How saving too much can make your retirement less satisfying

[SZonian]

If retirement is the average saver’s field of dreams, new research is telling them “If you build it, it will be sufficient.”

Building it — in this case a retirement portfolio — is a tall order for many people. A U.S. Government Accountability Office study released last year showed that many retirees and workers approaching their golden years have limited financial resources, with roughly half of households age 55 and over having no retirement resources at all.

Plenty of studies corroborate that level of trouble, and far more surveys suggest that Americans are concerned about amassing a sufficient retirement nest egg.

But part of the perceived retirement-savings problem is in fact perception — notions of how much is needed to retire that are promulgated by the financial planning industry

[excerpted]

http://www.marketwatch.com/(S(rnrsydaynixa5x55oiibxm45))/story/how-saving-too-much-can-make-your-retirement-less-satisfying-2016-07-13

[ExFreeper]

I found the link to the report on the 4% rule to be more enlightening than the market watch article.

Why Most Retirees Will Never Draw Down Their Retirement Portfolio
https://www.kitces.com/blog/consumption-gap-in-retirement-why-most-retirees-will-never-spend-down-their-portfolio/

[IsailedawayfromFR]

I consider saving money for retirement is very similar to buying ammo.

One can never have too much.

[SZonian]

I found the link to the report on the 4% rule to be more enlightening than the market watch article.

Why Most Retirees Will Never Draw Down Their Retirement Portfolio
https://www.kitces.com/blog/consumption-gap-in-retirement-why-most-retirees-will-never-spend-down-their-portfolio/

Thanks, good info there.

[catfish1957]

I consider saving money for retirement is very similar to buying ammo.

One can never have too much.

I have been a pretty savy investor, retired at 55, but could have retired at age 46, if I had preferred.

When I asked how, I provided these guidelines in other forums.....
On another thread (TOS) I did give this general advise that has served me well through the years and during ‘87, ‘00, and ‘08 crises ....

1. Priority 1 should be eliminating or reducing debt. I view debt payments by default as negative income.

2. Competitively bid all aspects of your expenses. Get the utmost value down to the penny for everything you buy, or services you secure. Over years and years, you would be surprised how much this adds to your net worth balance sheet.

3. Keep your investment portfolio that is intended toward goals... i.e retirement as an example, in strong conservative investments. When you have those bases covered, then you can look at speculative plays.

4. I invested zero in the dot coms in the ‘90’s. My father gave me the best advise of all in that era.. “Why would you ever invest in anything that doesn’t make money?” To me that rules still applies today.

5. I have found that the simple rule of putting 100 minus your age in equities worked pretty well for me. Maybe not for everyone, but........

6. Research and “like”. When investing, I tend to get into stocks which I think have good products that I like. Before getting in I research it to death too. A Low P/E is often a good indicator. Furthermore, is there a long term demand for the product too.

7. The best time often to invest is when everyone is rushing out the door. The is the toughest part, but finding a price bottom, is golden toward finding long term return.

8. Monitor investments and net worth monthly. Research, evaluate, and adjust as needed.

9. Don’t fall in love with a stock/fund/etc. so much that you resist selling when the fruit is ripe. Don’t forget that your favorite stock is not a family member.

10. Never forget that a SHTF scenario is always a possibility. Remote, but still there. Have a base amount of investments that will address. Metals, Land, etc.

11. Formulate and adhere to three different budget scenarios... (1) Regular (2) Austerity (3) Emergency.

[IsailedawayfromFR]

I have been a pretty savy investor, retired at 55, but could have retired at age 46, if I had preferred.

When I asked how, I provided these guidelines in other forums.....
On another thread (TOS) I did give this general advise that has served me well through the years and during ‘87, ‘00, and ‘08 crises ....

1. Priority 1 should be eliminating or reducing debt. I view debt payments by default as negative income.

2. Competitively bid all aspects of your expenses. Get the utmost value down to the penny for everything you buy, or services you secure. Over years and years, you would be surprised how much this adds to your net worth balance sheet.

3. Keep your investment portfolio that is intended toward goals... i.e retirement as an example, in strong conservative investments. When you have those bases covered, then you can look at speculative plays.

4. I invested zero in the dot coms in the ‘90’s. My father gave me the best advise of all in that era.. “Why would you ever invest in anything that doesn’t make money?” To me that rules still applies today.

5. I have found that the simple rule of putting 100 minus your age in equities worked pretty well for me. Maybe not for everyone, but........

6. Research and “like”. When investing, I tend to get into stocks which I think have good products that I like. Before getting in I research it to death too. A Low P/E is often a good indicator. Furthermore, is there a long term demand for the product too.

7. The best time often to invest is when everyone is rushing out the door. The is the toughest part, but finding a price bottom, is golden toward finding long term return.

8. Monitor investments and net worth monthly. Research, evaluate, and adjust as needed.

9. Don’t fall in love with a stock/fund/etc. so much that you resist selling when the fruit is ripe. Don’t forget that your favorite stock is not a family member.

10. Never forget that a SHTF scenario is always a possibility. Remote, but still there. Have a base amount of investments that will address. Metals, Land, etc.

11. Formulate and adhere to three different budget scenarios... (1) Regular (2) Austerity (3) Emergency.

Great comments that many should embrace.

I am retired as well and have simpler concepts. 

One I heard once and adher to is to treat your savings into buckets of various timeframes that are immediate, short-term and long term.

Never place equities in immediate or short-term, but emphasize them in long-term.

The key is to ensure each bucket contains only what should be suitable in them, which is easy to do.

What is tougher is to decide what % goes into each bucket over time.  Your 100 minus age is a good way to direct.

[LadyLiberty]

It's also a good idea to get long term care insurance.  If you need assistance in your later years, whether it be live-in help or to go into an assisted living center, that will drain a nest egg much faster than planned.  When savings is depleted, then it's a crappy nursing home funded by Medicaid (which is you, the tax payer).  I look at it not just as insurance for my care, but insurance to preserve what took me many years to accumulate.  I want what is left over to go where I want it to go, not get used up for old age care.