If You Were Me, Would You Spend More?

[gcgang]

Spend it now, while you can enjoy it!

Things like FireCalc aren't " one and done" answers. They are just guides. You are in great shape to enjoy things. What if the market tanks? Re run your simulation then. Maybe you can only spend extra $25k, or maybe not be able to spend the extra when you're 80+, when you probably won't feel like it anyways.

[ocdokie]

Quote:

Originally Posted by NW-Bound Now, you are talking spending! I have not gathered up the courage to get a Business seat with my own dime, but with your pension, you are in better financial shape than we are. Enjoy!

I've never paid for Business Class, either. We've redeemed airline miles to do it twice, but it takes so long to save them up. The reason DH specifically mentioned doing it to go to New Zealand, is that in the past I said I wouldn't take a flight that long unless I could be somewhat comfortable (compared to cattle -- er, economy -- class). Now it seems I've created a monster.

[shortstop14]

Just got back from two months traveling all around New Zealand, and we're in a similar situation to you *without* the pension. So I guess that answers the question from my perspective on loosening up a little now - although I still don't care for seeing the stash go down after years of focus on pushing it up. Fortunately, the last two years since retirement have been good to our portfolio. The first big down year will likely see us cutting back on travel, but until then, we'll hit the road.

But no business class for me - those frugal habits die hard, and the back end of the plane gets there at the same time. And we traveled around New Zealand in a cheap campervan. But that's really personal preference, in the end. We'll spend a month or so in Arizona during the colder weather, and probably a month or so visiting our daughter over the holidays. Getting the time to travel was one of the major incentives for retiring in the first place for me.

[imoldernu]

After you cover yourself for long term expenses as in nursing homes... and have insurance against lawsuits... the rest is yours to enjoy.

Here are some numbers that tell who is still alive, at what age... In my own case, more than half of the people who were born when I was, are now dead.
Not morbid... just facts... (from 2006)

Something to think about.

[ICNTR]

I didn't read all of the responses so please excuse me if this is not within the context. Regardless, your question is a tough and complicated one. Here's another. Do you want for anything?
If so then run the numbers and make an educated decision. If not then enjoy the blessings of the moment.

[NW-Bound]

Quote:

Originally Posted by imoldernu Here are some numbers that tell who is still alive, at what age...

Wow, more than 1/2 make it to 80. It is higher than I thought.

However, I suspect that I will not be among those lucky 1/2.

[Moemg]

[QUOTE=ocdokie;1463288"

I think I need a new suitcase. Thanks again, one and all.[/QUOTE]
To keep your budget inline buy your suitcase at TJ Maxx !

[butterfly]

Quote:

Originally Posted by ER Fireball Here is how I see it. You are covering everything now without tapping the principle. SS will add more to the mix. The basics are covered. Here is how I look at the 'what-ifs': If you have a health situation that threatens to sink your boat, $200K less isn't going to make any difference. Eat your dessert while you can enjoy it. If the economy goes into a tail spin, you are in better shape than the vast majority of people. I would be more concerned in that situation about the pitchforks and torches than I would be about what happened to my $1.9 million. Here is one way to approach this: Pull (on paper) $200K into your 'vacation account'. That leaves $1.7M in your investment account. That will fund $30K for almost 7 years, assuming no growth. Maintain your $1.7 year after year. Anything over it goes into the paper vacation account. If the market has a bad year, you don't put anything into the vacation account. You said that you see no need to leave a legacy, so there is the problem of what to do with the $1.7 down the road. I would volunteer to help you out with that, but that would make me look like an Variable Annuity Salesman! Allowing yourself to have a stash of mad money that you can spend without guilt should allow you to take some very nice vacations. If the market continues to grow, you have allowed yourself to enjoy some travel while you are able. Down the road is an unknown that can be dealt with down the road. Rerun your Firecalc with $1.7 instead of $1.9. I would guess that it is still 100%.

I completely agree with this. You are living on an income stream without touching your principal.
While you are young and fit enough I would travel wherever you desire because as you age your will want to do this less and less and (hopefully) many other expenses will dwindle too.

But with pensions, SS and that large investment; you are fine.
Have some great trips, relax and enjoy!

[chris2008]

I'd like to stronly support the "vacation account".
That is what we did after receiving an inheritance from a travel loving aunt. The amount is earmarked.
She used to say that your memories are the only things that can't be taken away from you.
So, if you like to travel, build happy memories while you can. Some people feel that the lust for travelling goes away as you get older. So do it while you can.
You won't start travelling when you are 80 and find that you still have all your principal intact.
And then, reconsider your understanding that travelling must be expensive. There are many ways to travel economically when you have time enough and do not insist on international 5* hotels.

[CUinFl]

You should be able to incrementally, and conservatively, add ~$50k annually to your current expenses. The reason is you still have the SS kicking in at 70.

I would suggest you take the trips you are thinking, spreading them over a few years and assess where things stand every couple years.

[Meadbh]

My accountant tells me she can see a clear pattern of withdrawals among her (mostly self employed) clients. For the first 10 years of retirement, they travel and spend more. After that, health problems mount, and they stay closer to home. Their withdrawals decrease, at least until they need long term care.

Better travel now, while you can enjoy it.

[audreyh1]

What if you had a health catastrophe? All the more reason to do some traveling NOW while you both have your health.

[Fishingmn]

Since you said said it looks like you could do $30k with 100% success I would start by doing an extra $20k in the coming year and see if you really enjoy it and where your portfolio stands. In reality you can probably spend even more than $30k without too much worry.

[dtbach]

Quote:

Originally Posted by braumeister Yes, do it. The phrase "spend it while you can" has deep meaning. The older you get, the less you'll want to travel and the more you'll regret not doing it while you could have.

My parents always wanted to travel more but just couldn't bring themselves to spend the money. Now they are in their 90's and can't travel and regret it. Their problem now is what to do with the $1.9M they have, as it creates tax issues since it keeps dumping more money on them.

My father regularly calls me and asks "What should I do with the $30K in my money account?"

Please travel when you are able to. Don't end up with a big stash and think about all the places you could have gone when younger.

[Live And Learn]

Quote:

Originally Posted by ER Fireball Here is one way to approach this: Pull (on paper) $200K into your 'vacation account'. That leaves $1.7M in your investment account. That will fund $30K for almost 7 years, assuming no growth. Maintain your $1.7 year after year. Anything over it goes into the paper vacation account. If the market has a bad year, you don't put anything into the vacation account.<snip>. Rerun your Firecalc with $1.7 instead of $1.9. I would guess that it is still 100%.

+1.

I am very much like you. I could probably spend more but I don't because I NEED to feel safe. I would love to take 4 specific very expensive vacations and I have done exactly what was suggested. I've pulled nearly $100k from my retirement portfolio when doing any calculations (including calculating my retirement assets). Its as if the money simply doesn't exist. When I do take those trips the dollars will come from that "phantom pot of gold" and it will not impact any of my calculations.

Given that your pensions and SS will more than cover your expenses I would think you could easily put 200k - 300k aside for travel or whatever other non-essentials you might want to spend on. I'd bet you are still at 100% in FIRECalc and other planners with the lower portfolio amount.

ETA: I guess I should have finished the thread before replying. I'm glad this method worked to calm your fears. I look forward to hearing about your travels !

[NW-Bound]

In case anyone misses it, the OP already said they were thinking about getting business-class seats to New Zealand. That works!

Many posters talk about parents or relatives regretting not traveling when they still had health. Well, if people wait even longer past that phase, that regret will go away. The following story I have told, but is worth repeating.

When I told an older engineer 20 years my senior that I wanted to travel because I did not want to regret not doing so on my deathbed, he shook his head and said that people on their deathbed only wished for the pain to go away, and were not in the mind to regret anything!

Quote:

Originally Posted by Meadbh My accountant tells me she can see a clear pattern of withdrawals among her (mostly self employed) clients. For the first 10 years of retirement, they travel and spend more. After that, health problems mount, and they stay closer to home. Their withdrawals decrease, at least until they need long term care. Better travel now, while you can enjoy it.

Bernicke told us so, and I believe him. Many posters here were gung-ho and believed that they would maintain health and constant expenses until their 90s. I did not feel I would be so lucky, and the recent bout with totally unexpected illness reinforced it (I have recovered and am doing OK now, but not back to where I was).

[H2ODude]

Truly a great thread. DW and I are in similar situation numbers wise to OP except already spend a bit more on travel as two kids overseas. Leaving Saturday for Amsterdam, Africa, then London. We do a trip like that twice a year; as we generally are staying with kids that only eats up about $6k a trip for tickets and misc.

As I read through the responses it motivates me to kick up the monthly draw from the investments to our spending accounts. Funny thing is that while we did move the live in MIL to assisted living, we still have two dogs and the MIL's cat here at the house! This trip we're trying a house sitter for them, as much for their comfort as savings. We're going to give her a big tip if it works out so we can do some longer trips guilt free; somewhere besides our usual London/Africa visits. I will say that as much as we like the travel, those long plane rides are no fun. How you folks who did that for a living put up with it is a mystery to me.

[NW-Bound]

Long plane rides are not bad at all if you spring for business seats. I dread those coach seats, so usually make my trips 2 to 3 weeks to make it worth the flying pain. Longer than 3 weeks, then we both start to miss home. My sister and her husband routinely take trips of up to 2 months, and they would do it 2x a year in addition to shorter domestic trips of 2-3 weeks. I can't do that.

However, in our motorhome we have gone for close to 2 months and not miss home at all. Here looking forward to our next trip, which cannot start till mid August due to various constraints.

[Spanky]

Quote:

Originally Posted by ocdokie I think I need a new suitcase. Thanks again, one and all.

Enjoy -- you and your DH deserve it.

As others have pointed out, you can definitely spend more as pension alone covers majority of expenses + financial assets + SS (if necessary in the future)

[Car-Guy]

Life is short, enjoy it while you can.