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New Math for Retirees and the 4% Withdrawal Rule

Stashed in: Awesome, Longevity!, America!, Aging, Retirement, Aging, Personal Finance, Retirement

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With longevity increasing in an expensive way -- people live longer but need more medical and nursing care -- the rule of thumb that retirees should plan to withdraw 4% of their assets per year for 30 years is coming under scrutiny.

It sure seems like there's no amount that is a guarantee in retirement anymore unless you're super rich.

I think it's less about being super rich, and more about being able to be honest with yourself about your true wants and needs in life -- which is very hard to do but especially I would imagine in the context of possibly dissolving so many of the bonds that held your adult life together. I respected the guy who recently said he didn't want to have aggressive medical care after age 75, and I respect older people I know who are able to streamline their possessions so they don't spend their retirement just taking care of a big house full of old stuff, and I respect the volunteers who keep so many things running... those are the role models I want to have.

I went back and reread that guy's article, and I see what you mean:

I think you have chosen excellent role models.

I think I'd be 67 if I stayed in my day job to "retirement."  According to Adam's rule of 75, I have to make it eight years.  Assuming my house will be paid off, because I will never again take equity from my primary (read: "only") real estate to bootstrap a business, I won't need that payment.  I can still forage for wood so I won't much money for oil.  My grandparents ate tea and toast as they aged, but my doctor took gluten from me, so I'm wondering what my old-person equivalent is--maybe avocados and coffee? Both, expensive--I need to save extra for that.  And let's not talk about health care, because even if I were financially ready for retirement, that's the one thing that can take someone who is well prepared and crush them like Giles Corey--the irony of fate. 

So, I have enough money to retire on cat food if I can find a vegetarian brand, but I'm starting something which I think may just be the solution.  It's called the Soylent Green Retirement Fund.  It's not ready for the general public yet...If I can just get Jack Kevorkian on board as an advisor, all the kinks'll be ironed out and I can retire in style... 

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