AUTHOR: bbbobbins on 10/11/2024 FIRST: Ben Rodriguez on 10/11/2024 | RECENT: Billy McKelvy on 10/15/2024
Comments
Ha ha - my first thought was the choose your parents carefully. Even taking quite notionally similar developed nations there can be vast differences in teh interplay of systems. Most Europeans benefit from affordable healthcare but at a level of taxes, Americans would consider unpalatable and a highly regulated insurance market. So Americans in similar positions probably earn more net, have more consumption and toys but then cannot retire as early because they get trapped until they qualify for Medicare. A while back I did consider whether I should think about retiring to one of a few specific locations in the US chosen for lifestyle purposes. But the slightest research into healthcare made it a non starter. Plus y'know what the population have decided the US should be more recently via actions at the ballot box.
Thanks for reminding us that behind every addiction story and life gone too soon there is so much more in terms of a 3 dimensional person who loved and was loved, and achieved so much.
I think you've posted that you do track perhaps more intensely than most - do I recall you saying that you checked bank/cc statements every day? Just because you don't record it yourself and rely on records from financial institutions doesn't mean you're not doing a form of budgeting - just that it is in arrears. And the reason your method is successful and you always have surplus is your extremely high income relative to your needs NOT because of the innate superiority of your method. Put yourself in the hypothetical position that you'd been made redundant 10 years before your eventual retirement and then had to scrape by in a succession of short term lower paid roles. How does your method stand up then?
Don't you see how these facts are incredibly specific to you? Someone else with the same wealth might have been remunerated on low basic but with high bonus and stock based comp. So your rule would probably undercook the lifestyle spend they could "afford". The key is understanding lifestyle spend NOT the shortcuts you took because you are a stubborn and maths-phobic person. It worked for you because of your hangups about budgets. Doesn't mean that other people would not be better advised to have a more rounded analysis.
I think we need to distinguish types of people/retiree Let's say we have Type A people - the kind you describe trying to justify a path to retirement they can't quite afford. Probably through life they've made other suboptimal decisions like expensive debt on credit cards or inflated lease payments on a car they didn't need. Probably have never thought about inflation conceptually so it's always an adverse surprise and a "well how could we know" matter. Then we have Type B people who have saved dilligently, know their expenses and what will change directionally. And they also know that the way to match or beat inflation is to have assets that outgrow it i.e. remain invested in "risky" equities. IMO the solution is not to try to create a simple rule for the Type As and castigate the Type Bs for their risky behaviour by insisting the only mantra is "fix your income" at all costs. I'd suggest it is to turn the As into Bs through education etc and get them more comfortable bearing "risk" through retirement. And there may be objections of that will never work for some people. Sure that's fine they can either go short in retirement or spend health and time capital working until they really have everything fixed because security is clearly worth more to them than living life.
Good question. If you assume someone qualifies for SS then they have a baseline of inflation protected longetivity risk covered. I think the practical reality then is that anyone remotely responsible with $1m+ in investible assets never runs out of money in ordinary lifetime circumstances. They simply pare back the additional spend when the pot is looking shaky. And sure you can probably find individual counter examples where someone thought "hey I'm a millionaire" and bought Lamborghinis or Deluxe cruise suites every vacation, but more likely you'll find a sad story of those actually running out as a result of dementia related fraud/romance cons etc
I think you're in danger of trying to solve yesterday's problem for a bunch of people in no position to do anything about it. Q- What do old people complain about (as a generic population)?
A- Everything While this isn't actually true, if you spend your time trawling FB or other online forums looking for the complaints re retirement personal finance it'll look like it. The population you need to reach is the not at retirement yet people. And that's where your philosophy falls down because your situation was incredibly non-comparable to people in their 40s and 50s today. They don't need magic but they do need to take ownership of their expected spending needs to drive everything else. And for many people that means budgeting or tracking in some form. Then they need to appraise their resources in order to fill those expected needs. Income sources, SS may be part of it but deployment of capital is ultimately a key part.
Ah the old canard. Might just as well be called quack economics. Your % may give YOU comfort but anyone who has read HD for any length of time knows you've massively overprovisioned for your retirement. Thinking about in income terms alone is arguably dangerous because unless that income is inflation linked ultimately it is just guess work. What people need is not INCOME but ASSETS they can deploy flexibly to drawdown income while offering growth to offset inflation. The other thing that people need the financial education to understand this and the basics of budgeting/appraising their needs. That is what should give them comfort and confidence. Not an unattainable rule of thumb that would see them giving healthy years of their lives to work unnecessarily.
The more time you spend in personal finance circles the more you realise that though you thought it was all about money, in many ways that is the least important part, well behind wellbeing both physical and mental/spiritual. And that's as important on the journey to retirement as in retirement. And if the money thing is the lead in to helping you understand that it's just the thing that nudges you into finding the things you truly value and planning to have/sustain them. And if your frame it the right way lots of bad luck can be viewed as a lesson or experience that makes the good things better. I've certainly known cancer survivors who emerge with a whole new joie de vivre having looked into the darkness. We need to be tolerant and forgiving of ourselves. Of course we're flawed. we screw up and make sub-optimal decisions and put ourselves in places where we are more vulnerable to "luck". And some of us really do get unfair outcomes through no fault of our own or long ago choices or inherited behaviour patterns. It's being human. All the more reason to squeeze all the juice from the good days.
I suspect the posts you read from seniors are those that do not really have adequate funds built up in IRAs (or other investment orientated savings) to act as the buffer on top of SS. The world has however changed and anyone who has retired in the past 10 years (or is coming up to retirement) should be aware of the utility in maintaining equity market exposure as a key part of managing inflation (and other life event) risks. As has been discussed before SWR is only a tool not the entire answer. If you're asking how much can I draw from $1m capital then 40k pa (rising with inflation) is a reasonable answer for a 30 year lifespan etc. That does nothing to tell you whether $40k will support your lifestyle and/or leave enough surplus for unexpected needs. Hence why you also need a budget or alternately the discipline to live within the income. I'd suggest it is wise to at least think about financial strategy in weathering unexpected needs. But it doesn't need to negate the overall drawdown strategy - for some it might be drawing at only 3.5%, for others maintaining a cash-like emergency fund or being prepared to sell a second home or whatever. My approach is to have a notional "when it's gone, it's gone" pot to cover lumpy one-off spend. Then I top it up from excess from my planned drawings or if it goes, replenish by paring back lifestyle spending a bit. Some people might need to see that as a physically separate fund/account. That's personal choice (possibly for those allergic to spreadsheets/budgeting ;) ) and largely just accounting presentation.
Comments
Ha ha - my first thought was the choose your parents carefully. Even taking quite notionally similar developed nations there can be vast differences in teh interplay of systems. Most Europeans benefit from affordable healthcare but at a level of taxes, Americans would consider unpalatable and a highly regulated insurance market. So Americans in similar positions probably earn more net, have more consumption and toys but then cannot retire as early because they get trapped until they qualify for Medicare. A while back I did consider whether I should think about retiring to one of a few specific locations in the US chosen for lifestyle purposes. But the slightest research into healthcare made it a non starter. Plus y'know what the population have decided the US should be more recently via actions at the ballot box.
Post: The Lottery of Birth
Link to comment from August 20, 2026
Thanks for reminding us that behind every addiction story and life gone too soon there is so much more in terms of a 3 dimensional person who loved and was loved, and achieved so much.
Post: My Sister – A Reflection One Year Later
Link to comment from August 12, 2026
I think you've posted that you do track perhaps more intensely than most - do I recall you saying that you checked bank/cc statements every day? Just because you don't record it yourself and rely on records from financial institutions doesn't mean you're not doing a form of budgeting - just that it is in arrears. And the reason your method is successful and you always have surplus is your extremely high income relative to your needs NOT because of the innate superiority of your method. Put yourself in the hypothetical position that you'd been made redundant 10 years before your eventual retirement and then had to scrape by in a succession of short term lower paid roles. How does your method stand up then?
Post: What is the right percentage?
Link to comment from August 12, 2026
Don't you see how these facts are incredibly specific to you? Someone else with the same wealth might have been remunerated on low basic but with high bonus and stock based comp. So your rule would probably undercook the lifestyle spend they could "afford". The key is understanding lifestyle spend NOT the shortcuts you took because you are a stubborn and maths-phobic person. It worked for you because of your hangups about budgets. Doesn't mean that other people would not be better advised to have a more rounded analysis.
Post: What is the right percentage?
Link to comment from August 11, 2026
I think we need to distinguish types of people/retiree Let's say we have Type A people - the kind you describe trying to justify a path to retirement they can't quite afford. Probably through life they've made other suboptimal decisions like expensive debt on credit cards or inflated lease payments on a car they didn't need. Probably have never thought about inflation conceptually so it's always an adverse surprise and a "well how could we know" matter. Then we have Type B people who have saved dilligently, know their expenses and what will change directionally. And they also know that the way to match or beat inflation is to have assets that outgrow it i.e. remain invested in "risky" equities. IMO the solution is not to try to create a simple rule for the Type As and castigate the Type Bs for their risky behaviour by insisting the only mantra is "fix your income" at all costs. I'd suggest it is to turn the As into Bs through education etc and get them more comfortable bearing "risk" through retirement. And there may be objections of that will never work for some people. Sure that's fine they can either go short in retirement or spend health and time capital working until they really have everything fixed because security is clearly worth more to them than living life.
Post: What is the right percentage?
Link to comment from August 10, 2026
Good question. If you assume someone qualifies for SS then they have a baseline of inflation protected longetivity risk covered. I think the practical reality then is that anyone remotely responsible with $1m+ in investible assets never runs out of money in ordinary lifetime circumstances. They simply pare back the additional spend when the pot is looking shaky. And sure you can probably find individual counter examples where someone thought "hey I'm a millionaire" and bought Lamborghinis or Deluxe cruise suites every vacation, but more likely you'll find a sad story of those actually running out as a result of dementia related fraud/romance cons etc
Post: For most retirees, the greatest fear is not death—it is running out of money before they die.
Link to comment from August 10, 2026
I think you're in danger of trying to solve yesterday's problem for a bunch of people in no position to do anything about it. Q- What do old people complain about (as a generic population)? A- Everything While this isn't actually true, if you spend your time trawling FB or other online forums looking for the complaints re retirement personal finance it'll look like it. The population you need to reach is the not at retirement yet people. And that's where your philosophy falls down because your situation was incredibly non-comparable to people in their 40s and 50s today. They don't need magic but they do need to take ownership of their expected spending needs to drive everything else. And for many people that means budgeting or tracking in some form. Then they need to appraise their resources in order to fill those expected needs. Income sources, SS may be part of it but deployment of capital is ultimately a key part.
Post: What is the right percentage?
Link to comment from August 10, 2026
Ah the old canard. Might just as well be called quack economics. Your % may give YOU comfort but anyone who has read HD for any length of time knows you've massively overprovisioned for your retirement. Thinking about in income terms alone is arguably dangerous because unless that income is inflation linked ultimately it is just guess work. What people need is not INCOME but ASSETS they can deploy flexibly to drawdown income while offering growth to offset inflation. The other thing that people need the financial education to understand this and the basics of budgeting/appraising their needs. That is what should give them comfort and confidence. Not an unattainable rule of thumb that would see them giving healthy years of their lives to work unnecessarily.
Post: What is the right percentage?
Link to comment from August 10, 2026
The more time you spend in personal finance circles the more you realise that though you thought it was all about money, in many ways that is the least important part, well behind wellbeing both physical and mental/spiritual. And that's as important on the journey to retirement as in retirement. And if the money thing is the lead in to helping you understand that it's just the thing that nudges you into finding the things you truly value and planning to have/sustain them. And if your frame it the right way lots of bad luck can be viewed as a lesson or experience that makes the good things better. I've certainly known cancer survivors who emerge with a whole new joie de vivre having looked into the darkness. We need to be tolerant and forgiving of ourselves. Of course we're flawed. we screw up and make sub-optimal decisions and put ourselves in places where we are more vulnerable to "luck". And some of us really do get unfair outcomes through no fault of our own or long ago choices or inherited behaviour patterns. It's being human. All the more reason to squeeze all the juice from the good days.
Post: Looking Back On My Hard Luck Days
Link to comment from August 7, 2026
I suspect the posts you read from seniors are those that do not really have adequate funds built up in IRAs (or other investment orientated savings) to act as the buffer on top of SS. The world has however changed and anyone who has retired in the past 10 years (or is coming up to retirement) should be aware of the utility in maintaining equity market exposure as a key part of managing inflation (and other life event) risks. As has been discussed before SWR is only a tool not the entire answer. If you're asking how much can I draw from $1m capital then 40k pa (rising with inflation) is a reasonable answer for a 30 year lifespan etc. That does nothing to tell you whether $40k will support your lifestyle and/or leave enough surplus for unexpected needs. Hence why you also need a budget or alternately the discipline to live within the income. I'd suggest it is wise to at least think about financial strategy in weathering unexpected needs. But it doesn't need to negate the overall drawdown strategy - for some it might be drawing at only 3.5%, for others maintaining a cash-like emergency fund or being prepared to sell a second home or whatever. My approach is to have a notional "when it's gone, it's gone" pot to cover lumpy one-off spend. Then I top it up from excess from my planned drawings or if it goes, replenish by paring back lifestyle spending a bit. Some people might need to see that as a physically separate fund/account. That's personal choice (possibly for those allergic to spreadsheets/budgeting ;) ) and largely just accounting presentation.
Post: Inflation, prices, COLAs, retirement and the last 16 years
Link to comment from August 7, 2026