I realize this is a subjective question, but I'm truly interested in your answers. I have no one else to ask, because money is a verboten topic with my friends and family. So, understanding that nothing is certain for the future regarding the market, events, and potential additional expenses due to aging, I welcome your input.
DH (63) and I (56) have been retired for 4 years. For income, I have a non-COLAed state pension that covers 80% of our current expenses. (I realize that the value of the pension will shrink as time goes on.) The other 20% of our expenses is funded with interest and dividends. We have no children and no wish to leave a financial legacy. We plan for DH to take SS at 70 and for me to take it at 62. The amount as estimated by the SSA, combined with the pension, will more than cover our current expenses.
Our stash is currently $1.9M, invested in Vanguard mutual funds, TIAA-CREF, and several individual US Treasury bonds and notes (these were inherited - we're keeping them because they'll pay between 4.5% and 7.5% from now until 2027). Our asset allocation is 50/50 equities/fixed income. We're in the 15% Federal tax bracket and the 4% bracket for State tax.
Our expenses for the last 4 years have averaged $57K. The biggest single expense is for health insurance at $12K/yr. The next highest expense is for HOA fees for our co-op, at $9K/yr. (We live in a 55+ community with 16,000 residents and many amenities. The $9K includes our property tax.) As for the rest of our expenses, we live in southern California. (Enough said?) We live a very low-key lifestyle -- we have one car, eat out once each week ($20 max total), and shop at resale stores. We don't feel at all deprived -- except for the travel issue.
While we're relatively young, we'd like to travel more. When we were both working, we took two trips per year -- one international and one domestic. Now that we're retired, we have the chance to take much longer (and therefore more expensive) trips. DH is all for this; I'm the foot-dragger. I've run several FireCalc simulations and get 100% success for 35 years if we spend up to $30K more annually than we do now. That would pay for some nice trips, but I can't seem to get past the "what-ifs" -- what if the market tanks for several years; what if inflation goes back to 1970s levels; what if we have a health catastrophe?
Until now, we haven't touched our stash because we haven't needed to. Spending another $30K/yr will require us to start withdrawals, especially before we take SS. Intellectually, I know that the whole reason for having a stash is to fund one's retirement expenses, but for some reason I feel "safe" as long as we don't touch it. But, DH's wishes are very important to me, and he wants to travel.
So, what do you say? If you were me, would you spend more -- on travel, or anything else?
DH (63) and I (56) have been retired for 4 years. For income, I have a non-COLAed state pension that covers 80% of our current expenses. (I realize that the value of the pension will shrink as time goes on.) The other 20% of our expenses is funded with interest and dividends. We have no children and no wish to leave a financial legacy. We plan for DH to take SS at 70 and for me to take it at 62. The amount as estimated by the SSA, combined with the pension, will more than cover our current expenses.
Our stash is currently $1.9M, invested in Vanguard mutual funds, TIAA-CREF, and several individual US Treasury bonds and notes (these were inherited - we're keeping them because they'll pay between 4.5% and 7.5% from now until 2027). Our asset allocation is 50/50 equities/fixed income. We're in the 15% Federal tax bracket and the 4% bracket for State tax.
Our expenses for the last 4 years have averaged $57K. The biggest single expense is for health insurance at $12K/yr. The next highest expense is for HOA fees for our co-op, at $9K/yr. (We live in a 55+ community with 16,000 residents and many amenities. The $9K includes our property tax.) As for the rest of our expenses, we live in southern California. (Enough said?) We live a very low-key lifestyle -- we have one car, eat out once each week ($20 max total), and shop at resale stores. We don't feel at all deprived -- except for the travel issue.
While we're relatively young, we'd like to travel more. When we were both working, we took two trips per year -- one international and one domestic. Now that we're retired, we have the chance to take much longer (and therefore more expensive) trips. DH is all for this; I'm the foot-dragger. I've run several FireCalc simulations and get 100% success for 35 years if we spend up to $30K more annually than we do now. That would pay for some nice trips, but I can't seem to get past the "what-ifs" -- what if the market tanks for several years; what if inflation goes back to 1970s levels; what if we have a health catastrophe?
Until now, we haven't touched our stash because we haven't needed to. Spending another $30K/yr will require us to start withdrawals, especially before we take SS. Intellectually, I know that the whole reason for having a stash is to fund one's retirement expenses, but for some reason I feel "safe" as long as we don't touch it. But, DH's wishes are very important to me, and he wants to travel.
So, what do you say? If you were me, would you spend more -- on travel, or anything else?