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Old 03-04-2012, 09:19 AM   #21
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Fortunately we have been able to give up the saving and start the spending, but not the LBYM habit, in that we stay at or below a 3% WR. Hopefully you will be able to do the same.

the year before we ER'ed was in line with the previous 4 years spending (not including taxes), so using that year as a baseline:

First year of ER our spending was up 27%.

Second year up 31%

Third year (2012) is looking to be up ~20% as all our vacation time will be in the USA.
That's exactly what we're planning for our retirement. Increased spending, but still LBYM with a ISWR of <3%.
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Old 03-04-2012, 09:27 AM   #22
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I was scared to death about the same thing. Though we had lived the previous 4 years comfortably on the returement budget. Every model we ran said we were good to go. DH retired last April and I can honestly say I have not lost a night's sleep.

We were use to weekly paychecks, so we sweep our money from a savings account that holds the years spending to the checking account weekly. Works fine for us.

We saved, we planned, we tested, now we enjoy! Really enjoy!
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Old 03-04-2012, 09:03 PM   #23
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I find it difficult to cease frugality.
Have found it easier to give away money than to spend it.
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Old 03-04-2012, 09:21 PM   #24
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I think, come 2013 (when I will be 58 and technically retired), I will find it very hard not to continue saving. So, I probably will and will feel fortunate in being able to do so (knock on crystal ball). Granted, it will not be at the current level but it won't be pennies either. "Saving some percentage of income", at least for me, may prove to be a hard habit to break.
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Old 03-05-2012, 04:58 AM   #25
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So some like Nords have spoken of parents, and others have more income than they need or spend. My mom is in a situation where she gets 2 checks each month, one from pension and one from SS. She also has paid off her home and has about $450K in investments.

Each month she spends one check and deposits the other into a savings acct. She has asked me to watch over her investments so every 6 months or so I sweep savings into her investments and invest according to AA I set up for her with her broker. She is worried she will need long term care and spend her savings and end up needing help.

She is happy, but it pains me to see her saving at the age of 80 and not enjoying her assets. But she is happy, so why screw with it. Just another example FWIW.
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Old 03-05-2012, 05:59 AM   #26
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@Retireby90: Our moms are sisters - or are we siblings?
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Old 03-05-2012, 07:10 AM   #27
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Don't mean to scare you, but wait until you do retire and then realize no regular paycheck coming in. It does take awhile to get used to that feeling.

I do find myself too in retirement, LBYM and try to spend less than my budget. Old habits die hard.
We spend significantly less than we can afford according to all spending models I know of. But we've always LBYM, so we don't feel deprived at all, why spend more just because maybe we could? I've only been retired for 8 months, so I assume we'll be more comfortable spending more in a few years. And though history is on our side, who knows what the future will bring?

You really won't know if your plan has been successful until you're 20-40 years in (rarely acknowledged here), makes sense to be a little cautious in the first decade if not longer. It's a little like having good career success in your early years and declaring you've HAD a successful career, you can only know for sure when it's over. YMMV
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Old 03-05-2012, 07:18 AM   #28
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@Midpack. Agree with you from a financial point of view. Problem is many people want to spend more early in their retirement when they feel more energetic. Somehow I doubt frugal conservative spenders will actually want to or be able to mentally, raise spending later in retirement.
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Old 03-05-2012, 07:40 AM   #29
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@Midpack. Agree with you from a financial point of view. Problem is many people want to spend more early in their retirement when they feel more energetic. Somehow I doubt frugal conservative spenders will actually want to or be able to mentally, raise spending later in retirement.
The limited examples I have witnessed first hand agree with the last part of your post which I highlighted.
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Old 03-05-2012, 07:40 AM   #30
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@Midpack. Agree with you from a financial point of view. Problem is many people want to spend more early in their retirement when they feel more energetic. Somehow I doubt frugal conservative spenders will actually want to or be able to mentally, raise spending later in retirement.
Can't disagree, but I'd rather be challenged to spend more later than having to figure out how to spend (substantially) less later, it's not like we can go look for work at 80 or 90 years old.

We all had to strike a spending balance between saving for the future and immediate gratification while working, and we still have to strike a prudent balance in retirement - surprise!

YMMV
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Old 03-05-2012, 08:21 AM   #31
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Can't disagree, but I'd rather be challenged to spend more later than having to figure out how to spend (substantially) less later, it's not like we can go look for work at 80 or 90 years old.

We all had to strike a spending balance between saving for the future and immediate gratification while working, and we still have to strike a prudent balance in retirement - surprise!

YMMV
agree. It is at least as much of a balancing act early in retirement as it was when we were working.
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Old 03-05-2012, 10:28 AM   #32
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While planning for my eventual retirement I have discovered a hurdle to finally making the move. From the time my DW and I started out we always saved from every paycheck, bonus, gift ,etc. After 35 years I find it very difficult to reverse this mindset.
I can see us cutting back to the point of pain to save from even our retirement withdrawals. Does anyone feel this way or deal with this?
we were the same way as far as saving etc.
I do not start withdrawals until 2013 and today is only my 4 th "w$%k day being retired so I am no expert, but here is how I looked at it.
We are 59/55 yrs old and I looked at our current expenses and realized that we can keep our current lifestyle at 66/62 with just one SSN and a small pension. we go on current value of the money and assume we can keep up with inflation. (no one really knows for sure )
Then I looked at our savings and took out X amount each year till we reach that 66/62 milestone) then I took out X amount for 20 years from the remainder starting at age 60/56 (prime traveling years) and was actually shocked on how much we had left when we are 80/76 so I kept adding to the extra amount we planned to withdrawal till we had an amount we felt good with. So I just need to keep on track and I feel like we will be ok. We also know that we can get over $200k reverse mtg. at any time after my wife reaches 62 so that adds a little security.
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Old 03-05-2012, 10:42 AM   #33
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I'm not retired, but I went through a 5-year focused debt elimination period. Afterwards I still wanted to keep saving, but I wanted to free some spending to enjoy today, too. It was an oddly difficult conversion where I had to push myself to spend more.

I was going to say it's still a struggle 7 years later, but now I'm recalling a lot of discretionary spending last year, so maybe I'm over it after all. (Oh yeah, and there's that London trip coming up...)
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Old 03-05-2012, 12:36 PM   #34
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Can't disagree, but I'd rather be challenged to spend more later than having to figure out how to spend (substantially) less later, it's not like we can go look for work at 80 or 90 years old.
Besides, sometimes the elderly need care or assistance. I would be amazed if the prices for these services don't skyrocket when the baby boomers get to be that age.
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Old 03-05-2012, 10:00 PM   #35
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I am somewhat of a similar mindset - although I'm hoping that if I can live off of a SWR of about 2.3%ish, and it's met nearly all by dividend income alone, I can convince myself to take some capital gains distributions every now and then to just splurge.

It's funny how people are wired - the exact same situation mirrored can be found aplenty in society.

Take a young woman who sat at my dinner table Saturday night during a social outing with a social group I'm an assistant organizer for. I overhead her lamenting to a friend about how the company she works for starts you out making next to nothing as an insurance adjuster. She then mentioned to her friend that the debt consolidation plan she agreed to last year (where she apparently is supposed to pay $200/month to an account) hasn't received any $200 payments since October 2011!

Of course, she apparently has cash to go out to eat, and have some disposable income for entertainment.

Just as it's next to impossible for many of us to attack the principal (despite FireCalc assuming that will happen in it's modeling), it's also next to impossible for many in society to deny themselves and (gasp) save just a few bucks to get themselves out of debt.
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Old 03-05-2012, 10:08 PM   #36
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Habits: How They Form And How To Break Them : NPR seems to apply here. Just go on vacation and spend lots of money.
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Old 03-05-2012, 11:12 PM   #37
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agree. It is at least as much of a balancing act early in retirement as it was when we were working.
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Habits: How They Form And How To Break Them : NPR seems to apply here. Just go on vacation and spend lots of money.
Third year in, lots of vacations in the first 2 years, and 3 months of vacations all booked up for this year and we're ready to go, starting end of April .

We ER'ed in Jan, 2010.

If we'd ER'ed in Jan 2008, then the balance would have shifted and I'm sure we would have cut back the travel expenses dramatically, and planned to spend more, later in retirement if things got better.

As Otar says in his book, there is a lot of luck involved in those early years of retirement.
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Old 03-06-2012, 01:50 AM   #38
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I know about this problem myself but I do not know what the solution is. We have always saved and so we want to continue saving. Who among us would have thought that our LBYM mentality could eventually become a curse?
I don't see it as a curse. There are many disciplines in life- money discipline, eating discipline, drinking discipline, exercise discipline, cleanliness discipline, neatness in one's home discipline.

These are all virtues; why try to make yourself lose a life virtue? We will all eventually confront big problems, in fact most of have have already done so. All our history of discipline in these many areas will help us to meet these life challenges ahead.

IMO there is nothing dumber than trying to make oneself spend money he doesn't really want to spend, for stuff or experiences that he doesn't really want.

Ha
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Old 03-06-2012, 06:31 AM   #39
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I don't see it as a curse. There are many disciplines in life- money discipline, eating discipline, drinking discipline, exercise discipline, cleanliness discipline, neatness in one's home discipline.

These are all virtues; why try to make yourself lose a life virtue? We will all eventually confront big problems, in fact most of have have already done so. All our history of discipline in these many areas will help us to meet these life challenges ahead.

IMO there is nothing dumber than trying to make oneself spend money he doesn't really want to spend, for stuff or experiences that he doesn't really want.

Ha
I don't think LBYM in retirement is a virtue? You will either spend it or give it away. Obviously you don't want to LAYM either. Maybe it's a terminology issue that revolves around the uncertainties of future investment returns?
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Old 03-06-2012, 10:16 AM   #40
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Retirement is not a risk free place to be. What about those FIRECalc lines that go down and then turn up? How low is too low? Will you be patient when the market has been going up but you are still down (from the inflation adjusted starting portfolio) because you were spending money? Wanting the portfolio to hit new highs should not be the goal in ER.

I don't want to sit around too much in my 60's waiting for the portfolio to get higher. And the 70's ... statistically that's close to the end of life for all of us. In my 80's I'll be lucky to stay awake past 8pm.
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