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At risk of outliving your retirement savings?

RDS

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Delaying retirement, portfolio of stocks, bonds, reverse mortgages etc. are solutions but inflation is a killer.
In the good old days, retirement was pretty simple. You worked 30 years. Got a pension. And put your money in bonds to make it last.

But this isn't your father's retirement. Back then, life expectancy was such that people only spent less than a decade in retirement.

Today is different. Boy, is it different!

After working for 30 years, it's not out of the question to spend another 30 years in retirement. And that, for lots of people, is the big worry.

People getting ready for retirement are worried that they won't be able to save enough to last. And people already in retirement worry they will outlive their nest eggs.
At risk of outliving your retirement savings?
 
If I run out of money, I'll just show up on the doorstep of whichever kid has the best snacks and sleep on their porch like an old stray cat until they feed me and take me in and rub my belly and stuff :)
 
i wonder if i'll even be able to retire.
 
i wonder if i'll even be able to retire.

Not until your body gives completely out probably. I plan on semi-retiring when I am in my 50's and do a lot of travel and then unretire at 60 :)
 
Delaying retirement, portfolio of stocks, bonds, reverse mortgages etc. are solutions but inflation is a killer. At risk of outliving your retirement savings?

If you're going to spend 30 years in retirement you need to WORK. If you go through all that life-prep and it's not enough - then obviously the problem is you retired and expected to coast along for over 30 years without a hitch.

It's illogical.
 
If you're going to spend 30 years in retirement you need to WORK. If you go through all that life-prep and it's not enough - then obviously the problem is you retired and expected to coast along for over 30 years without a hitch.

It's illogical.

That and it would be boring as hell to be retired and broke for 30 years.
 
Delaying retirement, portfolio of stocks, bonds, reverse mortgages etc. are solutions but inflation is a killer. At risk of outliving your retirement savings?

28-fingers-in-ears.jpg
 
According to Monte Carlo simulations if you invest in a diversified portfolio of stocks and bonds (60% stock/ 40% bonds) you can withdraw from that portfolio at about 4% initial rate (annualized) and adjusted annually at 3% for inflation and not run out of money 90% of the time for a period of 25 years. If you retire at 65 this should cover you well into the early 90s, which is above the average life expectancy in the US.

At 5% the success ratio is 71%
At 6% it is 41%
 
According to Monte Carlo simulations if you invest in a diversified portfolio of stocks and bonds (60% stock/ 40% bonds) you can withdraw from that portfolio at about 4% initial rate (annualized) and adjusted annually at 3% for inflation and not run out of money 90% of the time for a period of 25 years. If you retire at 65 this should cover you well into the early 90s, which is above the average life expectancy in the US.

At 5% the success ratio is 71%
At 6% it is 41%

So if I end up with a million bucks in my investment portfolio, all I can withdraw is $40k/yr and I still have a 10% chance of not even making it 25 years?

Yup, I'd better keep working...forever.
 
Not until your body gives completely out probably. I plan on semi-retiring when I am in my 50's and do a lot of travel and then unretire at 60 :)

I actually like that idea a lot. We should all have at least a few years when we can actually enjoy ourselves, without work, and without being so old and decreped that we don't feel like enjoying ourselves.

I'm thinking that maybe I should start aiming not for perminate retirement, but maybe a temporary sebatical from work....soon, before it's too late.
 
So if I end up with a million bucks in my investment portfolio, all I can withdraw is $40k/yr and I still have a 10% chance of not even making it 25 years?

Yup, I'd better keep working...forever.

That $40k would adjust every year and I'd say focus in the fact that you have. 90% of making it. :) plus that $40k is to supplement your pensions and/or social security.

Maybe get 2 million :)
 
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