In Retirement

WHEN I STARTED writing for HumbleDollar, Jonathan gave me some simple but important advice: “Don’t brag about your financial situation. You want readers to like you.” Perhaps that’s one of the reasons he named his financial site HumbleDollar.
I try to follow this advice not only regarding money, but in other aspects of my life. I know how fleeting things can be—especially when it comes to health. Life can change on a dime. It can humble you.

I WAS SCROLLING through social media recently and saw somebody dismiss retirement accounts as “paper wealth.” The argument was familiar: Your money is locked away and you’re waiting for permission to access it.

There’s a grain of truth here. Retirement accounts do come with rules. But much of the discussion online ignores how flexible these accounts actually are. More important, it ignores the enormous tax advantages.
Most people today will likely live well beyond age 59½.

My almost 47 year old daughter is getting divorced from her 49 year old retired military  husband. He wants her to drop the Survivor Benefit Plan which costs close to $400 monthly and he will get a 15 or 20 year term insurance policy for $500,000 for her benefit. She has been a stay- at- home mom so her career prospects are unclear.  My concern is she could end up at 62 or 67 without the insurance or survivor benefits. 

While working, there is something we call payday, it may happen once a month, more likely two or four times a month. Generally that means money is deposited into our bank account – a steady income stream we count on to pay a new set of bills. 
Then we retire and everything changes, no more payday. To me recreating that is the key to a less stressful retirement.  I can say that because I am fortunate to be able to do so and know the feeling of a retirement payday. 

RETIREMENT IS LIFE’S most expensive purchase. During our working years, we deprive our present selves of immediate pleasure by refusing to spend money for nicer cars, a bigger house or a vacation to boast about. Instead, we squirrel away those saved dollars with an eye toward keeping the future us fed, clothed and living indoors. 
At age 64, after decades of choosing to save and invest a large chunk of each paycheck, rather than spend it,

“Everyone” knows that Social Security was never intended as the sole source of retirement income or even the majority of income – but apparently not everyone knows it if you believe the rhetoric. 
Many people claim that the COLA in inadequate, even unfair, some rage that what they receive from Social Security is not what they were promised or what they paid for. 
Truth is that it is what was promised and we did not pay for our benefits,

I always thought waiting until 67 to take Social Security was the responsible choice, until life gave me a reason not to.
I retired early, but I’ll save that story for another time.
What mattered then was this, I’d earned enough credits to claim Social Security at 62. Under Jonathan’s guidance, the plan was simple, we wait until 67 and lock in a larger monthly check. It was sound advice, grounded in math and discipline. So I held onto it.

I asked my friends AI, what percentage of pre-retirement income to retirees actually live on. Of course, most of the data is survey based. The answer was 66% on average. 
A T. Rowe Price/NewRetirement survey found that, nearly three years into retirement, retirees report living on 66% of pre-retirement income on average—and 57% said they live as well or better than before. 
A Goldman Sachs Asset Management survey showed retirees receive ~60% of pre-retirement wages on average,

I recently explained some facts about Social Security spousal benefits and upon doing so discovered there were some questions related to the linkage of spousal and survivor benefits. I delved deeper into survivor benefits and found some interesting facts about them as well.
Survivor vs spousal benefits. Survivor benefits are separate from spousal benefits. While spousal benefits are capped at 50% of the workers full retirement amount (FRA), survivor benefits can pay up to 100 % of what the deceased was receiving or entitled to receive.

Those words are repeated in video after video on Facebook by seniors (possibly actors) complaining they can’t pay their bills because Social Security is inadequate and does not keep up with rising costs. “We worked our whole lives and paid into SS and this is what we get?” they ask.
What is disturbing to me are the thousands of “likes” the videos receive and the hundreds of agreeing comments posted every time.  In essence, 

It’s not hard to find articles about high prices, the burden inflation puts on seniors, those with a so-called fixed income, which is a myth. Virtually no retiree is on a fixed income and the more they depend on Social Security the less so. 
Of course, high inflation, actually any inflation creates financial stress for many retirees, but is it a surprise? Isn’t being aware of and planning for inflation a key part of retirement? Inflation is nearly always with us. 

I just spent the last two months with a bunch of nerds. This was my second year as a volunteer tax preparer for AARP, in Bowling Green, Ohio. If I wasn’t a nerd when I signed up, I certainly am one now. Just kidding, I’ve been a nerd all along.
I’ve jotted down some comments from clients as well as some things that made a mark on my memory from the season. 

In preparation for the phasing out of refund checks in the mail next year,

While many retirees know that waiting until age 70 can maximize their own retirement check, applying that same logic to Spousal Benefits is a costly mistake. If you are eligible for a spousal claim, waiting too long could mean losing three years of benefits for no gain.

Why Age 70 doesn’t work                                                                                                              A worker’s personal retirement benefit increases by roughly 8% per year for every year they delay filing past their Full Retirement Age (FRA)> However spousal benefits stop increasing once you hit your own FRA.

As best as I can tell, I’ve transitioned into the early stage of my life’s fourth quarter. Certainly, I could be at the tail end of my third quarter and, not to be presumptuous, there’s a chance that I’m closer to the end of the fourth quarter without realizing it.
At this stage, there’s no new financial wisdom for me to share with HumbleDollar readers. The Forum and Article archives are filled with much better advice than I could give.

Should You Use a ‘Safe’ Withdrawal Rate?

A very interesting blog post from this morning, on the White Coat Investor site.
Upshot:  its REALLY hard to deplete all of your assets if you spend 4% or more……many things need to go wrong
As an aside: the chart showing the “famous” spending smile from David Blanchett is likely incorrect, in a good way – new data shows that the rise in spending at the right side of the curve,