The Retiree Who Ran Out in Year 12
A cautionary tale about the first five years of retirement.
A cautionary tale about the first five years of retirement.
The situation
Dan retired at 63 with $920,000 and a $2,400/month Social Security check. He didn't have a written plan — 'the money's plenty.'
The first five years
New truck. Second home down payment. Two big trips a year. He withdrew about $85,000/year — around 9% — plus Social Security. It felt fine because markets were up.
What he didn't see
By age 68 his portfolio was $520,000, not $920,000, despite decent returns. He'd been spending it faster than it grew.
The unraveling
At 73 RMDs kicked in and pushed his taxes higher. At 75 the market dropped 22% and he panicked. By 78 his portfolio was $180,000. He now lives on Social Security only.
The first five years of retirement set the tone for the next thirty. Spend them like they matter — because they do.
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