AUTHOR: bbbobbins on 10/11/2024 FIRST: Ben Rodriguez on 10/11/2024 | RECENT: Billy McKelvy on 10/15/2024
Comments
Sounds like the right sort of financial support- freely offered and gratefully received rather than expected or demanded. And in quantities not each in themselves lifechanging but enough to smooth a path.
Lots of things are uncontrollable on an individual level. Doesn't mean we should totally ignore them. A politically invoked nuclear conflict anywhere will be pretty damaging to all the world's citizens and could more than rewrite existing financial systems. It pays where possible to elect political leaders who can compromise.
Bite the bullet on at least one trip. Then reappraise how you feel. Once you see how spend fits within your budget and what proportion of your entire portfolio it has been you may relax a bit more. Remember you always have the option of returning to work, you don't have the option of getting back a day you have worked. And time works against all of us ultimately.
If 6 months in is mid-retirement I'm concerned. Otherwise it's just commonsense isn't it? There are pitfalls new retirees can fall into like not having thought about what they want to do and assuming they'd pick up hobbies they'd never had interest in before. Or overscheduling themselves with volunteer, family or part time roles. Or even for the first time in their lives having to spend 24/7 with a spouse. Doesn't mean everyone will hit these problems but it seems to me to be a very important part of retirement planning. To have self examined enough to know how to deal with such issues. And to have aligned plans with others. No good expecting to retire to 3x golf per week and a day of volunteering pkus long vacations when adult kids have you earmarked for free childcare.
It's the fairness thing that is most acute. I guess most of us accept that we likely paid a different fare from the person in the next seat on the plane and that's "fair" based on how far we committed in advance. The optionality being something we get used to. With a concert or a show the product is the same and we have the same view so it feels fairer that prices are equal. And it feels more unfair if we showed commitment early and prices subsequently drop. Even though a showtime is the ultimate distressed good the old world would rather see seats unsold than encouraging "bad" customer behaviour by last minute sniping (I understand lots of venues have backchannels to "seatfiller" operations where people might indeed get a free or nominal cost show on condition of strict non-disclosure). With dynamic pricing that needn't really happen unless it's price discovery that the audience simply isn't big enough.
As as been explained to you many times - you effectively use net income as a proxy for budget (because you hate the latter word). But for most people net income isn't the same as what their spend requirements are because they will have been saving, paying now redeemed debt etc. And on the flipside perhaps they have deferred capital projects or relocation or increased travel ambitions to fund. Then there is the other issue of constructing net income from a variety of sources with different tax treatments. It certainly won't be the same as drawing the equivalent gross employment income. You propose simplicity but a considered bottom up approach beats a clumsy replace gross income approach not least because of the years of life it possibly frees up to those not wedded to their jobs.
As I've said before I personally doubt people live rigidly to the letter of the 4% rule. For starters what measure of inflation should they apply and when to time that. It is a very useful tool for determining what "enough" is for people setting retirement portfolio goals and an ongoing useful check. I think having a more fluid approach in drawdown is probably useful. If nothing else we are emotional animals and the thought that we should keep spending regardless when there is a market driven dip in our portfolio will probably make many uncomfotable when it comes to higher level discretionary (luxury) spend. And I recognise that by nature of the prudence of the "rule" most will come out ahead of it. Periodic reappraisal seems sensible - perhaps unwise to harvest every year but certainly adjusting for upside every few years seems sensible if (and this goes to other threads) the spend enabled is personally meaningful. I hope my portfolio outpaces my drawdown in the early years but the 4% rule is there to provide me comfort if it doesn't. At 5 years I plan to fully reappraise in the light of "new life" budget expectations and what my actual sequence of returns has been. If that means rebooting by reapplying my chosen SWR then I'm good with that. If we break it down into multiyear cycles I suspect there will be some where I feel bound by the SWR and others where I will nowhere near an upward revised figure. It won't matter overall to wealth but I'm considering allocating a notional "when it's gone it's gone" pot to sit outside any SWR calcs to smooth lifestyle, so that again would be flexing the "rule". Conceptual idea is I top that up in years of plenty.
If you're in a position of deciding rather than having no choice in order to survive then the problem is probably lower order. There is no single right answer for anyone unless you , unfortunately, have a strong predictor of when you are going to die. Actuarial maths should make the decision largely a wash. People have different needs and emotions based on their own circumstances - hence the "take early so I have more portfolio to leave to heirs" vs "take late so I have maximised the most secure inflation proofed part of my "portfolio" in the event of a long life". It's a popular topic it seems because there is loads of maths to be cranked to try to prove out positions but ultimately I would say it's an emotional decision. And one that no-one should have regrets over.
I think every consumer hates variable pricing because it loads big data against them. On occasion you may win because you're in early and get to buy at launch price or you hold your nerve/have flexibility and buy very late. But there is no objective way to win without the full dataset of customer behaviours. I guess one should view any price below the average paid is a "win". I think that some musical acts with integrity insist on fixed pricing.
Comments
Sounds like the right sort of financial support- freely offered and gratefully received rather than expected or demanded. And in quantities not each in themselves lifechanging but enough to smooth a path.
Post: Perspective from a grateful recipient of outpatient economic care
Link to comment from October 17, 2025
Lots of things are uncontrollable on an individual level. Doesn't mean we should totally ignore them. A politically invoked nuclear conflict anywhere will be pretty damaging to all the world's citizens and could more than rewrite existing financial systems. It pays where possible to elect political leaders who can compromise.
Post: The Edge of Indifference
Link to comment from October 16, 2025
So sorry for you both. Best of luck.
Post: Why I worry about money. How about you?
Link to comment from October 16, 2025
Bite the bullet on at least one trip. Then reappraise how you feel. Once you see how spend fits within your budget and what proportion of your entire portfolio it has been you may relax a bit more. Remember you always have the option of returning to work, you don't have the option of getting back a day you have worked. And time works against all of us ultimately.
Post: Retirement blues
Link to comment from October 14, 2025
If 6 months in is mid-retirement I'm concerned. Otherwise it's just commonsense isn't it? There are pitfalls new retirees can fall into like not having thought about what they want to do and assuming they'd pick up hobbies they'd never had interest in before. Or overscheduling themselves with volunteer, family or part time roles. Or even for the first time in their lives having to spend 24/7 with a spouse. Doesn't mean everyone will hit these problems but it seems to me to be a very important part of retirement planning. To have self examined enough to know how to deal with such issues. And to have aligned plans with others. No good expecting to retire to 3x golf per week and a day of volunteering pkus long vacations when adult kids have you earmarked for free childcare.
Post: Wade Pfau has put me in a funk. Are you dealing with the stages of retirement?
Link to comment from October 11, 2025
It's the fairness thing that is most acute. I guess most of us accept that we likely paid a different fare from the person in the next seat on the plane and that's "fair" based on how far we committed in advance. The optionality being something we get used to. With a concert or a show the product is the same and we have the same view so it feels fairer that prices are equal. And it feels more unfair if we showed commitment early and prices subsequently drop. Even though a showtime is the ultimate distressed good the old world would rather see seats unsold than encouraging "bad" customer behaviour by last minute sniping (I understand lots of venues have backchannels to "seatfiller" operations where people might indeed get a free or nominal cost show on condition of strict non-disclosure). With dynamic pricing that needn't really happen unless it's price discovery that the audience simply isn't big enough.
Post: Hit With Dynamic Pricing! Has this happened to you?
Link to comment from October 10, 2025
As as been explained to you many times - you effectively use net income as a proxy for budget (because you hate the latter word). But for most people net income isn't the same as what their spend requirements are because they will have been saving, paying now redeemed debt etc. And on the flipside perhaps they have deferred capital projects or relocation or increased travel ambitions to fund. Then there is the other issue of constructing net income from a variety of sources with different tax treatments. It certainly won't be the same as drawing the equivalent gross employment income. You propose simplicity but a considered bottom up approach beats a clumsy replace gross income approach not least because of the years of life it possibly frees up to those not wedded to their jobs.
Post: Retirement Income Goals: Bottom Up Beats Top-Down
Link to comment from October 10, 2025
As I've said before I personally doubt people live rigidly to the letter of the 4% rule. For starters what measure of inflation should they apply and when to time that. It is a very useful tool for determining what "enough" is for people setting retirement portfolio goals and an ongoing useful check. I think having a more fluid approach in drawdown is probably useful. If nothing else we are emotional animals and the thought that we should keep spending regardless when there is a market driven dip in our portfolio will probably make many uncomfotable when it comes to higher level discretionary (luxury) spend. And I recognise that by nature of the prudence of the "rule" most will come out ahead of it. Periodic reappraisal seems sensible - perhaps unwise to harvest every year but certainly adjusting for upside every few years seems sensible if (and this goes to other threads) the spend enabled is personally meaningful. I hope my portfolio outpaces my drawdown in the early years but the 4% rule is there to provide me comfort if it doesn't. At 5 years I plan to fully reappraise in the light of "new life" budget expectations and what my actual sequence of returns has been. If that means rebooting by reapplying my chosen SWR then I'm good with that. If we break it down into multiyear cycles I suspect there will be some where I feel bound by the SWR and others where I will nowhere near an upward revised figure. It won't matter overall to wealth but I'm considering allocating a notional "when it's gone it's gone" pot to sit outside any SWR calcs to smooth lifestyle, so that again would be flexing the "rule". Conceptual idea is I top that up in years of plenty.
Post: Has the 4% Rule Had Its Day? The Case for Dynamic Retirement Spending
Link to comment from October 10, 2025
If you're in a position of deciding rather than having no choice in order to survive then the problem is probably lower order. There is no single right answer for anyone unless you , unfortunately, have a strong predictor of when you are going to die. Actuarial maths should make the decision largely a wash. People have different needs and emotions based on their own circumstances - hence the "take early so I have more portfolio to leave to heirs" vs "take late so I have maximised the most secure inflation proofed part of my "portfolio" in the event of a long life". It's a popular topic it seems because there is loads of maths to be cranked to try to prove out positions but ultimately I would say it's an emotional decision. And one that no-one should have regrets over.
Post: Why Delaying Your Social Security Benefits May Not Make Sense
Link to comment from October 10, 2025
I think every consumer hates variable pricing because it loads big data against them. On occasion you may win because you're in early and get to buy at launch price or you hold your nerve/have flexibility and buy very late. But there is no objective way to win without the full dataset of customer behaviours. I guess one should view any price below the average paid is a "win". I think that some musical acts with integrity insist on fixed pricing.
Post: Hit With Dynamic Pricing! Has this happened to you?
Link to comment from October 9, 2025