Very interesting retirement plan balance history

[disneysteve]

But you can only that retrospectively. As Texashusker points out there are many decades where it was flat.

I'm certainly not promoting a 100% stock portfolio. We've had that discussion before. I'm a 60/40 guy myself at this stage of my life. We have been as high as 85/15 in the past but we were never 100/0.

[jIM_MI]

My cousin retired in 2010.
He took his first IRA distribution in May 2011. Prior to that distribution, the account balance was $373,430.
Every month since then he took out the same amount, $1,565 per month. That continued until his death last month, exactly 10 years later.

The account balance when he died in May 2021 was $445,319.

So he withdrew $18,780/year. That represented 5% of his balance at the start. He continued that same withdrawal for 10 years and still ended up with almost $72,000 more than he started with.

Obviously, the last 10 years were a great time to be invested and that greatly contributed to this outcome, but it's still informative to see how someone's numbers actually played out in real life rather than just an online calculator projection. Plus this account was with a paid investment firm that charged him 1% AUM and he still ended up with more money 10 years later. Had he done it himself, he would have had over $100,000 more after 10 years.

My father retired in 2001 and his balance now is higher than when he retired as well.
He only takes out RMD because mother has a govt Pension plus their SS

[LivingAlmostLarge]

My father retired in 2001 and his balance now is higher than when he retired as well.
He only takes out RMD because mother has a govt Pension plus their SS

My parents as well have a substantially larger balance. The years have been good to them.

[disneysteve]

This just makes me think we may be agonizing over having "enough" for me to retire when the reality could very well be that if I retired tomorrow, we could have more money 5 years from now than we do today and I could have gotten out sooner. Sure wish my crystal ball wasn't so murky.

[jIM_MI]

This just makes me think we may be agonizing over having "enough" for me to retire when the reality could very well be that if I retired tomorrow, we could have more money 5 years from now than we do today and I could have gotten out sooner. Sure wish my crystal ball wasn't so murky.

I have read a lot of papers on backtesting market and monte carlo, and the biggest risk is a down market the first 5 years of retirement or needing to withdraw a higher than normal percentage the first 5 years of retirement.

[disneysteve]

I have read a lot of papers on backtesting market and monte carlo, and the biggest risk is a down market the first 5 years of retirement or needing to withdraw a higher than normal percentage the first 5 years of retirement.

That makes sense. It's also the main reason I want to have 3 years of cash on hand when I retire, just in case the market tanks soon after. If we can live on cash for a few years, we can give the market time to recover.

[LivingAlmostLarge]

I wonder if people really spend what they think they will?

[disneysteve]

I wonder if people really spend what they think they will?

Some spend more, some spend less, some are pretty close. It all depends how realistic their projections were And how life plays out. Unforeseen stuff could raise or lower your actual spending.