Habitual Saver

[chris2008]

@Retireby90: Our moms are sisters - or are we siblings?

 

[Midpack]

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

 

[Danmar]

@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.

 

[MichaelB]

@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.

 

[Midpack]

@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

 

[Danmar]

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.

 

[SJ1_]

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.

 

[BigMoneyJim]

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...)

 

[W2R]

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.

 

[MooreBonds]

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.

 

[LOL!]

Habits: How They Form And How To Break Them : NPR seems to apply here. Just go on vacation and spend lots of money.

 

[Alan]

agree. It is at least as much of a balancing act early in retirement as it was when we were working.

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.

 

[haha]

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

 

[Danmar]

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?

 

[Lsbcal]

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.

 

[haha]

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?

In my mind it is not something that easily yields to algorithmic analysis. My goal is neither to save money, nor to spend it, but rather live in a way that I enjoy and that is in accord with my values-which include a degree of restraint. Others may well be different, but I find that purchased pleasures dim with frequent repetition. Often enough, but not too often is for me a satisfying schedule.

As for money, I would not enjoy retired life knowing that periodically I might encounter frightening and income threatening drawdowns. Just wouldn't be prudent for me. For that reason although I find Firecalc interesting, I would never say "Ok, FIRECALC likes this plan so I'll give it a go".

And regarding having money left over at death, I regard that as a sign of life well lived, not a problem to be solved. Anyway, it is too risky to spend heavily early on, and the ways older people find to blow money just do not look appealing to me. For example, how did getting locked onto a floating disease-incubating Disneyland with a lot of old people become appealing? Or how did stopping at heavily touristed trading posts, where as the uninformed buyer you will always be cheated, become appealing?

Ha

 

[Lsbcal]

Ha, you sound like a very sensible ER guy. I'm constantly asking myself if we are spending the right amount? We are down about -8% from the start portfolio inflation adjusted value. Should we spend less and try to get it back up? Are we on a slow glide path down or is it only temporary? Tick tock, tick tock, ....

We don't do the vacation shopping for pleasure thing. But we are going off to Paris for 2 weeks this year. Will be indulging our love of art and mostly tourist haunts. My spreadsheet says we are doing reasonable spending.

 

[haha]

We don't do the vacation shopping for pleasure thing. But we are going off to Paris for 2 weeks this year. Will be indulging our love of art and mostly tourist haunts. My spreadsheet says we are doing reasonable spending.

That sounds like a very good trip to me also. Enjoy!

Ha

 

[Shawn]

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.

I agree. I see no reason to buy a McMansion simply because I can. My modest 3 bedroom home perfectly suits my needs.

I've been LBYM all my life. This is not likely to change after I retire. I have no desire for this to change. I buy what I want, and forgo what I don't want.

I believe a LBYM lifestyle in retirement is a virtue. A lot of people say, "spend it now because you can't take it with you." While that's technically true, I don't see a problem with giving your money to charity or to family and friends after you die. Even if it's a lot of money. More so, the future is unknown. Financial security and flexibility have significant emotional value. Knowing that I *can* buy a McMansion is far more beneficial to me than actually buying one.

My problem is that by continuing to work, I am sacrificing time for money. I don't need to stop saving. What I need is to fully recognize the value of time.

 

[Nords]

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.

My father lived like this for nearly two decades. His idea of a "big trip" was a two-week drive through the Rockies, camping & hiking. In later years when he got tired of sleeping on the ground, he'd do the same with cheap hotels.

He kept a couple years' expenses in cash, but for his lifestyle that didn't require much cash. When he turned over his finances to me, his investment portfolio was over 85% equities.

My spouse and I still lock up over some large one-time expenses. Our initial reaction is "That costs too much!" followed a few minutes later by a more rational question: "Compared to what?" Eventually we realize that spending a big chunk of change once or twice a year isn't going to bankrupt us. Or, as my spouse says, "Well, that's what money is for"...

We're getting better at it. My nephew the Army Ranger is getting married next month, so we'll be spending the weekend at a luxury hotel in Austin (the site of their wedding & reception). We wanted to reserve adjoining rooms so that spouse and I could hang out with our daughter, but the hotel wouldn't guarantee "adjoining". By the time we were finished with the conversation we'd ended up reserving their 1400 sq ft "suite". With free coffee!

We don't live like this on every trip, but I suspect that this time we'll appreciate having the party suite. And compared to what we save during the rest of the year, this week will only be a fraction.

I find it difficult to cease frugality.
Have found it easier to give away money than to spend it.

Same here. Although it's not for lack of opportunity to spend it (like during my working days), but it seems like such a hassle to actually do it.

 

[Chuckanut]

Knowing that I *can* buy a McMansion is far more beneficial to me than actually buying one.

This reminds me of a joke on a bubble gum wrapper that I read as a kid.
First guy says "I wish I had enough money to buy an elephant."
Second guy "What would you do with an elephant!?!?!"
First guy "I don't want an elephant, just enough money to buy one!"

It has taken the deaths of several people close to me to make me realize that my plan to work until I was 66 was flawed. I believe somebody at this site once made the comment that his father said "You can always sell your time to the man, but you can never buy it back."

 

[haha]

I believe somebody at this site once made the comment that his father said "You can always sell your time to the man, but you can never buy it back."

This is pithy, but incorrect. Plenty people have found and will continue find that they can no longer sell their time to the man, or to anyone else, as no one appears to want to pay for their time any longer.

Ha

 

[Chuckanut]

By the time we were finished with the conversation we'd ended up reserving their 1400 sq ft "suite". With free coffee!

Well, the free coffee is the clincher. For the three of you (Nords, spouse and daughter) a couple of trips to SBUX or the local coffee house would be expensive - $3 for each coffee, plus some goodies to go with the coffee, plus the expense of driving to the coffee house, plus assorted taxes on coffee, food, and tourists, plus the value of your time, plus the new taxes to pay for Obamacare, plus the new fees to balance state and local budgets. I figure the room is costing you about 37 cents a day.

 

[Chuckanut]

This is pithy, but incorrect. Plenty people have found and will continue find that they can no longer sell their time to the man, or to anyone else, as no one appears to want to pay for their time any longer.

Ha

Speak for yourself.

 

[ripper1]

DH will retire sometime this year and almost from day #1, we have been savers. Ya, that first pension check is probably going to freak me out.

+1.....It is like you hit the lotto every month.