It's time to start digging up those Squirrelled Nuts!!!!

DairyQueen

cfw1994 wrote: »

I have that same nagging feeling....but then, I’ve had that feeling for about 18 months now: if I’d moved to cash back then, I’d be a huge % down :rotfl:

Now then.....where did I put that crystal ball :huh:

I was pretty sanguine until the last few months but the recent rises have been sufficient to give me the prickles. 'The prickles' are a crystal ball equivalent and can be relied upon almost as much as a tip for the 2:30 at Aintree.:)

DairyQueen

michaels wrote: »

I can't be bothered to look for the stats but I suspect with a safe withdrawal rate model that historically returns exceed withdrawals 5+ years out of every decade -on average - and that is the key bit. If you run cfiresim there are many more run away growth scenarios than close to bust scenarios.

I need to revisit cfiresim but it's the sequence of those up-and-down years in the first decade of retirement that concerns me. I have positioned our portfolio assuming that the first five years are -ve. Yes, I know, ultra-cautious.

Late last summer I finished positioning our portfolio for drawdown. We are overweight cash as drawdown will be front-loaded and most of that cash is earmarked for spending by 2025. As our drawdown rate will be low post-2025, and we will hold a cash buffer to suspend drawdown, we are overweight equities for the medium/long-term.

Or I thought we were...

Sadly, Mr DQ's mum died last November. It seems that he will receive a substantial inheritance sometime this year. Very conflicted at this turn of events as, like most people, we have not factored inheritance into our plans and benefiting from the death of a much-loved parent feels somehow 'wrong'.

We have decided to stay with our original retirement plan and make decisions about the inheritance after OH retires and we are settled into our new home. I think it will take some time to reconcile to this turn of events.

The best laid plans... etc., etc.

michaels

DairyQueen wrote: »

I need to revisit cfiresim but it's the sequence of those up-and-down years in the first decade of retirement that concerns me. I have positioned our portfolio assuming that the first five years are -ve. Yes, I know, ultra-cautious.

Late last summer I finished positioning our portfolio for drawdown. We are overweight cash as drawdown will be front-loaded and most of that cash is earmarked for spending by 2025. As our drawdown rate will be low post-2025, and we will hold a cash buffer to suspend drawdown, we are overweight equities for the medium/long-term.

Or I thought we were...

Sadly, Mr DQ's mum died last November. It seems that he will receive a substantial inheritance sometime this year. Very conflicted at this turn of events as, like most people, we have not factored inheritance into our plans and benefiting from the death of a much-loved parent feels somehow 'wrong'.

We have decided to stay with our original retirement plan and make decisions about the inheritance after OH retires and we are settled into our new home. I think it will take some time to reconcile to this turn of events.

The best laid plans... etc., etc.

My condolences.

I agree that sequence of return risks is real but it seems most of us hedge against that by setting a very low SWR to minimise the probability of running out of money (I often run the 'no failures' scenario). Probably worth thinking more about the consequences of excessive caution elsewhere but I am sure it does mean that the majority of years our pots will actually increase (especially in nominal terms) despite being in drawdown.

Inheritances I also find difficult. I would like my parents to spend as much as possible - they earned the money so should get the benefit - but there will probably be an inheritance. So on a cold intellectual basis it seems silly not to include it in my plans and instead potentially work longer and harder doing stuff I don't enjoy just because I am squeamish about counting a likely asset class.

Karmacat

DairyQueen wrote: »

Sadly, Mr DQ's mum died last November. It seems that he will receive a substantial inheritance sometime this year. Very conflicted at this turn of events as, like most people, we have not factored inheritance into our plans and benefiting from the death of a much-loved parent feels somehow 'wrong'.

Thats the position I was in, and thats what I did - although my mum was very elderly when she died, we expected her to live another ten years at least, she was younger than her mother had been when *she* died - she might have needed money for a care home, or a nursing service, anything. So the money I got, I'd thought about it, but never factored it in to a budget, never.

ggmf

Condolences DQ. Sadly Mrs GGMF's mother passed away rather quickly at the beginning of November, just as we were just starting to think about support and care packages. MIL (Mother-in-law) had very little in the way of assets, as such we had not factored in any thoughts of inheritances, as any assets MIL held would have been used to fund potential care package costs. My mother just keeps on going, even though health wise, she is a ticking-time-bomb, again she has very little in the way of assets, what she has may need to be released when the time comes to fund any care home requirement.

Sea_Shell

Condolences. This scares me the most about the future!!

Yes, the realities are that with both sets of parents still owning the family homes, there might be something left, but no, we haven't factored that in at all.

They may spend it, give it away, need it before then...which is of course up to them.

However, I might advise against depriving themselves of their assets too much...not for my benefit, but for their own longer term needs. Mine have a habit of bailing out other family, to their own detriment!! But that's a whole other saga!!

JoeEngland

michaels wrote: »

My condolences.

I agree that sequence of return risks is real but it seems most of us hedge against that by setting a very low SWR to minimise the probability of running out of money (I often run the 'no failures' scenario). Probably worth thinking more about the consequences of excessive caution elsewhere but I am sure it does mean that the majority of years our pots will actually increase (especially in nominal terms) despite being in drawdown.

Inheritances I also find difficult. I would like my parents to spend as much as possible - they earned the money so should get the benefit - but there will probably be an inheritance. So on a cold intellectual basis it seems silly not to include it in my plans and instead potentially work longer and harder doing stuff I don't enjoy just because I am squeamish about counting a likely asset class.

There's a chance I'll get an inheritance in the future, but I haven't included it in our financial plans as I didn't want that to rely on a windfall that might not happen.

crv1963

My condolences.

My M-I-L died a few years ago, we have not factored my wifes share of the estate into our plans at all either. The executors have not progressed disposing of the bulk of the estate including the house - another issue but not worth falling out with siblings over money.

shinytop

Luckily I don't have to factor inheritance into our plans because whatever I get will make little difference to us. Neither set of parents is anywhere close to being wealthy and there are fifteen siblings in total between the two families to share what there is!

Sea_Shell

Well folks, we hit a milestone this week!!

I've now been retired for 6 MONTHS!!!:j

Wow, that's passed so quickly, and no, I haven't missed being at work for one second.

It helps that the finances are holding up so far and like I said up thread, we're actually (on paper) better off now than we were when I finished!!

I've been able to run, swim, walk, read, jigsaw and read MSE to my hearts content. Not to mention a few more sneaky glasses of wine with lazy lunches!!:D

Can't wait for Spring, when we shall really hit GO with our out and about plans. We need to sort our National Trust Membership too.


One other thing, as an aside. I hope the MSE migration goes to plan, and that we'll all still be here afterwards, and we don't get lost in cyberspace!! Or that we decide that it's not user friendly enough for us anymore and quit the forum.

Fingers crossed i'll see you on the other side!!;)


To Infinity....and beyond!!!