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Living it up a little before retiring?
Old 11-12-2013, 05:27 PM   #1
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Living it up a little before retiring?

First post here.

I have been saving all my life (51 years and ticking) and want to retire soon (around 55) before I get too old to enjoy retirement. But I am afraid that once I retire, I won't be able to spend money freely even if I have enough. So, while I have a cushy job, I am trying to live it up a little before FIRE. By this, I mean doing things that I would not normally do while I was in "save" mode: dining at top rated restaurants, buying luxury car, playing in fancier golf course, traveling abroad on tour (no backpacking), etc.. Of course, I am doing/will be doing these without reducing my future retirement fund. In fact, I will still be saving but at lesser rate and will retire with $2M in the asset. Has anyone else done this - splurging before retirement b/c once retired, you just can't (or reluctant to do so)? Opinions? Thoughts?
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Old 11-12-2013, 05:32 PM   #2
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A bit. DW and I bought ourselves a jetski for our double-nickel birthdays in 2010. Your plan sounds sensible to me. Nothing wrong with a little splurge now and then as long as you can afford it.
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Old 11-12-2013, 05:54 PM   #3
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Even once you retire you can do things like that if you like.

Travel is a wonderful way to spend money IMHO, and something you will enjoy less as you age so earlier is better.

As long as it can fit in your long term plan, go for the gusto!
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Old 11-12-2013, 06:02 PM   #4
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opposite with us. We splurged after retirement because we had more time and more money.
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Old 11-12-2013, 06:05 PM   #5
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We're not particularly splurging, but we are "practicing" retirement while still employed.

This year one of us has been to Italy, Turkey, Hawaii, Colorado, Manhattan (twice), DC, NC, PA, New Zealand, Australia. Before year-end there should be additional travel to Colorado, Seattle, and Australia completed. OK, most of this was business travel with vacations days tacked on, so it really didn't cost much.
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Old 11-12-2013, 06:18 PM   #6
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After living the last 20 years before ER well below my means, it's sometimes hard to spend more. I will spend on the discretionary items I prize the most (like travel and dining out), but why do I still have to get a "deal" on these things before I feel comfortable in doing so?
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Old 11-12-2013, 06:21 PM   #7
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The idea of practice retirement is beginning to have an appeal to me. Tomorrow my DW and I leave on another vacation courtesy of miles and points earned at megacorp. I'm not too sure I will easily spend MY money this way in retirement.
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Old 11-12-2013, 06:33 PM   #8
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After living the last 20 years before ER well below my means, it's sometimes hard to spend more. I will spend on the discretionary items I prize the most (like travel and dining out), but why do I still have to get a "deal" on these things before I feel comfortable in doing so?
+1. Life long habits are hard to break.
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Old 11-12-2013, 06:40 PM   #9
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+1. Life long habits are hard to break.
Agreed, which makes it easy to LBYM. To the OP, I wonder if you are doing yourself a disservice, though. If post retirement trips that are a little less posh would leave you feeling a bit let down for all future lower budget trips.
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Old 11-12-2013, 06:44 PM   #10
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but why do I still have to get a "deal" on these things before I feel comfortable in doing so?
My feelings exactly, just a life-long habit that got me where I am now but still practiced even though the need is no longer as important. Couldn't just go out and buy a new car, still had to shop around for an exceptional value (two year old used car with low miles at 65% of sticker). Anything else would have given me the uneasy feeling that I was financing someone's lifestyle.
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Old 11-12-2013, 06:52 PM   #11
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Agreed, which makes it easy to LBYM. To the OP, I wonder if you are doing yourself a disservice, though. If post retirement trips that are a little less posh would leave you feeling a bit let down for all future lower budget trips.
Good point. But the thing is, with what I have in saved up money, I don't think I can afford too many "posh" trips after I retire. If I want to have the posh trips during retirement, I probably need to retire at 60 (not 55 as I am planning now).
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Old 11-12-2013, 06:53 PM   #12
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There's nothing wrong with enjoying better things once in awhile, but I don't agree with your rationale on the money.
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Of course, I am doing/will be doing these without reducing my future retirement fund.
If you are spending on extras instead of saving, you are reducing your retirement fund. Not a problem, since you plan to save enough for retirement and enjoy the extras, but the fact is that you could either retire a bit earlier, or be able to enjoy some extras in retirement if you weren't spending it now. It's just a choice. Some people would rather take retirement ASAP. I preferred to work a bit longer to put away enough to enjoy some nice things both while working and in retirement, though I don't go overboard.

I have the same kind of reaction when I hear about people who do things like move up putting on a new roof just before retiring, or replacing their car early. There's no difference between spending that money in retirement or while working, except that by deferring it until it is actually needed you put off the next time replacement needs to be done.

Ongoing expenses like fine dining and entertainment actually are a bit different, so maybe it is best to do it now and use retirement as a signal to live with fewer luxuries.
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Old 11-12-2013, 06:56 PM   #13
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opposite with us. We splurged after retirement because we had more time and more money.
+1 Me, too. It's a lot more fun when you don't have to go in to work the next morning.
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Old 11-12-2013, 07:02 PM   #14
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This is very much how we live. As long as we meet our savings goal and are on track to retire, I don't mind splurging a bit. This includes pricier home improvement projects in our possible retirement home to international travel with the entire family. We even pay private school for our kids.

Sure, we could save a lot more and stop working sooner, but as it is we'll probably stop working when the kids either leave for college or when they're done with college. In the meantime, the work isn't bad and the extras we opt for make our lives more enjoyable.
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Old 11-12-2013, 07:09 PM   #15
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We splurged when we were young and stupid (me, not DW ). But there's no right or wrong answer. If you want to splurge just before you retire, or after, whatever you plan for is right for you.

Don't worry what others may think or say, they don't know enough about your personal situation to have a meaningful opinion...
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Old 11-12-2013, 07:12 PM   #16
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If one is getting near his "number", the additional annual saving becomes a smaller percentage of the "number", and the market fluctuations also dwarf that addition. Your additional savings might be 1 or 2% of portfolio, while the market might add or subtract 5 to 10% easily. So, after a bull market run like we have had, I do not see any harm in "rebalancing" that additional saving into some fun activities.

What if something happens to you in the 4 years to retirement, throwing all your plans out the door? I have seen unexpected things happen to people while they are planning. The potential harm I can see is that one might get used to it, and the lifestyle creep may become more than the SWR can support.

Quote:
Originally Posted by robnplunder View Post
First post here.

I have been saving all my life (51 years and ticking) and want to retire soon (around 55) before I get too old to enjoy retirement. But I am afraid that once I retire, I won't be able to spend money freely even if I have enough. So, while I have a cushy job, I am trying to live it up a little before FIRE. By this, I mean doing things that I would not normally do while I was in "save" mode: dining at top rated restaurants, buying luxury car, playing in fancier golf course, traveling abroad on tour (no backpacking), etc.. Of course, I am doing/will be doing these without reducing my future retirement fund. In fact, I will still be saving but at lesser rate and will retire with $2M in the asset. Has anyone else done this - splurging before retirement b/c once retired, you just can't (or reluctant to do so)? Opinions? Thoughts?
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Old 11-12-2013, 07:40 PM   #17
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I came very close to going the other way and cut spending this year - the concern being that once I got into the habit of spending more it would be difficult to stop. So we are going to wait a year or two to adjust to the idea of not having any employment income before deciding whether or not to increase the spending.

I guess I just worry too much.
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Old 11-12-2013, 07:48 PM   #18
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Originally Posted by robnplunder View Post
First post here.

I have been saving all my life (51 years and ticking) and want to retire soon (around 55) before I get too old to enjoy retirement. But I am afraid that once I retire, I won't be able to spend money freely even if I have enough. So, while I have a cushy job, I am trying to live it up a little before FIRE. By this, I mean doing things that I would not normally do while I was in "save" mode: dining at top rated restaurants, buying luxury car, playing in fancier golf course, traveling abroad on tour (no backpacking), etc.. Of course, I am doing/will be doing these without reducing my future retirement fund. In fact, I will still be saving but at lesser rate and will retire with $2M in the asset. Has anyone else done this - splurging before retirement b/c once retired, you just can't (or reluctant to do so)? Opinions? Thoughts?
Yes, bought a nice new car and second home. Wanted to have some of those costs and expenses behind me and known for ER.
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Old 11-12-2013, 09:35 PM   #19
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DW and I are pursuing a similar strategy as you have described. I'm 51 as well. Our current portfolio could support a comfortable retirement at a certain expense level. But, my current lifestyle exceeds that expense level. So, DW and I choose to continue working and spending without touching the portfolio.

While we are working, we make sure we are stress free and happy every day. DW works 20 hours a week while I work 30. We take many vacations; some budget and some more expensive, so we have a lot of variety and activity. We dine out quite a bit and try to cook with premium products we enjoy.

For us, retiring on the current portfolio will require some adjustments which we are prepared for... when the time is right.

I think having fun is job #1. "Cushy Job" doesn't sound stressful to me. If so, working, spending ("living it up"), and staying consistent with the ER plan is quite acceptable.

Personally, the only no-no here is using the portfolio as the means to "live it up".
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Old 11-12-2013, 10:56 PM   #20
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If one is getting near his "number", the additional annual saving becomes a smaller percentage of the "number", and the market fluctuations also dwarf that addition. Your additional savings might be 1 or 2% of portfolio, while the market might add or subtract 5 to 10% easily. So, after a bull market run like we have had, I do not see any harm in "rebalancing" that additional saving into some fun activities.

What if something happens to you in the 4 years to retirement, throwing all your plans out the door? I have seen unexpected things happen to people while they are planning. The potential harm I can see is that one might get used to it, and the lifestyle creep may become more than the SWR can support.
Very good point. Enjoy the moment so to speak. And if things go wry, I can maybe work one more year to recover.
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