Do you plan to actually spend down your portfolio?

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Clever_Username
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Re: Do you plan to actually spend down your portfolio?

Post by Clever_Username » Mon Oct 28, 2019 6:03 pm

flyingaway wrote:
Mon Oct 28, 2019 8:38 am
OP here again.
Thank you for all contributed, which has been very helpful.
My take-away is that the 4% rule is a good indicator of financial independence. However, in actual life, many people intend to use something that is more close of 3% rule for their retirement withdrawal. Many people prefer to see a large balance in their portfolio no matter which stage of their life is.
For me, I prefer to see my portfolio balance to be flat throughout my retirement life, i.e., it always maintains the same nominal level.
Might be nice, and I might even agree, but it's very unlikely we'll not have any bad years, so we need the up years to balance things out.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_ | | I survived my first downturn and all I got was this signature line.

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flyingaway
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Re: Do you plan to actually spend down your portfolio?

Post by flyingaway » Tue Oct 29, 2019 8:58 am

Clever_Username wrote:
Mon Oct 28, 2019 6:03 pm
flyingaway wrote:
Mon Oct 28, 2019 8:38 am
OP here again.
Thank you for all contributed, which has been very helpful.
My take-away is that the 4% rule is a good indicator of financial independence. However, in actual life, many people intend to use something that is more close of 3% rule for their retirement withdrawal. Many people prefer to see a large balance in their portfolio no matter which stage of their life is.
For me, I prefer to see my portfolio balance to be flat throughout my retirement life, i.e., it always maintains the same nominal level.
Might be nice, and I might even agree, but it's very unlikely we'll not have any bad years, so we need the up years to balance things out.
I totally agree. I have revived some "bad" hobby to spend money recently.

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flyingaway
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Re: Do you plan to actually spend down your portfolio?

Post by flyingaway » Tue Oct 29, 2019 9:00 am

longinvest wrote:
Mon Oct 28, 2019 4:30 pm
smectym wrote:
Sun Oct 27, 2019 10:56 pm
We are using “variable percentage withdrawal (“VPW”)” which is designed to NOT completely spend down the portfolio—at least until age 100, when VPW suddenly goes nuts and starts recommending 50% annual withdrawals, then just STOPS. So, the implicit VPW strategy at the age 100 inflection point is...

https://www.bogleheads.org/wiki/Variabl ... withdrawal
Smectym, the linked page suggests "Around age 80, if you're still alive, it is important to consider using part (but not all) of your remaining portfolio to buy an inflation-indexed Single Premium Immediate Annuity (SPIA), so that total non-portfolio income (including Social Security, pension, and other lifelong income) is sufficient to live comfortably, independently of future portfolio withdrawals. This aims to reduce the financial risks associated with living past age 100." It also suggests "to limit the withdrawal percentage to no more than 10%, after buying the inflation-indexed SPIA".

My understanding is that there's no inflection point or any weird behavior after age 100 when following these suggestions.
I don't know if I will have a sound mind at 80 to buy a SPIA product. How about I ask one of my children to take care of my finance at that time?

wolf359
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Re: Do you plan to actually spend down your portfolio?

Post by wolf359 » Wed Oct 30, 2019 2:22 pm

flyingaway wrote:
Tue Oct 29, 2019 9:00 am
longinvest wrote:
Mon Oct 28, 2019 4:30 pm
smectym wrote:
Sun Oct 27, 2019 10:56 pm
We are using “variable percentage withdrawal (“VPW”)” which is designed to NOT completely spend down the portfolio—at least until age 100, when VPW suddenly goes nuts and starts recommending 50% annual withdrawals, then just STOPS. So, the implicit VPW strategy at the age 100 inflection point is...

https://www.bogleheads.org/wiki/Variabl ... withdrawal
Smectym, the linked page suggests "Around age 80, if you're still alive, it is important to consider using part (but not all) of your remaining portfolio to buy an inflation-indexed Single Premium Immediate Annuity (SPIA), so that total non-portfolio income (including Social Security, pension, and other lifelong income) is sufficient to live comfortably, independently of future portfolio withdrawals. This aims to reduce the financial risks associated with living past age 100." It also suggests "to limit the withdrawal percentage to no more than 10%, after buying the inflation-indexed SPIA".

My understanding is that there's no inflection point or any weird behavior after age 100 when following these suggestions.
I don't know if I will have a sound mind at 80 to buy a SPIA product. How about I ask one of my children to take care of my finance at that time?
My intent is that when I first have to claim RMDs, that I will buy the maximum allowed QLAC Annuity, deferred until 80-85, and with the Return of Premium (ROP) option. This action will remove a chunk of money from the RMDs, and supplement Social Security payments starting between 80-85. Should I pass away prior to getting my premium back in payments, the ROP option will pay the remainder to my heirs.

QLACs are currently limited to $130,000, which is also below most states' insurance Guaranty Association limits. Doing this around 70 1/2 means I should have sound mind at that time (at least, I hope so.)

orangeandwhite
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Re: Do you plan to actually spend down your portfolio?

Post by orangeandwhite » Sun Jan 12, 2020 3:45 pm

phxjcc wrote:
Sun Oct 27, 2019 5:20 pm

Friends ex-wife.

590k at 47.
50 k on cars
40 k on down payment on house for her kid pre-crash, gave house back to bank after crash because it went down 40% in value.
40 k for furniture for above house
60 k down on vacation house that (thankfully) appreciated 140 k in two years.
15 k furnishing for above
40 k on lavish cruise vacation
50 k on other vacations
Other crap.
Net: after 7 years it was all gone.

It happens.
Looks like she actually did pretty well - the 140k profit on the real estate investment covered for most of the firehose consumption. I’d imagine that annual new iPhones for everyone in the household over the age of five was in there too, ate out every night and so on.

Ultimately all the money ends up being consumed by someone, sometime. Arguably, if people want to drive in retirement a beat up ex state trooper Crown Vic or an Odyssey with 250k, when they can afford a Lexus, someone’s going to end up with the Lexus eventually... the kids, some hippie university professor, the IRS, etc.

My read is that when people hesitate to leave money to kids out of fear of “waste,” a lot of it is fear that the kids will live a higher standard of living than they did themselves, which must be quite irritating given that they were the ones who actually made the money. At least if you leave it to your alma mater, the way it’s spent is abstracted away.

Gnirk
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Re: Do you plan to actually spend down your portfolio?

Post by Gnirk » Sun Jan 12, 2020 4:52 pm

Some people enjoy spending the money they’ve worked so hard to save during their working years. Others don’t. For example, my 80 yo DH spends his RMD from his low 6 figure IRA and his SS. He grew up in poverty, and through hard work, sacrifice and ambition he built a successful business. He doesn’t want to spend a dime from his mid-7-figure taxable account because he “doesn’t want to see his pile go down” (his words).

Everyone looks at money differently.
His 2 kids won’t have any problem spending it.

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Re: Do you plan to actually spend down your portfolio?

Post by willthrill81 » Sun Jan 12, 2020 5:03 pm

flyingaway wrote:
Mon Oct 28, 2019 8:38 am
For me, I prefer to see my portfolio balance to be flat throughout my retirement life, i.e., it always maintains the same nominal level.
How will you deal with withdrawals then when the market is down significantly? Will you cease all withdrawals until/if your balance recovers?

Why would you care about your nominal balance? $1 million today is worth a lot less than $1 million 30 years ago.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

brad.clarkston
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Re: Do you plan to actually spend down your portfolio?

Post by brad.clarkston » Sun Jan 12, 2020 5:04 pm

I tell the wife if she doesn't kill me before I retire I'm drawing down for beer & hookers ... I doubt I make it that far ;)

But in reality at 20 years out I have no clue.

Broken Man 1999
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Re: Do you plan to actually spend down your portfolio?

Post by Broken Man 1999 » Sun Jan 12, 2020 5:19 pm

I feel fortunate that DD's have earned their standard of living in their own after DW and I did what we could to get them launched. They have flourished in their careers.

I have at this point in time turned my attention towards getting our grandchildren successfully launched.

That effort is the long game, unfortunately I might not be alive to see the results, but I am hopeful the efforts do two things: help in allowing DD's to focus on their retirement, and to cover most of the education for the grandchildren.

DW and I are blessed to be able to do this, and frankly we aren't sacrificing anything in our standard of living in our own retirement.

I can't think of anything that would give me more pleasure than to be able to do these things. I'm paying it forward as best I can.

Right now our portfolio is still outgrowing our needs. Might cease at any moment.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

afan
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Re: Do you plan to actually spend down your portfolio?

Post by afan » Sun Jan 12, 2020 5:33 pm

orangeandwhite wrote:
Sun Jan 12, 2020 3:45 pm


Ultimately all the money ends up being consumed by someone, sometime..
Not really.

Money can remain invested long term. There is no law requiring it to be spent.

This can be kept in the family as an ongoing asset or given to endowments. In either case, they can hold on to the principal. The endowments will usually spend some amount of the income on programs. Some may be required to spend a portion of the total but that amount may be less than the growth in value. A family has no such limitations and can keep the principal and income invested forever.
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

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Re: Do you plan to actually spend down your portfolio?

Post by TomatoTomahto » Sun Jan 12, 2020 5:58 pm

Broken Man 1999 wrote:
Sun Jan 12, 2020 5:19 pm
I feel fortunate that DD's have earned their standard of living in their own after DW and I did what we could to get them launched. They have flourished in their careers.

I have at this point in time turned my attention towards getting our grandchildren successfully launched.

That effort is the long game, unfortunately I might not be alive to see the results, but I am hopeful the efforts do two things: help in allowing DD's to focus on their retirement, and to cover most of the education for the grandchildren.

DW and I are blessed to be able to do this, and frankly we aren't sacrificing anything in our standard of living in our own retirement.

I can't think of anything that would give me more pleasure than to be able to do these things. I'm paying it forward as best I can.

Right now our portfolio is still outgrowing our needs. Might cease at any moment.

Broken Man 1999
+1

We have no grandchildren (still early days), but otherwise: ditto, especially the bolded part.
Okay, I get it; I won't be political or controversial. The Earth is flat.

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Re: Do you plan to actually spend down your portfolio?

Post by samsoes » Sun Jan 12, 2020 5:59 pm

Of course I plan to spend down my portfolio. I can't take it with me.
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Re: Do you plan to actually spend down your portfolio?

Post by Sheepdog » Sun Jan 12, 2020 6:16 pm

I do not plan to spend down my portfolio. If I did, what would I spend it down to? Age 76, 86. 96, 106? I don't want to run out. I don't want to being close to run out. At 64, I had a heart attack....a warning sign, right? Nope. I am now 86 and am optimistic. Soooo.....
We don't have grand children (Now, that is not our fault....) We will be willing out about half to our two sons, and the other half to our favorite do good groups. How long from now will they get that? Hell, if I know. But I won't spend it down....I expect to see it grow..
Just because it isn't your fault doesn't mean it isn't your responsibility....Josh Reid Jones

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willthrill81
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Re: Do you plan to actually spend down your portfolio?

Post by willthrill81 » Sun Jan 12, 2020 6:29 pm

afan wrote:
Sun Jan 12, 2020 5:33 pm
Money can remain invested long term. There is no law requiring it to be spent.
Spot on.

While we justifiably spend a lot of time around here discussing tax-advantaged accounts, I think that many overlook the advantages of taxable accounts for those looking to build generational wealth. LTCG rates are quite favorable, the benefit from the step-up in cost basis when the taxable assets can be huge, you can TLH and TGH, and you can donate appreciated shares. Roth is still obviously preferable 99.9% of the time, but I wouldn't feel bad at all reinvesting the proceeds from an inherited tax-advantaged account in a taxable account.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

WJW
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Re: Do you plan to actually spend down your portfolio?

Post by WJW » Sun Jan 12, 2020 7:03 pm

DW and I plan to spend down our portfolio since we have no children. The only variable and it's a big one, is that we do not know when we will die...

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flyingaway
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Re: Do you plan to actually spend down your portfolio?

Post by flyingaway » Mon Jan 13, 2020 8:08 am

willthrill81 wrote:
Sun Jan 12, 2020 5:03 pm
flyingaway wrote:
Mon Oct 28, 2019 8:38 am
For me, I prefer to see my portfolio balance to be flat throughout my retirement life, i.e., it always maintains the same nominal level.
How will you deal with withdrawals then when the market is down significantly? Will you cease all withdrawals until/if your balance recovers?

Why would you care about your nominal balance? $1 million today is worth a lot less than $1 million 30 years ago.
I need to have a large portfolio, I guess. It is a different way to say that will not run out of money in my life.

smitcat
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Re: Do you plan to actually spend down your portfolio?

Post by smitcat » Mon Jan 13, 2020 9:42 am

flyingaway wrote:
Mon Jan 13, 2020 8:08 am
willthrill81 wrote:
Sun Jan 12, 2020 5:03 pm
flyingaway wrote:
Mon Oct 28, 2019 8:38 am
For me, I prefer to see my portfolio balance to be flat throughout my retirement life, i.e., it always maintains the same nominal level.
How will you deal with withdrawals then when the market is down significantly? Will you cease all withdrawals until/if your balance recovers?

Why would you care about your nominal balance? $1 million today is worth a lot less than $1 million 30 years ago.
I need to have a large portfolio, I guess. It is a different way to say that will not run out of money in my life.
"I need to have a large portfolio, I guess. It is a different way to say that will not run out of money in my life."
Then you will have two challenges/opportunities:
1. How to amass a suitably large portfolio while still living life
2. How to ''spend' the remaining portfolio when you are gone

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flyingaway
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Re: Do you plan to actually spend down your portfolio?

Post by flyingaway » Mon Jan 13, 2020 10:15 am

smitcat wrote:
Mon Jan 13, 2020 9:42 am
flyingaway wrote:
Mon Jan 13, 2020 8:08 am
willthrill81 wrote:
Sun Jan 12, 2020 5:03 pm
flyingaway wrote:
Mon Oct 28, 2019 8:38 am
For me, I prefer to see my portfolio balance to be flat throughout my retirement life, i.e., it always maintains the same nominal level.
How will you deal with withdrawals then when the market is down significantly? Will you cease all withdrawals until/if your balance recovers?

Why would you care about your nominal balance? $1 million today is worth a lot less than $1 million 30 years ago.
I need to have a large portfolio, I guess. It is a different way to say that will not run out of money in my life.
"I need to have a large portfolio, I guess. It is a different way to say that will not run out of money in my life."
Then you will have two challenges/opportunities:
1. How to amass a suitably large portfolio while still living life
2. How to ''spend' the remaining portfolio when you are gone
For #1, work for a few more years.
For #2, I have two sons who will help.

Unladen_Swallow
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Re: Do you plan to actually spend down your portfolio?

Post by Unladen_Swallow » Mon Jan 13, 2020 10:28 am

Phineas J. Whoopee wrote:
Thu Oct 24, 2019 1:59 pm
Is is not is. Is is was.

My answer to OP's question: I am willing to spend any amount, up to and including all the the portfolio's value, to meet my own needs. Anything left over, likely to be a lot, is set to go to charity.

PJW
Our intent would be similar.
"I think it's much more interesting to live not knowing than to have answers which might be wrong." - Richard Feynman

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willthrill81
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Re: Do you plan to actually spend down your portfolio?

Post by willthrill81 » Mon Jan 13, 2020 10:42 am

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Last edited by willthrill81 on Mon Jan 13, 2020 10:45 am, edited 1 time in total.
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willthrill81
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Re: Do you plan to actually spend down your portfolio?

Post by willthrill81 » Mon Jan 13, 2020 10:45 am

flyingaway wrote:
Mon Jan 13, 2020 8:08 am
willthrill81 wrote:
Sun Jan 12, 2020 5:03 pm
flyingaway wrote:
Mon Oct 28, 2019 8:38 am
For me, I prefer to see my portfolio balance to be flat throughout my retirement life, i.e., it always maintains the same nominal level.
How will you deal with withdrawals then when the market is down significantly? Will you cease all withdrawals until/if your balance recovers?

Why would you care about your nominal balance? $1 million today is worth a lot less than $1 million 30 years ago.
I need to have a large portfolio, I guess. It is a different way to say that will not run out of money in my life.
The size of the portfolio does nothing for helping to maintain the same nominal portfolio balance over time. A $10 million portfolio can drop by 30% just as easily as a $1 million portfolio. Now if you 'over-save', you can put it in all in a TIPS ladder and never experience market fluctuations, which is more or less what the liability matching portfolio folks do except that they only do this with enough funds to cover their essential spending put the rest of their portfolio into the markets.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Sandtrap
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Re: Do you plan to actually spend down your portfolio?

Post by Sandtrap » Mon Jan 13, 2020 10:47 am

flyingaway wrote:
Wed Oct 23, 2019 11:12 am
Many retirement calculators or rules usually assume that a retiree will spend down their money at end of the presumed life. A success is that you have more than zero dollar at the end of your modeling years, be it 30 years or 40 years.

Yet we see here again and again statements (from retirees) like:
(1) I have more money now than I had at the retirement;
(2) My portfolio has doubled, thanks to the bull market;
(3) I have more money than I know how to spend it;
(4) My pension and social security cover all my expenses;
(5) How do I do with the money from RMD when I don't need it?

We see discussions about strategies (or advices) about tightening belts (adjusting spending down) when the market is down. Yet the other way is rarely discussed. OK, you spend more when the market is up. Will you or did you?

My question is:
1
Do (did) you REALLY intend to spend down your portfolio?
2
increase the spending when the market is good?
1. No. I don't think that's likely unless DW and I go to Monte Carlo and blow everything on the Baccarat tables.
We have an IPS and we follow it.
2. No. Our withdrawal rate is the same every year. Market fluctuations are irrelevant to a "Bogle Portfolio".

j :happy
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MnD
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Re: Do you plan to actually spend down your portfolio?

Post by MnD » Mon Jan 13, 2020 11:33 am

MnD wrote:
Mon Oct 28, 2019 7:17 am
flyingaway wrote:
Sun Oct 27, 2019 12:03 pm
MnD wrote:
Sun Oct 27, 2019 8:41 am
Maybe, maybe not as that depends on what Mr. Market has in store.
One year into retirement we are spending right on plan which is 5% of annual portfolio balance with a 3% inflation adjusted SWR floor. On the basis of historical sequences this plan left retirees (starting with $1M after 35 years) with a low of about $250K real (the dreaded 1966 retiree sequence) and a high of around $2.5M real. Average and median sequences were around $1M real after 35 years. The plan is conservative if poor sequences actually occur, but provides significantly higher levels of retirement income in all but poor sequences versus a fixed inflation-adjusted low % SWR. We are relatively young, with lots of energy, interests and activities and have a high utility for retirement income at this point in life.
Do you plan to lower the withdrawal rate if the market looks not encouraging?
By definition a % of annual portfolio withdrawal plan increases and reduces reduces spending proportionally with portfolio value.
There are no arbitrary decisions about retirement income from portfolio "if the market looks not encouraging" or whatever. Also no ad-hoc decisions to "loosen up" on spending later in retirement, as many here claim they will if their ultra-low SWR plan results in a runaway portfolio to the upside. Given the reluctance to spend from portfolio many exhibit and the documented typical declines in spending as one ages in retirement, I'm very skeptical many will be loosening up, regardless of how much their portfolio grows.
Per 2019 results and our retirement investment policy statement (RIPS) below in signature, portfolio balance and retirement income from portfolio both increased by ~16% at the start of 2020 which translates to an after-tax raise in income of $1150 per month. Pension provides roughly 50% of income so overall retirement income is up ~8% in 2020 versus 2019.

At age 57/58 lots of energy and utility for retirement income and any increases in it that Mr. Market may provide. :beer
70/30 AA, Global market cap equity. Rebalance if FI <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.

Dasnyc
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Re: Do you plan to actually spend down your portfolio?

Post by Dasnyc » Mon Jan 13, 2020 11:40 am

GerryL wrote:
Wed Oct 23, 2019 1:07 pm
Five years into retirement, about one year into SS and RMDs. Am planning to spend DOWNWARD, but not planning to die with my last nickel gripped in my fist (my dad's unsuccessful plan). At this point, the balance keeps growing. It might be a bit of a shock when the trend reverses, but I am preparing myself for that eventuality.
+1

fposte
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Re: Do you plan to actually spend down your portfolio?

Post by fposte » Mon Jan 13, 2020 11:46 am

I plan to spend from my portfolio. As I don't need to provide for heirs, whether it gets spent down entirely or not isn't really a concern to me. Unless I know in advance which year is my last, I probably won't spend down completely, as I'd rather leave some money to others than cut it too fine.

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Re: Do you plan to actually spend down your portfolio?

Post by smitcat » Mon Jan 13, 2020 11:47 am

flyingaway wrote:
Mon Jan 13, 2020 10:15 am
smitcat wrote:
Mon Jan 13, 2020 9:42 am
flyingaway wrote:
Mon Jan 13, 2020 8:08 am
willthrill81 wrote:
Sun Jan 12, 2020 5:03 pm
flyingaway wrote:
Mon Oct 28, 2019 8:38 am
For me, I prefer to see my portfolio balance to be flat throughout my retirement life, i.e., it always maintains the same nominal level.
How will you deal with withdrawals then when the market is down significantly? Will you cease all withdrawals until/if your balance recovers?

Why would you care about your nominal balance? $1 million today is worth a lot less than $1 million 30 years ago.
I need to have a large portfolio, I guess. It is a different way to say that will not run out of money in my life.
"I need to have a large portfolio, I guess. It is a different way to say that will not run out of money in my life."
Then you will have two challenges/opportunities:
1. How to amass a suitably large portfolio while still living life
2. How to ''spend' the remaining portfolio when you are gone
For #1, work for a few more years.
For #2, I have two sons who will help.
For #1, work for a few more years.
For #2, I have two sons who will help.
Problems solved....

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220volt
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Re: Do you plan to actually spend down your portfolio?

Post by 220volt » Mon Jan 13, 2020 12:25 pm

Spending down method is more commonly knows as THE WASTING ASSET RETIREMENT MODEL (WARM) with a twist - no money in the stock market at all. JL Collins posted about it a while back. In order for this to work, you need 20% more assets than with 4% rule (stock.bonds) method. Not for everyone for sure, but it is another option for an arsenal.
https://jlcollinsnh.com/2017/09/09/slee ... ent-model/
"If I had only followed the advice of financial analysts in 2008, I'd have a million dollars today, provided I started with a hundred million dollars" - Jon Stewart

BV3273
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Re: Do you plan to actually spend down your portfolio?

Post by BV3273 » Mon Jan 13, 2020 1:03 pm

As someone mentioned. Intent and what actually happens can be quite different.

I have and will inherit nothing. I would like my kids to inherit something from me. Not just my devilishly good looks and charm.

wrongfunds
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Re: Do you plan to actually spend down your portfolio?

Post by wrongfunds » Mon Jan 13, 2020 2:08 pm

I am plowing all my life savings in to nursing care industry. That is the only conclusion that I can make when I read this particular topic. All of BH is going to make me very very wealthy :-)

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Tamarind
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Re: Do you plan to actually spend down your portfolio?

Post by Tamarind » Mon Jan 13, 2020 2:29 pm

Yes, most of it. Still in accumulation but I plan to back off on paid work as soon as VPW spreadsheet indicates we can sustain our planned expenses through age 70, and would likely stop entirely if we hit 30x expenses. I plan to decumulate using the VPW method.

Statistically speaking, that means we will likely not spend the whole thing. I won't be lighting money on fire at the end or anything, but I would value more years of increased freedom over more discretionary spending.

My experiences lead me to believe that early and consistent exposure to financial skills and a low-debt college education would provide most of the available benefit to a future child.

quantAndHold
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Re: Do you plan to actually spend down your portfolio?

Post by quantAndHold » Mon Jan 13, 2020 3:20 pm

Dad ended up with more in his portfolio when he died than he had when he retired. Mom and dad were planning on spending more, but mom didn't live long enough to accomplish that, and after she died, dad lost interest in the things (travel, etc) that they had been planning to do together.

Mom in law, however, had $34k left when she passed at 94. The kids were on the verge of needing to chip in to support her. A combination of lots of fun and living a long time.

Wife and I are modeling our lives after mom in law. I retired in my 50's to be able to spend time doing things with my wife while we're both healthy enough to do them. The plan is for the check to the funeral home to bounce. I know enough to know that at this point, we really have little control over anything except spending rate, so we'll adjust as necessary as we go along.

TresBelle65
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Re: Do you plan to actually spend down your portfolio?

Post by TresBelle65 » Tue Jan 14, 2020 7:40 am

Lots and lots of posters in this thread seem to have devoted much of their life's resources in order to be able to turn those funds over to the long term care industry, if needed.

What are the options for long term care?

- a facility

- paying someone(s) to come to your home and care for you full time

- family or friends care for you in your home or theirs for compensation or not

I seem to recall an article in this past week in the WSJ where people are shipping their relatives to long term care facilities offshore - Thailand or Mexico, for a fraction of the cost.

dcabler
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Re: Do you plan to actually spend down your portfolio?

Post by dcabler » Tue Jan 14, 2020 7:51 am

flyingaway wrote:
Mon Oct 28, 2019 8:38 am
OP here again.
Thank you for all contributed, which has been very helpful.
My take-away is that the 4% rule is a good indicator of financial independence. However, in actual life, many people intend to use something that is more close of 3% rule for their retirement withdrawal. Many people prefer to see a large balance in their portfolio no matter which stage of their life is.
For me, I prefer to see my portfolio balance to be flat throughout my retirement life, i.e., it always maintains the same nominal level.
Some people, perhaps, will use 3%. Others have noted that they plan to use a variable withdrawal method such as VPW or a PMT based method which requires a guess of the number of years you have left on this planet, though one might add a few years buffer. It's the same for me. My plan is to spend down with no specific desire to leave a legacy, but if circumstances (i.e. earlier than expected demise) means some is left over, then my will already states what's to be done with it. I fully expect that for many years, the withdrawals will be more than I need. If so, then I will either give away the excess or simply keep the excess in my portfolio.

TN_Boy
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Re: Do you plan to actually spend down your portfolio?

Post by TN_Boy » Tue Jan 14, 2020 9:24 am

flyingaway wrote:
Mon Jan 13, 2020 8:08 am
willthrill81 wrote:
Sun Jan 12, 2020 5:03 pm
flyingaway wrote:
Mon Oct 28, 2019 8:38 am
For me, I prefer to see my portfolio balance to be flat throughout my retirement life, i.e., it always maintains the same nominal level.
How will you deal with withdrawals then when the market is down significantly? Will you cease all withdrawals until/if your balance recovers?

Why would you care about your nominal balance? $1 million today is worth a lot less than $1 million 30 years ago.
I need to have a large portfolio, I guess. It is a different way to say that will not run out of money in my life.
I still don't understand what you are thinking of doing here. It's not possible to guarantee your portfolio maintains a level nominal balance if you are investing in stocks and bonds. Let's try numbers and explain to me what you would do.

Example: you have a 1M portfolio, 40% stocks, 60% bonds. This is fairly conservative.

The stock market drops about 50%, via a slower bear market, such as we saw in 2000 to 2003. It then takes several years to recover. At the bottom of a 50% stock drawdown, your portfolio will be worth about 800k (perhaps a bit more if your bonds go up some).

What, exactly, will you be doing during those years? Your portfolio is sharply down in nominal terms and will remain so for a while. Will you avoid pulling money from it until it reaches or surpasses 1M again?

Obviously, as others have noted, it doesn't matter whether you have 1M or 10M; the portfolio behavior is the same.

It's a separate question whether thinking about the portfolio in nominal versus real terms is a good idea, but I'm puzzled on exactly what your stated plan to keep the portfolio balance level means. It seems like an impossible/ill-advised goal.

TN_Boy
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Re: Do you plan to actually spend down your portfolio?

Post by TN_Boy » Tue Jan 14, 2020 9:44 am

TresBelle65 wrote:
Tue Jan 14, 2020 7:40 am
Lots and lots of posters in this thread seem to have devoted much of their life's resources in order to be able to turn those funds over to the long term care industry, if needed.

What are the options for long term care?

- a facility

- paying someone(s) to come to your home and care for you full time

- family or friends care for you in your home or theirs for compensation or not

I seem to recall an article in this past week in the WSJ where people are shipping their relatives to long term care facilities offshore - Thailand or Mexico, for a fraction of the cost.
The phrase "spend down" is vague/nonsensical. If it means just "yep, the investments may go down because I plan to actually use the money I accumulated" then yes, I certainly will spend it down. If it means, "I plan to die with 0 dollars," it's nonsensical, because you don't know how long you will live.

An example. Suppose you are 80 to 85 years old and looking at 500k in investments. Your health is excellent. You'd really like to buy a Ferrari to drive around town in and also do some traveling flying first class -- live a little. Unfortunately (?) you have no idea if you will live to 90 remaining in good health and then drop dead suddenly, or have a stroke and spend five years in skilled nursing. Or die suddenly after two years driving your Ferrari. Thus it would be absurd (to me) to truly "spend down" the portfolio.

To the LTC costs* I should note this phrase is sort of strange: "in order to be able to turn those funds over to the long term care industry, if needed"

Certainly I'd rather NOT have to spend a lot of money on long term care for myself or spouse. But let's look at your options listed:

1) US facility (moderate to major cost depending on your resources or care required)
2) In-home help full time (think $20 to $25 an hour 365x24 for the cost)
3) family or friends help you in home or their home (this ranges from an inconvenience to completely taking over the caregivers life ....)
4) long term care overseas (which means US based relatives or friends cannot really monitor the care given)

Giving money to the LTC industry so that you are not a (huge) burden to family and friends strikes me as a pretty good use of money.

Look at those care options. If you cannot take care of yourself, somebody is going to have to help, and that help is not free.

I haven't seen the WSJ article, but from experience I (and anybody who has had to help an aging relative) will tell you the only way to ensure your relative is getting consistently good care, especially if there is any dementia at all, is to have the relative in a facility as near to you as possible. You need to stop by in person and not just on holidays ...

I personally cannot imagine sending anybody I care about to a facility thousands of miles away.

*we should probably avoid turning this thread into a LTC thread, but I did want to comment on the reason to not "spend down" the portfolio.

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BogleFanGal
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Re: Do you plan to actually spend down your portfolio?

Post by BogleFanGal » Tue Jan 14, 2020 11:27 am

TN_Boy wrote:
Tue Jan 14, 2020 9:44 am
TresBelle65 wrote:
Tue Jan 14, 2020 7:40 am
Lots and lots of posters in this thread seem to have devoted much of their life's resources in order to be able to turn those funds over to the long term care industry, if needed.

What are the options for long term care?

- a facility

- paying someone(s) to come to your home and care for you full time

- family or friends care for you in your home or theirs for compensation or not

I seem to recall an article in this past week in the WSJ where people are shipping their relatives to long term care facilities offshore - Thailand or Mexico, for a fraction of the cost.
The phrase "spend down" is vague/nonsensical. If it means just "yep, the investments may go down because I plan to actually use the money I accumulated" then yes, I certainly will spend it down. If it means, "I plan to die with 0 dollars," it's nonsensical, because you don't know how long you will live.

An example. Suppose you are 80 to 85 years old and looking at 500k in investments. Your health is excellent. You'd really like to buy a Ferrari to drive around town in and also do some traveling flying first class -- live a little. Unfortunately (?) you have no idea if you will live to 90 remaining in good health and then drop dead suddenly, or have a stroke and spend five years in skilled nursing. Or die suddenly after two years driving your Ferrari. Thus it would be absurd (to me) to truly "spend down" the portfolio.

To the LTC costs* I should note this phrase is sort of strange: "in order to be able to turn those funds over to the long term care industry, if needed"

Certainly I'd rather NOT have to spend a lot of money on long term care for myself or spouse. But let's look at your options listed:

1) US facility (moderate to major cost depending on your resources or care required)
2) In-home help full time (think $20 to $25 an hour 365x24 for the cost)
3) family or friends help you in home or their home (this ranges from an inconvenience to completely taking over the caregivers life ....)
4) long term care overseas (which means US based relatives or friends cannot really monitor the care given)

Giving money to the LTC industry so that you are not a (huge) burden to family and friends strikes me as a pretty good use of money.

Look at those care options. If you cannot take care of yourself, somebody is going to have to help, and that help is not free.

I haven't seen the WSJ article, but from experience I (and anybody who has had to help an aging relative) will tell you the only way to ensure your relative is getting consistently good care, especially if there is any dementia at all, is to have the relative in a facility as near to you as possible. You need to stop by in person and not just on holidays ...

I personally cannot imagine sending anybody I care about to a facility thousands of miles away.

*we should probably avoid turning this thread into a LTC thread, but I did want to comment on the reason to not "spend down" the portfolio.
I'm going to add to this from another angle I don't see emphasized enough: more folks are child-free these days. Great for enjoying life now...but unless these people have younger relatives who won't have parental caregiving obligations of their own AND are in a good place to check in/oversee care, (which means fairly mature, trustworthy, mentally stable with personal integrity and common sense,) money will be needed to hire financial trustees, elder care managers, aides and other professionals later who can be paid to conduct surprise facility visits and check on staff, handle their client's finances, support them during medical appts or while hospitalized- basically be eyes and ears to ensure they're not abused, etc.

How can you even plan or budget for that? LTC policies don't cover this, other than the facility and maybe an aide. It requires a pile 'o money set aside - money that may never be needed if you go quickly. But that needs to be there till the end, just the same.

This isn't a "doomsday" view - it's actually pretty practical and realistic, based upon my caregiving experiences with my own parents.
"Life would be infinitely happier if we could only be born at the age of eighty and gradually approach eighteen." Mark Twain

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unclescrooge
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Re: Do you plan to actually spend down your portfolio?

Post by unclescrooge » Tue Jan 14, 2020 11:36 am

Meg77 wrote:
Thu Oct 24, 2019 2:32 pm

Yep, this is very normal and should be expected for most retirees. Studies show even those who retire with "only" $100K or $200K (and live off social security or pensions, etc.) rarely actually spend down their assets.
On the flip side, we don't really hear about the people who end up living off cat food in their retirement.

A mentor of mine told me a story about his aunt. She was living in a paid off home, but had no money for food and was literally eating canned cat food.

He put a reverse mortgage on it (he carried the note) and helped her live out her remaining years in dignity.

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willthrill81
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Re: Do you plan to actually spend down your portfolio?

Post by willthrill81 » Tue Jan 14, 2020 11:38 am

TresBelle65 wrote:
Tue Jan 14, 2020 7:40 am
Lots and lots of posters in this thread seem to have devoted much of their life's resources in order to be able to turn those funds over to the long term care industry, if needed.

What are the options for long term care?

- a facility

- paying someone(s) to come to your home and care for you full time

- family or friends care for you in your home or theirs for compensation or not

I seem to recall an article in this past week in the WSJ where people are shipping their relatives to long term care facilities offshore - Thailand or Mexico, for a fraction of the cost.
In general, those with at least $2 million of invested assets can pretty easily self-insure LTC risk. The lion's share of those needing LTC need it for no more than five years, and even in a nursing home (typically the highest cost LTC setting), that would cost about $500k in most places today. That would leave the surviving spouse with a still very significant $1.5 million of assets. Depending on how much non-portfolio income a couple has, they might be able to self-insure the risk of LTC with well under $2 million.

Based on the options currently available, I think that we would be most attracted to buying into a CCRC with a type 'A' contract (i.e. guarantees lifetime care regardless of future inability to pay the monthly fees) using the proceeds from selling our home by the time we're around age 70. Last year, we visited a new facility (actually an ILF and not a CCRC) that opened a couple of miles from our current home, and it felt like a nice cruise ship, certainly a place that my wife and I would be very happy living in. The amenities were incredible.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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TomatoTomahto
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Re: Do you plan to actually spend down your portfolio?

Post by TomatoTomahto » Tue Jan 14, 2020 12:17 pm

[nitpick]
@willthrill81, I agree with everything you said above, with the small (I hope) nitpick that it’s not really “self-insure” as is commonly said on BH. Insurance carries some aspect of pooled risk. The term, IMO, should be “self-fund.”
[/nitpick]
Okay, I get it; I won't be political or controversial. The Earth is flat.

Unladen_Swallow
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Re: Do you plan to actually spend down your portfolio?

Post by Unladen_Swallow » Tue Jan 14, 2020 1:26 pm

BogleFanGal wrote:
Tue Jan 14, 2020 11:27 am
I'm going to add to this from another angle I don't see emphasized enough: more folks are child-free these days. Great for enjoying life now...but unless these people have younger relatives who won't have parental caregiving obligations of their own AND are in a good place to check in/oversee care, (which means fairly mature, trustworthy, mentally stable with personal integrity and common sense,) money will be needed to hire financial trustees, elder care managers, aides and other professionals later who can be paid to conduct surprise facility visits and check on staff, handle their client's finances, support them during medical appts or while hospitalized- basically be eyes and ears to ensure they're not abused, etc.

How can you even plan or budget for that? LTC policies don't cover this, other than the facility and maybe an aide. It requires a pile 'o money set aside - money that may never be needed if you go quickly. But that needs to be there till the end, just the same.

This isn't a "doomsday" view - it's actually pretty practical and realistic, based upon my caregiving experiences with my own parents.
You assume that all children become responsible, caring adults that will look after their parents. Or even that they will be "able" enough to do so. That couldn't be further from the truth. Have you seen the real world? Families come in all forms.

Our lives are filled with long living single aunts and uncles, family with no kids, family with wonderful children, family with special needs kids that need lifetime care, family with wayward kids who need to be supported their entire lives (and parents working forever). There is no formula here.

Just like anything else in life, you do your best to plan for things. People on this forum constantly plan for leaving a legacy for their children and loved ones. Or extended care for their family. Are they now incapable of planning for their own lives?

People support their elderly relatives and friends. Friends help out friends. Nieces and nephews help. And most importantly, people can help themselves.
"I think it's much more interesting to live not knowing than to have answers which might be wrong." - Richard Feynman

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GerryL
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Re: Do you plan to actually spend down your portfolio?

Post by GerryL » Tue Jan 14, 2020 3:06 pm

BogleFanGal wrote:
Tue Jan 14, 2020 11:27 am


I'm going to add to this from another angle I don't see emphasized enough: more folks are child-free these days. Great for enjoying life now...but unless these people have younger relatives who won't have parental caregiving obligations of their own AND are in a good place to check in/oversee care, (which means fairly mature, trustworthy, mentally stable with personal integrity and common sense,) money will be needed to hire financial trustees, elder care managers, aides and other professionals later who can be paid to conduct surprise facility visits and check on staff, handle their client's finances, support them during medical appts or while hospitalized- basically be eyes and ears to ensure they're not abused, etc.

How can you even plan or budget for that? LTC policies don't cover this, other than the facility and maybe an aide. It requires a pile 'o money set aside - money that may never be needed if you go quickly. But that needs to be there till the end, just the same.

This isn't a "doomsday" view - it's actually pretty practical and realistic, based upon my caregiving experiences with my own parents.
This situation is exactly what I an trying to work through right now. Never married. No kids. One adult nephew living 1k miles away. And family history of Alzheimer's. (My brother and his wife are older.)
For me, it's not so much about the money but about finding trusted people and setting a system in place that can take charge if it should ever come to that. Very difficult puzzle to solve.

wrongfunds
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Re: Do you plan to actually spend down your portfolio?

Post by wrongfunds » Tue Jan 14, 2020 4:00 pm

willthrill81 wrote:
Tue Jan 14, 2020 11:38 am
TresBelle65 wrote:
Tue Jan 14, 2020 7:40 am
Lots and lots of posters in this thread seem to have devoted much of their life's resources in order to be able to turn those funds over to the long term care industry, if needed.

What are the options for long term care?

- a facility

- paying someone(s) to come to your home and care for you full time

- family or friends care for you in your home or theirs for compensation or not

I seem to recall an article in this past week in the WSJ where people are shipping their relatives to long term care facilities offshore - Thailand or Mexico, for a fraction of the cost.
In general, those with at least $2 million of invested assets can pretty easily self-insure LTC risk. The lion's share of those needing LTC need it for no more than five years, and even in a nursing home (typically the highest cost LTC setting), that would cost about $500k in most places today. That would leave the surviving spouse with a still very significant $1.5 million of assets. Depending on how much non-portfolio income a couple has, they might be able to self-insure the risk of LTC with well under $2 million.

Based on the options currently available, I think that we would be most attracted to buying into a CCRC with a type 'A' contract (i.e. guarantees lifetime care regardless of future inability to pay the monthly fees) using the proceeds from selling our home by the time we're around age 70. Last year, we visited a new facility (actually an ILF and not a CCRC) that opened a couple of miles from our current home, and it felt like a nice cruise ship, certainly a place that my wife and I would be very happy living in. The amenities were incredible.
You said $0.5M "today". When you reach 70 years, which is probably few decades away, what would be that number? Are you planning to have that amount available at age 70?

If you plan on self-funding for both of you and for many years (worst case scenario), is there an upper limit on the amount that will be extracted from you by the elder care industry? Would having double digit millions be enough when two people need 15 years of solid care each?

Will there be ever a point where the collective us will say "enough is enough" and I am not throwing any more money to that industry?

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willthrill81
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Re: Do you plan to actually spend down your portfolio?

Post by willthrill81 » Tue Jan 14, 2020 4:05 pm

wrongfunds wrote:
Tue Jan 14, 2020 4:00 pm
willthrill81 wrote:
Tue Jan 14, 2020 11:38 am
TresBelle65 wrote:
Tue Jan 14, 2020 7:40 am
Lots and lots of posters in this thread seem to have devoted much of their life's resources in order to be able to turn those funds over to the long term care industry, if needed.

What are the options for long term care?

- a facility

- paying someone(s) to come to your home and care for you full time

- family or friends care for you in your home or theirs for compensation or not

I seem to recall an article in this past week in the WSJ where people are shipping their relatives to long term care facilities offshore - Thailand or Mexico, for a fraction of the cost.
In general, those with at least $2 million of invested assets can pretty easily self-insure LTC risk. The lion's share of those needing LTC need it for no more than five years, and even in a nursing home (typically the highest cost LTC setting), that would cost about $500k in most places today. That would leave the surviving spouse with a still very significant $1.5 million of assets. Depending on how much non-portfolio income a couple has, they might be able to self-insure the risk of LTC with well under $2 million.

Based on the options currently available, I think that we would be most attracted to buying into a CCRC with a type 'A' contract (i.e. guarantees lifetime care regardless of future inability to pay the monthly fees) using the proceeds from selling our home by the time we're around age 70. Last year, we visited a new facility (actually an ILF and not a CCRC) that opened a couple of miles from our current home, and it felt like a nice cruise ship, certainly a place that my wife and I would be very happy living in. The amenities were incredible.
You said $0.5M "today". When you reach 70 years, which is probably few decades away, what would be that number? Are you planning to have that amount available at age 70?

If you plan on self-funding for both of you and for many years (worst case scenario), is there an upper limit on the amount that will be extracted from you by the elder care industry? Would having double digit millions be enough when two people need 15 years of solid care each?

Will there be ever a point where the collective us will say "enough is enough" and I am not throwing any more money to that industry?
I'm referring to inflation-adjusted numbers. So everything, including the needed portfolio size, may double in the next 20 years.

No one is 'forced' to go to a LTC facility. If you don't want to go, then don't go, but you will have to make other arrangements for needed care. Usually, this burden falls to a family member, the afflicted's spouse or child(ren). I think that paying for in-home care is a relatively cost-effective solution in many instances, but it's not a one-size-fits-all solution. There are no such solutions.

I don't think that many will be open to "shipping their relatives" to offshore facilities for LTC, no matter what. We certainly would not.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

stoptothink
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Re: Do you plan to actually spend down your portfolio?

Post by stoptothink » Tue Jan 14, 2020 4:30 pm

unclescrooge wrote:
Tue Jan 14, 2020 11:36 am
Meg77 wrote:
Thu Oct 24, 2019 2:32 pm

Yep, this is very normal and should be expected for most retirees. Studies show even those who retire with "only" $100K or $200K (and live off social security or pensions, etc.) rarely actually spend down their assets.
On the flip side, we don't really hear about the people who end up living off cat food in their retirement.

A mentor of mine told me a story about his aunt. She was living in a paid off home, but had no money for food and was literally eating canned cat food.

He put a reverse mortgage on it (he carried the note) and helped her live out her remaining years in dignity.
There are so many avenues in this country for people of limited means to get food (without any cost to them) that this should never be a thing. I think the bigger issue is not that this individual had such limited financial resources, but maybe they did not have knowledge of all the programs that could provide them food or simply the ability to physically go and get it.

longinvest
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Re: Do you plan to actually spend down your portfolio?

Post by longinvest » Tue Jan 14, 2020 4:31 pm

dcabler wrote:
Tue Jan 14, 2020 7:51 am
Some people, perhaps, will use 3%. Others have noted that they plan to use a variable withdrawal method such as VPW or a PMT based method which requires a guess of the number of years you have left on this planet, though one might add a few years buffer.
The instructions of our wiki's Variable Percentage Withdrawal (VPW) retirement plan include the following step:
4. Around age 80, if you're still alive, it is important to consider* using part (but not all) of your remaining portfolio to buy an inflation-indexed Single Premium Immediate Annuity (SPIA), so that total non-portfolio income (including Social Security, pension, and other lifelong income) is sufficient to live comfortably, independently of future portfolio withdrawals. This aims to reduce the financial risks associated with living past age 100.
* It's possible that, after consideration, it is found that one already has sufficient pension income and doesn't need more.

In other words, the VPW retirement plan doesn't require any guess about one's longevity. Instead, it uses Social Security, pensions, and (when necessary) a cost-of-living-adjusted SPIA bought at age 80 to dampen the financial risk of living beyond 100.
Bogleheads investment philosophy | One-ETF global balanced index portfolio | VPW

Gardner's Son
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Re: Do you plan to actually spend down your portfolio?

Post by Gardner's Son » Tue Jan 14, 2020 5:19 pm

No. We have 5 adult kids ages 42 to 29. Our goal is to leave the vast majority to them. We did plan on spending down our portfolio when we were younger, but our income from ages 55-68 allowed us to pay off everything. I'm still working part-time at age 69 (wife still works PT at age 66). We were fortunate: have/had jobs that were 80%+ enjoyable and being in the right place/right time as far as real estate/investments went. I'm thinking it would be almost impossible to replicate if we were starting out now. But who knows?
Last edited by Gardner's Son on Wed Jan 15, 2020 10:34 am, edited 2 times in total.

TN_Boy
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Re: Do you plan to actually spend down your portfolio?

Post by TN_Boy » Tue Jan 14, 2020 6:19 pm

wrongfunds wrote:
Tue Jan 14, 2020 4:00 pm

stuff deleted ....

If you plan on self-funding for both of you and for many years (worst case scenario), is there an upper limit on the amount that will be extracted from you by the elder care industry? Would having double digit millions be enough when two people need 15 years of solid care each?

Will there be ever a point where the collective us will say "enough is enough" and I am not throwing any more money to that industry?
Where do you want to throw the money? Let's suppose you, wrongfunds, cannot take care of yourself when you hit 75 or 80.

Exactly how do you want to be helped? What would you like to happen?

Do you want your children (or some other relative) to take this burden on? If you don't want to pay the "elder care industry" to help, who should help? Should they do it for free? It's not a fun job.

To keep this on-topic, one of our portfolio goals is to have enough so that relatives would not be faced with the extreme burden of day to day care* for us if we need it. Thus don't spend it all down, or buy LTC insurance, etc.

I would prefer to be in a medicaid facility before I'd want a child of mine to have to take on daily care responsibilities. It would suck for me, but better that than ruin a family member's life.

*even "just" managing someone's financial affairs and keeping them safe in a facility can be a burden ... you are still more or less managing their life, which gets pretty tiring after a while.

TN_Boy
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Re: Do you plan to actually spend down your portfolio?

Post by TN_Boy » Tue Jan 14, 2020 6:22 pm

stoptothink wrote:
Tue Jan 14, 2020 4:30 pm
unclescrooge wrote:
Tue Jan 14, 2020 11:36 am
Meg77 wrote:
Thu Oct 24, 2019 2:32 pm

Yep, this is very normal and should be expected for most retirees. Studies show even those who retire with "only" $100K or $200K (and live off social security or pensions, etc.) rarely actually spend down their assets.
On the flip side, we don't really hear about the people who end up living off cat food in their retirement.

A mentor of mine told me a story about his aunt. She was living in a paid off home, but had no money for food and was literally eating canned cat food.

He put a reverse mortgage on it (he carried the note) and helped her live out her remaining years in dignity.
There are so many avenues in this country for people of limited means to get food (without any cost to them) that this should never be a thing. I think the bigger issue is not that this individual had such limited financial resources, but maybe they did not have knowledge of all the programs that could provide them food or simply the ability to physically go and get it.
Agreed, this story is a bit strange. Among other things, I doubt if cat food is cheaper than many types of people food .....

One can only assume the aunt in question had some cognitive issues and was unable to ask for the right kind of help. The "mentor" helping with the reverse mortgage was certainly doing the right thing.

Freefun
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Re: Do you plan to actually spend down your portfolio?

Post by Freefun » Tue Jan 14, 2020 6:23 pm

I will spend it. Last $ is for the coffin.
Remember when you wanted what you currently have?

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TheTimeLord
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Re: Do you plan to actually spend down your portfolio?

Post by TheTimeLord » Tue Jan 14, 2020 6:27 pm

Yes, not to $0 but significantly, I didn't save it to count it. Whether through spending, gifts or donations I expect my balance to decrease over the coming years. I am sure it will be quite an adjustment.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

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