Follow up: LBYM in retirement

[Sam]

This is a continuation of the "At, Below, or Above your means" poll.
http://early-retirement.org/forums/i...?topic=13131.0

For retirees only who voted "Below our means" in the above poll. Thanks.

[mickeyd]

LBYM provides retirees with the most flexibility. You can easily increase your spending and, if you do, you already know that if you have to later decrease it, you will have little difficulty making the necessary adjustments because of your past experience of LBYM.

Those that retire and spend away with no long-term idea about where future spending will come from, may develop a false sense of security that may cause them to be trapped in the future with no visible escape route!

[lazygood4nothinbum]

earlier this week i spent 5 days with two shoppers. it seemed like i'd never been in so many stores in all the rest of my life. and they didn't just shop; they found all sorts of fascinating things that they bought. but when i look at the same stuff, all i see is crap.

[JustCurious]

Quote:

Originally Posted by mickeyd LBYM provides retirees with the most flexibility. You can easily increase your spending and, if you do, you already know that if you have to later decrease it, you will have little difficulty making the necessary adjustments because of you past experience of LBYM. Those that retire and spend away with no long-term idea about where future spending will come from, may develop a false sense of security that may cause them to be trapped in the future with no visible escape route!

LOL. There is a middle ground, ya know? :

[crazy connie]

I save because I can. I do not know what the future of my health insurance costs will be is a big reason. Also, having extra funds put aside give a modicum of security in case the markets take a 2 or 3 year dump. If I choose to make a big change on a dime... I can buy a new home before selling current one. I plan to self insure for long term care. Perhaps I wil splurge on weddings or down payment matches for my 2 kids. I like the confidence that living below my means affords me. Besides, if I want to I can spend more. If I hadn't saved I would be limiting my tomorrows abilities. I save because it makes sense to me and I do not feel deprived by doing so.

[Nords]

That should be a multiple-choice poll...

We can LBYM anytime we want. We've done it for most of our lives, and this home-improvement spurt is only temporary. It's LAYM that's the real challenge for LBYMers!

So LBYM is a hard habit to break, and when you've conditioned yourself to find pleasure via means other than spending money, then spending money doesn't give you any particular pleasure.

LBYM is also a good way to set an example for your kids. Ours has spent a good bit of time rehabbing our rental with us (cleaning, vacuuming, electrical repairs, painting, and paperwork) and she's been well-paid for it. She's watched the ceiling, painting, & carpet contractors ("Stay in school, kid"). She's blown about a third of her earnings (on Amazon.com and a Netflix subscription) and she's sending the rest to her IRA. But the best part of sharing her earning experience was having a discussion with her about the whole concept of earning money, paying bills, spending some of it on entertainment, and letting the rest compound away. She was inspired by hanging out with Trombone Al and hearing about the rest of the ERs, and now she's stoked to follow our lead.

We're actually pretty optimistic about the future of the stock market, Social Security, Medicare, and even the U.S. govt. The degree of rancorous dialogue on all sides of the issues gives hope that we'll all muddle through, especially if someone can keep finding ways to make a profit from muddling.

I still pick up pennies off the sidewalk, although I no longer head-butt little old ladies to get there first. I still find myself comparing the monthly cost of our DSL ISP (or whatever) to the number of starving children that we could feed in Africa. But I'll never be Mother Teresa or even be able to give it all away like Buffett. Unfortunately I'm applying the same value criteria to our charitable giving as I do to our spending and our investments, and the vast majority of the charities are still coming up short.

Reports from other posters' donation experiences are convincing me that I should don a Groucho Marx disguise, walk into charity offices, hand over envelopes of cash while not leaving fingerprints or DNA evidence, and request that a receipt be made out to acknowledge my anonymous donation. Or I guess I could also hire a lawyer or an accountant to be our go-between...

[lazygood4nothinbum]

Quote:

Originally Posted by Nords Reports from other posters' donation experiences are convincing me that I should don a Groucho Marx disguise, walk into charity offices, hand over envelopes of cash while not leaving fingerprints or DNA evidence, and request that a receipt be made out to acknowledge my anonymous donation. Or I guess I could also hire a lawyer or an accountant to be our go-between...

don't mean to hijack thread but just to comment that it is only truly anonymous when you forgo your receipt and don't report it to the irs. that is when you have given charity purely for charity's sake instead of even just a little for your own. otherwise it might be best to take the credit up front as an example & incentive to others.

[Sam]

Thanks all for the votes so far. I'm a little surprised by the majority "The worst is yet to come".

Quote:

Originally Posted by Nords We're actually pretty optimistic about the future of the stock market, Social Security, Medicare, and even the U.S. govt.

Me too. I can't stand the fear-mongering being propagated by the press. But I do understand that bad/horrible news/analysis sell better. And it's always easier to criticize than coming up with constructive and meaningful solutions.

Quote:

Originally Posted by Nords That should be a multiple-choice poll...

I thought of that, but decided to go with only one choice underlying the main reason.

Quote:

Originally Posted by Nords LBYM is also a good way to set an example for your kids.

Congratulations. I'm not sure my kids really understand the value of money. They are ok as far as money is concerned, but not great.

[spncity]

On charitable giving...

I understand the point - but if the purpose of giving is to do the most good - then, if you take the deduction, don't you then have more money you can give to charity?

God loves a cheerful giver, but charities love a giver no matter what mood you're in...



I know I have been inspired by the examples of others in certain areas of giving.

[Nords]

Quote:

Originally Posted by lazygood4nothinbum don't mean to hijack thread but just to comment that it is only truly anonymous when you forgo your receipt and don't report it to the irs.

I don't think the government needs more of my charity than I'm already forced to give. And I don't mind telling the IRS what I've given to whom; I'm pretty sure they won't call me up to ask me to send more to those charities.

[loosechickens]

Well, we voted "can't kick the habit" although just not finding stuff we want to spend money on came in a close second.

Partly, we just have a philosophical bent toward voluntary simplicity. Partly, we have lived a frugal lifestyle for so long that the ordinary American lifestyle seems incredibly wasteful to us.

We do buy quality items. We do eat mostly organic food. We do donate 10% of our income right off the top to charity. When something comes up that we really want to do or buy we do it, like our trip to Europe this fall, but we really enjoy lower budget travel and the people we meet more than the people we meet in higher priced venues.

Our broker tells us that we can spend twice what we spend each year safely, but there is truly not anything we want to spend it on. Living in a motorhome certainly helps because the opportunity to accumulate consumer goods is limited.

It's almost as though if you're the kind of person who has the ability to put your money away for early retirement, you'll find it hard to throw over the traces once you're there.

It's nice knowing that even if the market takes a real downturn we can still spend at our current level, but that's not why we do it. It's been so long since we had any kind of unfulfilled desire that I no longer remember what that feels like, although I see all around me people literally sick with desire for more, more, more. Seems like an awful waste of life energy to us.

It's not that we're so wealthy. Our investment portfolio is up over into seven figures, but there are many around us with much more, yet filled with unsatisfied desires for more. In the end, enough is in the heart, I think, not the pocketbook. And we feel such abundance of more than enough. I think that is real riches, that feeling of abundance in your life......and far more important than any specific number of dollars in one's portfolio.

[clifp]

Well, we voted "can't kick the habit" although just not finding stuff we want to spend money on came in a close second.

Partly, we just have a philosophical bent toward voluntary simplicity. Partly, we have lived a frugal lifestyle for so long that the ordinary American lifestyle seems incredibly wasteful to us.

Ditto for me. Clearly there are many kindred souls on the boards.
When I was younger I was definitely a gadget guy, now by Silicon Valley standards not particularly excessive, and I never paid top dollar for any gadget, but still I was an early adopter. However, now days I find that more often than not a new gadget just isn't worth the hassles of researching it, figuring out how to use, where to store it, and remembering to change the batteries or recharge it.

I just went through a mental list of a several dozen things ranging from cell phones, kitchen stuff: breadmakers, cuisanarts, to entertainment devices like computers, HD TVs, and MP3 players, I have purchased or received as gifts or premiums last 4 or 5 years, and I concluded that in more than 1/2 the cases the hassles associated with the obtaining the device (even if it is free like my iPOD) outweigh the benefits.

It is interesting cause I still get the initial rush, or wow this is so cool it slices, it dices, it juices, and cleans the carpets, but things are never that easy...

On the other hand, I find owning a piece of a company, or making an investment in a local company pretty cool.

[old woman]

I chose Other because I enjoy watching the money grow more than I enjoy most things. I do projections and see if I don't spend any money how rich I will be someday so every time I spend I know my projections will get smaller. I don't have heirs except nieces and nephews that should be about 80 when I die and if they can't save their own money too bad for them.
Sometimes I tell myself how silly it is to oversave and can get myself to spend some but I am a bit of a miser. Scrooge McDuck was my childhood hero. :

[chinaco]

We are not retired yet... ER in 4 years. However, I intend to spend our money and enjoy it. This means we will have elevated spending early (55-70 or 75).

That said, the comments from several of you seem to ring true. We have followed LBYM for along time. That is not to say that we deprive ourselves... we do not, but we try to spend wisely. Our largest discretionary spend is on vacations. We like to enjoy ourselves.

Anyway... our LBYM habits may be a bit of a rut for us. I wonder if we will feel comfortable actually elevating spending. It will probably feel a little wasteful.

Of course some of that elevated spending could be part of singular events... Buy a winter condo in Florida or somewhere else. But that type of expenditure is partly an investment in an asset that will return most of the money later.


I suspect that we will spend our money on travel, entertainment, etc...

I agree with a comment... Are we oversaving. Or should we ER earlier. The two things holding us back right now are waiting on the medical benes from mega corp and I have not hit the magic number of 25 x income needs. I am wondering if I am over estimating out income needs.

[Jeb-NY]

Retired early because of LBYM. If I had feathered the nest to live high on the hog in retirement I wouldn't have retired early. If we have a good long bull market and the nest egg grows a lot we may splurge on some things we don't need, but otherwise, we were happy with our level of living while we were working why not now.

Jeb

[Moemg]

I can't find things I want to spend money on .I think it is from years of living slimply.

[Dreamer]

I voted I just do it, I have no idea why, because I think that it is for a variety of reasons. I feel the main one was due to my growing up so poor and having the feeling of being a "charity case" for many years. I also don't need a lot of money to enjoy life. I can do things simply and enjoy it. I actually feel sorry for people that seem to be on a spend spend cycle and can't retire due to all the money that they are constantly spending.