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Principle Preservation Is WRONG When You Retire

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    #46
    Originally posted by disneysteve View Post

    "One of each" what? I have a few taxable mutual funds, a rollover IRA, a traditional IRA, a Roth IRA, a 401k, and some individual stocks. My wife has a rollover IRA, a traditional IRA, a Roth IRA, a 403b, and a 401k. We will need to decide every month or quarter where to draw from. Some of those accounts have RMD, others don't. Some are taxable, some are not.

    And yes, I know we need to do some consolidating and rolling over.
    How did/do you decide each month where to put the money in?

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      #47
      Originally posted by corn18 View Post

      How did/do you decide each month where to put the money in?
      The only accounts that are still being funded are my 401k and our taxable Vanguard account.
      Steve

      * Despite the high cost of living, it remains very popular.
      * Why should I pay for my daughter's education when she already knows everything?
      * There are no shortcuts to anywhere worth going.

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        #48
        Originally posted by disneysteve View Post

        The only accounts that are still being funded are my 401k and our taxable Vanguard account.
        Fine, but you did contribute to them at some point. And made decisions how to contribute to them. So just learn how to withdraw vs. save.

        My MIL hates to sell anything and has no clue how or what to sell. But she didn't run the finances. She pays a financial advisor about 1.5% a year to take care of her money.

        My wife wouldn't have a clue how to withdraw money, either. I try to help her learn but she hates it. I have found an FA that I interviewed and would trust to help her if I died. He charges 1%. But as long as I am alive and not nuts, I know how to sell things and withdraw money. If I can figure out how to put it in and allocate it, I sure better be able to get it out.

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          #49
          Originally posted by corn18 View Post

          When you've won the game, take your chips off the table.
          Interesting. Didn't think our retirement accounts are in a casino. Saving advice forum actively promoting gambling as a form of saving for retirement.

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            #50
            Originally posted by corn18 View Post

            Fine, but you did contribute to them at some point. And made decisions how to contribute to them. So just learn how to withdraw vs. save.

            My MIL hates to sell anything and has no clue how or what to sell. But she didn't run the finances. She pays a financial advisor about 1.5% a year to take care of her money.

            My wife wouldn't have a clue how to withdraw money, either. I try to help her learn but she hates it. I have found an FA that I interviewed and would trust to help her if I died. He charges 1%. But as long as I am alive and not nuts, I know how to sell things and withdraw money. If I can figure out how to put it in and allocate it, I sure better be able to get it out.
            I'm not suggesting that I don't know how to do that. I was just making the point that it isn't a simple decision. You can't just say "sell one of each". If all we each had was a raditional IRAs with RMDs it would be pretty straightforward but it isn't. There are many factors to consider, tax implications, investment implications. While I personally feel I've got a decent handle on that, not everyone does.

            Again, I wouldn't want my mom to have to decide every month what to sell (nor do I want the task of managing her portfolio along with our own). She gets regular checks every month or quarter from her accounts. That along with SS is what she lives on. The only "selling" that happens is bonds or CDs maturing and her having to reinvest that money. Otherwise, it's pretty much on autopilot.
            Steve

            * Despite the high cost of living, it remains very popular.
            * Why should I pay for my daughter's education when she already knows everything?
            * There are no shortcuts to anywhere worth going.

            Comment


              #51
              Originally posted by Singuy View Post

              Interesting. Didn't think our retirement accounts are in a casino. Saving advice forum actively promoting gambling as a form of saving for retirement.
              Firecalc sim spits out a probability of success. If it's less than 100%, there is a probability of failure.

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                #52
                Originally posted by corn18 View Post

                Firecalc sim spits out a probability of success. If it's less than 100%, there is a probability of failure.
                3% chance failure, 97% chance of never running out of money, 80% chance of making more than what your accounted started, 50% chance you make 5x your initial base. Love those odds, and as for 3% chance of failure, I have downside protection in the form of children.

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                  #53
                  Originally posted by Singuy View Post

                  3% chance failure, 97% chance of never running out of money, 80% chance of making more than what your accounted started, 50% chance you make 5x your initial base. Love those odds, and as for 3% chance of failure, I have downside protection in the form of children.
                  All good. I am going through the rich, broke or dead scenarios now. I could work another 5 years to get to 100%, but I think I am good with 95% and retire in 5 months. If I had enough money for 100%, I might go all equities and leave my kids a fortune, but I'd rather not work any more. Like you stated, there is a 50% chance I'll die with more than I started.

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                    #54
                    Originally posted by Singuy View Post

                    Interesting. Didn't think our retirement accounts are in a casino.
                    It's not about being a casino, but at some point, if you have enough money to last the rest of your life, what's wrong with taking your foot off the gas? As I've said, everyone ought to have some money, at least 30% or so, in stocks to combat inflation, but other than that, most people don't care about dying with more money than they started with.


                    Steve

                    * Despite the high cost of living, it remains very popular.
                    * Why should I pay for my daughter's education when she already knows everything?
                    * There are no shortcuts to anywhere worth going.

                    Comment


                      #55
                      Originally posted by corn18 View Post

                      All good. I am going through the rich, broke or dead scenarios now. I could work another 5 years to get to 100%, but I think I am good with 95% and retire in 5 months. If I had enough money for 100%, I might go all equities and leave my kids a fortune, but I'd rather not work any more. Like you stated, there is a 50% chance I'll die with more than I started.
                      No no, more than 80% chance you end with more thant you started. 50% chance you become stupid wealthy, like staring out with 3 million and you end up with 20 million.

                      Comment


                        #56
                        Originally posted by disneysteve View Post

                        It's not about being a casino, but at some point, if you have enough money to last the rest of your life, what's wrong with taking your foot off the gas? As I've said, everyone ought to have some money, at least 30% or so, in stocks to combat inflation, but other than that, most people don't care about dying with more money than they started with.

                        Perhaps I'm an unusual with my thinking, but I'm actually targeting leaving something to my heirs. Haven't planned exactly what this would look like - a trust perhaps. That being said, I think I'll stick with a 70/30 to 80/20 investment portfolio thru retirement and employ a bucket strategy to take money off the table when the market is up and rely on a cash stockpile when things are down (realizing this sounds quite a bit more straighforward than it'll likely be to implement). Are others of the same mindset or am I unusual?

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                          #57
                          To say qualitatively that anything is ABSOLUTE for anyone doesn't take into account one's individual situations. So, I disagree that it's "wrong".

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                            #58
                            Originally posted by Snicks View Post
                            To say qualitatively that anything is ABSOLUTE for anyone doesn't take into account one's individual situations. So, I disagree that it's "wrong".
                            Read my post, it literally has qualifiers of when it's right and when it's wrong. If anything, your take away is not absolute, but to think outside of the box and leave emotions/conventional wisdoms aside as peddled by financial advisors as the ultimate truth(how you should "de-risk" yourself based on age and not the economic environment).

                            Comment


                              #59
                              Originally posted by Singuy View Post

                              Read my post, it literally has qualifiers of when it's right and when it's wrong. If anything, your take away is not absolute, but to think outside of the box and leave emotions/conventional wisdoms aside as peddled by financial advisors as the ultimate truth(how you should "de-risk" yourself based on age and not the economic environment).
                              I agree one should most definitely examine "conventional wisdom" and make their own decisions. When we bought our home, everyone was telling us Do not pay off your home, pay cash for your car, etc. After taking a hard look for US we decided that paying off our home made far more "sense" to us and we instead financed our cars. We owned the asset of value and financed the thing that lost value at a very low interest rate. I am sure one can argue the wisdom of that either way but that is what we did and our home has been paid off for years.

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                                #60
                                Originally posted by corn18 View Post

                                My wife wouldn't have a clue how to withdraw money, either. I try to help her learn but she hates it. I have found an FA that I interviewed and would trust to help her if I died. He charges 1%. But as long as I am alive and not nuts, I know how to sell things and withdraw money. If I can figure out how to put it in and allocate it, I sure better be able to get it out.
                                I think Disneysteve makes a good point about the complexity especially when a small miscalculation could end up costing a lot in taxes (possible taxation of ss benefits and possibly higher cost for medicare part B). It is possible to have several funding options such as: After tax, pretax, Roth. If you pick from the After tax option, there may be tax implications such as capital gains (from selling equities).

                                I would love to find a FA/CPA/Estate planner that would be able to take over in case 1. I became incapacitated (or died) or 2. both DH and I became incapacitate (or died)--for the sake of our heirs.
                                Last edited by Like2Plan; 10-18-2020, 09:52 AM.

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