A total mind shift on spending in retirement

[Texas Proud]

Just from observation I think it makes a difference in how close you came to death...


I have a sister who was in a bad car accident and was very lucky she was not killed.... she changed how she approaches life... I have heard a few comments from her that I would say leads me to think she has changed her spending habits... mostly that some items she just does not care... IOW, it is not a huge expense so if it is $20 or $50 it does not matter...


I have another sister who had a scare with medical and was in the hospital or rehab facility for about a year.... she went on a traveling spree once she got better... I do not think she would have traveled as much as she has if she had not had that scare... BTW, she is approaching visiting 100 countries.... she told me yesterday that she had planned to hit it this year on a cruise but just got info that they will not be docking at some country since it is now not safe... so it will probably be next year when she hits 100....

[FreeBear]

Sobering thread. Sorry for all the folks and their loved ones who have struggled with cancer and other life threatening issues.

Fortunately, nothing that dramatic or challenging for us, yet. After three years of retirement in a bull market, it has been dawning on us that we may be running out of time faster than running out of money. Our financial situation has improved in this bull market despite a fairly heavy burn rate.

During the first 2 years of retirement, I was afraid to spend anything, so arrived about 15% below budget. Last year we were hit with a $10K dental bill. At first, we thought about cutting travel a bit, but the winter blues set in. We decided "screw it, let's do it" and snow birded for almost a month. It turned out were just a bit above budget despite such a heavy burn because our total required expenses have grown more slowly than inflation, despite health insurance/health care.

So gotten lucky so far, but I realize this can change at any minute. We have enough $$ and discipline that financial ruin will come, if it does, either very slowly over decades or though some huge life changing crisis that is impossible to mitigate beforehand. I expect we will enjoy the $$ from the bull market, but naturally cut back when things eventually slow down. Instead of saving even more for a greater margin of "safety", we're learning to enjoy life while we can.

[misshathaway]

Quote:

Originally Posted by Focus You'd think that would make me tighten the grip on my wallet, but it's had the opposite effect. My attitude now is: I'll be damned if I end up spending my savings on the U.S.'s overpriced health care industry. As a result, I find I'm less frugal and spending much more freely than ever before. Has anyone else had a similar experience?

Yes. Somewhat different turning point though. For me it started with withdrawing from equity funds for the first time to rebalance and putting it in my checking account for spending. I noticed that the earth did not stop spinning. Hmmm ...

Then we had a horrible winter filled with insecurity for me when a big tree limb fell within feet of the middle of my roof, my oil deliverer decided to stop delivering oil in Dec. because my oil tank's feet were rusted, and my basement had a continuous puddle in it all winter due to seepage from outside. Sort of forced me to think "You have x in the bank. You can easily fix this" So I did.

My turning point was more seeing that I was living so far below my means that I could not relax and really enjoy retirement, and not having any rational reason for doing so.

[Scuba]

Our first year of ER, we spent right on budget except for one “splurge” item, but still ended the year well ahead of where we’d thought we would. Our new Fidelity FA said we could ratchet up our spending quite a bit and still be fine, which DH has taken to heart. Luckily he is pretty frugal so his ratcheting it up a bit is still not too bad. I feel like we’re still early in ER and we have a nice lifestyle, spending slightly more than we did when we were working, so I don’t feel a need to bump anything up too much. Maybe after 5 years of ER if we’re still in a really solid position, we can start “blowing more dough.”

[ER Eddie]

I had a somewhat similar experience in the sense that I had a very serious medical condition for which I was hospitalized for a couple months (almost died). I emerged from that experience having realized one thing -- that I should stop being so tight/frugal with money, that I should spend it more freely and enjoy it, rather than be too concerned with saving and preserving it.

[scrabbler1]

I had some health issues 3 years ago including being diagnosed with Type 2 Diabetes as part of a 12-day hospital stay. I hit my OOP max thanks to the ACA Silver plan I had. I have had to alter my med expenses within my budget since then due to extra doctors and some prescription drugs. Nothing which will bust my budget, just reduce the cushion I have built into my budget. It hasn't affected the rest of my spending.

[Chuckanut]

Thanks to some minor medical issues and one scare that turned out to be a false alarm I do spend more than I might otherwise, but I certainly don't spend for the sake of 'bloughing the dough'. The ability to spend a day at home reading, or working on a hobby or small project is plenty of reward in and of itself.

[RobbieB]

I don't spend for the sake of spending either, I spend for stuff I really want.

Like fancy hotel rooms and first class airfare.

[kcowan]

I buy organic food when it tastes better. We are only going this way once.

We will always spend more for comfort and service when it makes sense.

We spend whatever it takes on health.

[googily]

I have cautionary tales on both ends of the spectrum--DH's death last year from cancer at 55, of course, but also my father, still chugging away at nearly 85. His father died at 57 and so he became pretty intense about his health after he turned 50. He still bikes, and lives alone, and does what he wants to do (with plenty of dough left to do it with).

But he never expected to make this age, nor to be alone if he did get there--Mom was seven years younger and of strong stock, but died of neurodegenerative diseases five years ago. And now Dad is losing the last of his life-long friends, and has very few people left to spend time with outside of kids and grandkids.

It's all made me realize that you don't want to be the first to go, but you don't really want to be the last to go, either.

I'm spending pretty freely, but still with caution, and with plenty of cushion.

[FIREd]

After 3 years of living off the portfolio, we are still sticking to the budget and resisting splurges which would require increasing our withdrawals (we are still in our 40's with potentially a pretty long road ahead still). Even if I ran into a life-altering health issue, my wife could still live well into her 90's (good genes ) and it would probably not feel right to splurge recklessly and risk her financial future.

[Focus]

Quote:

Originally Posted by googily I have cautionary tales on both ends of the spectrum--DH's death last year from cancer at 55, of course, but also my father, still chugging away at nearly 85. His father died at 57 and so he became pretty intense about his health after he turned 50. He still bikes, and lives alone, and does what he wants to do (with plenty of dough left to do it with). But he never expected to make this age, nor to be alone if he did get there--Mom was seven years younger and of strong stock, but died of neurodegenerative diseases five years ago. And now Dad is losing the last of his life-long friends, and has very few people left to spend time with outside of kids and grandkids. It's all made me realize that you don't want to be the first to go, but you don't really want to be the last to go, either. I'm spending pretty freely, but still with caution, and with plenty of cushion.

Thanks for sharing this. That's what it all comes down to, doesn't it? Life is unpredictable. And relationships are more important than anything one can buy with money.

[googily]

Quote:

Originally Posted by Focus Thanks for sharing this. That's what it all comes down to, doesn't it? Life is unpredictable. And relationships are more important than anything one can buy with money.

Indeed. And, as John Lennon and others have said, life is what happens when you're busy making other plans.

Which can be tough for inveterate planners to accept! [emoji16]

[isisdave]

This is why DW is insisting we go-go-go until we can't-can't-cant. Retired at 66/65, deferred SS to 70 except for spousal, and spending way more than 4% on travel until we have to slow down. It did take about 18 months to shift from frugal mode to live-a-little mode.

At 80, a pair of hydraulic ramjet rocking chairs and a gigabit Ethernet connection will be just fine. It'll take to age 95 to edit all the photos, anyway.

[97guns]

Life is short as it is if you make it to the average lifespan, I’ve given that lots of thought and with my net worth blowing up since retirement I’ve really let loose with my spending. my brother is planning a Vietnam vacation in 2020, I don’t plan that far out anymore, if I have the desire to go somewhere I go ASAP because nobody knows what tomorrow holds.

[DrRoy]

Quote:

Our first year of ER, we spent right on budget except for one “splurge” item, but still ended the year well ahead of where we’d thought we would. Our new Fidelity FA said we could ratchet up our spending quite a bit and still be fine, which DH has taken to heart. Luckily he is pretty frugal so his ratcheting it up a bit is still not too bad. I feel like we’re still early in ER and we have a nice lifestyle, spending slightly more than we did when we were working, so I don’t feel a need to bump anything up too much. Maybe after 5 years of ER if we’re still in a really solid position, we can start “blowing more dough.”

This is pretty much where we are. First year on a pretty free budget, but still below 2% WR, and spending more than we did pre-RE. This year spending more, but again under 2%. I am thinking of taking out 2% for next year and just spend it all.

Quote:

I don't spend for the sake of spending either, I spend for stuff I really want. Like fancy hotel rooms and first class airfare.

This would probably do it.

[VanWinkle]

Quote:

Originally Posted by RobbieB I was max out of pocket the last 2 years of my wife's life. Hospitals and chemo ain't cheap. But she died anyway and that was what made me less frugal. Spend the dough while you can, you may be diagnosed with pancreatic cancer and have 2 years left.

Sorry to hear about your late wife RobbieB, I was not aware of your loss.
I can relate as my wife is is ongoing treatment now.

[Momcpa]

RobbieB......sorry for your loss. None of us know how long we have. A really sad part of serious illness (one of the sad parts), is that when it hits, it may be too late to do those things we've put off: vacations, travel, splurges. Our health and doctor commitments may make those things WAY less likely to happen. To a smaller degree, my DH and I have been there and seen it first hand.