03-03-2021, 09:27 AM
(03-03-2021, 08:55 AM)MikeWa Wrote: You shouldn’t account for only regular living expenses. Once in retirement, a healthy buffer in either cash reserve or additional income stream will be needed for emergencies. What if you need to replace a car or you or spouse gets sick and need a special treatment? There may be a need to cover long term care expenses in either a facility or by hiring nurse.Good points. Just for this reason I intend to start retirement with a newish vehicle and a couple more things I know I will "need" for the quality retirement I've always planned.
These costs will quickly drain your portfolio if they come from principal.
A few more considerations.....
-If you have another income source such as pensions, rental income, or even an intermittent part-time job, best to plan your budget so these sources could get you by for a few years early i retirement if the market goes to hell. I'd like to believe widespread dividend cuts could never happen, but we can't know that for sure. If your port goes 40% off that would be a horrible time to be selling off shares to live.
-It's likely I will have good enough health at age 60 to fully enjoy retirement life. Health at age 70 is far less certain, and even being alive at age 80 might be in question. I'm not planning to leave this world with all my capital. I'll make sure my heirs have some assets, and now and then I will take a chance and spend a little money while I can enjoy it. I gave up a lot of luxuries in life to be in my current financial situation. A long way around saying "you can't take it with you".