Friday, February 26, 2016

Damnit, They Predict I Will Live to 100

Ideal Retirement Food Choices to Meet Your Financial Goals

I decided to take advantage of Vanguard's financial planning service to get an update on my retirement plan.  I am semi-retired and want to make sure the plan still works.  Basically, how much can I spend based on my current assets?

Three years ago, the financial planner said something like "..you are conservative, you can spend a lot more than your plan, you have nothing to worry about...".  This time around, I expected the same answer and was prepared to increase our budget and buy that Shelby Ford Mustang Supercharged Convertible Cobra with the pimp red leather seats that I always wanted.

Alas, the news this time was not as good.  We need to slightly decrease our spending.  But why, I asked miserably?  Well, Vanguard made two big changes:

  1. The Monte Carlo simulation was modified to take into account the "new normal" of low returns.  Thanks to the ineptitude of the US, Chinese, and European governments, we are stuck with low growth, low returns, and no wars to spur inflation.
  2. They now assume that both spouses live to 100, not 95 as they did previously.  This problem is caused by our damn health care system making us live longer.  The only solution is to reduce my life expectancy by eating more bacon, drinking more alcohol, taking illegal drugs, smoking, and maybe putting a Hillary for President sign on my front lawn.
So watch out.  Medical Science is not your friend.  You will live longer and have to save more to have a nice retirement.