To die (with wealth) or not to die, that is the question.

[Moonlover]

13 minutes ago, Jingthing said:

What's a check?

American spelling of cheque.

[Moonlover]

48 minutes ago, SAFETY FIRST said:

It's so sad to think a person can live their life without any children. 

 

It's my kids that keep me going, giving me the strength to succeed, in facing the world's daily challenges. 

 

Couldn't think of living in a world without my kids. 

 

 

I had 3 kids by 2 wives, but I was never really cut out to be a father and would have preferred to have done without.

[Jingthing]

The math on this issue is not too complicated, but the emotional stuff can be.

Obviously these are very individual decisions as each person has different finances, different situations, and different probabilities on life spans.

It's similar to decision Americans make on social security benefits as far as the starting age impacting the annual payout. 

As a general rule most people shouldn't be thinking about drawdown until older age, probably for most people some time in their 60s.

You can look at the traditional 4 percent withdrawal guideline when you start to retire, again for most people in their 60s or later.

Under that guideline, the formula includes adding an additional increment annually as well.

For Americans with taxable retirement accounts the government forces us to withdraw more than 4 percent starting at about age 72.

So it's a moving math game competing with biological realities.
The idea of spending down to nothing is fun to think about of course but crazy because you can't predict when the perfect time to have nothing will be unless you intend to off yourself then.

I guess I think the middle path is best. Draw down yes but in a reasonable way that doesn't make running out of money likely. 

Easier said than done as I'm now old enough to draw down but spend so little that my net worth keeps increasing!

So yeah I need to work on this harder.

Good topic to get people to think about this.

[gargamon]

6 hours ago, Rampant Rabbit said:

Was discussing this with my Wife the other day as we  have amassed a  lot over the years. The  problem is who to give it to, WE both neither trust any Thai charities and western ones  seems to spend  inordinate amounts on "management"

Open to suggestions................erm not the obvious, must be NON religious  based prefer education inc anti religion

Doctors without borders

Mercy ships

Etc

 

[SAFETY FIRST]

33 minutes ago, Jingthing said:

News flash. Not everyone is you.

News flash. 

 

I'm allowed to make comment and give an opinion on your strange posting. 

 

 

 

[Celsius]

I'll be leaving my wealth to Stoner and Goat

[mancub]

We always believed in the old adage "there's no pockets in shrouds"  or "he who dies with the most toys wins"

....and then the kids came along.

[Andre0720]

38 minutes ago, Jingthing said:

1 hour ago, SAFETY FIRST said:

It's so sad to think a person can live their life without any children. 

 

It's my kids that keep me going, giving me the strength to succeed, in facing the world's daily challenges. 

 

Couldn't think of living in a world without my kids. 

 

 

Expand  

News flash. Not everyone is you.

 

Well, take a listen to Jordan Peterson on this subject. But you might say oh, just a professor of psychology...

 

And regarding:  'not every one is you', Peterson's narrative is certainly more credible than yours...

 

 

 

 

 

[PJ71]

2 hours ago, georgegeorgia said:

50's is too young to retire , you need to be doing something

 

As for the World changing ,yes I believe Thailand will become another Singapore 

 

 

50 is a great age to retire if you can financially.

 

The reason most people continue to work beyond that age ( or at all ) is coz they have no choice.

 

There's more to life than working!

[Jingthing]

12 minutes ago, Andre0720 said:

 

Can you be deluded AND immature?

 

 

[Jingthing]

1 minute ago, PJ71 said:

50 is a great age to retire if you can financially.

 

The reason most people continue to work beyond that age ( or at all ) is coz they have no choice.

 

There's more to life than working!

I retired earlier than that but early retirement has different math considerations.

You can retire at 30 if you can afford it, but probably most such people shouldn't be drawing down before their 60's.

[daveAustin]

6 hours ago, ezzra said:

What a morbid topic to start the day with...

Everyone should think about it because everyone will do it... die.

 

2 hours ago, georgegeorgia said:

50's is too young to retire , you need to be doing something

hmmm. Yes and no, but not work for another! I would have retired in my 40s if hadn't missed a couple glaring opportunities, now rued. There is so much to do with one's own time, and it certainly shouldn't be to make someone else rich, which I will not do anymore. Reading, music and the arts, travel, exercise, sports, voluntary work, hobbies, building, investing, etc etc. That someone equates not being retired as 'having' to work and to use up their precious time because there's nothing else to do (usually for an employer that uses you and doesn't care about you), quite frankly I find bizarre and unimaginative.

 

I've known of quite a few folks that live frugally but are minted and have no-one else. I mean, to what end? Why did you give up all your time to accrue that sh!t to not reap the reward and enjoy freedom? Spend it, ffs, before it's too late! 

[georgegeorgia]

10 minutes ago, PJ71 said:

50 is a great age to retire if you can financially.

 

The reason most people continue to work beyond that age ( or at all ) is coz they have no choice.

 

There's more to life than working!

If you can keep busy doing things you like .

I don't want to be sitting in a province in the Philippines or Thailand like the guys on here sitting on ASEAN 24hours 

[Nemises]

According to this Australian report, 4% drawdown is the rule. 

—

 

We’re living longer, so is the 4% rule a safe guide to retirement spending?

 

by Janelle Ward

11 February 2024, 12:29 am

 

An annual report from financial services company Morningstar puts the spotlight on retirement savings and a safe withdrawal rate. It specifically looked at the ‘4 per cent rule’ and whether it was still sound in the face of increasing longevity.

 

Back in 2022, Annika Bradley, Morningstar’s director of manager research ratings-Australia, told YourLifeChoices that it was time to abandon this retirement spending rule of thumb.

 

She said the 4 per cent rule, which applies to a hypothetical portfolio with 50 per cent stocks and 50 per cent bonds, was convenient and fitted neatly into Australia’s financial planning infrastructure, but that it was too simple. “It doesn’t optimise for a retiree who may: live for a shorter or longer period than 30 years (longevity risk); wish to spend more in the early years of retirement; is unable to stomach market ups and downs, or holds significant levels of home equity.”

 

So what is the thinking in 2024?

 

The State of Retirement Income 2023, written by Christine Benz, John Rekenthaler and Amy Arnott, was released by Morningstar late last year. It had this to say about the 4 per cent rule. “My co-authors and I estimate that retirees drawing down income from an investment portfolio can now afford to withdraw as much as 4 per cent as an initial spending rate, assuming a 90 per cent probability of still having funds remaining after a 30-year time horizon.

 

“That figure is the highest safe withdrawal percentage since Morningstar began creating this research in 2021. (The highest starting safe withdrawal rate based on similar assumptions was 3.3 per cent in 2021 and 3.8 per cent in 2022.)”

 

So, does that mean all retirees can withdraw 4 per cent?

 

Your time horizon matters

 

Not necessarily, says Ms Benz. “Time horizon is super important when thinking about this. In our base case in this research, we assume a 30-year time horizon. So, we’re assuming, say, a 65-year-old who thinks that they will live until, say, age 95. And in that case, when we look at that 30-year time horizon, a 90 per cent probability of not running out of funds over that 30-year horizon, we come up with 4 per cent when we plug it all into our Monte Carlo simulations.

 

“But if you have, say, a shorter time horizon, maybe you’re a 75-year-old retiree and you’re thinking of more like a 20-year time horizon. In that case, you can take about 5.5 per cent according to our research. If you’re a young retiree, say, a 55-year-old with maybe more like a 40-year time horizon, you’d need to be more conservative. You’d need to take more like 3.3 per cent. So, think about your time horizon.”

 

She also says predictability of cash flows must be considered. “If you’re someone who wants a very steady pay cheque equivalent from your portfolio, which is kind of what we assumed in our base case, that generally points to needing to be more conservative in terms of your withdrawal, your starting withdrawal percentage. If you’re someone who is comfortable with more variability, you can arguably take more from your portfolio initially.”

 

Equity exposure

 

Withdrawal rate also depends on equity exposure.

 

Someone who is comfortable with more variability in terms of income stream would probably want to favour more growth assets, more equity assets, the study’s authors say. The highest safe withdrawal percentage corresponds to portfolios that have between 20 and 40 per cent equity exposure, they say. Someone who is comfortable with more variability in terms of the payday would probably want to favour more growth assets.

 

An added dimension to the research was data on how retirees actually spend.

 

Perhaps unsurprisingly, the finding was that people tend to spend less as the years go by, but surprisingly that trend was maintained across income bands.

 

Ms Benz says: “So, when we plug in the extent to which spending tends to actually trend down and we assume that natural downtrend in spending, we see a nice elevation in starting spending patterns.

 

“So, you can get the starting withdrawal rate over 5 per cent. You just have to be okay with that trade-off that further on in retirement, you have to spend less.

 

“But for a lot of people with tight plans who really want to maximise their retirement consumption, their enjoyment in those early years of retirement when they’re feeling good and they have pent-up demand to do fun things, they should take a look at that.”

 

What do others say?

 

The Motley Fool says that blindly following a formula without considering whether it’s right for your situation could lead you to either run out of money prematurely or be left with a surplus that you could have spent on the things you enjoy.

 

It summarises the pros and cons of rule as follows:

 

The rule is simple to follow.

You’ll have predictable income.

However, it says:

 

It isn’t dynamic enough to respond to lifestyle changes.

It doesn’t react to different market conditions.

It is somewhat outdated and can no longer guarantee that your funds won’t run short.

SuperGuide says the 4 per cent rule and Spend Your Age rule (when you draw down a percentage that is the first digit of your age) are handy tools in the absence of detailed information, but have limits.

 

“For starters, they are based on population averages and you’re not average. Some, like (William) Bengen’s 4 per cent rule, are based on overseas experience. Also, they are based on historic returns, so they won’t tell you with any certainty how the future will unfold.”

 

Of course, if the bulk of your retirement funds are in super, there are minimum drawdown rates based on your age. So the 4 per cent may need no further consideration.

[georgegeorgia]

1 minute ago, daveAustin said:

Everyone should think about it because everyone will do it... die.

 

hmmm. Yes and no, but not work for another! I would have retired in my 40s if hadn't missed a couple glaring opportunities, now rued. There is so much to do with one's own time, and it certainly shouldn't be to make someone else rich, which I will not do anymore. Reading, music and the arts, travel, exercise, sports, voluntary work, hobbies, building, investing, etc etc. That someone equates not being retired as 'having' to work and to use up their precious time because there's nothing else to do (usually for an employer that uses you and doesn't care about you), quite frankly I find bizarre and unimaginative.

 

I've known of quite a few folks that live frugally but are minted and have no-one else. I mean, to what end? Why did you give up all your time to accrue that sh!t to not reap the reward and enjoy freedom? Spend it, ffs, before it's too late! 

Absolutely

I know a guy at my work 77yo this year ,fit skinny guy, works all the overtime ,his wife stays at home Filipino , is a millionaire with his own  house 

I asked him why ? Why Arnold I said to him , why do this at your age ?

 

[GammaGlobulin]

Not to die.

That is the answer.

Only the good die young.

 

[gargamon]

9 minutes ago, georgegeorgia said:

asked him why ? Why Arnold I said to him , why do this at your age ?

He knows he couldn't spend all day with the wife so working is the least painful option. 

[brianthainess]

7 hours ago, sidjameson said:

I know I should drawdown. But at 56 find it difficult to start. This question will only get bigger as I age.

Interested in others experiences.

Only 56 and worrying about this already, I'm 72 and still not thinking about it, 'cept for my wife to have easy access to my money.

[MarkT63]

7 hours ago, Rampant Rabbit said:

Was discussing this with my Wife the other day as we  have amassed a  lot over the years. The  problem is who to give it to, WE both neither trust any Thai charities and western ones  seems to spend  inordinate amounts on "management"

Open to suggestions................erm not the obvious, must be NON religious  based prefer education inc anti religion

Not sure where you are based but here on Phuket I would look to a charity like "Phuket Has Ben Good To Us Foundation". They do amazing work for orphaned and under-priviledged children. I have done some work with them so have seen first hand how the charity is run and the amazing people involved who do so much with so little funding

[snairb]

as a 1942 model i am very busy trying to stay  alive so dont worry about being alive you wont feel a thing

[Jingthing]

Taxation is another factor to consider.

If you do take out big chunks that means more tax if your withdraws are subject to tax meaning drawing down too much if there is tax increases the chance of running out of money.

Of course the fear of running out of money when you are past earning money is the main and very real fear factor in these decisions.

[Rampant Rabbit]

45 minutes ago, georgegeorgia said:

Absolutely

I know a guy at my work 77yo this year ,fit skinny guy, works all the overtime ,his wife stays at home Filipino , is a millionaire with his own  house 

I asked him why ? Why Arnold I said to him , why do this at your age ?

 

Keep  busy best  for longevity

[johnnybangkok]

8 hours ago, Rampant Rabbit said:

Was discussing this with my Wife the other day as we  have amassed a  lot over the years. The  problem is who to give it to, WE both neither trust any Thai charities and western ones  seems to spend  inordinate amounts on "management"

Open to suggestions................erm not the obvious, must be NON religious  based prefer education inc anti religion

Have a look at Gift of Happiness Foundation - Home (gohappiness.org)

 

This is a small but fantastic charity that is has been run by Eddie for many years now. They have very small operational costs and the vast majority of donations go straight to the kids. I've been supporting this for many years now and have never had to worry about them 'spend  inordinate amounts on "management" (a particular bugbear of mine as well).

 

P.S. It's also non-religious.

[Rampant Rabbit]

26 minutes ago, MarkT63 said:

Not sure where you are based but here on Phuket I would look to a charity like "Phuket Has Ben Good To Us Foundation". They do amazing work for orphaned and under-priviledged children. I have done some work with them so have seen first hand how the charity is run and the amazing people involved who do so much with so little funding

Ill have a look, do they have audited   accounts?

[Rampant Rabbit]

4 minutes ago, johnnybangkok said:

Have a look at Gift of Happiness Foundation - Home (gohappiness.org)

 

This is a small but fantastic charity that is has been run by Eddie for many years now. They have very small operational costs and the vast majority of donations go straight to the kids. I've been supporting this for many years now and have never had to worry about them 'spend  inordinate amounts on "management" (a particular bugbear of mine as well).

 

P.S. It's also non-religious.

Thanks Ill have a look

[mikesil]

“I’m planning to spend every penny and die broke. My last check is going to the funeral home. It will bounce”
— Kevin Kelly (https://kk.org/thetechnium/)

[animalmagic]

In the words of the song by Seasick Steve, 'I started out with nothing and I've still got most of it left!'

[HugoFastor]

There are a lot of posts bringing up the issue of someone having lived modestly, being a saver their whole life, and then finding it difficult to suddenly change their ways and start needlessly splashing out just to use up some of their money before they die. Yes, this is a definite issue and psychological obstacle for many. And who would want to suddenly start accumulating lots of high value items that they don't need or want anyway?
 

I think one of the easiest ways to spend more in a meaningful way would be to start taking 1-2 five-star trips a year. Go to some unusual and interesting places. Fly business class. Stay in some really nice hotels and eat in the best restaurants for a couple of weeks.
 

This type of spending and travel will help to use up some of the money, but without having to change one's lifestyle or accumulate unnecessary possessions, but while still providing some amazing experiences and offering some great and fulfilling memories to go with it. 

[john donson]

9 hours ago, Rampant Rabbit said:

Was discussing this with my Wife the other day as we  have amassed a  lot over the years. The  problem is who to give it to, WE both neither trust any Thai charities and western ones  seems to spend  inordinate amounts on "management"

Open to suggestions................erm not the obvious, must be NON religious  based prefer education inc anti religion

 

never too late to take a side chick or two and get a couple of kids on the side...

[rwill]

The problem is you never know how long you will live and what emergencies may arise.