… there’s less chance that the average American will run out of money in retirement.
US life expectancy dropped in 2021 for second consecutive year
https://www.theguardian.com/us-news/2022/aug/31/us-life-expe…
intercst
9 Likes
yippie, my retirement funds now only need to last 37 years instead of 40! I am going to splurge now and maybe in that process I can delete a few more years so i can in turn increase my take rate.
It should also move the date the that the SSA will have to cut SS payments to sometime further in the future.
3 Likes
thejusticier writes,
yippie, my retirement funds now only need to last 37 years instead of 40! I am going to splurge now and maybe in that process I can delete a few more years so i can in turn increase my take rate.
You need to be careful. I’m assuming that like most posters here you’re in the top 20% of the wealth income pyramid that tends to live 4 or 5 years longer then the average American.
https://www.nytimes.com/interactive/2016/04/11/upshot/for-th…
intercst
“You need to be careful. I’m assuming that like most posters here you’re in the top 20% of the wealth income pyramid that tends to live 4 or 5 years longer then the average American.”
Even better if you don’t smoke. The average smoker takes 13 years of life expectancy by smoking.
t.
1 Like
"… there’s less chance that the average American will run out of money in retirement.
US life expectancy dropped in 2021 for second consecutive year
https://www.theguardian.com/us-news/2022/aug/31/us-life-expe……
intercst "
Every individual has different circumstances. Life expectancy included.
Howie52
it was meant to be facetious. We all have different life expectancy but this will follow a bell curve -no power law here. So we are talking about several years to a couple of decades plus or minus?
why not have everyone target 100 years and plan accordingly? or for more years? the billionaires now like the kings of past years are seeking the elixir for longevity. Eternity is too long? We should live at least longer than a turtle but not seek so long a life as a tree- we would get suicidal bored at one point. 150yol is definitely feasible but retirement planning and living would be very different then.
how long did you think your retirement would last? Maybe you were uncertain at the beginning and then your portfolio went up and up, and you relaxed and stopped asking if your portfolio will last until your passing. I do not have a pensions and my sole source will be our portfolio.
I don’t want to retire at a market top and find myself in a lost decade. In Nov 2021, I thought I would have more than enough to start my retirement. Now 10 months later, even with the >40% drop from the top, I still am ok to retire but the margin has slimmed appreciably.
If the down trend continues for a few years, I would not feel very comfortable to start with the lower level of my portfolio.
So I have some sort of a moving target for my retirement start date. I have ~5 years of expenses in the bank so worst case I have this time buffer and I can see when to start dipping into it. But I am always seeking clarity that I don’t know if it will come or not.
How was it like when you took the plunge?
tj
1 Like
But I am always seeking clarity that I don’t know if it will come or not.
Clarity is only a thing in hindsight.
1 Like
It’s supposed to be good news that the average American will not run out of money in retirement … this is due to things like COVID-19 and the briefer life that, statistically, Americans have. So, it’s good that we won’t live so long as to run out of money … and we should be happy because we’ll run out of life first(?)
How is good news?
culcha
But I am always seeking clarity that I don’t know if it will come or not.
Clarity is only a thing in hindsight.
Likewise, I try not to get too carried away by hindsight too. It is so easy to see the past through the same distorted way of looking at things as we apply - unintentionally - to the future.
How was it like when you took the plunge?
Retired in Sept 2006. My employer gave a buy-out bonus of 1 year’s worth of salary. Now we’re up to 2008. Just in time to get smacked in the face with the 2008/2009 bear market.
Not a happy time, but I had already settled on using Guyton-Klinger withdrawal strategy at 4.5%. S&P500 lost almost 50%. We did fine.
Don’t panic and know that the market has up and down.
I have ~5 years of expenses in the bank
You might want to look at previous downturns and see what the future held.
What I would do just now would be bide my time waiting for the S&P500 to rise to the 43 week moving average, and then put 3/5th of that money into a combination of BRK-B, KMX, GOOG, BAM, MKL, and a bit of QQQE. Or VTI and RSP.
1 Like
How was it like when you took the plunge?
I don’t remember but I can say that I have much much more than I did when I retired. Think about it. No more contributing to the Thrift Fund, no more participating in a 401k, no more contributing to an IRA. I have more spending money now than I ever had during my working career. Just pick what you consider and decent SWR. Something under 4% as a draw and increase that draw annually by the SS COLA percent and you can’t go wrong.
Regards,
ImAGolfer (retired '03)