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financial changes due to retiring.
Old 10-26-2015, 01:07 PM   #1
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financial changes due to retiring.

Am I the only one struggling with living paycheck to paycheck again? I thought those days were over when I was raising children?

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Old 10-26-2015, 01:33 PM   #2
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Yes I struggled for a couple of years, trying to make enough in our portfolio to cover living costs. After 2 years, I backed off, having hit on the right strategy. After 11 more years, I just spotcheck the buffer monthly.

I also learned in 2008 not to sweat a couple of years as long as we had enough principal to last.

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Old 10-26-2015, 02:06 PM   #3
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Yes we are struggling with it too. Before retirement, we had a huge excess of income. Now, we have to be a lot more careful. We recently had to pay a couple of large, unexpected bills and the stress that it created reminded us of our days living paycheck to paycheck. It seems silly because the bills were minuscule compared to the size of our portfolio, but with my obsession to keep our withdrawal rate as low as possible, the tiniest unbudgeted expense creates some angst. I may have to loosen the purse string a little.
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Old 10-26-2015, 02:17 PM   #4
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It's been 16 months for me and 3 years for DW but we don't feel the same. We have already exceeded the budgeted withdrawals for the year with two months to go due to some unforeseen extensive dental work for both of us but I'm not planning to cut down on our spending and remain comfortable with our plan. Now if this trend continues for a couple of years then we will rethink our spending. Party on
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Old 10-26-2015, 03:03 PM   #5
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While it was a bit strange at first I easily got used to it. I think one thing that helped big time was that I have a monthly transfer from the cash component of my retirement investments (in an online savings account earning 0.95%) to our local checking account that we use to pay our bills. I think of this transfer as my monthly "paycheck".

Also, all dividends and CG distributions from our taxable accounts go to our local bank as well. The total matches up pretty well with our budget/what we spend both in magnitude and timing, though sometimes I have to make an additional transfer to cover big bills (like when we built our garage) and other times we spend less an the balances accumulate (like currently but that will change since we recently ordered a new car).

It just takes getting used to.
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Old 10-26-2015, 03:10 PM   #6
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What DW and I did prior to hanging it up is to try to live on what I thought our income stream would be at the beginning of retirement. We did this for about 6 months, as I recall, and once we got used to "practicing retirement", real retirement was a breeze as we had actually made a calculation mistake and had more money to play with than we had assumed.

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Old 10-26-2015, 04:49 PM   #7
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It was definitely a cultural shock. The first year didn't go badly; we'd been saving a big % of my income (DH was already retired) so just not saving any more lowered our cash needs. The first year we kept the withdrawal rate to under 4% and our net worth actually increased, so I relaxed somewhat.

Then came the downsizing. Ugh. Money to fix up the old place. Selling and purchase expenses. The bank wouldn't loan us as much we wanted (I swear they ignored our assets completely and fixated on DH's SS and my $10K/year pension) so we had to take a little under 2% of the assets out to make the changes we wanted to the new house.

It should get better from hereon in even though we figure we'll have to replace the A/C and a couple of windows next year. I keep close track of spending categories and a whole lot of what's flying out the door are travel expenses and charitable donations, both highly discretionary items. I've also got a healthy SS benefit coming but hope to wait till I'm 70 to collect (I'm 62 now).

Have you taken a look at where you might cut expenses or bring in some extra income? Are you comfortable with your withdrawal rate?
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Old 10-26-2015, 05:46 PM   #8
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No. I set up automatic monthly withdraws from savings to checking that were about the same as my monthly take home pre-retirement. I didn't envision any big change in my lifestyle pre/post retirement, though some people will - they may want to travel, or do other things with their time that will cost more $. Others will spend less, due to less commuting, buying business clothes, keeping up a certain expected lifestyle, etc. It can go either way for any number of reasons (moving to a higher/lower COL area for one more example).

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Old 10-26-2015, 07:53 PM   #9
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I do not envision a huge change. My rentals will provide 100% of my needs if my projections are correct. I did add some buffer on the expenses and income too.
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
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Old 10-26-2015, 08:04 PM   #10
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Struggling, maybe if you let us know more about your situation we could offer some advice like athena53 mentioned - ways to trim expenses or bring in some extra income. There are lots of little ways in the various deal and side income forums to bring in some extra money, even without a regular job, which might help with your budget issues.
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Old 10-26-2015, 09:27 PM   #11
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Can't say as I've considered it to be a struggle. By simply being cautious about spending which is basic to LBYM anyway, our spending so far is running a bit lower than our previous (to ER) five year average. Had the new car bug recently, but realizing that we valued travel more than having a new car that is were we will spend our money for now. Doing both - now that would likely lead to a struggle.

Handling a large expense such a roof replacement or furnace is challenging, but having some after tax funds set aside for that type of one time event reduces the anxiety over the uncertainty of when it might be incurred.
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Old 10-26-2015, 10:56 PM   #12
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I haven't had to pinch pennies at all in retirement. Surely at some point my luck will change. But so far, so good.

Now if I could just stop growing older so fast, I'd be set.
"You can never cross the ocean until you have the courage to lose sight of the shore." - - - C. Columbus
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Old 10-27-2015, 08:40 AM   #13
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This is the OP's first post, so we don't know if he/she retired by choice or was forced to do so before being ready.

Struggling - Welcome! It would help us if you introduce yourself in the Hi,I am forum.
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Old 10-27-2015, 09:11 AM   #14
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Originally Posted by struggling View Post
Am I the only one struggling with living paycheck to paycheck again? I thought those days were over when I was raising children?
I'm also feeling the challenge to fit lifestyle within my budget. In part because I retired BEFORE I was done raising children... and they create random unexpected expenses. (This year it was sports injuries and medical expenses.)

It's a learning curve for me. Some of the things that improving my bottom line spending are:
- Experimenting with cooking from scratch/whole grains/less meat. I'm mastering some very low cost meals that the family is really enjoying.
- Buying used when it's practical. I have more time to seek out bargains. Things like a wetsuit for my 12 year old. Seems silly to buy new when he will just outgrow it... Makes sense to buy used. Would have taken too much time/effort when working to hunt down the bargains.
- Enjoying FREE and low cost activities. Rather than a gym membership, I walk the dog on the beach for 2.5 miles 5 days a week (free), and do a swim aerobics class at the public pool (cheap) 2-3 days a week.

Sure you could look at this as living paycheck to paycheck... but the more I get used to it - the more it comes naturally.
Retired June 2014. No longer an enginerd - now I'm just a nerd.
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Old 10-27-2015, 09:16 AM   #15
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I got around this issue by keeping a large cash buffer-maybe 9-12 months of expenses. Divs and pensions in and expenses out. Divs can be pretty lumpy so certainly need a buffer. This way never have to worry about month to month.

Obviously you still need to keep expenses generally in line with income but this was never much of a problem for us. Also a good reason to pad the retirement expense budget a bit before pulling the trigger. Always nice to have a cushion.
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Old 10-27-2015, 11:01 AM   #16
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Our retirement came suddenly when MegaCorp overreacted to the financial downturn of 2008 and decided to run a $15 billion company without experienced (older) employees.

And we at the point where many of our assets were wearing out--needing replacement. We had to buy a SUV to haul our newborn grandchildren, as our car was too small. A SeaDoo wore out and our pontoon boat blew the engine--both had to be replaced. My parents died and I had to buy out my sister's half of their lake house. Three really big trees had to be professionally removed. We also spent $10K in a lawyers' bills in child custody proceedings.

We were wanting to have a simple retirement where we get into our camper and leave for 3-4 months at a time. Now, we find ourselves a big part of our young grandchildren's lives and we have to stay close to home most of the time. We'd be withdrawing less money to live on had we not had those children in our lives. But they're worth it.
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Old 10-27-2015, 06:35 PM   #17
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We are living on two social securities and my husband's state employee pension. The 3 sums added together are what we lived on when we were working, because we were adding the rest to savings. So it really hasn't been different for us. So far, we haven't withdrawn any money from our savings. We seem to have money leftover each month, since we don't have dry cleaning and have much lower gas and auto costs. We don't have the massive savings that some of you have, but we have health insurance covered and no debt. I feel very fortunate.

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Old 10-29-2015, 08:46 PM   #18
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Strugling. There are lots of people living paycheck to paycheck in retirement.
You just haven't gotten much of a response from them on here.
This particular forum is frequented by more affluent people as a rule, hence the name emplies "Early Retirement". Most people who chose to retire Early, can afford to retire early.

On the other hand, some people have been forced into retirement early due to job loss. There is a forum over on City Data called Retirement Forum. You will find a much better mixture of income levels over there and many posts by people who struggle during retirement. Also on the Frugal forum.
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Old 10-30-2015, 08:41 AM   #19
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To answer your question directly no I am not struggling. However I have a ballpark budget in my head. I have been told a written budget is the proper way to do it and to have my spouse involved in it. I do have more than 6 months living expenses in the checkbook, and I certainly have dental expenses in my budget. I went 2 years with just cleanings and fillings so I just rolled it into the next month. However a few dental implants later at 3,400 a pop sure depleted that budget item. Just like home repairs I budget 1 % of the homes value, in my case that's just over 1,000 a month. I don't spend that every month but I had the air conditioner serviced it was over 1700. Mind you I spent 360,000 in major upgrades right after I retired. For regular medical I budget 6000 a year that's what I need to spend before my catastrophe insurance kicks in.
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Old 10-30-2015, 09:05 AM   #20
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I hope the OP came back to read our answers!

A thought I had after reading some of the replies: I do find that I'm more conscientious about taking advantage of discounts, questioning expensive items, etc. In just the last month I've gotten $170 knocked off my share of a mammogram charge (they said the error was a "known issue" with their new computer system), convinced the sewer company in our new town that we're honest people and we don't need to put down a $100 deposit, and remembered to use a Lowe's coupon that got us 10% off a $900 cooktop. (I also made sure we put in the final order before the special promotion expired and saved another $100.)

When I was employed, I might have let some of these slide. I don't drive 20 miles to save 50 cents off a grocery item but when I can use free time to save $100 here, $100 there, it's worth it to me now.

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