FREE NEWSLETTER
We sat down this afternoon and did an end of the year sort of recap of this year and started working on our end of year net worth. I wasn’t sure how things would go, but so far my estimates of how much we would spend were pretty close to actual spending. I was especially happy that the balances in our regular bank stayed pretty constant from last year to this. And all our investments grew. I think that means we didn’t over spend, right?
It was a tough year to try to decide when to turn on our various income streams since Spouse was still working part time, but I think we did ok. I read on HD about when to turn on SS for our particular situation and found articles and calculators to help. I also read about how to get more interest from our everyday savings and we opened our very first money market account last January. It is easier than doing CDs for us. I also read about how to keep our income low for long term capital gains. Heck, for a long time, I didn’t even know what they were b/c we didn’t own any stocks until the Great Recession.
We are just regular, middle class people, and I want to encourage any of you reading this who are like me, that there is a place for you in the Forum. Don’t be afraid to ask a question. Jonathan, I hope this post encourages you. You have poured your heart and soul in to HD to help everyone, and I want you to know you have helped Spouse and me to retire with dignity. Chris
This statement caught my attention, “And all our investments grew. I think that means we didn’t over spend, right?” You didn’t overspend for last year, per say, based on this definition (that is your investments grew). However, remember stock did well last year (2024). For example, vanguard total stock market index fund (VTSAX) total return was around 23%. If all you had in your retirement accounts was this one fund (not at all recommending this at your age, but it makes for an easy example), you could have withdrawn 15% or more from your retirement accounts and still seen a growth in your investments. So, whether one has overspent shouldn’t be based solely on whether one’s investment grew (not saying you are, just pointing it out). Of course, a person can and should adjust one’s spending to some degree based on their investment’s performance (e.g., using a dynamic withdrawal strategy), but I wouldn’t solely (not that you are) base overspending on investment performance. For instance, VTSAX total return in 2022 was -19.53%. Thus, if your retirement accounts included just this one fund (VTSAX), you would have seen a loss of 19.53% (add 0.04% for expense ratio) from your retirement accounts and thus overspent in 2022 when actually you may have spent $0.
Good point
Good thought, Fred, thanks. Chris
Just curious regarding this statement. “I also read about how to keep our income low for long term capital gains.”
You sound like you put in a lot of effort into this. Have you consolidated your investments? You would not need to calculate your net worth if everything was in one place.