Planning to spend more in the go go years?

[NW-Bound]

Thanks for looking it up. I used to fish on the big lake up there 20+ years ago. (and camp, too).

We have been to the casino on day trips from Tomahawk. It's very small and cozy ad the hotel is pretty nice.

The area is absolutely beautiful (in the summer).

As mentioned elsewhere, my travel plan is one long international trek one year, alternating with a long RV trek the next.

Having recovered somewhat from the 5-week auto trip through Portugal and Spain recently, I slowly get in the mood of thinking where to go with my RV for 2020. I have not been to the Michigan UP and the surrounding region, so may very well spend some time in Wisconsin on next year's trip.

 

[HI Bill]

I'm planning to spend as much as possible in the go-go years (retirement through 75). It's a little nuanced, though.

Phase 1: Move overseas for a few years (age 54-57 or 58) where the rent and medical insurance is cheap, and the diving's good, and travel convenient. Live modestly, but travel between Thailand, Japan, Philippines, and Indonesia extensively, for multiple months a year.

Re-evaluate: Health, desire to travel. Wife's health and desire to travel.

Phase 2: Age 57 or 58. If ready, move back to Hawaii. Spend ~1/3 to 1/2 of the portfolio on a house (haven't figured out the best way to access half without huge tax consequences, so there may be a tax bite or a mortgage). Up until now, I've always rented rooms or lived in purchased condos, so having a nice house with a pool, garage, workshop, and bbq area would be killer.

Phase 3: Age 58-67. If my desire for travel has waned, reduce spending a little, until SS kicks in at 67-70.

Phase 4: Age 67 to 75. Ramp up the spending. Time for toys, high-end cars, first class tickets. Not sure by then how much a supercar would mean to me, or better speakers....other than that, my only vices include good camera, drone, and home theater gear.

It's a plan. Not sure it's a great one. Everything has risks and compromised. SORR concerns!

 

[bobandsherry]

Why do you think that will happen? I am puzzled. I am sure you have a good reason for assuming this, but personally at age 71 I don't see that happening. Like you, I never engaged in a lot of expensive international travel.

Here's a chart covering my first 10 years of retirement:

From what I have gathered from your other posts, you haven't really splurged much in your retirement years. But imagine if 15-20% of your spend early on was on travel, that does begin to trail off as you get older and just can't or don't want to travel. And also 10-15% on other entertainment (dinners, day trips, time at the casino). Without any fat on the bone you are probably right, but I have intentionally given myself some fat to work with before having to worry about trimming meat from the bone.

I basically look that my travel and entertainment expenses will drop and help offset healthcare costs

 

[Katsmeow]

I caught this Kiplinger article this am on my news feed, https://www.kiplinger.com/article/r...s-go-ahead-and-spend-more-in-go-go-years.html. .

I do agree with this article. I think this makes a lot of sense.

I do know my 90 y.o. mom, while very alert and physically able for her age doesn't spend half of what she used to spend. For her a good day is spending the day alternately reading and napping followed by dinner out with a martini (but now only two, not three as she can't handle them like she used to)

My mother died at 94 and there was a big difference in what she was doing in her life at 64 and 94. There was a big difference between 74 and 94. She just got much less active over time. She just didn't want to go places as much (not just travel, but shopping). She rested more. She also didn't wear out clothes as quickly or anything else for that matter. So, she didn't need to replace stuff that often.

Why do you think that will happen? I am puzzled. I am sure you have a good reason for assuming this, but personally at age 71 I don't see that happening. Like you, I never engaged in a lot of expensive international travel.

Here's a chart covering my first 10 years of retirement:

For me, eating out costs the same at age 70 as it did at age 60. I don't eat as much food, but I choose more expensive menu items because I like the luxury of being able to do that. Maybe that's just me.

W2R there is a big difference between 70/71 and being over 80 or over 90. My DH is 71 and he is still in good health. He has maybe slowed down slightly in terms of doing outside work at the house (he takes more breaks) but we still eat out as often, etc. We are not big travelers either but right now he is still fully able to travel.

But -- I think of my mom and several other relatives and they really started slowing down eventually. Over time, my mom got to the point where she just didn't want to go out to a restaurant even if someone else was driving and paying. It was tiring to her just to make the trip so she didn't often want to do it. When she was 70, though, there was no problem.

The difference isn't between 60 and 70 (which for DH has been minimal). it is the difference between 70 and 80 or 70 and 90, which is way more substantial.

 

[W2R]

I guess these are the go-go years for us, but we really don't go much of anywhere. A couple of short domestic vacations per year. We're early 60's and imagine our expenses will drop dramatically in our mid 60's and then again in our 70's.

Why do you think that will happen? I am puzzled. I am sure you have a good reason for assuming this, but personally at age 71 I don't see that happening. Like you, I never engaged in a lot of expensive international travel.

Here's a chart covering my first 10 years of retirement:

W2R there is a big difference between 70/71 and being over 80 or over 90.

Of course there is! You are absolutely right. But that's why I quoted PatrickA5's post that I was responding to, in my post (see above). I bolded where he was talking about some younger ages when he expects expenses to drop dramatically. He answered my questions in his post #38 on this thread.

 

[W2R]

From what I have gathered from your other posts, you haven't really splurged much in your retirement years. But imagine if 15-20% of your spend early on was on travel, that does begin to trail off as you get older and just can't or don't want to travel. And also 10-15% on other entertainment (dinners, day trips, time at the casino). Without any fat on the bone you are probably right, but I have intentionally given myself some fat to work with before having to worry about trimming meat from the bone.

I basically look that my travel and entertainment expenses will drop and help offset healthcare costs

So far I have noticed that my healthcare costs have increased. But you are right; I don't spend a whole lot on entertainment. More importantly, I suppose, is the fact that my only child was "off the payroll" by the time I was 50, other than gifts, and that was not the case for PatrickA5. See his response to my post (post #38 on this thread).

 

[Moemg]

The one thing that no one has mentioned is entertaining. I used to entertain several times a year for about 20 people but I have slowly lost the interest in doing that .

 

[brett]

I thought we spent a lot on travel last year until reviewing what we paid for new lens after cataract procedures, and just recently dental implants.

We intend to spend more than last year. Still within our means. After eight years of retirement with good growth in our resources we have come to the conclusion that we can do what we want when we want. And that we should do it while we have the good health and the inclination to do it.

 

[Teacher Terry]

Mo, yes we like to entertain and have 3 big dinner parties a year.

 

[NW-Bound]

When I stop entertaining relatives and neighbors, it will not make a big difference in my expenses. I do not serve them caviar, Dom Perignon, nor foie gras. Filet and lamb racks are still not expensive. I pour some XO after dinner for a few men who are interested, but that does not cost much either.

 

[daylatedollarshort]

Since most of the people our age are working or moved to lower cost of living areas, we're often around seniors 10 - 20 years older than us in clubs and activities. Seeing them slow down and not be able to do as much has been in part what has inspired us to eat healthier (Blue Zones, plant based) and try to get more exercise. In the Blue Zone in the U.S., Loma Linda, the men and women live on average 10 years longer than the rest of the U.S., plus are ten times more likely to live to 100.

We aren't that into travel as a hobby for now and don't have plans to spend more upfront, but we are trying to extend our healthy years for day trips, hikes and doing our own house and yard work.

 

[Teacher Terry]

NW, entertaining doesn’t matter financially to us either. I cook and everybody brings something. No catered affairs)

 

[DrRoy]

In the past 6 years we have traveled more trying to take advantage of our good years.

+1 Also, 3% is go go spending for us.

 

[BeachOrCity]

I think in general the closer your budget is to "fat fire" the more one can spend more in the early years. I would be very comfortable with a VPW based approach for this. For a 50 yo person this is more like 4.5% at a 75% equities level.

Also when calculating mortgage as spend always back out the principal as you are just paying yourself and as some pointed out when older one can access that money thru reverse mortgage.

Final thought. No ones life ever follows a spreadsheet over the years. So make your plan, then set it aside and just evaluate it once a year to see how you are on track. Life happens. You adjust.

 

[Teacher Terry]

Reverse mortgages are terrible deals. If we ever need our house money we will downsize to a small condo which costs a lot less.

 

[aja8888]

Reverse mortgages are terrible deals. If we ever need our house money we will downsize to a small condo which costs a lot less.

Agreed, the only way a reverse mortgage works in your favor is if you die the exact day the income stream ends.

 

[Moemg]

NW, entertaining doesn’t matter financially to us either. I cook and everybody brings something. No catered affairs)

It is not the cost it is one thing I see people do less of as they age .

 

[NW-Bound]

We talked about the cost of entertaining because the thread topic is about expenses.

But it is absolutely true that people do less of every activity as they age. And at the very end, they of course do nothing as they become bedridden.

Have I made everyone's day?

 

[W2R]

We talked about the cost of entertaining because the thread topic is about expenses.

But it is absolutely true that people do less of every activity as they age. And at the very end, they of course do nothing as they become bedridden.

Have I made everyone's day?

I nominate this as hands down winner of the "Cheeriest Post of the Day Contest"!

Just joking!

 

[NW-Bound]

It's the other side of the Bernicke's coin.

I should remind myself of that when I notice that I keep spending less and less over time.

The situation may not be as good as it appears.

 

[HI Bill]

It's the other side of the Bernicke's coin.

I should remind myself of that when I notice that I keep spending less and less over time.

The situation may not be as good as it appears.

Unfortunately, there comes a point at which health, energy, and mobility inhibit one's ability to spend on other than health care, if one lives long enough. People stop buying new toys, new tools, new kitchen stuff, new clothes, etc. They are happy with what they have, and buying new stuff just takes effort.

My mom's spending plummeted after she stopped driving around age 79.

 

[NW-Bound]

... People stop buying new toys, new tools, new kitchen stuff, new clothes, etc. They are happy with what they have, and buying new stuff just takes effort...

This is more common than people realize. It is likely I will leave a lot of money behind, but I do not desire more stuff.

There's still something that I would not mind having, such as a waterfront home on the Puget Sound across the bay from Seattle downtown, but I do not have enough for that.

The things more within reach, such as a fancy car, I do not care for.

It does not mean that I am unhappy now, not being able to get that fruit out of reach. The more time goes on, the less I care for anything. As long as I have my health, I am grateful.

 

[dtbach]

With the market the way it is, I'm selling 2% and putting into the travel fund. That brings me to about 5.5% WR for this year and will fund nice travel for at least 3 years. I'm 66 and DW is 62 an NOW is the time to do it.


I'm sure we will be just fine in our 80's.

 

[BeachOrCity]

Agreed, the only way a reverse mortgage works in your favor is if you die the exact day the income stream ends.

I am not sure I agree with this.

The reverse mortgage provides security. Sort of like a pension. It insures you against longevity and this is what (some of) the fees cover.

IMHO the big change in retirement financial planning is the fact that there are fewer and fewer pensioners retiring now. By "insuring" for longevity we effectively as a retiree group all need only plan for 'average' life expectancy. Since pensions are mostly gone for most now we all have to plan for life to 95 or 100. A much larger target financially.

 

[Teacher Terry]

Beach, read the stories about if you miss or fall behind on properties taxes because you are old and forget they refuse to let you pay penalties and catch up. They are targeting seniors to take their homes by foreclosure. Really horrible true stories.