't really see an alternative.

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