I see what you mean. It won't be a big issue as if I am accurate in my projection for 2034 spending, it should be similar to my spending in 2050 when I am 70, barring extra health costs (non-health insurance premium related as I have also budgeted for my health insurance before Medicare).Level of confidence of which prediction? The prediction of our spending amount in 2050? Or SS amount being different from my projection?I plan to retire in ~10 years (2034) and I will collect SS in 2050 when I am 70. From 70 and on, me and SO's spending will be below the total of my and her SS (after-tax).
You're in your mid-40s now. What's your level of confidence around this prediction? Honest question.
For SS, there are various tools that let you project SS amount based on future earnings.
For spending, I know how much I spend right now, and I need that inflation adjusted amount when I retire in 2034, and when I collect SS in 2050 when I am 70. I know when my 2.25% fixed rate mortgage will be paid off, etc etc.
That is the beauty of using TIPS because you take the inflation component out of it.
Obviously I review my projections annually, and I can easily adjust the TIPS ladder with the other 60% of my portfolio (i.e. buy more TIPS if needed).
I have a high level of confidence, also understanding that I need to review annually and might need to buy more TIPS if my spending habits/projection change.
I meant overall spending (not SS risk). I'm not as confident that far out, which adds some complexity. And best spending assumption is above SS. Thanks for sharing your thoughts.
From now to 2034 and no to 2050, I still have 60% of my retirement portfolio in stock, hopefully growing. Plus I will be contributing $92k (one 401k w/ backdoor Roth and another 401k w/o backdoor Roth) a year in today's value, until I retire in 2034.
I can easily fund extra TIPS if I find my spending projection needs to change.
Worst case is I get an immediate annuity when I am close to 70, which will be cheaper because I will be older then.
Any comments are welcome though as I would like to also learn if my thinking doesn't make sense.
Statistics: Posted by silvergga — Wed Apr 17, 2024 1:52 am — Replies 3135 — Views 684033