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^
Or an even funnier way to put it, 'what if I live too long and run out of money?' I'm trying to imagine waking up one morning and saying, 'oh ****, I've lived too long.' There are people aged 110 who get up each morning and enjoy their day. Probably not in the same way as they did at age 30 or 40 but they enjoy it nevertheless. You're saying, 'I don't want a plan to do that'.
... I wonder who that will be?

OTOH, you're saying "I want a plan for that as I'm going to live to 100+" ... get real. No wonder financial planners love folks like you, selling fantasies.
 

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As always, this kind of planning makes the assumption that you are going to 'draw down' from capital. There is however another way and that is to not touch your capital at all but instead live off the income you generate. There is no age limit on how long that can be done for.
Sure that's an option but for most people either they don't have enough capital to generate income for their desired lifestyle and/or they don't want to limit their lifestyle for no good reason. The saved money is there to be spent, albeit, within an estimated budget over time.
 

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^ ... I wonder who that will be?

OTOH, you're saying "I want a plan for that as I'm going to live to 100+" ... get real. No wonder financial planners love folks like you, selling fantasies.
A man in my old swimming group was still getting in the pool at 104. And my own grandmother still swam in the ocean into her 90s.

https://www.cbc.ca/news/canada/manitoba/105-year-old-winnipeg-swimming-champion-passes-away-1.2825576

As a side note here... hard to tell correlation/causation but there are probably worse things you can do than swimming regularly. Speaking of which, I'm off to the pool to swim laps.
 

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LTA, it has nothing to do with a 'need to know when I will die'. One's best before date is simply a planning assumption. Few people will have the capital resources to simply live off investment income, nor does that make sense long term. The capital will jut continue to appreciate with markets and one dies the wealthiest person in the funeral home. What is the point in that?

I have no interest in having more capital left the day I die than I do now so it makes no sense whatsoever to unnecessarily 'horde' resources when there is no need to do so. However, that also doesn't automatically imply spending like crazy and running out of money either. Financial planning tools take an objective look at a retirement period and spending rate, without just throwing a dart at the board. How one actually then lives their life can be correlated back to planning outcomes.

Everyone has an anecdote on a 100+ year old friend or relative. StatsCan puts it into reality. https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1710000501

Reality is only 0.03% of the country's population is 100 years of age or more and only 0.6% of those now aged 70-74. I am more than 99% sure I am not going to see 100.....and for what it is worth, I have no interest in doing so.
 

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My spreadsheet goes to age 100. No reason, just went nuts with cut-n-paste rows.

I calculated the drawdown of RRIF to run out at age 90. If I'm still alive by then, I'm sure my expenses will be minimal. After all, we're soon gonna have free drugs ( I don't need any yet ), free glasses ( I don't need any yet ), and free dental ( just 6 mos cleaning now ).

What else does a 90 y/o spend money on?
 

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A man in my old swimming group was still getting in the pool at 104. And my own grandmother still swam in the ocean into her 90s.

https://www.cbc.ca/news/canada/manitoba/105-year-old-winnipeg-swimming-champion-passes-away-1.2825576

As a side note here... hard to tell correlation/causation but there are probably worse things you can do than swimming regularly. Speaking of which, I'm off to the pool to swim laps.
... I think ALTRED said it best in his post #25, along with the StatsCan link.
 

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Life is pretty random. And what happens if you do happen to become one of those 102 years olds?

If there's one thing worse than being 102, it's probably being 102 and having $0 left.
 

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Life is pretty random. And what happens if you do happen to become one of those 102 years olds?

If there's one thing worse than being 102, it's probably being 102 and having $0 left.
... so what's the use of being 110 year old, lost of all faculties but with a trillion dollars in the bank? Richest person in the graveyard ... eventually?
 

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LTA made a lot of great points in his post such as:

_________________________

What seems funny to me is that some people do live within their means all their lives and yet when they retire they suddenly switch to a 'live till when I guess I will die' mentality.

Imagine someone 30 writing, 'what if I don't live to reach 40 and I die with money in my savings account, what a disaster.'

'what if I plan for 110 and only live till age 90, I'll leave money in the bank, what a disaster'

'what if I live too long and run out of money?' I'm trying to imagine waking up one morning and saying, 'oh ****, I've lived too long.'


_________________________

These are the same thoughts I had through this thread, but the rebuttals to these ideas that others have posted are also quite good.

No matter what, it ends badly.

Everyone's situation is different, so there's no right answer to the OP's original question.

ltr
 

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Life is pretty random. And what happens if you do happen to become one of those 102 years olds?

If there's one thing worse than being 102, it's probably being 102 and having $0 left.
That won't be the case. There will be CPP, OAS and even GIS. At that age, one won't even know what is coming in or going out. Besides, you are assuming inflexible withdrawals. There is plenty of time for one's POA to make adjustments* passing through 90 when one won't be spending any money of consequence anyway. Your 3% will go mostly unused.

* In the case of the VPW table https://www.finiki.org/wiki/Variable_percentage_withdrawal#VPW_Table, just start capping withdrawals at 10-12% as one hits 90 rather than ramping up exponentially in those last years.
 

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LTA, it has nothing to do with a 'need to know when I will die'. One's best before date is simply a planning assumption. Few people will have the capital resources to simply live off investment income, nor does that make sense long term. The capital will jut continue to appreciate with markets and one dies the wealthiest person in the funeral home. What is the point in that?

I have no interest in having more capital left the day I die than I do now so it makes no sense whatsoever to unnecessarily 'horde' resources when there is no need to do so. However, that also doesn't automatically imply spending like crazy and running out of money either. Financial planning tools take an objective look at a retirement period and spending rate, without just throwing a dart at the board. How one actually then lives their life can be correlated back to planning outcomes.

Everyone has an anecdote on a 100+ year old friend or relative. StatsCan puts it into reality. https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1710000501

Reality is only 0.03% of the country's population is 100 years of age or more and only 0.6% of those now aged 70-74. I am more than 99% sure I am not going to see 100.....and for what it is worth, I have no interest in doing so.
The elephant in the room AltaRed is that most people don't have enough money to fund retirement without spending their capital. I don't care how much capital I leave behind me, I just care about having enough income to do what I want to do till I die.

Most people retire with some kind of an income from pensions or whatever but that income is not as much as they would like it to be. It's all about human nature and is the same reason why most people live in debt, they want more than they can afford. But there are SOME people for whom that generalization does not hold true. There actually are people who earn more money than they find they need to enjoy their life.

My wife and I live very happily on less than 2/3rds of our income. That income is without touching capital. So capital just sits there so to speak. So what? Just as you say you have no interest in having more capital left the day you die and that 'hording' it makes no sense, I agree. I don't horde it, I don't care how much I leave, I'm just like you in that regard. The difference is I still don't need it all and so it will just sit and build and I'll continue to not care if it does or not, as long as I have more income than I need to do as I want.

I don't need any 'planning assumption' as to when I will die. You call it a 'simple' planning assumption. Really? I don't find anything about when I will die, simple. I don't want to guess as to when it will be, I sure as heck don't want to plan when it will be or I'll go broke, etc.

There is no point to dying the wealthiest person in the funeral home, now what is the point to dying the poorest person in the funeral home. Or the point to dying, the day before you go broke and become the poorest? There is no point to any of it, why pick on their being no point to dying with money left over? What is WRONG with dying with money left over? Someone will get it even if it is Revenue Canada if you have no heirs. It won't go to waste, someone will use it.

One thing I know, I will not die the poorest in the funeral home. Someone who outlives their 'simple planning assumption' won't be saying that though will they? So which is the stupid way to do things? Live on less than you earn or plan on when you will die? Because one thing is for sure, you may not expect to live till you are 100 and may be 99% sure of that but what if you DO and you went broke the day before your birthday? Oops.

To me it's all about the real question. How much is enough income? If you have that, there is no need to bother spending any time, thought or effort on planning anything except how you want to spend it. Most people though can't answer that question of how much is enough income. The only word they know is MORE.
 

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LTA, it has nothing to do with a 'need to know when I will die'. One's best before date is simply a planning assumption. Few people will have the capital resources to simply live off investment income, nor does that make sense long term. The capital will jut continue to appreciate with markets and one dies the wealthiest person in the funeral home. What is the point in that?
... I think ALTRED said it best in his post #25, along with the StatsCan link.
I think LTA does not get it. His recommnedations would lead you to the big stash and no charitable/intergenerational donations when you pass on.
LTA made a lot of great points in his post such as:_________________________

What seems funny to me is that some people do live within their means all their lives and yet when they retire they suddenly switch to a 'live till when I guess I will die' mentality. _________________________

Everyone's situation is different, so there's no right answer to the OP's original question.

ltr
But the FP did address the situation that many FPs do not. I will give him that. But I think he missed the conversation that such a plan should engender. That is why OP is here.
 

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I would be interested to see/hear what financial planners actually use for themselves in their projections. And do they follow through their own advice.
 

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My wife and I live very happily on less than 2/3rds of our income. That income is without touching capital. So capital just sits there so to speak. So what? Just as you say you have no interest in having more capital left the day you die and that 'hording' it makes no sense, I agree. I don't horde it, I don't care how much I leave, I'm just like you in that regard. The difference is I still don't need it all and so it will just sit and build and I'll continue to not care if it does or not, as long as I have more income than I need to do as I want.
This thread has to do with the OP and best I can tell, the OP is not in a position (nor desire) to just live on income. For the purpose of this thread, it does not matter one iota to the OP what you or I would do.
 

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Discussion Starter #38 (Edited)
AltaRed ... thanks very much for that information ... I'll read up on it when I have time. Today turned out to be nutty.

RE:
As a side note here... hard to tell correlation/causation but there are probably worse things you can do than swimming regularly. Speaking of which, I'm off to the pool to swim laps.
I'm a big swimmer too.


As for someone else's response:
As always, this kind of planning makes the assumption that you are going to 'draw down' from capital. There is however another way and that is to not touch your capital at all but instead live off the income you generate. There is no age limit on how long that can be done for.

The problem for most people is that they cannot generate enough income with the capital they have or through pensions. Someone who has pension income of $100k for example has no need to draw down capital unless they want to live beyond $100k per year in spending. It's called living within your means.

What seems funny to me is that some people do live within their means all their lives and yet when they retire they suddenly switch to a 'live till when I guess I will die' mentality. Retirement is seen as a waiting for an end rather than simply a new time in life that should be treated in the same way as any other. Imagine someone 30 writing, 'what if I don't live to reach 40 and I die with money in my savings account, what a disaster.' Yet when someone writes, 'what if I plan for 110 and only live till age 90, I'll leave money in the bank, what a disaster', we don't see it as equally as stupid a thing to say. Or an even funnier way to put it, 'what if I live too long and run out of money?' I'm trying to imagine waking up one morning and saying, 'oh ****, I've lived too long.' There are people aged 110 who get up each morning and enjoy their day. Probably not in the same way as they did at age 30 or 40 but they enjoy it nevertheless. You're saying, 'I don't want a plan to do that'.

Interestingly, people who end up with nothing but government pension income don't have any problem. They have an income and they learn to live within in. When does it end, not until the day they die, WHENEVER that may be.

It seems to me there is something very fundamentally wrong with this 'I need to know when I will die, so I can plan' picture.
Wow LTA, if by "you're saying ..." you are referring to me, you sure are making a lot of assumptions about what I'm thinking, which isn't actually what you suggest I'm thinking. What I'm thinking is I want to make the most of the healthiest years I have left, so I don't avoid doing some things (i.e. related to amount of travel) because I think I can't afford it, if in fact I can afford it. I WILL have to draw down on the capital. If I had triple the money I have, it wouldn't matter what age I was planning to because then I'd have more than I could ever spend. So NO LTA I'm NOT saying " ...'I don't want a plan to do that," even if you think or want to suggest I am. I'm not sure about even posting on this forum if people here make so many assumptions and try to put words in other people's mouths and thoughts in other people's brains. And NO, I also never said "I need to know when I will die." lol No one can possibly know that. What I'm saying it's, it's unlikely I'll live to 110, based on family history. There's a big difference between what I'm thinking, and your extensive suggestions (assumptions) about what I'm thinking.

RE:
LTA, it has nothing to do with a 'need to know when I will die'. One's best before date is simply a planning assumption. Few people will have the capital resources to simply live off investment income, nor does that make sense long term. The capital will jut continue to appreciate with markets and one dies the wealthiest person in the funeral home. What is the point in that? ....

Everyone has an anecdote on a 100+ year old friend or relative. StatsCan puts it into reality. https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1710000501

Reality is only 0.03% of the country's population is 100 years of age or more and only 0.6% of those now aged 70-74. I am more than 99% sure I am not going to see 100.....and for what it is worth, I have no interest in doing so.
Exactly. I'm just trying to decide what's a realistic age to plan to. LTA is basically mocking me for considering reducing the outer age limit for the financial plan, yet most people think planning to age 110 is "ridiculous" (the word most people use when I mention that to them.)

I'm still reading responses ... and trying to reply in one post, thus I keep editing this.

What else does a 90 y/o spend money on?
One of my parents was in private assisted living the last two years of life, and it was very (VERY) expensive ... more than living in the mortgage-free house.

... versus the upside of gifting his assets to kids whilst alive? Did the f.p. not make a suggestion?
I wouldn't be able to retire if I gifted a significant amount of money to my children during my life, other than a few thousand dollars here and there, unless I have a streak of spectacular returns. Though, the financial planner did ask me at the outset of this process if I planned to gift anything and, if so, when. It's very early days ... far too early to consider gifting money that enables me to retire. It's sobering how much money is actually necessary to generate a modest retirement income while at the same time investing prudently for reasonable returns without high risk.

My wife and I live very happily on less than 2/3rds of our income. That income is without touching capital. So capital just sits there so to speak. So what? Just as you say you have no interest in having more capital left the day you die and that 'hording' it makes no sense, I agree. I don't horde it, I don't care how much I leave, I'm just like you in that regard. The difference is I still don't need it all and so it will just sit and build and I'll continue to not care if it does or not, as long as I have more income than I need to do as I want.
That's great. Though your income might be high so it might be easier for you to live on 2/3 of your income. Someone else's entire income might be less than 2/3 of your income. Anyways, I have zero debt and plan to keep it that way, thus the planning. I would think people here would think it's smart/prudent to hire a financial planner in my situation (no pension, managing my own retirement fund without extensive knowledge of investing.) I sought outside advice to develop as realistic a financial plan as possible, while recognizing there are unknowns. The age we might live to is one of those unknowns.

I don't need any 'planning assumption' as to when I will die. You call it a 'simple' planning assumption. Really? I don't find anything about when I will die, simple. I don't want to guess as to when it will be, I sure as heck don't want to plan when it will be or I'll go broke, etc.
IF you have so much money that you don't need to make planning assumptions because you know you have so much money that you'll never run out, then that's good for you. However, some people may have a more modest amount of money to retire on, but an amount that requires more planning to meet their goals.

Lastly:
I guess this is why they often say to avoid talking about religion, politics, and money. It's obviously contentious. Reading everyone's responses was interesting, though wish people wouldn't make assumptions what someone is thinking by extrapolating. One thing doesn't necessarily mean another.

Have a good evening :)
 

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LTA is best ignored. What he can or wants to do has no relevance to your specific situation.

I do suggest you take a good look at VPW withdrawal methodology. You can pick your start date (age) for withdrawal and your preferred asset allocation. and then trial and error beginning sums to get an idea of what size you want/need your nest egg to be. VPW methodology will always allow you to start spending more money than a very rigid SWR methodology, whether indexed for inflation or not, or whether re-calibrating the portfolio value at the beginning of each year or not. And remember, you don't HAVE to spend the amounts VPW gives you. These are the maximum amounts to be withdrawn.
 

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Keep in mind that this is a plan. Circumstances change over time. I started planning in my early 50's. Running the numbers on my own program and doing the whatifs and tax scenerios.

We have changed the plan multiple times, even since early retirement. Why? Lifestyle choices, ROR on our assets, spending...whatever. Even some health issues. Like others I took the plan out to 90. Perhaps in five years I might take it to 95 or perhaps drop it down to 75 for one us. One thing for certain...I do not want to be the richest person in the old folks home wishing that we had done this or that in retirement whilst we had the health, the inclination, and the money. Plan your retirement but don't plan it away.

Be flexible and acknowledge that changes in your life will necessitate changes in your financial plan. AltaRed certainly has the right mindset for this. Practical, Flexible, Realistic.
 
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