Ok, so we are old and retired. Now what??

[crimsonghost747]

(02-07-2022, 04:28 PM)ken-do-nim Wrote: Remember that thanks to inflation $150k in 10 years won't be as hot as it sounds now.

This is one of my main reasons for choosing dividend growth as my main investment style. As long as my dividend growth percentage is larger than inflation, it means that I have more purchasing power every year. (excluding the effects of tax changes or sale of assets).

This is what makes it so attractive to me. As long as I can make sure that the growth rate is better than inflation then it should translate to a continuously improving lifestyle. I have no idea what I need that growing pile of spending money for but I'm sure I'll figure it out along the way.

[cemanuel]

Just read an article today and supposedly 50% of boomers have next to no investment savings.  Net worth under $200K, and a SS pension.  Only about 1/3rd have employer pensions.  Scary stuff.

Any time I read something like that the spread between median and mean numbers are really bad. And if you have reasonable income, so unnecessary these days. A lot of tools out there. A lot of folks make different choices than planning for retirement during their working years.

There are people who had a devastating life event they couldn't get past, particularly medical with poor health insurance. I give those folks a pass. But for those with a decent middle-class income and no extreme events? No reason for it. Well, there's always a REASON; they tend not to be good ones.

[ken-do-nim]

(02-08-2022, 05:30 AM)crimsonghost747 Wrote:

(02-07-2022, 04:28 PM)ken-do-nim Wrote: Remember that thanks to inflation $150k in 10 years won't be as hot as it sounds now.

This is one of my main reasons for choosing dividend growth as my main investment style. As long as my dividend growth percentage is larger than inflation, it means that I have more purchasing power every year. (excluding the effects of tax changes or sale of assets).

This is what makes it so attractive to me. As long as I can make sure that the growth rate is better than inflation then it should translate to a continuously improving lifestyle. I have no idea what I need that growing pile of spending money for but I'm sure I'll figure it out along the way.

The other option is when you have a high DIV payer, to reinvest a portion of the proceeds equal to the current rate of inflation.  For instance, let's say you have an 8.5%er who rarely if ever raises the dividend.  If inflation is 2.5%, you can still withdraw 6%.

[fenders53]

(02-08-2022, 06:09 AM)cemanuel Wrote: Just read an article today and supposedly 50% of boomers have next to no investment savings.  Net worth under $200K, and a SS pension.  Only about 1/3rd have employer pensions.  Scary stuff.

Any time I read something like that the spread between median and mean numbers are really bad. And if you have reasonable income, so unnecessary these days. A lot of tools out there. A lot of folks make different choices than planning for retirement during their working years.

There are people who had a devastating life event they couldn't get past, particularly medical with poor health insurance. I give those folks a pass. But for those with a decent middle-class income and no extreme events? No reason for it. Well, there's always a REASON; they tend not to be good ones.

There are a number of common things that can wreck a retirement saving plan, that you may not have complete control over.

As you mentioned medical can end it all and make you not even care.  You'll be spending your time trying to figure out which program might help you enjoy your life just a little.  My brother-in-law maxed out a good medical insurance plan's lifetime benefit.  It was financial game over after that.          

Divorce (with kids) is a big one.  You often end up with two broke adults, that may kill some years getting their retirement plan back in order, if they don't give up.  

Lack of financial education is a big problem for all generations.  Many boomers were blissfully ignorant. I have a pension, and SS, so I'm probably good since I have a few $K in the bank.  That game changed in the 80's when large companies started going BK and the pension fund often wasn't solvent when interest rates fell from crazy land.  Then pension plans just went away.  A lot of the younger generation just has no clue they are going to work until they die if they don't start saving early.

I had some early excuses to not bother.  Lousy wage and economy ten years out of college.  I did have a financial education so I knew I better find a way to get started.

[cemanuel]

Update:

Now that I've been retired for a bit, my day-to-day living expenses are down by about 15-20% compared to when I was working. These are things like groceries, gas for the vehicles, eating out, buying a pack of gum at Speedway, etc. I got my cc statement earlier this week and that's twice in a row it's been that way.

This does NOT mean my overall spending is down. Health care - automatic account withdrawal - already more than makes up for it. And I'll be traveling once spring gets here. But even though I used to bring lunch to work, evidently the "unseen costs" of employment were more than I thought.

[fenders53]

I am three days into my retirement. No big news to report. I am planning for my expenses to be fairly high the first few years. To be honest that stresses me but the drawdown from my port the first years will probably be 6%-5%-4%. By then all pensions have kicked in and I could probably draw zero from my IRA for a few years if I don't like where the balance is. A 5% return from the market the next few years would make me feel better for sure.

[cemanuel]

I'll offer this. When looking to invest a chunk of money into the market with a new account focus and many different stocks, being retired is a HUGE help.

I'm sure I'd have figured out how to do it if I was still working but I'd have been frazzled. Last week I went in thinking I'd be rushing to get what I wanted re looking into companies completed by yesterday. I started working on it in earnest Monday and was largely finished by Friday.

[crimsonghost747]

Time for a little update.
I've been a free man for 1.5 weeks now. And I've been so busy I haven't even had time to visit this forum much. I got home from my last work assignment and didn't even have time to unpack, just packed another bag and left for some well deserved vacation with my girlfriend. We are somewhere way above the arctic circle right now. Amazingly beautiful nature, tons and tons of snow, superb norther lights... life is good.

I haven't had time to experience the "take it easy" life yet since I've been so busy, and looks like I'll stay that way for another couple of weeks. Lots of things planned and I almost forgot that I'm still enrolled in university so I should maybe study a bit once in a while. But I can say that it's a lovely feeling when I know that this "vacation" doesn't currently have an end date.

[fenders53]

I love the northland. Good to hear you are having fun.

[ken-do-nim]

Yes, enjoy!

I was away at a gaming convention myself. Now I need to have an experience-nature vacation.

[cemanuel]

Back in the day I used to enjoy baking. My version of Christmas Cheer was to deliver loaves to a bunch of friends. But I haven't done it in a while.

Decided to try my hand at it again now that I'm retired and have the time. Baking bread is a lot like having a garden. It makes zero sense from a pure food source perspective when you consider your time. Produce - and bread - is cheap and plentiful in this country. What you bake/grow does taste better but IMO you should be doing it because you enjoy it. I discovered that I still do.

Here's the fringe benefit. I plan to incorporate bread day into housecleaning day. Cleaning is the single easiest thing for me to put off until I gross myself out and spend the better part of a day taking care of my own mess. Lot of down time with bread - waiting for it to rise and bake. So baking/cleaning days will be merged.

   

[fenders53]

Looks good. I love homemade bread.