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First year in Retirement
Old 03-22-2007, 02:13 PM   #1
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First year in Retirement

I'm retiring at the end of 2007. My wife and I are on the countdown and trying to prepare. We are getting dental work done, eye exams etc. We are buying things we think we will need in retirement.

I guess my concern is my first year in retirement. In my case, the first year will be more expensive than the rest. We have to sell a house and relocate to a house that is paid for but needs remodeling so we have those expenses plus we plan on buying a new boat next spring to use in retirement.

We have most of the money for the expenses outside of our retirement funding but will still need a little from our retirement money.

So, I'm wondering if most folks entering retirement found the first year, the transition year, more expensive than the following years.

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Re: First year in Retirement
Old 03-22-2007, 02:24 PM   #2
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Re: First year in Retirement

I retired last summer, but my wife still works, and her income is sufficient to cover all our expenses along with additions to her 401K.

My discretionary spending has gone down a bit from when I was working...I'm just enjoying sleeping in, reading, hanging around the shack, playing some guitar, going for motorcycle rides, etc. Hard telling how my wife will respond when she finally hangs it up...she may enjoy her new-found freedom enough to just hang around town on the cheap for while also, or she might be itching to head for Australia by way of Maui, etc.


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Re: First year in Retirement
Old 03-22-2007, 02:41 PM   #3
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Re: First year in Retirement

Originally Posted by garrynky
So, I'm wondering if most folks entering retirement found the first year, the transition year, more expensive than the following years.
We're almost done with our second year and it looks to be 8-10% more expensive than the first, including inflation adjustments. We went the RIP route (Retired in Place) so no relocation expenses and I've been demonstrating a lot of patience waiting to buy an RV while DW attempts to break free from the grandchildren (at least for a couple of weeks at a time). So year two activities are very close to what we did in year one...just more of them.

I tracked our spending pretty closely for three years prior to pulling the plug. We did lots of pre-retirement spending to get prepared. Even then we had a few unexpected repairs to autos and appliances, but everything fit well within our planned budget. I think we are spending more in year two because we saw we had some wiggle room and could loosen the purse strings a bit and still stay within the bounds of our target SWR.

Numbers is hard.

Retired in 2005 at age 58, no pension

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Re: First year in Retirement
Old 03-22-2007, 03:24 PM   #4
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Re: First year in Retirement

We're nine months into our first year. So far expenses are up compared to the last year of working due to an increase in travel and vacationing and some remodeling we didn't have time for while working. But this is all planned stuff and within budget.

One suggestion.........don't work too hard at labeling various pots of money with different labels. In the end, it's all money and you need to manage your total net worth to survive in the long run.

Write down a complete budget. Include normal day-to-day expenses, discretionary fun expenses, planned remodeling expenses, the new boat, etc., etc. Then, have you got enough money saved? If yes, enjoy! FIRE is really great!
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Re: First year in Retirement
Old 03-22-2007, 03:44 PM   #5
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Re: First year in Retirement

We're in year 4. Our ER was a bit more sudden than others. DH quit in 2002 and I planned to work part time until age 55... oops, got laid off in 2003. We adopted the "widow's rule" (that is, don't do anything big, like sell your house, for at least 1 year). We stayed put until 2006, when we decided to sell our POS condo and buy something newer and nicer a bit further away.

We spent about $80-$100K renovating our new house and are very happy we did so. We are now living in a beautiful (new!) place.

One of the most difficult things in the first year was to get over the mindset of "saving every cent you can", because once you are in ER, there's no reason to do so anymore.

We did the same thing, i.e., eye exams, glasses, dental work, etc. before we quit.

However, most surprisingly, we have been hit with many different emergencies such as needing a new central a/c, and have been able to weather it financially and still maintain a SWR of less than 4%.
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