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How much in retirement / brokerage accounts to "retire?"

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  • #31
    Originally posted by Tim View Post
    Long term care is NOT just every possibility. That is a known risk for you and your spouse.
    • Insure
    • Self insure
    • Or dump on those cute little kids you have.
    Medicare does NOT pay for even SNF unless there were 3 full days inpatient. The hospital does everything possible to roll you or your wife to the curb and dump you.
    The risk is probably greater than you home owners insurance. I have had to deal with 3 that have passed and one in process.
    Dismissing it as "every possibility" is irresponsible. You are dumping on your family.
    Unless you pass suddenly, which you tell me the percentages.

    Not intended to be snarky. Expect it.

    If it comes to that I might just wander off into the woods.

    The problem is if you keep preparing because of all the things that could go wrong you will continue working until they all start going wrong. Pick reasonable goals and make reasonable risks. Cannot account for everything.

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    • #32
      Originally posted by Lordosis View Post


      If it comes to that I might just wander off into the woods.

      The problem is if you keep preparing because of all the things that could go wrong you will continue working until they all start going wrong. Pick reasonable goals and make reasonable risks. Cannot account for everything.
      Problem is if no plans are made in advance other than wishful thinking that one will age in place and die peacefully during a nap you will likely be too demented to wander off into the woods with enough determination to avoid being found naked in the cul de sac. I'm sure some of my view is over exposure from the number of Pop Drops in ED but seriously the continuing care communities that take you from condo to locked memory care unit are solid gold in my opinion.

      I'd also like to know the stats on the chance of dying quickly as opposed to lingering like I tend to see on a daily basis.

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      • #33
        Originally posted by StateOfMyHead View Post

        Problem is if no plans are made in advance other than wishful thinking that one will age in place and die peacefully during a nap you will likely be too demented to wander off into the woods with enough determination to avoid being found naked in the cul de sac. I'm sure some of my view is over exposure from the number of Pop Drops in ED but seriously the continuing care communities that take you from condo to locked memory care unit are solid gold in my opinion.

        I'd also like to know the stats on the chance of dying quickly as opposed to lingering like I tend to see on a daily basis.
        Of course I do not plan anything of the sort now but you are right that having a plan is key. Being open with your wishes with your kids and having a healthcare proxy if you are unable to advocate for yourself is vital.

        All I am saying is you cannot prepare for everything and if you try you will miss out on the much more likely. LTC is a mess. Who knows what it will be in 50 years?

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        • #34
          Plan for retirement; prepare for illness and other contingencies.

          From the budget perspective from most folk in this forum when you're looking at 150-200k annual spend, if one gets sick, the other spend will likely shift to medical care rather easily. You're not going to take nice trips or nice cars if you're sick. Also, it'll probably curtail that 30 year horizon too.

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          • #35
            Originally posted by Lordosis View Post


            If it comes to that I might just wander off into the woods.

            The problem is if you keep preparing because of all the things that could go wrong you will continue working until they all start going wrong. Pick reasonable goals and make reasonable risks. Cannot account for everything.
            "According to the administration, about seven in 10 people (69%) turning age 65 today will need, at some point, some type of long-term-care services—either at home, in their community or in a facility. Typically, women need care longer (3.7 years, on average) than men (2.2 years). And while about one-third of people who are 65 may never need long-term care, 20% will need it longer than five years."

            You are ignoring statistical risk management. The indians used a version of your technique with migrations. They would just leave the person behind when they migraged. Happened alot in upstate NY!

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            • #36
              Originally posted by Lordosis View Post
              If it comes to that I might just wander off into the woods..
              Might I recommend reading Robert Frost before you do that.

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              • #37
                Originally posted by Tim View Post

                "According to the administration, about seven in 10 people (69%) turning age 65 today will need, at some point, some type of long-term-care services—either at home, in their community or in a facility. Typically, women need care longer (3.7 years, on average) than men (2.2 years). And while about one-third of people who are 65 may never need long-term care, 20% will need it longer than five years."

                You are ignoring statistical risk management. The indians used a version of your technique with migrations. They would just leave the person behind when they migraged. Happened alot in upstate NY!
                Other costs will decrease, significantly, if you go frail and demented.

                And if it’s far into your retirement (much more likely than early on) then you are significantly more likely to have a multiple of your starting NW at that point than to be scraping by.

                Agree with Lordosis that if you try to plan—and save—for every single horrible thing then you will 1) go nuts, and 2) end up with “one more year” syndrome to the Nth degree, and lose out on your years that are actually good.

                Not possible to have a 100% success projection for SWR. 99% will have you working forever. Is 90% or 95% not good enough?

                Changes can be made to spending.

                Cannot avoid risk.

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                • #38
                  Originally posted by bovie View Post

                  Other costs will decrease, significantly, if you go frail and demented.

                  And if it’s far into your retirement (much more likely than early on) then you are significantly more likely to have a multiple of your starting NW at that point than to be scraping by.

                  Agree with Lordosis that if you try to plan—and save—for every single horrible thing then you will 1) go nuts, and 2) end up with “one more year” syndrome to the Nth degree, and lose out on your years that are actually good.

                  Not possible to have a 100% success projection for SWR. 99% will have you working forever. Is 90% or 95% not good enough?

                  Changes can be made to spending.

                  Cannot avoid risk.
                  No one said you can avoid risk. For a married couple, odds are Lordosis will chew up a ton of cash the wife will sell the house and go figure it out.
                  The risk premium is much more likely than term life, auto insurance, home owners insurance and LTDI insurance.

                  Your path is self insurance. That is fine. That 90% or 95% depends on a 50% chance for the spouse or maybe the costs don't move the needle.

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                  • #39
                    the last AARP data, reported $94,000/yr. ave. national cost of SNC.

                    Comment


                    • #40
                      Originally posted by Lordosis View Post

                      Of course I do not plan anything of the sort now but you are right that having a plan is key. Being open with your wishes with your kids and having a healthcare proxy if you are unable to advocate for yourself is vital.

                      All I am saying is you cannot prepare for everything and if you try you will miss out on the much more likely. LTC is a mess. Who knows what it will be in 50 years?
                      Important point. Even with reaching your inflation adjusted FI number and utilizing a 4% (or whatever %) guideline, you still have to be flexible to unexpected spending hits. The big three risks: long term care, health care costs and risk of outliving your money. Others might add a fourth: prolonged poor market returns, but I tend to think our markets will behave as they always have (that we won't become Japan et al) . I'm hoping to have some cushion above my FI number to mitigate these risks, but not so much that I'm working more only to shorten my retirement.

                      Comment


                      • #41
                        Originally posted by forgetthebananas View Post
                        Had this debate with my friends recently.

                        What is your magic number in retirement and/or brokerage accounts combined would you need to call it quits / go part time by age 55?

                        For me, I think 3 million is about right. By the 4% rule, I'm taking out 120k a year, probably enough for my spouse and I. The remaining money would continue to accrue interest of course. I'm also assuming the house is already paid off, and I've saved enough for my kids to go to college, be it private or public. I figure by 3 million, I'd probably have enough to go half time / part time or just completely retire.

                        Friends said 5 million by 55 at least.

                        Any thoughts?
                        Putting "retire" in quotes makes it sound like you wouldn't retire. But, anyway, a few million would be enough for many, and $5 million should be enough for most.

                        Comment


                        • #42
                          If you guys want to raise 3 million and pay it to me, I will retire on the day it’s transferred.

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                          • #43
                            Originally posted by Tim View Post

                            This year is a "perfect year" for your own personal stress test.
                            Retired 9/30/21 at 55. 10 years to medicare, 15 years to SS.
                            How would you feel?
                            What would you need to have in place to "calm your nerves"?
                            Assume 100% S&P 500.
                            This is where you are:
                            Down 15.47 % for one year $2,535,900
                            Down 23.87 for YTD = $2,283,900
                            Both of those balances do not include any withdrawals.
                            The wind at your back felt pretty good 1 year ago, not so much now.
                            Now you have inflation and uncertainty . Your cost of living is up and your balances are down the above PLUS any additional $120k and say 10% $132k next year.
                            I guarantee you will be hoping for a flat market and much lower inflation. Just how likely will you feel that is?

                            This is what you need to consider in retiring at 55 years old exactly one year ago. Not intended as a scare tactic, simply to illustrate what recency (optimism) can impact your choices. Most have not relied only on financial assets and experienced significant market losses. Those losses have actually been doubled within your investing careers.

                            "I'd probably have enough to go half time / part time or just completely retire." Is one way of addressing it.
                            "Friends said 5 million by 55 at least." Is another way of addressing it.
                            Not much has changes in retirement life, just markets and income and expenses.
                            Hope for the best and plan for the worst. Good luck.
                            Just trying to put a perspective from the down side of the life cycle, the above is real.
                            Reminds me of a discussion (as an impending semiretiree) I had about whether this is a bad year to retire. The point was made that if you’d retired last year, it would have felt like a great time then. But now you’d have all this new information and might not be feeling so good about it. The argument was that it’s preferable to retire now with a known market downturn. Of course that’s no guarantee that next year won’t be worse.
                            My plans are unchanged.
                            My Youtube channel: https://www.youtube.com/channel/UCFF...MwBiAAKd5N8qPg

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                            • #44
                              Originally posted by Antares View Post

                              Reminds me of a discussion (as an impending semiretiree) I had about whether this is a bad year to retire. The point was made that if you’d retired last year, it would have felt like a great time then. But now you’d have all this new information and might not be feeling so good about it. The argument was that it’s preferable to retire now with a known market downturn. Of course that’s no guarantee that next year won’t be worse.
                              My plans are unchanged.
                              Hint: It is not really about this year or last year. Reframe your time frame to decades, because once the income ceases, that never recovers.
                              At some point, it’s retired 5, 10 or 15 years ago.
                              You can’t really control the point of retirement on a graph of market. At 60, 65 or 70, a 50% drop will impact the sense of financial security.
                              Inflation, market, and time are not controllable.
                              Sure, AA tries to mitigate, but impossible to eliminate.
                              Now the kicker my friend Antares , fate or destiny, you have a plan just follow it.
                              I know you detest fate, enjoy the next 5, 10, or 15 years. You have a nest egg, that is security regardless of size. I don’t think timing retirement is possible to optimize with the market. Just do it and see where it leads.

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