Mid(ish) life single investor questions

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nebraskaman
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Mid(ish) life single investor questions

Post by nebraskaman »

Hello!

I have a quick a quick question.

But first to start, I joined this forum back in 2013 and contributed through 2014 a tiny amount. I was in a different place back then and have had life events that dug me out and shoveled me back in. However, I continued to actively read the forum and it has kept me on track in the best way I was able until now and for that I am very appreciative!

In the past year I have have sold my house and cut out a ton of expenses which has allowed me to eliminate all of my debt. I have also considerably upped my contributions to my retirement accounts after I sold my house and revamped my contributions.

Accounts which consist of 401a (this is fixed and cannot change that which includes my full max to get the employers full max) 403b (considerate boost in the last year, from 0 to 75% contribution) Roth IRA (now fully every year starting 2019,2020 as allowed).I currently sit around 95/5 invested with that 5% cash.

My question involves single folks at my age (40ish). How are you figuring your numbers if you plan on staying single? I am planning on leaving some money to my nieces and nephews but am not where close to my retirement numbers for myself, but plan on increasing my current contributions to retire early.

Thanks!
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mrspock
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Re: Mid(ish) life single investor questions

Post by mrspock »

I’m not sure I understand? I’m doing it the same way as married folks, I figured out my minimum and “comfortable” spending amounts, and then built up my nest egg big enough to support them both at a 3.5% SWR (pick whatever SWR you are comfortable with).

Not sure what being single has to do with retirement? Lower risk of being financially crippled via divorce maybe? Estate planning might be slightly different, I’m probably going to do the generation skipping thing, and give big to the nieces/nephews as my siblings don’t need the money — assuming their parents are supportive.
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Re: Mid(ish) life single investor questions

Post by Sandtrap »

nebraskaman wrote: Tue Dec 07, 2021 11:19 pm Hello!

I have a quick a quick question.

But first to start, I joined this forum back in 2013 and contributed through 2014 a tiny amount. I was in a different place back then and have had life events that dug me out and shoveled me back in. However, I continued to actively read the forum and it has kept me on track in the best way I was able until now and for that I am very appreciative!

In the past year I have have sold my house and cut out a ton of expenses which has allowed me to eliminate all of my debt. I have also considerably upped my contributions to my retirement accounts after I sold my house and revamped my contributions.

Accounts which consist of 401a (this is fixed and cannot change that which includes my full max to get the employers full max) 403b (considerate boost in the last year, from 0 to 75% contribution) Roth IRA (now fully every year starting 2019,2020 as allowed).I currently sit around 95/5 invested with that 5% cash.

My question involves single folks at my age (40ish). How are you figuring your numbers if you plan on staying single? I am planning on leaving some money to my nieces and nephews but am not where close to my retirement numbers for myself, but plan on increasing my current contributions to retire early.

Thanks!
Notes:
1.
Tough to give suggestions in "your context" without more information. Consider editing your post using the "pencil icon" in this format.
Asking Portfolio Questions
https://www.bogleheads.org/forum/viewt ... =1&t=6212

2.
Per your questions:
a) Sound portfolio basics, in general, are the same whether single or married.
b) Estate planning for your hares: seek legal counsel for will/trust setup, concurrently integrate this structure with your portfolio.
d) For early retirement, again, consider posting a portfolio review in forum format.
e) If you plan on gifting funds to your hares before your demise, then that is another question for specifics.
f) Are you comfortable with an AA of 95/5 (equity/fixed) ??? How did you arrive at that? Is that an overall allocation or only withint the Roth IRA you mention?
g) How will your financial plans and long term strategy change if you meet "the one" :D and get married?

j :D
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dbr
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Re: Mid(ish) life single investor questions

Post by dbr »

It's the same as for married people. You can start with a model like www.firecalc.com and there are many others.

As mentioned it may be simpler for a single person because issues of divorce or death of a partner don't arise. On the other hand disability and old-age may take more planning if one does not have a stay at home caretaker. In our experience we and others have helped older single people many times, but not everyone has that support.
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Re: Mid(ish) life single investor questions

Post by AnnetteLouisan »

Being single with no dependents has a big impact and I think I’ve yet to see it thoroughly analyzed anywhere. Not complaining AT ALL, but singles with no external support and significantly higher taxes at the same income level than MFJ w dependents (which is fine, I get the reasoning there) need to have a risk analysis tailored to their situation.

I won’t tell others what to do, but since everything rides on my one income, I have high long term disability (income replacement) and LTCI coverage, higher premium health insurance, lower housing costs below what my income would support, no debt, higher focus on tax impacts of what I do, high savings rate, greater need for legal protection of job, greater need for say profl liability and umbrella insurance and likely much higher needs in retirement since no family to help etc. And no one else’s social security, pension or IRA to rely on.

Plus as “successes” we may need to help our parents and siblings but there is no coverage we can buy for them based on our employment. There is no PAC for singles. It does impact my AA and make me less likely to take advantage of an HSA. And as we age, charlatans and worse target us since we are pretty easy pickings for emotion based appeals in many cases. Higher income, higher class charlatans.

Next someone should ask about how adult children of non- (white collar or unionized blue collar) parents, and immigrants or children of immigrants should plan differently since they won’t inherit securities, IRAs, pension survivor benefits, or life insurance and all the other stuff responsible parents do. Not complaining!! It’s been a blast!
Last edited by AnnetteLouisan on Wed Dec 08, 2021 9:06 am, edited 10 times in total.
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Re: Mid(ish) life single investor questions

Post by dbr »

AnnetteLouisan wrote: Wed Dec 08, 2021 7:52 am Being single with no dependents has a big impact and I think I’ve yet to see it thoroughly analyzed anywhere. Not complaining AT ALL, but singles with no external support and significantly higher taxes at the same income level than MFJ w dependents (which is fine, I get the reasoning there) need to have a risk analysis tailored to their situation.

I won’t tell others what to do, but since everything rides on my one income, I have high long term disability (income replacement) coverage, higher premium health insurance, lower housing costs below what my income would support, no debt, higher focus on tax impacts of what I do, high savings rate, greater need for legal protection of job, and likely much higher needs in retirement since no family to help etc.
I think those are good observations.
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Re: Mid(ish) life single investor questions

Post by AnnetteLouisan »

dbr wrote: Wed Dec 08, 2021 7:53 am
AnnetteLouisan wrote: Wed Dec 08, 2021 7:52 am Being single with no dependents has a big impact and I think I’ve yet to see it thoroughly analyzed anywhere. Not complaining AT ALL, but singles with no external support and significantly higher taxes at the same income level than MFJ w dependents (which is fine, I get the reasoning there) need to have a risk analysis tailored to their situation.

I won’t tell others what to do, but since everything rides on my one income, I have high long term disability (income replacement) coverage, higher premium health insurance, lower housing costs below what my income would support, no debt, higher focus on tax impacts of what I do, high savings rate, greater need for legal protection of job, and likely much higher needs in retirement since no family to help etc.
I think those are good observations.
I actually think it would be a great topic for a handbook and for some kind of packaged financial services product tailored to “independent” folks that could help provide some security and the administrative assistance needed for managing all this stuff ourselves. Singles could buy it for themselves. Parents and grandparents could buy it for their kids, uncle Oscar or troubled junior. Not everyone at all income levels can set up a revocable trust without a trustee, lawyer, executor, beneficiaries etc. And even with a trust there’s simple stuff like having an emergency contact, health care proxy and hospital visitor.

50 percent of Americans are single, divorced or widowed and financially fragile and reliant on a sole credit score whether or not they fully appreciate the extent at the moment. The trend of remaining single is reported as being only intensifying among millennials and younger. Some are estranged from relatives or live too far away. Single with dependents is also known to be a massive constellation of high risks. And yet as a commenter above mentioned it’s treated similarly to married when we plan.

I do understand that singles also don’t have to support children or a spouse, pay for schools and braces, raise the next generation and grandchildren, etc. So I’m not at all saying poor me. We just have a thinner reed to succeed upon, or not and potentially greater risk of social isolation as we are not in the network of local schools parents etc and are sometimes resented by married coworkers with dependents who perceive us as financially fancy free and footloose (and hence not as deserving of high salaries and bonuses). One of my relative’s retirements has been profoundly shaped for the better by her network of private school parents from my childhood.
Last edited by AnnetteLouisan on Wed Dec 08, 2021 9:14 am, edited 8 times in total.
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Re: Mid(ish) life single investor questions

Post by exodusNH »

nebraskaman wrote: Tue Dec 07, 2021 11:19 pm Hello!

I have a quick a quick question.

But first to start, I joined this forum back in 2013 and contributed through 2014 a tiny amount. I was in a different place back then and have had life events that dug me out and shoveled me back in. However, I continued to actively read the forum and it has kept me on track in the best way I was able until now and for that I am very appreciative!

In the past year I have have sold my house and cut out a ton of expenses which has allowed me to eliminate all of my debt. I have also considerably upped my contributions to my retirement accounts after I sold my house and revamped my contributions.

Accounts which consist of 401a (this is fixed and cannot change that which includes my full max to get the employers full max) 403b (considerate boost in the last year, from 0 to 75% contribution) Roth IRA (now fully every year starting 2019,2020 as allowed).I currently sit around 95/5 invested with that 5% cash.

My question involves single folks at my age (40ish). How are you figuring your numbers if you plan on staying single? I am planning on leaving some money to my nieces and nephews but am not where close to my retirement numbers for myself, but plan on increasing my current contributions to retire early.

Thanks!
Single or partnered doesn't make much of a difference. Your fixed living costs are going to be a larger percentage of your wealth. You will need to accumulate more / spend less.

If you plan on staying unpartnered, I think the biggest risk is your health as you get older. You may have to enter assisted living years sooner than you otherwise would. Planning your long-term care options now is probably the most important task.

I had an unmarried neighbor when I first moved here. He was in his 70s and mentally sharp. But he had arthritis and eventually had to move out of his house -- which was his childhood home! -- because he could no longer use the stairs to get to the shower. (He had been sleeping on a hospital bed on the first floor for years.)

Make sure you have medical directives set up and communicated with next of kin / emergency contacts.

You may need to set up some trust structure for yourself so that you don't fall prey to scammers or simply declining mental abilities.
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Re: Mid(ish) life single investor questions

Post by Dottie57 »

AnnetteLouisan wrote: Wed Dec 08, 2021 7:58 am
dbr wrote: Wed Dec 08, 2021 7:53 am
AnnetteLouisan wrote: Wed Dec 08, 2021 7:52 am Being single with no dependents has a big impact and I think I’ve yet to see it thoroughly analyzed anywhere. Not complaining AT ALL, but singles with no external support and significantly higher taxes at the same income level than MFJ w dependents (which is fine, I get the reasoning there) need to have a risk analysis tailored to their situation.

I won’t tell others what to do, but since everything rides on my one income, I have high long term disability (income replacement) coverage, higher premium health insurance, lower housing costs below what my income would support, no debt, higher focus on tax impacts of what I do, high savings rate, greater need for legal protection of job, and likely much higher needs in retirement since no family to help etc.
I think those are good observations.
I actually think it would be a great topic for a handbook and for some kind of packaged financial services product tailored to “independent” folks that could help provide some security and the administrative assistance needed for managing all this stuff ourselves. Singles could buy it for themselves. Parents and grandparents could buy it for their kids, uncle Oscar or troubled junior. Not everyone at all income levels can set up a revocable trust without a trustee, lawyer, executor, beneficiaries etc. And even with a trust there’s simple stuff like having an emergency contact, health care proxy and hospital visitor.

50 percent of Americans are single, divorced or widowed and financially fragile and reliant on a sole credit score whether or not they fully appreciate the extent at the moment. The trend of remaining single is reported as being only intensifying among millennials and younger. Some are estranged from relatives or live too far away. Single with dependents is also known to be a massive constellation of high risks. And yet as a commenter above mentioned it’s treated similarly to married when we plan.
As a singleton, I agree with so much of what you said. However, I don’t know what financial services for singles you are talking about. Can you explain?
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Re: Mid(ish) life single investor questions

Post by freckles01 »

AnnetteLouisan wrote: Wed Dec 08, 2021 7:58 am
dbr wrote: Wed Dec 08, 2021 7:53 am
AnnetteLouisan wrote: Wed Dec 08, 2021 7:52 am Being single with no dependents has a big impact and I think I’ve yet to see it thoroughly analyzed anywhere. Not complaining AT ALL, but singles with no external support and significantly higher taxes at the same income level than MFJ w dependents (which is fine, I get the reasoning there) need to have a risk analysis tailored to their situation.

I won’t tell others what to do, but since everything rides on my one income, I have high long term disability (income replacement) coverage, higher premium health insurance, lower housing costs below what my income would support, no debt, higher focus on tax impacts of what I do, high savings rate, greater need for legal protection of job, and likely much higher needs in retirement since no family to help etc.
I think those are good observations.
I actually think it would be a great topic for a handbook and for some kind of packaged financial services product tailored to “independent” folks that could help provide some security and the administrative assistance needed for managing all this stuff ourselves. Singles could buy it for themselves. Parents and grandparents could buy it for their kids, uncle Oscar or troubled junior. Not everyone at all income levels can set up a revocable trust without a trustee, lawyer, executor, beneficiaries etc. And even with a trust there’s simple stuff like having an emergency contact, health care proxy and hospital visitor.

50 percent of Americans are single, divorced or widowed and financially fragile and reliant on a sole credit score whether or not they fully appreciate the extent at the moment. The trend of remaining single is reported as being only intensifying among millennials and younger. Some are estranged from relatives or live too far away. Single with dependents is also known to be a massive constellation of high risks. And yet as a commenter above mentioned it’s treated similarly to married when we plan.

I do understand that singles also don’t have to support children or a spouse, pay for schools and braces, raise the next generation and grandchildren, etc. So I’m not at all saying poor me. We just have a thinner reed to succeed upon, or not and potentially greater risk of social isolation as we are not in the network of local schools parents etc and are sometimes resented by married coworkers with dependents who perceive us as financially fancy free and footloose (and hence not as deserving of high salaries and bonuses). One of my relative’s retirements has been profoundly shaped for the better by her network of private school parents from my childhood.
I just read an article about the escalating costs of being single on Vox yesterday. https://www.vox.com/the-goods/22788620/ ... alone-cost

Its a good read and makes me grateful that I've been lucky enough to be able to support and save for my current and future self.
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Re: Mid(ish) life single investor questions

Post by junior »

I've been looking at the numbers in the VPW Accumulation And Retirement Worksheet (just the accumulation tab) available at https://www.bogleheads.org/wiki/Variabl ... withdrawal.
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Re: Mid(ish) life single investor questions

Post by THY4373 »

AnnetteLouisan wrote: Wed Dec 08, 2021 7:58 am
I do understand that singles also don’t have to support children or a spouse, pay for schools and braces, raise the next generation and grandchildren, etc. So I’m not at all saying poor me. We just have a thinner reed to succeed upon, or not and potentially greater risk of social isolation as we are not in the network of local schools parents etc and are sometimes resented by married coworkers with dependents who perceive us as financially fancy free and footloose (and hence not as deserving of high salaries and bonuses). One of my relative’s retirements has been profoundly shaped for the better by her network of private school parents from my childhood.
Just to state the obvious singles can have kids (I have one). Singles are a very heterogenous bunch so it is hard to make generalizations. You can have single for life by choice, single for life by happenstance, divorced, widowed, etc. Some might include folks involved in long term romantic relationships but not living with said partner as singles and so on.

Interestingly Dr. Bella Depaulo who has researched the lives of single people finds that single people on average are more socially connected than married folks this is especially true for single females. I recommend her writings to anybody who is single. She cuts through a lot of the BS and stereotypes that get tossed around about single people.
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Re: Mid(ish) life single investor questions

Post by AnnetteLouisan »

Traditionally (1930s-60s), tax policy aimed, among other things, to disincentivize the single male breadwinner (insert irresponsible bachelor stereotype here) from remaining single under the then-prevailing strictures. Divorces were rare and considered shameful, unmarried men considered suspect, women were largely limited to the pink collar workforce, divorcees and widows/widowers’ life expectancy was shorter due to wars, poor healthcare etc, minorities and immigrants mostly conscribed to non-unionized, menial jobs.

That focus on incentivizing the 1950s era bachelor to marry is among the reasons why a reasonably high earning but higher risk level single today pays 35 a percent marginal federal income tax rate, compared to their married coworkers with a home, spouse and kids with the same income pay 25 (plus obviously we want to subsidize people doing the critically important work of raising the next generation, no one begrudges them that or denies its importance for a second).

However - as noted in the data around elderly singles today, most notably as described by Elizabeth White on Twitter and movies like Nomadland - demographic shifts occurred that created a class of sociologically very vulnerable people, mostly aging boomers caught in the divorce, drug, 401k and offshoring/restructuring revolutions, an unexpected result of much longer lives, much more prevalent divorce, singles by choice (or not), alternate family arrangements, social downward mobility, and single parenthood. Congressional hearings were held earlier this year on the status of the nations elderly and the news isn’t good.

On the plus side, there evolved increased opportunities for people from all backgrounds to earn high incomes for the first time - possibly supporting their less high achieving siblings and other extended family and their community (popularized by JD Vance and others). Or trying to, except that the tax and insurance framework treats them either the same as multigenerational upper middle class who need to have their fair share extracted or like a dissolute 1950s bachelor who can’t settle down.

I think benefits are starting to reflect some of these changes with a la carte offerings and government policies will as well. I think there’s a huge commercial opportunity here to address this market as well as room for a PAC to identify issues and advocate for singles, but hey. We certainly have other national priorities too such as veterans, education, national security, DEI, Covid, the drug war and many others.
Last edited by AnnetteLouisan on Wed Dec 08, 2021 2:16 pm, edited 5 times in total.
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Re: Mid(ish) life single investor questions

Post by THY4373 »

freckles01 wrote: Wed Dec 08, 2021 11:14 am
I just read an article about the escalating costs of being single on Vox yesterday. https://www.vox.com/the-goods/22788620/ ... alone-cost

Its a good read and makes me grateful that I've been lucky enough to be able to support and save for my current and future self.
It is an interesting article and does highlight some of the unique biases in our tax code and laws which hurt single people. I am of the opinion that the government should not encourage marriage via tax code (or even home ownership). However the article is also addressing the fact that living at the margins whether single or married isn't a great place to be.

As one's income increases the financial benefits of being married goes down. I do pretty well probably a top 10% earner overall. I have three close associates at work two peers one a superior. They are all married. I am single make the same or less than all of them and yet by far I am the most financially successful. Mostly because of an early focus on saving and living below my means. All three of my peers have effectively spouses that don't earn any significant income. One of them has a spouse that pretty much takes their paycheck and spends it. The other one has four kids so no surprise they aren't doing so well financially. The third one does invest quite a bit now but their spouse still wants a new kitchen, bigger house, etc.

All of this is to say if you make a decent income I don't see too many financial shortcomings to being single. Dual incomes are certainly helpful as you get down lower in the economic ladder.
Last edited by THY4373 on Wed Dec 08, 2021 2:20 pm, edited 1 time in total.
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Re: Mid(ish) life single investor questions

Post by THY4373 »

Sandtrap wrote: Wed Dec 08, 2021 7:35 am
g) How will your financial plans and long term strategy change if you meet "the one" :D and get married?
I can assure you I am at least as dedicated to my singleness (and certainly remaining unmarried) as you are to your wife. I always chuckle when folks point out the "risk" of getting married to a single person but don't generally point out the risk of getting divorced to married folks. Singleness is not necessarily a temporary lifestyle choice any more than marriage is permanent. I have no interest in a romantic relationship and even if I were to change my mind on that I would not get married as I personally see no point now that I am past the breeding stage of life. My chance of getting married at this point is akin to being struck by a meteor.
Last edited by THY4373 on Wed Dec 08, 2021 2:43 pm, edited 1 time in total.
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Re: Mid(ish) life single investor questions

Post by THY4373 »

mrspock wrote: Tue Dec 07, 2021 11:31 pm I’m not sure I understand? I’m doing it the same way as married folks, I figured out my minimum and “comfortable” spending amounts, and then built up my nest egg big enough to support them both at a 3.5% SWR (pick whatever SWR you are comfortable with).
As a 52 year old this is pretty much my approach from a financial perspective. From a non-financial perspective I am also doing stuff like exercising daily to keep my health up and hopefully keep my ability to operate independently as a long as possible. I also eat healthy. Starting to work on building up my social network which has atrophied due to long work hours and other things. I am also working on pursuing my passions and will explore doing charitable work once I retire in three years. Further down the road I may give consideration to moving to some sort of retirement community for better community support. I have a child so I don't face some of the same challenges that childless single people do.
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Re: Mid(ish) life single investor questions

Post by THY4373 »

AnnetteLouisan wrote: Wed Dec 08, 2021 1:28 pm That focus on incentivizing the 1950s era bachelor to marry is among the reasons why a reasonably high earning but higher risk level single today pays 35 a percent marginal federal income tax rate, compared to their married coworkers with a home, spouse and kids with the same income pay 25 (plus obviously we want to subsidize people doing the critically important work of raising the next generation, no one begrudges them that or denies its importance for a second).
Subsidizing kids I can understand as there is a societal need for replacement people subsidizing marriage I don't see. Marriage and kids are two different things. Also you really need to be careful with taxes as it is very situation specific my ex and I make enough to hit the 32% tax bracket as single fliers. My ex owns a place and has enough tax deductions to itemize. By choice I rent and so I don't itemize but I get to take the Head of Household deduction (we have a kid) the net effect is post the 2017 tax changes we pay less now in taxes than when we were married. Your taxes may vary as they say (the tax benefits of being married when both partners earn similar amounts are often modest if any).
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Re: Mid(ish) life single investor questions

Post by AnnetteLouisan »

To keep it actionable, what are some practical things the unattached can do to limit the risks of being single income (eg, a revocable trust, LTD insurance, a DIY treasury portfolio pension) and what things have worked for us or would be good to have (eg, ability to cover less fortunate siblings w insurance and other benefits)?
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Re: Mid(ish) life single investor questions

Post by Sandtrap »

THY4373 wrote: Wed Dec 08, 2021 2:13 pm
Sandtrap wrote: Wed Dec 08, 2021 7:35 am
g) How will your financial plans and long term strategy change if you meet "the one" :D and get married?
I can assure you I am at least as dedicated to my singleness (and certainly remaining unmarried) as you are to your wife. I always chuckle when folks point out the "risk" of getting married to a single person but don't generally point out the risk of getting divorced to married folks. Singleness is not necessarily a temporary lifestyle choice any more than marriage is permanent. I have no interest in a romantic relationship and even if I were to change my mind on that I would not get married as I personally see no point now that I am past the breeding stage of life. My chance of getting married at this point is akin to being struck by a meteor.
Meteor ordered and en route, extra spicy, hold the onions. . . . :D

j :D
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Re: Mid(ish) life single investor questions

Post by fposte »

Being single and having no kids is why I'm making sure to have wills and POA paperwork in place and known among family and friends. It's also why I'm anticipating entering a CCRC--there's a nice one near me that a friend (also interested) and I have already toured. I'm not interested in leaving an estate or planning any particular post-mortem provisions, and I never take the survivor benefits option on anything. I don't necessarily handle my portfolio any differently, save for the absence of the need to keep anybody else in the loop and happy with it.

What the Vox article talks about is true, and I feel very lucky to have found a life track that makes the financial disparity less of an issue. For me at my life in my recently retired 50s, it's mostly about figuring out ways to safeguard myself in future from my own flagging abilities. Having a pension is a real reassurance that I'll have income even if I get very vulnerable.
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Re: Mid(ish) life single investor questions

Post by THY4373 »

Sandtrap wrote: Wed Dec 08, 2021 3:41 pm Meteor ordered and en route, extra spicy, hold the onions. . . . :D

j :D
Lol anything is possible I suppose. As I type this I am in Bora Bora which is where I am celebrating my 52 birthday. It is truly the most romantic place I have been but I still I have zero interest in being here with a romantic partner.
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Re: Mid(ish) life single investor questions

Post by nebraskaman »

Sorry for my late reply, work was crazy. Thank you all for your replies. That was a very interesting Vox article.

Annette, your posts have given me a lot to think about, especially in your action items post, thank you!

Another question along these lines I am thinking on is when to take SS. If I am successful at retiring a few years early this will be the most expensive window of my retirement (not including LTC). I have read on here it might not matter when I take it compared to married folks. Is that true? I would prefer to wait until 70, but looking at that potential 10-15 year gap in addition to 10 of that fully funding healthcare is a lot of money.

My apologies on if what I was trying to say in my original post wasn't clear, AnnetteLouisan was able to decipher my slightly wandering post 🙂
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Re: Mid(ish) life single investor questions

Post by THY4373 »

Delaying social security is basically longevity insurance. In theory when you take it shouldn't matter actuarially average speaking you should come out the same. But if you live a long time then you come out ahead if you take it later. And keep in mind as a single person your later years are potentially more expensive if you need nursing care as you are less likely to have a spouse to care for you but of course spouses rarely go out at the same time so this risk exists for at least one spouse in a marriage (unless they remarry). Also when to take it may depend on your traditional 401k/IRA balances. For a number of reasons much of my wealth is tied up in such plans (I think about 60% ish with most of the rest in Roth space and only a small amount in taxable). My plan is to retire at 55, use the rule of 55 to access my 401k start withdrawing and spending the money and converting the rest up through the 24% tax bracket at current rates (which I think sunset right now in 2026 which makes it a little hard to plan too much). I also get a mostly inflation linked pension so probably around 60 or so I'll start taking my pension depending on my spend down/conversion of traditional 401k/IRA is going. If the markets fair badly early on then I'll access to my pension sooner to offset some of the sequence of returns risk. This will hopefully allow me to better control my Medicare costs which are means tests based on taxable income. Finally I'll take social security at 70.

Of course guessitmating your longevity is a tough one. Supposedly your parents longevity doesn't say much about yours (mine are still kicking and doing well in their late 70s to mid 80s). That said I don't have high cholesterol (it is rather low in fact), I am not overweight, I take no meds, and I exercise regularly so I figure the odds are in my favor I'll do ok (but of course no guarantees). Personally I suggest you start looking at various withdrawal strategies. I have a spreadsheet I use and also use tools like firecalc to run different scenarios to see how they play out. Especially when looking at Medicare costs (and also ACA costs prior to 65 if you don't get retiree health benefits of some sort).
Last edited by THY4373 on Wed Dec 08, 2021 10:40 pm, edited 1 time in total.
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nebraskaman
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Re: Mid(ish) life single investor questions

Post by nebraskaman »

THY4373 wrote: Wed Dec 08, 2021 7:52 pm Delaying social security is basically longevity insurance. In theory when you take it shouldn't matter actuarially average speaking you should come out the same. But if you live a long time then you come out ahead if you take it later. And keep in mind as a single person your later years are potentially more expensive if you need nursing care as you are less likely to have a spouse to care for you but of course spouses rarely go out at the same time so this risk exists for at least one spouse in a marriage (unless they remarry). Also when to take it may depend on your traditional 401k/IRA balances. For a number of reasons much of my wealth is tied up in such plans (I think about 60% ish with most of the rest in Roth space and only a small amount in taxable). My plan is to retire at 55, use the rule of 55 to access my 401k start withdrawing and spending the money and converting the rest up to the 24% tax bracket at current rates (which I think sunset right now in 2026 which makes it a little hard to plan too much). I also get a mostly inflation linked pension so probably around 60 or so I'll start taking my pension depending on my spend down/conversion of traditional 401k/IRA is going. If the markets fair badly early on then I'll access to my pension sooner to offset some of the sequence of returns risk. This will hopefully allow me to better control my Medicare costs which are means tests based on taxable income. Finally I'll take social security at 70.

Of course guessitmating your longevity is a tough one. Supposedly your parents longevity doesn't say much about yours (mine are still kicking and doing well in their late 70s to mid 80s). That said I don't have high cholesterol (it is rather low in fact), I am not overweight, I take no meds, and I exercise regularly so I figure the odds are in my favor I'll do ok (but of course no guarantees). Personally I suggest you start looking at various withdrawal strategies. I have a spreadsheet I use and also use tools like firecalc to run different scenarios to see how they play out. Especially when looking at Medicare costs (and also ACA costs prior to 65 if you don't get retiree health benefits of some sort).

Thanks THY4373!

It sounds like we are following a similar path. Having access to so many different investment account options that I mentioned in my first post in addition to a taxable account is how I am trying to game all of this out. Due to the large amount of room I have in tax advantaged and late entry into taxable the lion share of my portfolio is likely to be in the 401a and 403b as well.

I think with a target of 58ish now is the time to adjust which of these accounts I should start weighing more heavily. I go back and forth but have settled on the minimum to get my max match in 401a, trying to get to max in the 403, and finally max Roth IRA. If I have a few bucks at the end of the month into taxable.

It looks like I can access the 403 starting at 55 without having to do the rule of 55. The 457 is super exciting with the unique benefits it has, but I can't start adding funds there until I have maxed the 403, which is frustrating.

All of that being said my current plan is to start my withdrawals at ~58 from the 403. At retirement I think I have to roll the 401 into an IRA and from there I do Roth conversions if it's size dictates. Hopefully my tiny taxable can cover those. Then after 70 and when the 403 depletes switch over to the IRA leaving the Roth to compound to the end. In addition, the workplace added an HSA option that I have set up to start fully funding next year. Hopefully in 17 years that is a nice little sum as I plan on never using it for medical expenses.
The early bird gets the worm but the second mouse gets the cheese.
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AnnetteLouisan
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Re: Mid(ish) life single investor questions

Post by AnnetteLouisan »

Dottie57 wrote: Wed Dec 08, 2021 10:54 am
AnnetteLouisan wrote: Wed Dec 08, 2021 7:58 am
dbr wrote: Wed Dec 08, 2021 7:53 am
AnnetteLouisan wrote: Wed Dec 08, 2021 7:52 am Being single with no dependents has a big impact and I think I’ve yet to see it thoroughly analyzed anywhere. Not complaining AT ALL, but singles with no external support and significantly higher taxes at the same income level than MFJ w dependents (which is fine, I get the reasoning there) need to have a risk analysis tailored to their situation.

I won’t tell others what to do, but since everything rides on my one income, I have high long term disability (income replacement) coverage, higher premium health insurance, lower housing costs below what my income would support, no debt, higher focus on tax impacts of what I do, high savings rate, greater need for legal protection of job, and likely much higher needs in retirement since no family to help etc.
I think those are good observations.
I actually think it would be a great topic for a handbook and for some kind of packaged financial services product tailored to “independent” folks that could help provide some security and the administrative assistance needed for managing all this stuff ourselves. Singles could buy it for themselves. Parents and grandparents could buy it for their kids, uncle Oscar or troubled junior. Not everyone at all income levels can set up a revocable trust without a trustee, lawyer, executor, beneficiaries etc. And even with a trust there’s simple stuff like having an emergency contact, health care proxy and hospital visitor.

50 percent of Americans are single, divorced or widowed and financially fragile and reliant on a sole credit score whether or not they fully appreciate the extent at the moment. The trend of remaining single is reported as being only intensifying among millennials and younger. Some are estranged from relatives or live too far away. Single with dependents is also known to be a massive constellation of high risks. And yet as a commenter above mentioned it’s treated similarly to married when we plan.
As a singleton, I agree with so much of what you said. However, I don’t know what financial services for singles you are talking about. Can you explain?
Well, just as an example, for $50k, a package of
-10 hours with an employment lawyer
-10 hours of someone to visit you in the hospital
-10 hours of handyman repair work
-10 hours of administrative assistance (like someone who will get your mail and bring you your bills or pay them if you are in the hospital)
-10 hours of some threatening angry voice to deal with belligerents of all stripes
-10 hours of a CPA
-10 hours of personal chef
-10 hours of laundry/ housekeeping
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Re: Mid(ish) life single investor questions

Post by Outer Marker »

mrspock wrote: Tue Dec 07, 2021 11:31 pm Not sure what being single has to do with retirement? Lower risk of being financially crippled via divorce maybe? ...
Haha. After a financially crippling divorce, I found it much more expensive being single, allowing for:
1) faster horses
2) younger women
3) older wiskey
. . . and accordingly, more money. https://www.youtube.com/watch?v=vnvMcX95G20

Being happily redomesticated, things are much much less expensive than in my mid life single years. :beer
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Re: Mid(ish) life single investor questions

Post by mrspock »

Outer Marker wrote: Mon Jan 03, 2022 6:47 pm
mrspock wrote: Tue Dec 07, 2021 11:31 pm Not sure what being single has to do with retirement? Lower risk of being financially crippled via divorce maybe? ...
Haha. After a financially crippling divorce, I found it much more expensive being single, allowing for:
1) faster horses
2) younger women
3) older wiskey
. . . and accordingly, more money. https://www.youtube.com/watch?v=vnvMcX95G20

Being happily redomesticated, things are much much less expensive than in my mid life single years. :beer
Did you include divorce costs in that? :) Your estate being “halved” can buy many horses, and many date nights with young women. I don’t drink… so I don’t have the whisky problem.

In any event, congrats on finding love again! While don’t believe in marriage, I do appreciate those who have found a life partner.
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Re: Mid(ish) life single investor questions

Post by Dottie57 »

AnnetteLouisan wrote: Mon Jan 03, 2022 5:55 pm
Dottie57 wrote: Wed Dec 08, 2021 10:54 am
AnnetteLouisan wrote: Wed Dec 08, 2021 7:58 am
dbr wrote: Wed Dec 08, 2021 7:53 am
AnnetteLouisan wrote: Wed Dec 08, 2021 7:52 am Being single with no dependents has a big impact and I think I’ve yet to see it thoroughly analyzed anywhere. Not complaining AT ALL, but singles with no external support and significantly higher taxes at the same income level than MFJ w dependents (which is fine, I get the reasoning there) need to have a risk analysis tailored to their situation.

I won’t tell others what to do, but since everything rides on my one income, I have high long term disability (income replacement) coverage, higher premium health insurance, lower housing costs below what my income would support, no debt, higher focus on tax impacts of what I do, high savings rate, greater need for legal protection of job, and likely much higher needs in retirement since no family to help etc.
I think those are good observations.
I actually think it would be a great topic for a handbook and for some kind of packaged financial services product tailored to “independent” folks that could help provide some security and the administrative assistance needed for managing all this stuff ourselves. Singles could buy it for themselves. Parents and grandparents could buy it for their kids, uncle Oscar or troubled junior. Not everyone at all income levels can set up a revocable trust without a trustee, lawyer, executor, beneficiaries etc. And even with a trust there’s simple stuff like having an emergency contact, health care proxy and hospital visitor.

50 percent of Americans are single, divorced or widowed and financially fragile and reliant on a sole credit score whether or not they fully appreciate the extent at the moment. The trend of remaining single is reported as being only intensifying among millennials and younger. Some are estranged from relatives or live too far away. Single with dependents is also known to be a massive constellation of high risks. And yet as a commenter above mentioned it’s treated similarly to married when we plan.
As a singleton, I agree with so much of what you said. However, I don’t know what financial services for singles you are talking about. Can you explain?
Well, just as an example, for $50k, a package of
-10 hours with an employment lawyer
-10 hours of someone to visit you in the hospital
-10 hours of handyman repair work
-10 hours of administrative assistance (like someone who will get your mail and bring you your bills or pay them if you are in the hospital)
-10 hours of some threatening angry voice to deal with belligerents of all stripes
-10 hours of a CPA
-10 hours of personal chef
-10 hours of laundry/ housekeeping
I don’t know anyone who would use such a package and yes my friends are mostly single.
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Re: Mid(ish) life single investor questions

Post by AnnetteLouisan »

Dottie57 wrote: Mon Jan 03, 2022 7:20 pm
AnnetteLouisan wrote: Mon Jan 03, 2022 5:55 pm
Dottie57 wrote: Wed Dec 08, 2021 10:54 am
AnnetteLouisan wrote: Wed Dec 08, 2021 7:58 am
dbr wrote: Wed Dec 08, 2021 7:53 am

I think those are good observations.
I actually think it would be a great topic for a handbook and for some kind of packaged financial services product tailored to “independent” folks that could help provide some security and the administrative assistance needed for managing all this stuff ourselves. Singles could buy it for themselves. Parents and grandparents could buy it for their kids, uncle Oscar or troubled junior. Not everyone at all income levels can set up a revocable trust without a trustee, lawyer, executor, beneficiaries etc. And even with a trust there’s simple stuff like having an emergency contact, health care proxy and hospital visitor.

50 percent of Americans are single, divorced or widowed and financially fragile and reliant on a sole credit score whether or not they fully appreciate the extent at the moment. The trend of remaining single is reported as being only intensifying among millennials and younger. Some are estranged from relatives or live too far away. Single with dependents is also known to be a massive constellation of high risks. And yet as a commenter above mentioned it’s treated similarly to married when we plan.
As a singleton, I agree with so much of what you said. However, I don’t know what financial services for singles you are talking about. Can you explain?
Well, just as an example, for $50k, a package of
-10 hours with an employment lawyer
-10 hours of someone to visit you in the hospital
-10 hours of handyman repair work
-10 hours of administrative assistance (like someone who will get your mail and bring you your bills or pay them if you are in the hospital)
-10 hours of some threatening angry voice to deal with belligerents of all stripes
-10 hours of a CPA
-10 hours of personal chef
-10 hours of laundry/ housekeeping
I don’t know anyone who would use such a package and yes my friends are mostly single.
So what kind of services do you think are needed?
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