Retirement question

[saveinla]

There is only so much money you can save with the time you have. People always learn to live with what they have (or complain constantly) when it comes to that. 

[Deleted]

Jun 3, 2020 7:12:54 GMT -5 @athena53 said:

The guy who developed the 4% safe withdrawal rate is now saying maybe it should be 2% or 3%- I think he did that during the last recession as well. Not good if you're already retired and need 4%! I've kept mine under 3.5% and it's trending down- 2016 was extraordinarily expensive because we downsized and there were a lot of costs associated with moving and fixing up.

That's when it's good to be in a situation where SS covers your fixed expenses so you can ride out the lean years and not touch your savings.  The articles I've seen about situations where the 4% rule doesn't work are usually where there is a long stretch of down years towards the beginning of retirement. The one I'm looking at now shows -25% first year, 15% second year, 10% third year and 5% fourth year (which also has me wondering how aggressively that example is invested in retirement!)  Most scenarios even with multiple down years as long as they were later on ended with the person dying with way more than they'd started with. 

[Deleted]

Jun 3, 2020 9:18:38 GMT -5 minnesotapaintlady said:

That's when it's good to be in a situation where SS covers your fixed expenses so you can ride out the lean years and not touch your savings.  The articles I've seen about situations where the 4% rule doesn't work are usually where there is a long stretch of down years towards the beginning of retirement. The one I'm looking at now shows -25% first year, 15% second year, 10% third year and 5% fourth year (which also has me wondering how aggressively that example is invested in retirement!)  Most scenarios even with multiple down years as long as they were later on ended with the person dying with way more than they'd started with. 

I agree. The only scary scenario in the professional financial plan I had was a series of down years during which I cluelessly kept spending at the same levels. That won't happen. Last year 40% of my spending was travel and charity (about evenly divided). This year my travel spending has been curtailed considerably, charitable is up, and I'm withdrawing less. When I read the sad stories of retirees losing everything ina down market, it's typically because they HAD to withdraw a certain amount to meet expenses and as a percentage it was unsustainable.

[CCL]

Jun 3, 2020 8:34:24 GMT -5 @athena53 said:

Jun 3, 2020 8:26:39 GMT -5 CCL said:

My dad's pension was something like $150 a month, but he also got his health insurance paid for himself and my mom, for life. Between that and Medicare, almost everything was paid.

I can see why companies don't offer that anymore.

Yeah- I wish!  I'm getting pensions from 2 previous employers, $900/month each, no COLA.  Nothing to sneeze at but no health insurance included.  I've seen two companies terminate retiree health insurance.  One of my previous employers froze their contributions at the amount they were paying at that point- so any increases in the cost were borne by the retiree.   Didn't apply to me since i didn't retire from there.  

My brother's company just stopped it a couple of years after he retired- he got a letter in late 2017 saying that as of 1/1/2018 they were no longer providing retiree health insurance.  End of story.    Last I heard, he and DSIL were paying $22K for the 2 of them for ACA coverage.  Fortunately they're very frugal and they've saved a lot over the years.  They become eligible for Medicare next year.

Unless you've got a union contract you shouldn't count on promises for retiree health insurance.

$1800 a month is not bad, but definitely would be better if health insurance was included.

Yikes. That's crazy expensive. If we had to pay that much for health insurance we couldn't have retired when we did.

My dad did belong to a union. Many of the retirees around here did at one time. Sometimes even with a union contract benefits can change. Healthcare plans change fairly often, too. Deductibles and co-pays go up while coverage goes down.

It's tough to plan for, but these are a few examples of how much things can change. I think when folks are planning their retirements they need to keep that in mind.

[Rukh O'Rorke]

Jun 3, 2020 9:18:38 GMT -5 minnesotapaintlady said:

Jun 3, 2020 7:12:54 GMT -5 @athena53 said:

The guy who developed the 4% safe withdrawal rate is now saying maybe it should be 2% or 3%- I think he did that during the last recession as well. Not good if you're already retired and need 4%! I've kept mine under 3.5% and it's trending down- 2016 was extraordinarily expensive because we downsized and there were a lot of costs associated with moving and fixing up.

That's when it's good to be in a situation where SS covers your fixed expenses so you can ride out the lean years and not touch your savings.  The articles I've seen about situations where the 4% rule doesn't work are usually where there is a long stretch of down years towards the beginning of retirement. The one I'm looking at now shows -25% first year, 15% second year, 10% third year and 5% fourth year (which also has me wondering how aggressively that example is invested in retirement!)  Most scenarios even with multiple down years as long as they were later on ended with the person dying with way more than they'd started with. 

What if you can't get there? 8^O

[buystoys]

Even a union contract won't save you if the union goes under.  Remember the Teamsters Union cutting everyone's pensions?  They also cut medical coverage.

link

[Deleted]

Jun 3, 2020 13:27:46 GMT -5 Rukh O'Rorke said:

Jun 3, 2020 9:18:38 GMT -5 minnesotapaintlady said:

That's when it's good to be in a situation where SS covers your fixed expenses so you can ride out the lean years and not touch your savings.

What if you can't get there? 8^O

You keep working. Or you have a plan for what you'll cut back in lean years. The alternative is taking too much out when values are reduced, leaving less for your remaining years.