Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just don’t be like my in-laws. They never figured out how to do it. They are worth almost $20M from the sale of a business and live on their social security checks plus about $40k/year.

Can we have one thread without gratuitous in law bashing? Your response isn’t helpful in the slightest.

It’s not bashing. It’s a cautionary tale on how not to behave with your money. It actually benefits me if they DON’T spend it. More inheritance for us! It’s just sad though - they should be living their best life.

+1

As well as the fact that if I had that much money (and we do), I'd want to see my kids and grandkids benefit from it when it matters most (college age and just after). It can change the entire trajectory of their future lives, without much impact on the couple.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just don’t be like my in-laws. They never figured out how to do it. They are worth almost $20M from the sale of a business and live on their social security checks plus about $40k/year.

Maybe they don't want any more? Want to leave it to future generations and/or charity? Or are they fearful?

I agree this doesn't tell us anything. It certainly is sad if they are forgoing enjoyment out of misplaced fear of overspending, but a retired couple with a paid-off house can live quite comfortably on $80,000 a year or so.

I’m the PP with the in-laws. It’s some of both. They aren’t extravagant people but there are definitely things they both want that they don’t allow themselves and it’s silly. FIL would love a new car and MIL really wants to throw a large milestone anniversary party for them and each is telling the other one no. Us kids are telling them do both and don’t give it another thought! They go on and on about wanting to host an extended family vacation (like a cruise or something) but then balk at what it will cost. Their own parents contributed more than half of college expenses for my DH and his two siblings and his parents won’t put anything in our kids 529s. They are in danger of running up against estate tax issues, especially if laws change, and even they hate that idea, but they are too afraid to start transferring even minor amounts of money to their kids or grandkids, even though their portfolio grows significantly every year because they spend so little of the income it throws off. Not saying they need to dramatically change their lifestyle but there is definitely a lot of unfounded anxiety at play and it’s very sad.

Well that is sad! They should enjoy their money while they can, and really should take advantage of the estate tax benefits with trusts/gifting before it sunsets. We are worth more than that (and kids are in college) and we have started gifting to the kids already, and plan to keep their 529s open forever, so we can start gifting to those yearly even before grandkids arrive (our kids all eventually want kids, so it's highly likely to happen at some point). $34K into the 529 for each kid for 3-4 years now will set up 2 grandkids from each kid for college in 20+ years.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just don’t be like my in-laws. They never figured out how to do it. They are worth almost $20M from the sale of a business and live on their social security checks plus about $40k/year.

Can we have one thread without gratuitous in law bashing? Your response isn’t helpful in the slightest.

It’s not bashing. It’s a cautionary tale on how not to behave with your money. It actually benefits me if they DON’T spend it. More inheritance for us! It’s just sad though - they should be living their best life.

Sad in your mind or are they sad because they can't figure out how to spend? Maybe they are happy as they are?

I'm a DP, and I really don't understand why you keep going on this. The PP was simply trying to help people with frame of mine in terms of spending. And then they say that it is only sad that the parents can't enjoy, basically, the fruits of their labor more at this stage of their life. As PP said, dad wants a new car but can't bring himself to spend the money, mom wants a big party, but doesn't want to spend the money. So that is sad when they have that kind of NW.

I was a DP. Sorry.

And I was truly trying to understand who was actually "sad" and why

Got it. As I read the PP's post the child of the wealthy couple is "sad" that the parents aren't enjoying their money more.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just don’t be like my in-laws. They never figured out how to do it. They are worth almost $20M from the sale of a business and live on their social security checks plus about $40k/year.

Maybe they don't want any more? Want to leave it to future generations and/or charity? Or are they fearful?

I agree this doesn't tell us anything. It certainly is sad if they are forgoing enjoyment out of misplaced fear of overspending, but a retired couple with a paid-off house can live quite comfortably on $80,000 a year or so.

If worth 20M+, they likely are collecting $60-80k from SS for the couple (assuming both were employed and doing well), so likely spending that plus $40K, so could be at $120K/year. And yes, if you own your home, you can live quite nicely on that amount. Especially if they have no desire to travel.

Anonymous wrote:Just don’t be like my in-laws. They never figured out how to do it. They are worth almost $20M from the sale of a business and live on their social security checks plus about $40k/year.

Well if they are pulling "top SS" they could each be getting $45K/year. That's 90K+40K= 130K/year. Assuming you own your home, you can still live very nicely on $130K/year. However, I get it, I'd be spending another $100-150K/year on travel and fun stuff personally. But there's a good chance your kids (or you) will be seeing a very nice inheritance down the road.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just don’t be like my in-laws. They never figured out how to do it. They are worth almost $20M from the sale of a business and live on their social security checks plus about $40k/year.

Can we have one thread without gratuitous in law bashing? Your response isn’t helpful in the slightest.

It’s not bashing. It’s a cautionary tale on how not to behave with your money. It actually benefits me if they DON’T spend it. More inheritance for us! It’s just sad though - they should be living their best life.

Sad in your mind or are they sad because they can't figure out how to spend? Maybe they are happy as they are?

I'm a DP, and I really don't understand why you keep going on this. The PP was simply trying to help people with frame of mine in terms of spending. And then they say that it is only sad that the parents can't enjoy, basically, the fruits of their labor more at this stage of their life. As PP said, dad wants a new car but can't bring himself to spend the money, mom wants a big party, but doesn't want to spend the money. So that is sad when they have that kind of NW.

I was a DP. Sorry.

And I was truly trying to understand who was actually "sad" and why

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just don’t be like my in-laws. They never figured out how to do it. They are worth almost $20M from the sale of a business and live on their social security checks plus about $40k/year.

Can we have one thread without gratuitous in law bashing? Your response isn’t helpful in the slightest.

It’s not bashing. It’s a cautionary tale on how not to behave with your money. It actually benefits me if they DON’T spend it. More inheritance for us! It’s just sad though - they should be living their best life.

Sad in your mind or are they sad because they can't figure out how to spend? Maybe they are happy as they are?

I'm a DP, and I really don't understand why you keep going on this. The PP was simply trying to help people with frame of mine in terms of spending. And then they say that it is only sad that the parents can't enjoy, basically, the fruits of their labor more at this stage of their life. As PP said, dad wants a new car but can't bring himself to spend the money, mom wants a big party, but doesn't want to spend the money. So that is sad when they have that kind of NW.

I was a DP. Sorry.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just don’t be like my in-laws. They never figured out how to do it. They are worth almost $20M from the sale of a business and live on their social security checks plus about $40k/year.

Can we have one thread without gratuitous in law bashing? Your response isn’t helpful in the slightest.

It’s not bashing. It’s a cautionary tale on how not to behave with your money. It actually benefits me if they DON’T spend it. More inheritance for us! It’s just sad though - they should be living their best life.

Sad in your mind or are they sad because they can't figure out how to spend? Maybe they are happy as they are?

I'm a DP, and I really don't understand why you keep going on this. The PP was simply trying to help people with frame of mine in terms of spending. And then they say that it is only sad that the parents can't enjoy, basically, the fruits of their labor more at this stage of their life. As PP said, dad wants a new car but can't bring himself to spend the money, mom wants a big party, but doesn't want to spend the money. So that is sad when they have that kind of NW.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just don’t be like my in-laws. They never figured out how to do it. They are worth almost $20M from the sale of a business and live on their social security checks plus about $40k/year.

Can we have one thread without gratuitous in law bashing? Your response isn’t helpful in the slightest.

It’s not bashing. It’s a cautionary tale on how not to behave with your money. It actually benefits me if they DON’T spend it. More inheritance for us! It’s just sad though - they should be living their best life.

Sad in your mind or are they sad because they can't figure out how to spend? Maybe they are happy as they are?

I fully retired a number of years ago but I had deferred a lot of compensation that got paid off the last five years but that will end early next year. It was so much that it each year it was close to my normal salary. But with pensions, social security and now required distributions from retirement accounts I will have a pretty good income but not enough so I will have to start tapping into non retirement accounts. I’ve always reinvested my dividends but next year I will start using some of those dividends to cover my income gap. Hopefully, I will not have to liquidate any principal but if I have to I will. I can’t take it with me!

I retired almost a decade ago in my early 50s. My net worth at the time was about $4 million. The bulk of our net worth was in retirement accounts, but we also had saved close to $1 million outside of retirement in brokerage and savings accounts. Our net worth is now around $7 million. We’ve been living off of $200-$250k a year in our retirement, which has allowed for a very comfortable even if not extravagant retirement. We travel frequently, eat out regularly, help our kids out financially when necessary or appropriate, and have enough to support both our primary and second homes.

We’ve managed because we have a diversified portfolio and have figured out how to minimize taxes. Obviously savings aren’t taxed, just the earnings on them, but if you play it right the zero percent capital gains tax rate can take you very far. Most years our federal income tax liability has been zero or close to it. One year I made a rookie mistake that ended up costing me more taxes than I wanted to pay (I stupidly went over some limits while trying to help one of the kids buy a house) but it didn’t kill me and I learned from the experience.

And that brings me to my final point. When you’re retired you have more time to track your expenses and figure out what works financially for you. While we were never huge spenders when I was working, we also didn’t carefully track our expenses. After retirement we started doing that (we use Personal Capital) and it’s very comforting and helpful - and actually kind of interesting to see and play around with. We now know exactly what our cash flow is and what expenses we could more easily cut if we had to.

To sum things up, if you have a sizeable nest egg that’s diverse and includes savings and brokerage accounts as well as retirement accounts, you can make this work.

My parents saved really well for retirement and had a lot of trouble switching from saving mode to spending mode.

The single best thing they did was hire a financial advisor. During the saving years, they managed it all themselves, but it turn out to be much harder deciding where and when to pull from their savings (and the associated tax implications) then where to invest when they were accumulating it. The financial advisor does all that mental work for them. Plus every six months he maps out what they’ve spent, what they had to pull from various accounts and how that impacts future withdrawals and assumptions.

I do not currently have a financial advisor but after seeing the mental lift having one provided them in retirement, I will definitely get one at that point.

Anonymous wrote:

Anonymous wrote:Just don’t be like my in-laws. They never figured out how to do it. They are worth almost $20M from the sale of a business and live on their social security checks plus about $40k/year.

Can we have one thread without gratuitous in law bashing? Your response isn’t helpful in the slightest.

It’s not bashing. It’s a cautionary tale on how not to behave with your money. It actually benefits me if they DON’T spend it. More inheritance for us! It’s just sad though - they should be living their best life.

Anonymous wrote:Just don’t be like my in-laws. They never figured out how to do it. They are worth almost $20M from the sale of a business and live on their social security checks plus about $40k/year.

Can we have one thread without gratuitous in law bashing? Your response isn’t helpful in the slightest.

I would consider annuitizing some of your savings— if you have plenty then maybe SS plus annuitizing 1/3 is enough to cover basic living expenses.