Riddle me this, on retirement income...

[Gailete]

You know our society is in a sad state of affair when people are this concerned with spending every single penny they own before the last second they die. Its ok if you die and theres still money left in your accounts. If people have absolutely no one they wish to leave their money to...then you truly never lived. Congrats...your life was a complete waste.

I don't think it is really that they want to spend every last penny, but more how to make sure that there is enough when they need it. I used to go to therapy at a place in my town and a little old lady was going at the same time. Well she died and when I read her obituary I almost fell over. She was 90 years old when she died, never married, had been a math teacher and retired at the age of 45! Which meant she retired in around the 60's. Either her parents had left her a hefty nest egg, or her math skills had helped her to handle her money/investments very well. She had no kids to inherit either. But to me it is amazing that someone could have retired that young and have been retired for half of their life. Obviously she had planned well. With no kids and no living relations at the time of her death, how would she have made ends meet without careful planning? I think that is the essence of this discussion and that is the necessity of careful planning.

[97guns]

I don't think it is really that they want to spend every last penny, but more how to make sure that there is enough when they need it. I used to go to therapy at a place in my town and a little old lady was going at the same time. Well she died and when I read her obituary I almost fell over. She was 90 years old when she died, never married, had been a math teacher and retired at the age of 45! Which meant she retired in around the 60's. Either her parents had left her a hefty nest egg, or her math skills had helped her to handle her money/investments very well. She had no kids to inherit either. But to me it is amazing that someone could have retired that young and have been retired for half of their life. Obviously she had planned well. With no kids and no living relations at the time of her death, how would she have made ends meet without careful planning? I think that is the essence of this discussion and that is the necessity of careful planning.

its easy to do when you are single with no dependants, she saved her money and made her money work for her instead of her working for money just like i did.

[disneysteve]

I don't think it is really that they want to spend every last penny, but more how to make sure that there is enough when they need it.

I think that is the essence of this discussion and that is the necessity of careful planning.

I agree. And also to be able to enjoy life while you are able. How much can I spend and not run out of money? Can we afford that cruise? What if I want to help my grandson with college? Will I still be able to pay my bills in 10 years?

[disneysteve]

its easy to do when you are single with no dependants, she saved her money and made her money work for her instead of her working for money just like i did.

Exactly. Nobody likes to admit it but having a family is expensive. My cousin retired at 55. Single, no kids, lived with his dad until he passed away and then lived alone after that. Three years ago at 57 sold his duplex in Philly and bought a beautiful house in Florida where he enjoys all of the amenities of the complex and spends time working and showing his 2 antique cars. He couldn't be happier. That's not what everyone wants in life but for some it's just perfect.

I love my family but I can't deny that strictly financially speaking I'd be far better off by myself. Most likely I'd be retired by now, or within a few years, had I never married.

[ua_guy]

You know our society is in a sad state of affair when people are this concerned with spending every single penny they own before the last second they die. Its ok if you die and theres still money left in your accounts. If people have absolutely no one they wish to leave their money to...then you truly never lived. Congrats...your life was a complete waste.

I would disagree that the goal is to spend every penny and leave nothing behind. As stated, the intent of this thread is really about determining how much money is needed, and for how long, given different models. The challenge is in stretching both those vectors given the fact that resources are limited.

[rennigade]

I love my family but I can't deny that strictly financially speaking I'd be far better off by myself. Most likely I'd be retired by now, or within a few years, had I never married.

Wouldnt DINK's have a much easier time than someone who was single? I know a lot of married couples who never had a kid and cant imagine how one would have a lot more money if they never married?

[disneysteve]

Wouldnt DINK's have a much easier time than someone who was single? I know a lot of married couples who never had a kid and cant imagine how one would have a lot more money if they never married?

Depends. If both partners worked and earned similar incomes that could be true. In my case, my wife didn't earn as much - about 1/5 of what I make. So for the most part, I support both of us. In that situation, I personally would be better off alone.

[Gailete]

its easy to do when you are single with no dependants, she saved her money and made her money work for her instead of her working for money just like i did.

Even if married with children, with living using common sense financial rules, a family can hit retirement with a better nest egg and better life style than they may have had pre-retirement.

However, pretty much the worst off are those that are married and divorced. And the more times married and divorced the wore it can get. Assets keep getting divided instead of multiplying. I have mentioned before that I had been married a second time to a guy that thought (or at least lived) as if credit cards were free money, and wanted to live in a better home with better vehicles than the income we had. When the dust settled and he was finally out of my life and finances I was left with $1000. I had married him with a healthy retirement account, savings, no credit card bills and had put up the $20K for the down payment on the house he said we HAD to have even though I owned a perfectly good double wide 3 bed 2 bath mobile home that I had bought new. He had even bought me an engagement ring even though I had told him I didn't want one, but he bought one anyhow--an UGLY thing! He bought it on credit and when the bills came in, I had to pay for it out of my paycheck! Boy did I hate paying that bill every month! Understand this guy had presented himself as having few bills, making decent money, etc. It was more or less too late when I found out what I now owed the day after marrying. Not only to say the phone calls from credit agencies hounding ME and my sons for over 10 years for the bills he had walked away from after our divorce. One of the biggest mistakes in my life.

Lesson: Be absolutely positive that you are both on the same page prior to getting married, have the same or similar life goals, have seen each others 'books' and financial situation. When I hear of people on this forum living with a boyfriend or girlfriend that brought wrecked finances or just lots of bills into the relationship, and the person who didn't make the bills is scrambling to help them pay them off and having trouble steering the signiciant other into a life of financial moderation, I just cringe and want to say run away while you still can! Or at least back off until that loser gets his own bills paid off. Why should you be forking out your hard earned money to pay off old dates, etc. instead of saving towards your retirement? I have learned that there are worse things in life than never getting married for sure.

[GrimJack]

There are some wonderful medical strides coming down the pike that have to do with longevity. In genetics there are certain mutations (age-1, daf-2, and so on) that might lead to longevity.

Telomeres are considered the protection at the end of chromosomes; during each replication a telomere is clipped off and once there are no more telomeres, the cell becomes inactive and can no longer divide.

Many of the sea-going species do not have a 'natural' lifespan, they are killed by their environment rather than old age.

And we could be hit by a bus tomorrow so party tonight.

[snafu]

No one ever seems to discuss Required Distribution, or whatever the legal terminology. At a certain age, individuals are required to draw down a specific sum so that their retirement plan equals zero as a certain age. In Canada, at age 72, the government mandates the percentage of retirement saving that must be taken. The seniors in our condo complex find this infuriating and just turn the sum over 1st to a non taxable plan similar to your ROTH and the remainder to a regular, taxable portfolio. The grumbling is enormous because assets must be sold into the market whether good or bad and there is no tax write-off in a downdraft market.

You may as well plan to give legacy sums to your loved ones while you're alive to see them enjoy it. If it goes to probate the government chooses how to spend your money

[Gailete]

The grumbling is enormous because assets must be sold into the market whether good or bad and there is no tax write-off in a downdraft market.

I've never even thought of that, but probably because the chance that our IRAs will most likely be completely wiped out long before the age of that I would be required to start pulling it out. I think if I had anything left by then it would be a huge miracle. But for those that did a much better job than I did saving for retirement, I certainly hear the pain there.

Wouldn't it be better than waiting for that date to hit to start making withdrawals much sooner and putting them into better savings plans such as the Roth IRA here in the US? Since I am older than my husband by 9 years, the bulk of our retirement funds goes into my accounts first since we can tap them sooner, than if we had to wait to tap his retirement funds. Obviously our income isn't high enough to fully fund two of them. But I am trying to be intelligent about what we are doing. At this point with all that we have tucked away we have a years worth of income tucked away not counting the SS I already get.

One thing I have been trying to do is find sources of continuous passive income so even if we can't work any longer, money should still hopefully be coming to us. Mavbe not a lot but some is better than nothing.

[disneysteve]

No one ever seems to discuss Required Distribution, or whatever the legal terminology. At a certain age, individuals are required to draw down a specific sum so that their retirement plan equals zero as a certain age.

That's one of the big advantages of a Roth instead of a traditional IRA. No required minimum distribution. You can leave the money in there as long as you want. If you don't need it, it continues to grow tax free and can pass to your heirs when you die.

[jIM_Ohio]

For RMDs I suggest having 3-4 years RMDs in cash, so the market fluctuations impact the amount of the RMD (RMDs are based on previous years balance Dec 31), but the actual withdraw comes from cash, preventing selling at a market low.

A 40-60 portfolio can generate stable withdraws as well.