Frugality is a popular concept in the world of retirement investing.
A low cost of living has a double benefit – you spend less/save more, and a lower net worth is required to support early retirement.
But most people don’t want to live uber-frugally, ourselves included.
That’s why we just front-loaded it.
Ladies and gentlemen, brothers and sisters, persons of all faiths and creeds, welcome.
We are gathered here today in this sacred place to celebrate the birth of a new fellowship, the Church of Curry Cracker.
Together, we can overcome life’s obstacles, make the world a better place, and enhance financial and spiritual well being.
The US tax code includes an Estate Tax for inherited wealth. Oligarchs and other opponents of such a tax like to refer to it by a more ominous title, The Death Tax. Ooh, scary.
After the passage of the Tax Cuts and Jobs Act of 2017, this tax applies only to households with more than ~$11 million per adult (~$22 million per couple.) Fewer than 0.2% of US households qualify. (*)
I’m personally more concerned with the tax that will apply to the other 99.8% of us. The real death tax.
Over the course of the years, I’ve shared how we’ve been increasing our spending with portfolio growth. Not unsurprisingly, this has garnered some criticism.
Statistically speaking, the 4% rule is flawed and is designed to fail! Scary!
This is a terrible idea! You are going to be begging for spare change when you are 80!
Increasing spending with growth is misguided and sharing this with GCC readers is irresponsible!
It seems that people interested in early retirement are a naturally conservative bunch.
My perspective, which I will irresponsibly share once again:
You will die before you run out of money.
When we officially stopped working for a regular paycheck, it would still be 30 years before I could start to collect full Social Security benefits at Age 67, and 35 years before Winnie could receive the spousal benefit.
With Social Security so far in the future, many early retirees don’t even consider SS as a factor. Who knows, maybe the program won’t even be in place in 30 years. Best case it might be an insurance policy, a final layer of protection for worst-case outcomes.
But time marches on. It is now only 18 years before I am eligible for reduced early benefits at Age 62.
Which got me thinking… should I start to include Social Security in our overall portfolio value? And if so, can we spend that future Social Security income now?
