Thinking About Retirement, Part 2

There are three other retirement-related concepts I have been thinking about lately.  

One is how long people live, or in particular, how long I will live.  This is, of course, unknown.  So we look to historical statistics.  Mortality rates are dropping.  Life expectancy is increasing, at least in the US.  There's even a breakdown for Southeast Asian males, but the data is older.  Of course, these are statistics.  You'll often hear stories of people who drop dead two days after their retire.  Even in my own family, the men rarely live past 80.   This factors into when to claim Social Security.  Many articles and mathematical calculations explore break even points when claiming at 62, 67, or 70. One should also think about spousal benefits.  These decisions are extremely personal, hence "personal finance".

The second thing that is swirling around in my head is spending in retirement.  I could sum it up as being somewhere between "Die with Zero", a book by Bill Perkins, and leaving something for my heirs.  The 4% rule has been deemed as too safe, even by William Bengen, who introduced it in 1994.   You will spend less and less as you grow older, meaning you can withdraw more in your "go-go years".  Your withdrawal rate is also dictated by the sequence of returns during retirement.  I also believe in Warren Buffet's advice to "leave enough so that your heirs can do anything, but not too much that they do nothing."  How much is enough?  Again, that's personal.

The third is where to retire.  I love the San Francisco Bay Area.  Almost everything is here.  But it is very expensive.  It's great if one can afford it during retirement.  But for most people, including myself, moving away will make their retirement dollars go farther elsewhere.  Personal preferences - weather, proximity to retirement activities, family and community, even healthcare options - dictate your choices.  Again, it is extremely personal.