To die poor ... or not

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ThirdChapter
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To die poor ... or not

Post by ThirdChapter » Sat Feb 09, 2019 7:42 am

I don't mean not to die, I guess we're all scheduled for that task someday. But I would be interested what you folks think, should you live it all up or should you keep it safe and leave something behind.

Me personally, I have made my calculations such that if I live to be over 100, I won't have a dime left and someone will need to either put me down or take care of me. If I happen to pass before, there will be some left.

Interested in your views.

If you want to see my calculator, it's here : http://lifeschapter3.com/retirement.html. It's free and no adds. It assumes I will live to be a centennial. If there's interest in it I can change it so anyone can pick their expectancy. Let me know.

IlliniDave
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Re: To die poor ... or not

Post by IlliniDave » Sat Feb 09, 2019 8:05 am

With children and a still potentially growing swarm of grandchildren I would like to leave some behind. That I'm financially conservative reinforces that. Facing potential death broke doesn't appeal to me (in part because I might not die on a schedule I can tie my spending too). Of course it's a balance. I wouldn't advocate spending years or decades feeling truly derived of something a reasonable amount of spending could provide.

ThirdChapter
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Re: To die poor ... or not

Post by ThirdChapter » Sat Feb 09, 2019 8:13 am

@IlliniDave : I get that. What I'm doing is to have a certain percentage of my budget assigned to my children. I either buy them something or give it to them in cash, whichever they want or need. This way I can enjoy giving while I'm still alive and also it avoids them having to pay inheritance tax.

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stand@desk
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Re: To die poor ... or not

Post by stand@desk » Sat Feb 09, 2019 8:33 am

I plan not to die poor but if I do, I don't think there is any shame in it with an ERE approach. If I died poor without the ERE approach I would have regrets.

Dream of Freedom
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Re: To die poor ... or not

Post by Dream of Freedom » Sat Feb 09, 2019 8:36 am

Are you promoting your website?

Scott 2
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Re: To die poor ... or not

Post by Scott 2 » Sat Feb 09, 2019 8:47 am

That'd be funny, this group is well beyond a 5 variable calculator for such projections.

IlliniDave
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Re: To die poor ... or not

Post by IlliniDave » Sat Feb 09, 2019 3:42 pm

ThirdChapter wrote:
Sat Feb 09, 2019 8:13 am
@IlliniDave : I get that. What I'm doing is to have a certain percentage of my budget assigned to my children. I either buy them something or give it to them in cash, whichever they want or need. This way I can enjoy giving while I'm still alive and also it avoids them having to pay inheritance tax.
Inheritance tax shouldn't be an issue for me unless the exemptions get lowered a lot (and the so-called gift tax limits are designed to prevent a person from avoiding estate tax by giving it all away to their kids or whatever to avoid estate tax). At whatever point it becomes undeniably clear I'm overfunded I might consider gifting it out sooner. In the near term I want them to develop their own robust financial habits (they haven't yet) rather than encourage them to be even sloppier because they know Daddy is gonna cut them a fat check every year. If they had good habits already (i.e., were saving any money) I would consider gifting sooner.

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unemployable
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Re: To die poor ... or not

Post by unemployable » Sat Feb 09, 2019 4:04 pm

I feel like the outcome will be binary. I'll die with either zero or millions. This will probably become known once Social Security kicks in, even accounting for potential benefit cuts. If I'm not already at zero my portfolio will go into runaway mode.

Getting married, much less having kids, is decreasingly likely. I have two younger sisters; one doesn't need my money and the other doesn't deserve it. I've already designated charities as beneficiaries.

Mister Imperceptible
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Re: To die poor ... or not

Post by Mister Imperceptible » Sat Feb 09, 2019 4:46 pm

unemployable wrote:
Sat Feb 09, 2019 4:04 pm
can i has ur moneys unemployable?

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unemployable
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Re: To die poor ... or not

Post by unemployable » Sat Feb 09, 2019 5:07 pm

Sure, in 31 years

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Bankai
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Re: To die poor ... or not

Post by Bankai » Sat Feb 09, 2019 5:17 pm

unemployable wrote:
Sat Feb 09, 2019 5:07 pm
Sure, in 31 years
How would you know?

The Old Man
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Re: To die poor ... or not

Post by The Old Man » Sat Feb 09, 2019 5:24 pm

Don't count your chickens until they hatch. In the final few years of life, expenses can increase dramatically through home health care, assisted living, and nursing home costs. These expenses are in addition to medical related costs. Unless you are truly rich or have put your money into trusts, then you should expect to run it all down. If you want to transfer some to your children or to charities, then you should act while you still can by either gifting now or establishing irrevocable trusts.

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unemployable
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Re: To die poor ... or not

Post by unemployable » Sat Feb 09, 2019 5:35 pm

Bankai wrote:
Sat Feb 09, 2019 5:17 pm
How would you know?
I'll either be
1. Dead
2. Alive but out of money, or
3. Alive with more money than I have a use for

bigato
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Re: To die poor ... or not

Post by bigato » Sat Feb 09, 2019 5:39 pm

How is it that you are so sure that you won't be somewhere between 2 and 3?

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Bankai
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Re: To die poor ... or not

Post by Bankai » Sat Feb 09, 2019 5:44 pm

unemployable wrote:
Sat Feb 09, 2019 5:35 pm
I'll either be
1. Dead
2. Alive but out of money, or
3. Alive with more money than I have a use for
Not sure how old are you, but it's likely that you'll still have at least a couple of decades ahead of you in 31 years time. With this in mind, unless you're way past a million at that time, the most likely outcome might be "have some money, probably maybe a lot but perhaps unlikely to say for sure due to too many variables".

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unemployable
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Re: To die poor ... or not

Post by unemployable » Sat Feb 09, 2019 5:50 pm

Bankai wrote:
Sat Feb 09, 2019 5:44 pm
Not sure how old are you, but it's likely that you'll still have at least a couple of decades ahead of you in 31 years time. With this in mind, unless you're way past a million at that time, the most likely outcome might be "have some money, probably maybe a lot but perhaps unlikely to say for sure due to too many variables".
Thirty-one years puts me just past the age where everyone on my father's side of the family has died, including Dad and counting one of his brothers, who was just recently diagnosed with months to live. More details here and following. So any time beyond that I'm alive will be just gravy. I doubt it will be as many as 20 years. And most simulations do have me well into seven figures in current dollars by then.

ThirdChapter
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Re: To die poor ... or not

Post by ThirdChapter » Sun Feb 10, 2019 4:34 am

@unemployable I like the floating fiscal death idea. You can enter the fiscal afterlife and really see if there is light or not. I have my fiscal death set at 100 and have a variable withdrawal rate. Statistically I should reach physical death before that.

arcyallen
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Re: To die poor ... or not

Post by arcyallen » Sun Feb 10, 2019 9:01 am

unemployable wrote:
Sat Feb 09, 2019 4:04 pm
I feel like the outcome will be binary. I'll die with either zero or millions.
I think that's pretty accurate assuming a sizable nest egg to start. As most people get older (70+) I'm pretty sure they're not blowing the money the way they thought they might.

EdithKeeler
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Re: To die poor ... or not

Post by EdithKeeler » Thu Feb 14, 2019 10:12 am

I’m confused by your calculator. I think it’s far too simplistic and more variables need to be addressed. FireCalc is a much better tool, imho. Sorry.

Oh, and you have a typo—should by “monthly,” not “montly.”

ThirdChapter
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Re: To die poor ... or not

Post by ThirdChapter » Sun Feb 17, 2019 11:16 am

@EdithKeeler, thanks for your feedback and no need to say sorry for your opinion. Anyways I've fixed the spelling mistake ;-)

I deliberately wanted to keep it very simple, there are a lot of complex tools out there already, I did not want to recreate those.

I have made 4 basic assumptions:

1) I'll be penniless when I turn 100
2) I will need, adjusted for inflation the same monthly amount
3) There is no change in total spending when you retire, if today you can not live with the amount you want to retire with, you won't be able in retirement either.
4) You have enough capital gain on your savings to cover for inflation. [ Yes, this model will break down in situations of hyperinflation, but I guess we're all doomed then]

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