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Paranoid about $$$ Running Out
Old 01-26-2013, 04:47 PM   #1
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Paranoid about $$$ Running Out

Need a little help from others who may have experienced what I am currently going through.

A little background....

I retired from full time work in 2009. Absolutely love being retired after 31 years working in my chosen profession. Still do a little consulting on the side more to keep my hand in the game than make money. Have retiree health benefits to medicare age then that policy continues as supplemental to medicare. One child who is just about to graduate college. No debts other than mortgage on primary house that will be paid off in six years unless I choose to pay off sooner.

Have run every conceivable calculator at about twice our current average annual expenditures for the last three years and each comes out with 100% success rate.

Everything sounds good huh?

The problem is I am having a hard time moving from the accumulation phase to the drawdown phase. I have this lingering paranoia that somehow it is still never going to be enough. I still anguish over expenditures that should be no big deal.

Anyone else have this problem? If so, anything you can reccomend to get over it?
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Old 01-26-2013, 04:55 PM   #2
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I share this problem, which, like fear of flying, is irrational based on the best available data. I think I will feel more confident if there is no crash in the first few years, which is exactly your situation. Perhaps we have some OCD traits?
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Old 01-26-2013, 04:56 PM   #3
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Anyone else have this problem? If so, anything you can reccomend to get over it?
Thankfully I don't have the problem, but I only see one solution for those who can't adjust to the withdrawal phase: go back to work. Keep working until you reach the point worrying about running out of money will pale in comparison to having to drag yourself into work, even for one more day.

Yep, a little tough love...
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Old 01-26-2013, 04:59 PM   #4
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I have the same issue.

It hasn't gone away after 1.5 years.

The only advice I can give you is what I have learned here:

If you think you are covered, you likely will be fine. You can't control catastrophe, so barring catastrophe ( in which case we are all in the same boat), LBYM and stay flexible with your budget/spending.
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Old 01-26-2013, 05:06 PM   #5
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I have known some people who are frugal for the sake of frugality rather than seeing frugality as a means to an end. Those who see frugality as a means to an end may find it easier to loosen up and spend more once that end (financial independence for example) as been reached.

For those who are frugal for its own sake I have seen some actually horrifying examples of being unable to spend money and enjoy what they have even when the frugality was no longer necessary and they had more than enough money to meet all of their financial goals.
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Old 01-26-2013, 05:10 PM   #6
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The problem is I am having a hard time moving from the accumulation phase to the drawdown phase. I have this lingering paranoia that somehow it is still never going to be enough. I still anguish over expenditures that should be no big deal.

Anyone else have this problem? If so, anything you can reccomend to get over it?
Yeah, I'm a bit that way myself but perhaps not to the extent you describe. 6.5 years into FIRE, a few things have gone against us financially but our "belt + suspenders" planning has held up and objectively there should be little to be worried about. But I still find myself working all the expenditures vs resources angles as though we were on the verge of crashing and I run retirement financial calculators like other folks do crossword puzzles.......

I've decided it's just the way I am. I'm more than satisified with our lifestyle, our home, our activities, etc. I do worry that DW would like to add some spending to the budget for things she wants or activities/travel she'd like to do and simply doesn't want to have to convince me. So, from time to time, I sit down with her and make sure she isn't holding back on getting any unspoken wants (travel, new car, bigger house, whatever......) into our plans. She insists everything is fine and that she savors the security of living LBYM in retirement.

As long as your pre-occupation with retirement finances isn't impacting anyone else negatively, keeping someone else from living life as they'd like, I'd suggest not worrying about it.
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Old 01-26-2013, 05:27 PM   #7
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In early 50's I would not worry if you are not yet in drawdown phase. If you are, perhaps tightening up expenses to match investment + consulting income might be possible for year or 2. You may find significant confidence in knowing you could avoid drawing down if you had to.
And anguishing about small expenses might not be such a bad thing. As Ben Franklin said-
"Watch the pennies and the dollars take care of themselves."
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Old 01-26-2013, 05:29 PM   #8
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Well, you could share your numbers with the group and we could give our opinion. However, that probably won't cure you since 100% results on calculations using twice your required income don't convince you. So all that's left is to offer my condolences to your family.
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Old 01-26-2013, 05:44 PM   #9
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Thanks for the suggestions/comments. I did not intend to give the impression that I am agonizing over every little expenditure as that is not the case. I have also found that as time goes on I am becoming more comfortable with spending as opposed to always thinking about saving. It's just that the transition is a slow process and maybe that is a good thing!
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Old 01-26-2013, 06:24 PM   #10
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Ever since DW announced her intention to retire next year, I have been tightening the screws. This ER thing is getting real now! The last time we spent so little was... I don't know sometimes before 2004, when we started tracking expenses with Quicken. I'm probably overdoing it but I can't help myself.

I think that fear is an essential ingredient for survival, so the fact that you are concerned about running out of money is actually a pretty good indication that you will probably succeed at this retirement thing.
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Old 01-26-2013, 06:26 PM   #11
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RockyMtn, I can relate to your fears. There are a few tricks that I think might be helpful. I get a lot of peace from having paid off my house; YMMV. Are you able to live off your dividends only? Perhaps that would help you to feel more secure. Will it be long before you can take Social Security?

Don't forget that even when working, nothing is ever certain. Working people are laid off every day.

Try giving yourself a "salary" each month, that you can spend or save to spend later in the year. Then when you have one of those larger expenditures, instead of worrying about it you can look and see that you have already saved enough money this year to pay for it without exceeding your "salary". This will give you more of a framework in which to plan your spending.
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Old 01-26-2013, 06:28 PM   #12
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If it helps any, there is one little trick I use that helps me avoid your problem (which I too suffered from at first).

I try to think of everything I can forecast, in as conservative a way as possible, but only for the next five years. It seems to me that projecting the future beyond that point is hardly more than a wild guess. As long as I can feel comfortable with where I see myself in five years, based on my detailed projection, I can relax and assume the rest of my life will also be under control.

I've been using this trick for 12 years now, making my five year projection each year, and I have pretty much completely conquered my anxiety over the more distant future.
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Old 01-26-2013, 06:33 PM   #13
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Now into our 24th year of ER, we faced the same problem. In our case, fewer actual $$$, but essentially the same worries.

Two things...
First, until about 6 years ago, always figured that we could go back to some kind of w*rk to supplement any shortfalls. (A bit too old to do that now.)
Second, we have a three tier spending budget that we base on our remaining net worth at the end of every year.
Optimal - Where we spend to satisfy not just our needs, but our wants.
Nominal - Where we spend without restriction, but are normally careful.
Austerity - Where we have calculated a budget from the basic needs.

So far, although we are naturally frugal, we have spent at the optimal level after the first four or five years... (when we were still a little nervous). The fallback plans help us to sleep well, even though we haven't used them.
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Old 01-26-2013, 08:01 PM   #14
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Anyone else have this problem? If so, anything you can reccomend to get over it?
Yup. In our case I'm pretty sure we didn't have enough money, and I'm still not totally convinced we do. But ER is so good, there's no way I'm going back. At least, mostly.

There's probably no single solution that works for everyone, but for me having a "plan B" helps. I'm already in my second and have another lined up if necessary. My first "plan B" was not related to work and helped me understand that money isn't the only thing that matters for a successful retirement.

If another year or two at work changes things in a way that enables retirement, then do it. If another year or two at work don't make a difference, then more work isn't the solution. Maybe shifting your attention to the non financial aspects of retirement will help.
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Old 01-26-2013, 08:26 PM   #15
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I've estimated our bare bones expenses. Once we retire I'll know pretty quickly what our true minimum expenses are. i then plan to run our numbers every year to see if we're at risk of not being able to fund that floor. If we get too close for comfort, we plan to buy an annuity with the remainder to ensure that our basic needs are met.

Based on where we are today I don't think we'll ever have to implement the plan, but knowing what we'll do in a worse case scenario should make the shift from saving to spending easier.
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Old 01-26-2013, 08:41 PM   #16
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Have run every conceivable calculator at about twice our current average annual expenditures for the last three years and each comes out with 100% success rate.

Everything sounds good huh?
Yes it does. Not many could double their expenses and still have a 100% success rate.

Since you already do consulting, I would continue doing that for a few years and use that money for extras outside of your normal expenses. Maybe buy a SPIA to cover your normal expenses and that could serve as your salary as previously suggested. You should still have plenty left over in your portfolio to cushion your retirement.

Looks like you have things covered already, but sometimes you have to structure things in a manner to make you feel even more secure.
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Old 01-26-2013, 08:43 PM   #17
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I share this problem, which, like fear of flying, is irrational based on the best available data. I think I will feel more confident if there is no crash in the first few years, which is exactly your situation. Perhaps we have some OCD traits?
I have the same trait which was made worse by retiring at the start of the great melt down.I do spend easily on small things . Large expenditures I analyze to death .
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Old 01-26-2013, 11:15 PM   #18
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Definitely have the same problem here. I overthink everything relating to money and security. I'm trying to get over it, but it's hard to relax over money.
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Old 01-26-2013, 11:22 PM   #19
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Originally Posted by RockyMtn View Post
The problem is I am having a hard time moving from the accumulation phase to the drawdown phase. I have this lingering paranoia that somehow it is still never going to be enough. I still anguish over expenditures that should be no big deal.

Anyone else have this problem? If so, anything you can reccomend to get over it?
Doesn't sound like paranoia to me. Sounds more like a rational recognition of the fact that those of us retired and living on our own assets, mostly or entirely, have more to lose than to gain. We should be conservative, vigilant, and a little worried all the time, in my opinion. Unless the worry gets out of hand to the point of preventing you from enjoying your life, I would welcome it as a source of caution. All of us retirees are doing this for the first time and won't get a do-over if we do something stupid or just get very unlucky.
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Old 01-27-2013, 12:13 AM   #20
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<snip>Yes it does. Not many could double their expenses and still have a 100% success rate.
Yes indeed.

We plan by using calculators, keeping spreed sheets, building a cushion, etc... We do the best we can to prepare for a successful retirement. I think it's normal to be a little concerned about our finances...and this is good as it keeps us attentive to our financial situation.

..and I have to say this. I'm not downplaying your feelings, but if this is the biggest concern in your life right now, you are a fortunate man. It's been my experience, events in life puts things in perspective.

My best to you.
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