u/mcglups

Baseline Information: Single with a “die with zero strategy”. I have a retirement plan that aims to start in the next couple of years and will rely on IRA funds within a qualified account, as well as lifetime income sources such as non-cola pension, non-cola annuity and cola social security. This part of the equation is well modelled and achieves the desired outcome. Using future dollars (or even current dollars) for the final 5-10 years, even with a no-go years reduction on lifestyle expenses, it still creates a big demand on the income side of things.

Scenario: I have a Long-term Care Policy with Prudential purchased many years ago with a fixed annual fee that will have a benefit bank of $4M when I’m 80. It has a facility daily benefit option for home health care cash option that will pay out 50% of the daily benefit. Right now, this illiquid asset is not part of my retirement plan, but it seems strange to be having a retirement plan that achieves a terminal balance of zero but has no connection to the LTC.

Question: What are suggested methods to layer in the LTC into the retirement plan? No one can predict our health needs 30 years from now, but should I be keeping this asset completely off the books? Or, is there a reasonable pathway to infuse it into my retirement plan, such that I can increase my lifestyle expenditures and utilize my income sources, earlier in my retirement life?

Please let me know if there is enough background information provided and your thoughts on this question.

Thank you

The storyline: I am putting my retirement plan through stress tests using various scenarios and by far the worst outcome comes from a 30-year sequence of rates that start with the profile from the “The Lost Decade” in the early 2000’s. Despite this 30-year period having an average rate of return of 9.74%, the timing of the big drops in the beginning and the overall drag in that first nine years wreak havoc, require making moderate adjustments to lifestyle expenses to reduce income so that the drawdown on the IRA is lessened. It essentially performs the same way a nominal rate of return of 5.4% across all years.

https://preview.redd.it/dyvqmgr3kx8h1.jpg?width=1033&format=pjpg&auto=webp&s=2030d5aaac36ba5dde2d7ad063ae001690381d6c

The question: Do you think this is a reasonable worst-case scenario that should be modelled, or is there another scenario that is worthwhile? I have tried several other such as the “Great Financial Crisis” and “Dot-Com Bust”, “Stagflation”, “1980’s interest rate volatility”, and “1997 Black Monday" in equal 30-year plots, but none of them come close to the implication of “The Lost Decade”.

Thank you for your time

I am building out my retirement plan and while I have gained insight and made advancements in various software products, I’m finding myself right back where I started in excel. I’m very comfortable with excel, so I’m not entirely surprised!

My question: I am looking for reasonably conservative values to use for key variables in my plan.

My scenario: I am working in flat current dollars across the entirety of my plan, but there are a few key variables that ultimately control how the plan delivers an outcome. I can easily change the variables within the main variables table to test out many scenarios but would like to get some input from the community.

Real Rate of Return: For the equities (all aggressive & diversified mutual funds) I hold in my qualified account, long term market returns are around 10% and with long term inflation around 3%, so the high-end Real Rate of Return I have been using is 7%. However, that seems too optimistic, so I work with a range of values from 3% to 7%. If you had to settle in on one number that is reasonably conservative, what would you select and why?

Range of fixed-income Interest Rates: For most of my portfolio management, I do lump-sum withdrawals from my equities before it is needed and then perform reinvestment in CDs to achieve structural Dividend while the money gets ready to be withdrawn, this is all within a qualified plan. Today’s rates range from 3.95% to 5.15% for the range of 3 months to 48 months. What would be a reasonably conservative range of rates to use for the lifespan of the plan?

Purchasing Power Discount Factor: To reduce the purchasing power of my Non-COLA pension and annuity, I am applying a 97% factor to the prior year, every year, so it monotonically reduces throughout the time period, do you think that is a reasonably conservative value to use, or should I go higher or lower?

I appreciate you taking the time to share your thoughts and rationale on these 3 key variables.

Thank you

The use case: I am wondering what is the best approach for how to use my heat pump in the summer (mid-June to early September). I like to have the cooling feature of the heat pump run on the second floor at night for sleeping and never use the cooling feature during the daytime (or on my first floor).

The baseline: My system is ductless with 3 inside head units connected to a single outside unit (Carrier 2.5 ton) with a 12K head upstairs and 2 head downstairs. it is a very effective for my home all year long. I have the floors separated so that the cold air doesn’t leak downstairs and is quite effective.

The question: What would be the preferred method for the least wear and tear on the system? With the system in the “cool mode, should I turn the system on at 8pm and off at 6am daily -OR- should I leave it on and set the temperature to 65F at 8pm and raise it up to 85F at 8am daily?

Thank you!

I have a 23CTL with 115K on it and perform proactive maintenance on it (oil and rotate tires every 5k, plugs at 60, CVT and Diff fluids changed at 40K and 80K, and so forth) the car runs like it is brand new, it is excellent.

However, around 95K I started to hear a low growl from the rear end and sure enough when we put the car on the lift and ran it and used the stethoscope, the rear wheel bearings were acting up, so we replaced both sets on the rear at 100K, perfect! (this is my 5th Subaru so I'm fine with changing out bearing as "inevitable regular maintenance").

At around 105K, a slightly different low base sound started in the back, so since that time I switched from winter tires to summer tires, and we have used the stethoscope and can’t find any sound, we checked the rear wheel bearings, all 4 CV boots, the differential. However, my local (trusted) mechanic acknowledges that when he brings it up to speed (over 40mph) on the ground, he can start to hear it, so we are kind of baffled as to what might be causing it.

The noise has not gotten worse in the past 10k, but that is very likely because I drive with the windows open more and so I don't hear it as much.

Next week we are going to have family friend Subaru technician visit my local mechanics shop (very grateful for this connection) and take a look. Does anyone have any sense of what might be causing a low base sound from the rear end, given that we have done the things listed above?

Thank you for your help.

I welcome your thoughts on my readiness to retire!

Investments --- Planning to retire in 3.5 years (the start of 2030, will turn 59.5 that year) with $1M in investments ($600K in equities in diversified/aggressive mutual funds in IRA, and $400K in deferred income annuity with equal installments of guaranteed cash in 2030 and 2035). I have a very good long-term care plan with a fixed fee that I enrolled in years ago. Not liquid, but I own two homes outright.

Employment  --- I recently changed jobs (less pay, less stress, more enjoyment) and while I still have an income, my contribution and growth years are over and working on preservation, building a small amount of on-hand cash, home repairs, living kind-of-like retirement, and dealing with chronic health issues that are manageable for the time being (but my life expectancy of 90 is a stretch, but I’m going for it!), and preparing for caring for aging parents (that are healthy today). I have no debt.

Retirement Income/Expense --- I will have $60K per year of lifetime income from various sources (social security, pension, SPIA, 401A) and will gradually increase my expenses but always under MAGI/ACA cliff, well below IRMAA cliff, and always above RMD requirements (unless my equities sky rocket in value). With no heirs, my approach is to “die with zero” but I’ll never be comfortably to literally die with zero, so I’ll leave my leftovers to cousins, friends, schools.

Thank you in advance for your time, and welcome your thoughts on things I need to consider and/or a sense of validation.