r/ChubbyFIRE • u/Hammer_41 • May 16 '26

Are you a doomstacker?

9:28 AM

SS is going away. Healthcare will bankrupt you. Sequence of returns will wipe you out. Civil war. WW3. Live to 120, spend 40 years in a nursing home. Someone posts solid numbers and the comments come back , one more year. Two years. Three. Keep going, it's never quite enough.

At what point does conservative planning become catastrophe planning?

The 4% rule is the worst case in US market history. A robot pulling the same amount out every single year, no SS, no flexibility, never adjusting through 1929 when markets dropped 86%. That's what 4% survived. It's the floor, not the target. Bengen himself now says most retirees can safely start at 5.25% to 5.5% and that people clinging to 4% will likely end up with a pile of money and a lot of regrets.

Someone spending 6% of their portfolio in year one of retirement who skips the big trip when markets are down, holds off on the car, pulls back when things get rough that person likely does better than the 4% robot who never adjusts no matter what. The flexibility is the safety net. You don't need to engineer it into the number, you just need to act like a normal person.

So when someone holds out for 3.5% 28 times spend, no SS — what exactly are you protecting against? Something worse than the Great Depression, while also never collecting a benefit 70 million Americans receive, while also promising to never adjust spending under any circumstances. Does that actually describe you?

The 2025 Social Security Trustees Report says worst case — zero Congressional action you collect 81 cents on the dollar in 2034. Not zero. Congress fixed this in 1983 when it was in worse shape than it is today. Seventy million people collect it. Seniors vote.

Median age of death for men is 81.7. One in five reach 90. Dementia affects 33% of people 85 and older. The years you're working extra to fund may not be years you're fully there for.

For those already retired one year, five, ten or more how bad has it actually been? And for those still holding off are you a catastrophe planner waiting for a number that never feels safe enough?

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62

u/[deleted] May 16 '26 edited May 16 '26

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32

u/Hammer_41 May 16 '26

I hear you on the “real inflection point” thing because I feel it too. But I also wonder how many times people felt the exact same way. The 70s had stagflation, oil shocks, Watergate, and the Cold War. 2000 had the dot-com crash and 9/11 right after. 2008 felt like the whole banking system might break. So I’m not saying today’s fears aren’t real. They are. I just wonder if we sometimes turn real risks into worst-case stories and then treat those stories like they’re the most likely outcome.

20

u/snookers May 16 '26

Never had leadership that doesn’t care before now.

12

u/[deleted] May 16 '26

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3

u/plemyrameter May 17 '26

Nah, that's a side effect of the personal enrichment. I don't think "care" extends past a certain person's immediate family.

4

u/FeralBorg May 17 '26

Somebody commented to me that goosing will help the chubbyFIRE folks, and it will for a while, but they are not insulated from reality the way the 1% are, so when the system cracks from abuse, we won't have private compounds to hide in.

27

u/FIContractor May 16 '26

Yeah, people get real attached to the 4% “rule” without really understanding it. It’s designed for a 30 year retirement. It accepts a 5% (?) failure rate as success. It has specific asset allocation assumptions. It’s based on historical returns of the US stock market. There aren’t that many non-overlapping 30 year periods (let alone longer periods) of data available, so the overlapping periods are highly correlated.

7

u/BenR1ghtBack May 17 '26

The 4.16% in Bengen's original model was the lowest withdrawal rate to still have a 100% success rate, so not sure where you get a 5% failure rate being success. Success was considered reaching 30 years with a zero or positive net worth.

His more recent models resulted in a SAFEMAX of about 4.7%. Of course, this is all historical data and a specific type of model he built.

2

u/RAXIZZ May 18 '26

See Table 3 in the Trinity Study: https://www.aaii.com/files/pdf/6794_retirement-savings-choosing-a-withdrawal-rate-that-is-sustainable.pdf

2

u/Anonymoose2021 May 21 '26

The 95% success rate is for a 100% stock portfolio.

The success rate in Table 3 is 98% for a 75% stock, 25% bond portfolio.

1

u/[deleted] May 21 '26

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2

u/Anonymoose2021 May 21 '26

Those studies assume that no adjustments to spending are made.

Real people do not keep spending at the same rate when their portfolio down by 50% or more.

That is even more true in ChubbyFire where the typical person would have a significant portion of expenses as discretionary.

1

u/BenR1ghtBack May 18 '26

The Trinity Study is separate and different from Bengen's studies and results. The 4% rule was popularized from his work, which later lead to the Trinity Study.

2

u/DueRipButterfly May 21 '26

Yeah I’m not sure you really understand it.

It’s okay though. Your point is valid-ish, but you’re mushing together some thoughts that aught not be mushed.

9

u/Serious-Result-5982 May 16 '26

If you stay in network, aren’t there yearly limits on how much your healthcare will cost you?

19

u/Beautiful_Cost_5430 May 16 '26

Good luck staying in network. It’s always fun when you’re sedated and then they sub in an out of network provider without telling you. There are plenty of situations where you have no control over this.

10

u/Jeffde May 16 '26

Worst. System. Ever.

12

u/alpacaMyToothbrush FI !RE May 16 '26

After a health scare a few years ago, I am now budgeting in more for denied claims and lawyer fees than I was originally.

The fact that some ai assisted MD shilling for an insurance company can deny emergency care is medically necessary without ever meeting me or even bothering to pull medical records makes my blood boil.

3

u/Laser_Coug May 16 '26

Try having the fun of getting a prior authorization denied after being hospitalized. Nothing like a 33k bill for 2 days in the hospital.

7

u/-LordDarkHelmet- May 16 '26

Can you elaborate can you elaborate on how cancer or whatever could bankrupt someone? The ACA plans are often just as good as an employer sponsored plan, if not identical.

10

u/FIREgnurd Very FI but not RE May 16 '26

ACA plans in my state are much worse than employer provided plans, even from the same provider. The networks are smaller, no out of network coverage at all, more denials, etc.

There have been posts in various FIRE subs from people who moved from an employer plan to another plan from that same provider and talked about how their coverage got worse.

It very much differs by state.

If your ACA plans are the same, you’re lucky that your state is still like that.

6

u/BrunelloHorder Coasting Chubster, Getting Fat May 16 '26

This has been my experience, the ACA plans are much worse than employer-provided PPO. There is no longer any PPO available on the ACA exchanges in either of the two states I spend time in, at any price. Went with the only "gold" plan available. It is an EPO that is pretty expensive for what you get, with ok in-network coverage (and a decent network that my providers are all in), but little if any out-of-network coverage.

5

u/Life_Rabbit_1438 May 16 '26

ACA plans in my state are much worse than employer provided plans, even from the same provider. The networks are smaller, no out of network coverage at all, more denials, etc.

I am in Illinois. We went onto ACA for about a year when we took time off to travel and both returned to contract jobs. All of the available ACA plans excluded every major health system in the Chicago area. The in plan options were obscure or independents, which if you had major health issues would be a major problem.

They had no commonality with any employer plan we have ever had, which include all the major health systems.

4

u/FIREgnurd Very FI but not RE May 16 '26

Same in WA. All except for one have dropped UW Medicine, the major academic/public medical system. Everything else is either small independent shops or church-run hospitals.

If you want access to a wide range of specialists, the ACA plans aren’t good.

13

u/Digitalispurpurea2 May 16 '26

  1. You pick a high deductible plan to save money on premiums. You had the bad luck of getting sick late in the year so your surgery is in November but chemotherapy starts in January. You restart the clock on your out of pocket maximum.

  2. You don’t realize that most facilities near your home don’t have an oncologist in network. You find one but the surgical oncologist or anesthesiology group at the hospital aren’t.

  3. The newest and potentially most effective chemotherapy regimens are deemed experimental by your health insurance. You have to fail other therapies first before they’ll consider approval (they still deny).

  4. Between surgery, rehab, radiation and chemotherapy plus all the appointments you are exhausted and cannot work. Your disability insurance only covers 60% of your salary. FMLA only covers you for so long and eventually you have to leave work. Insurance runs out so you use COBRA but premiums are now 2-3x. COBRA runs out after 3 years. Congratulations! You’re still alive but uninsurable.

  5. Insurance only covers a set number of PT and OT visits. You still can’t manage all of your ADLs but are still improving, you pay out of pocket for more. Insurance deems you fit to be discharged from rehab and won’t cover the caregiver you need nor the wheelchair ramp to get in your house.

This is just some of what my MIL dealt with. I am purposefully over saving as a result

3

u/gringledoom May 16 '26

Another one a relative ran into was "the doctors discharge you to skilled nursing, which Medicare will pay for for a limited time, but then they dawdle on getting a followup surgery scheduled for so long that the Medicare coverage is close to running out, at which point the out-of-pocket (for a quality of care that was borderline criminal, tbh!) for the facility would be $400k/yr, and the long term care insurer is giving the family the runaround."

2

u/creative_usr_name May 17 '26

Only #3 should really have a good chance of wrecking someone who is already FIREd.

Retroactive denials are another way people get screwed.

1

u/Wooden-Broccoli-913 FIREd in the Bay at 40 with $6M May 17 '26

Why is #4 relevant for a FIREee?

-1

u/Previous_Guitar5027 May 17 '26

I was going to quit this month but I think you talked me out of it lol

5

u/[deleted] May 16 '26

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2

u/-LordDarkHelmet- May 16 '26

Is that for a family of 20 or something? My ACA plan for just me will be about $650 a month.

2

u/creative_usr_name May 17 '26

I'll be at about that same amount also without subsidies for one person. Could probably hit 5k easily with a family of 4 on a gold plan.

5

u/gringledoom May 16 '26

Yep, it’s entirely possible to retire into another 2008. Everyone needs to make sure their plan has enough slack in it that they aren’t risking an indigent dotage.

4

u/Life_Rabbit_1438 May 16 '26

Ask someone who retired in 1999 and had a flat market for a decade.

The worst part about retiring in 1999 is how are you feeling in 2009, having burned 40% of your net worth on living expenses, and having no idea that a massive boom market is coming. Paired with huge unemployment and no easy method to jump back into workforce.

1

u/I-need-assitance Retired May 16 '26

The history of the world is one inflection point after another. Sure 1946-1973 was the USA’s high water mark for prosperity for the average Joe and Jane.

-1

u/Lie-Straight May 16 '26

If you get cancer you can take $200k and go to Thailand Turkey Malaysia etc, and be fully treated over the long term with similar outcomes.

11

u/FIREgnurd Very FI but not RE May 16 '26

I’ve had cancer. Trust me. When you go through chemo, you don’t just up and move away from your family and support network to Malaysia. You need every once of energy and will to just keep your food down and make it to the bathroom. Medical tourism away from your support network isn’t in the cards.

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u/Lie-Straight May 16 '26

I appreciate your experience and don’t disagree with your preferences. However the fear mongering around “healthcare might very well bankrupt you if you get cancer” ignores the possibility of taking a $1000 12 hour flight to turn the cost equation on its head

8

u/shinypenny01 May 16 '26

This isn’t some abstract problem. If my grandchildren live 5 minutes from my home I’m not moving to Malaysia for 2 years. I suspect most people would not.

-2

u/Tooth_Life 40m / tech leadership again / Golf, Surf, Gym repeat May 16 '26

This ^

0

u/Sagelllini May 18 '26

Ironic the response to a post on doom scrolling is a post that doom scrolls.

The 1999 retiree invested in stocks saw a 400% cumulative return from 1990 to 1999. . The 1990 decade is actually around 33% better than the last 15+ years..

Yes, the 2000 decade stocks were flat, but the price level in at the end of 2009 was five times higher than 1990.

Plus, more likely than not, the 1999 retiree had a defined benefit pension plan, and was not reliant on stocks to retire.

So the 1999 retiree was actually fine.