How much do we really need for retirement?

[Eye3md]

My grandparents are 90. They spend virtually no money at all. Groceries, house expenses, property tax. If they do go into assisted living it’s 8k a month so 96k/yr. You aren’t traveling and spending money at 90 like you are in 60s-70s. I’ve been thinking about it and wondering if we should change our savings goals (When to consist FI) bc we’ve seen them spend no money - pretty much since 80ish. I do not want to end up with a large inheritance or leaving tons to charity. I want to give to charity while I’m alive. And enjoy the money while alive and moving.

my two living grandparents are exactly the same. They spend no money. They both purchased new cars with cash, in their 80’s because they had nothing else they were spending money on. Now, for both of them, the new cars just sit and have less than 10,000 miles on them. Their only expenses are doc visits, groceries, and spending money on great grandchildren……and it’s been like this for nearly 15-18 years. So, if I’m looking at my living grandparents, and I’m trying to predict my spending, it seems I would need the majority of money from retirement to mid to late 70s. After that, their expenses dropped off like cliff. To me, that makes it seem like the 4% rule is possibly too low for the early years of retirement and way too high for the later years of life. I don’t want to die, at 103, with $50M in my account. I’m ok if it’s a few million (or even close to zero) when I die at 103, but it’s hard figuring out how to structure life and expenses

[Tim]

my two living grandparents are exactly the same. They spend no money. They both purchased new cars with cash, in their 80’s because they had nothing else they were spending money on. Now, for both of them, the new cars just sit and have less than 10,000 miles on them. Their only expenses are doc visits, groceries, and spending money on great grandchildren……and it’s been like this for nearly 15-18 years. So, if I’m looking at my living grandparents, and I’m trying to predict my spending, it seems I would need the majority of money from retirement to mid to late 70s. After that, their expenses dropped off like cliff. To me, that makes it seem like the 4% rule is possibly too low for the early years of retirement and way too high for the later years of life. I don’t want to die, at 103, with $50M in my account. I’m ok if it’s a few million (or even close to zero) when I die at 103, but it’s hard figuring out how to structure life and expenses

The unknown is the end of life path. When, what and if a person needs assistance and the impact mentally and mobility. Those $15k vacation trips can be replaced with $10k per month assistance for a different quality of life.
The glide path of one’s demise will determine the needs or desires.
So your grandparents stopped spending money in their 60’s? My question is what was their retirement spend rate? Probably not much different. You just became aware of it.

[childay]

The unknown is the end of life path. When, what and if a person needs assistance and the impact mentally and mobility. Those $15k vacation trips can be replaced with $10k per month assistance for a different quality of life.
The glide path of one’s demise will determine the needs or desires.
So your grandparents stopped spending money in their 60’s? My question is what was their retirement spend rate? Probably not much different. You just became aware of it.

Maybe even more than $10k a month if you need 24/7 CNA

[Tim]

Maybe even more than $10k a month if you need 24/7 CNA

Yes. Went on the low side, a home aid is for assistance during breakfast to dinner is much cheaper than any type of medical training.
No one wants to work 7 days per week. Probably need 3 people lined up. it is a mess.

[Eye3md]

The unknown is the end of life path. When, what and if a person needs assistance and the impact mentally and mobility. Those $15k vacation trips can be replaced with $10k per month assistance for a different quality of life.
The glide path of one’s demise will determine the needs or desires.
So your grandparents stopped spending money in their 60’s? My question is what was their retirement spend rate? Probably not much different. You just became aware of it.

True, but for a lot of us, we will have a retirement account that continues to outgrow our needs (ie, May have millions left over when we die).

The grandparents didn’t quit spending money in their 60s. They really enjoyed life until their late 70s. And, to be honest, I did pay attention to them because I always told my wife that I’m glad my grandparents enjoyed their lives (vacations, pampering grandchildren, helping to pay for grandchildren expenses, etc….) while they were “young enough” to do so. The only reason they stopped is because their advanced age made it too uncomfortable to drive long distances, or take long flights (even first class). At that stage, their expenses dramatically decreased as all their activities were very much local (cards with friends, church, at home eating vs going out a lot).

At one time, I was a little concerned about their spending because it seemed my grandmother was a “free spender”. As they aged, and we grew more concerned about the possibility of need assisted living, we decided to visit an elder care lawyer for advice. They were going to be fine if they needed that level of care, and I would not have to support them financially

[Eye3md]

Maybe even more than $10k a month if you need 24/7 CNA

I believe this varies a lot by area of the country. Within the past year, we’ve had to help family with assisted living arrangements. The costs were all over the board. A not so great place was around $3500/month A really nice assisted living…..movies, nice dining room, activities, your own living space, nursing care available, laundry service, etc….was closer to $9000/month. Both of these places required a deposit, to be put down, of $2500 to $6000.

[StarTrekDoc]

Yes, late 80s onwards slow down dramatically even to assisted living. $90k yearly is not insignificant costs either in today's dollars, let alone future dollars. It is hard to guess the tail and savings 20years earlier.

Agree saving aggressively early on is good and reassess at milestones:: net zero, 1M, 2M, kids at grade, middle and high school, and FI of goals and adjusting savings accordingly.

As I am just starting my own glidepath, I'm finding the norm is docs simply don't have anything to retire into and have a very difficult time in any transition to non-physician activities.

This is more a barrier to retirement than the actual financial savings for docs which appears to budget 150-250k per year in most recent poll here.

[afan]

I don’t want to die, at 103, with $50M in my account. I’m ok if it’s a few million (or even close to zero) when I die at 103, but it’s hard figuring out how to structure life and expenses

Dying with $50M would put a smile on my face.

Meanwhile, I have no desire to spend all my money. I have no desire to spend as much as I can without going broke. I spend enough to live the life I want. Income is greater than this amount so assets accumulate. No problem.

[mamaham]

Dying with $50M would put a smile on my face.

Meanwhile, I have no desire to spend all my money. I have no desire to spend as much as I can without going broke. I spend enough to live the life I want. Income is greater than this amount so assets accumulate. No problem.

who gets this $50M when you die? What’s the point of saving so much if you don’t need it or use it?

I’d like a calculator that shows the real withdrawal rate based on the retirement glide path phases and not just an arbitrary 4% withdrawal. Seeing my aging grandparents really has me thinking about this. It’s so hard to predict. If you need full nursing care or memory care, then you will need lots of money later in life. But if you’re healthy, your spending is so much lower and you are left with a big nest egg. So if I’m healthy at 90 and have tons of cash, I guess I will start funding building orphanages and other philanthropy?? Too many unknowns… maybe it’s best to just reassess often (based on heath and market rates) and spend enough now to enjoy life but not go crazy over spending or over saving. I definitely fall into the over saving category and I don’t want to die with $50M

[F0017S0]

Here's the answer, haha: https://www.youtube.com/watch?v=u_aLESDql1U

[HikingDO]

Dying with $50M would put a smile on my face.

Meanwhile, I have no desire to spend all my money. I have no desire to spend as much as I can without going broke. I spend enough to live the life I want. Income is greater than this amount so assets accumulate. No problem.

Dying with $50M would make me really sad. It would mean that I worked a lot longer than I should have.

[Anne]

who gets this $50M when you die? What’s the point of saving so much if you don’t need it or use it?

I’d like a calculator that shows the real withdrawal rate based on the retirement glide path phases and not just an arbitrary 4% withdrawal. Seeing my aging grandparents really has me thinking about this. It’s so hard to predict. If you need full nursing care or memory care, then you will need lots of money later in life. But if you’re healthy, your spending is so much lower and you are left with a big nest egg. So if I’m healthy at 90 and have tons of cash, I guess I will start funding building orphanages and other philanthropy?? Too many unknowns… maybe it’s best to just reassess often (based on heath and market rates) and spend enough now to enjoy life but not go crazy over spending or over saving. I definitely fall into the over saving category and I don’t want to die with $50M

You can use firecalc and choose the Bernicke Reality Retirement plan under spending models

https://www.i-orp.com/help/RealityRetirementPlanning.pdf

[Tim]

Dying with $50M would make me really sad. It would mean that I worked a lot longer than I should have.

Or it meant you won the lottery or wildly successful in the WSOP! For that, you would have a smile.

[FIREshrink]

Dying with $50M would put a smile on my face.

.

This really does seem like a colossal failure of consumption smoothing.

[Tim]

This really does seem like a colossal failure of consumption smoothing.

Usually $50m savings is the result of two things:
Reveue-expenses= savings
There are plenty of ways people up there spending and can ruin their lives. Just because you make it, doesn’t make it wise to spend it.
Smoothing is a concept.
I agree that expense cutting for a goal if $50m is a poor choice.