Withdrawal calculator

[SAJ-99]

I get it, but if someone only had a million, needed it to last 30 years, that much in equities is a lot of risk. I would expect most pro advisers to talk them down from that.

Not sure all people are good at assessing their own risk tolerance unless they have been actively managing their own investments before retirement. Even then they should be made aware of the impact of strong corrections.

The near future projections ...probably for some years...are for lower returns than we've seen the last decade, and higher inflation.

Now...lower the % in equties a bit...and you will likely be able to weather anything for 30 years and withdraw 5%. if your investments do really well RMDs might affect that.

I agree 70/30 is a little aggressive, but not much. Vanguard 2030 Target date fund (retirement 2026-2030) is currently about 60/40. It transitions over 7 years to the Retirement income fund (VTINX) which is 50%/50%. This is pretty much standard in the advisory world. The 50% in equities might be tilted toward lower beta, higher dividend stock, but there is also some cashflow risk in the bond piece which has a duration over 5.

I was just running a what-if using the worst period in recent memory. The absolute worst would be buying in fall of 1929 and by Spring of 1932 you had lost 85% of your investment and it would take 4.5years to get back to break even if you sold nothing. The issue is size of the portfolio versus spending, i.e. cash flow needs. A billionaire doesn't have 1000x the non discretionary spending of a millionaire.

I would agree that people are not good at assessing their risk tolerance. In fact, they suck at it.

 

[Robg2]

But don't withdraw before retirement!

Not true - that’s the beauty of a Roth. You can withdraw your contributions (not your earnings) five years after you made them.

 

[El Jason]

Hells Canyon is one of my top bicket list places to see/ possibly hunt. You might be onto something there....

I might know a guy…

 

[NoWiser]

I think if I have to go to assisted living, I'll instruct the boys to use me as bear bait.

My long term care plan is to step up my under-ice beaver trapping in my 80s. Only a matter of time until I step in a run and go down.

 

[rookieforever33]

There are nursing homes full of people that said they would never be in one. The only true way to avoid it is to save enough for home health care. Either family/loved ones, or professional. Either have their own issues. Plus getting sick can ruin the best laid plan.

 

[BigHornRam]

There are nursing homes full of people that said they would never be in one. The only true way to avoid it is to save enough for home health care. Either family/loved ones, or professional. Either have their own issues. Plus getting sick can ruin the best laid plan.

Dang! Here I was thinking Visiting Nurse Ratched would be a viable plan.

 

[Bonasababy]

Not true - that’s the beauty of a Roth. You can withdraw your contributions (not your earnings) five years after you made them.

 

[44hunter45]

Not many good LTC policy options left these days. The "good" ones cost a lump sum and have a fixed benefit and if not used they have an amount paid out to beneficiaries. Generally most people with the money to buy one of these policies are probably better off covering it from other savings.

The median nursing home stay is 5 months. Everyone knows about the exceptions, but reality is most don't last long. Pull the money from 401k/IRAs, which is taxable, but also deductible as medical expenses on taxes. After tax funds and real estate receive a step up in basis so better to die with those funds and other spouse can liquidate cheaper if needed.

This was my experience with my parents. A boatload of hassle finding them an affordable place and they were gone in 2 months. Arizona has state funded elder care, but you have to prove indigence. The facilities taking state funds are the worst of the worst.

 

[Robg2]

I'm scratching my head on this reply. What I said about Roth withdrawals is true.

 

[Nick87]

I'm scratching my head on this reply. What I said about Roth withdrawals is true.

I dont know shit about Roths but you have to consider the source.

 

[westbranch]

This was my experience with my parents. A boatload of hassle finding them an affordable place and they were gone in 2 months. Arizona has state funded elder care, but you have to prove indigence. The facilities taking state funds are the worst of the worst.

My dad is currently one of the exceptions, he had a stroke in July 2023; a few bad falls in the next several months as a stubborn old farmer and he was moved to a local assisted living in our nearby small Northeast MN town in Dec 2023. For a small facility with a lot of poor (Medicaid) patients they do a good job.

It was a big shift for my dad when spent 80 years living in the same farm house that he was born in. Still living at the facility with dementia but the staff call him smiley and my mom is able to visit him everyday (12 miles one way). She actually plans to move to their HUD subsidized apartments in Nov (don't worry folks, they raised 4 kids that pay a lot of taxes and support programs like this)

Sorry for the off tropic OP, but semi related.