Poll: Below, Within or Beyond

[Bikerdude]

I don't try, I actually do live below my means. Trying is for cissies


Here's my logic for living below my means in ER. I ER'ed with a slightly smaller portfolio than I would ideally have liked, at the age of 47 (15 years away from even early SS). Therefore, I have a conservative WR in order to hopefully allow my portfolio to grow a little so that I can have a higher income in the future. Everyone's situation is different. I believe my rationale is a reasonable one, given my particular situation.

I see your point. I guess it depends upon what "living within your means" means.

 

[Major Tom]

I see your point. I guess it depends upon what "living within your means" means.

It's easier to define when you have a set and predictable income from a job, or a check from a pension, SS etc. When you're drawing from a portfolio that contains equities and bonds then yes, there is no such thing as an exact amount you know you can draw in complete safety, so the exact definition of "living within your means" would vary, depending on the risk tolerance of the person.

At least, I think that's what you meant.

 

[pb4uski]

One could argue that if someone's net worth is increasing that they are living within or below their means. Or perhaps if their net worth is increasing by more than the change in unrealized appreciation of their assets (is expenses are less than income).

And if their net worth is declining then they are living above their means.

 

[Major Tom]

One could argue that if someone's net worth is increasing that they are living within or below their means. Or perhaps if their net worth is increasing by more than the change in unrealized appreciation of their assets (is expenses are less than income).

And if their net worth is declining then they are living above their means.

Now you're just being awkward

 

[Bikerdude]

It's easier to define when you have a set and predictable income from a job, or a check from a pension, SS etc. When you're drawing from a portfolio that contains equities and bonds then yes, there is no such thing as an exact amount you know you can draw in complete safety, so the exact definition of "living within your means" would vary, depending on the risk tolerance of the person.

At least, I think that's what you meant.

I think you nailed it.

 

[Bikerdude]

To truly live within your means you would have to know your expiration date.

 

[Major Tom]

To truly live within your means you would have to know your expiration date.

As well as exactly how your portfolio was going to perform in the future.

Sure would be nice if someone could stop being difficult and just tell us these things

 

[aja8888]

I live well below my means. DW lives a bit above her means. Thus we live within our means.

That's us, too!

 

[Chuckanut]

Below. But, after doing some SS math and playing around with variable withdrawal rates, I probabl won't be as far below as I had planned.

Since the future is unknown to me, having some padding to absorb unexpected problems (like living to long!) is well worth giving up some extras every year. OTOH, one never knows what will happen.

 

[Tadpole]

Why? Are you worried about running out of money?

No; we just aren't spending that much.

 

[Fermion]

Pre ACA my goal was to live within our means.

Post ACA, my goal is to live within your means.

 

[robnplunder]

Despite occasional splurge, I live way below my mean.

( I figured LBYM vote would be hovering over 90% given the nature of this forum's members. I stand corrected. )

 

[unclemick]

Accumulation - obviously below. In ER below, briefly above but on average below.

Thus after twenty years of ER as mentioned on another thread my new found pals at the IRS are helping via RMD.

Even with the leftovers spending up is painful emotionally since I took great pride in being a 'cheap SOB' for so long - sort of reveling in it.

heh heh heh - plus I married a financially independent gal also frugal so we need to expand without feeling frivolous and stupid because: a) you can't take it with you and b) we're not getting any younger.

 

[RetireAge50]

Our net worth is greater than zero so on average we live below.

 

[travelover]

I've tried to live beyond my means, but failed miserably. Still saving a portion of every pension check.

 

[calmloki]

I don't try, I actually do live below my means. Trying is for cissies .....

That jumped at me as well - using the word try in this group seems odd. Do or do not. there is no try.






(luke - who's your daddy?)

 

[dand76]

I live well below my means. DW lives a bit above her means. Thus we live within our means.

Same here but she has been given fair warning that in retirement there will be a budget
and the discretionary spending money will be divided equally between us.

 

[harley]

Same here but she has been given fair warning that in retirement there will be a budget
and the discretionary spending money will be divided equally between us.

Uhuh. Let me know how that works out.

 

[dand76]

Uhuh. Let me know how that works out.

After regaining consciousness when I told her of the equal spending plan I did have some doubts as to how well it was going to work.

 

[Sue J]

I am a habitual LBYMer. I have to save every month because I know from experience that stuff breaks and sh*t happens. I'm a terminal optimist but I know that no one knows what's around the corner in life and you are better off having saved for the unknown rather than being caught unprepared. Plus, I love knowing that our money is working for us.

Having money to cover the unexpected turns an emergency into an inconvenience.

DH could EASILY spend every dollar every month. I can't find things to spend any more money on, I have everything I need. Maybe it's a kind of disorder, but to me saving feels better than things.

Yes, opposites attract.

 

[freebird5825]

For the past 8 years between FIRE at age 48 and eligibility for my FERS pension at age 56,
I most definitely lived below my means. My income sources were a survivor CSRS pension and an immediate fixed annuity (TSP). I was very careful with spending and built up a better emergency cash fallback.

The very recent addition in Nov 2014 of my own FERS pension to my income stream has put me in a much better financial situation. I can now continue larger investments to my retirement portfolio and squander some on my hobbies and resume doing charitable donations. Trips will now be affordable with proper saving.

 

[flyingaway]

I certainly live below my means, I buy marked down food at supermarkets.

 

[scrabbler1]

Prior to retirement - below
Once retired - within

+2, makes sense to me.

 

[Meadbh]

Pre ER, LBYM, obviously. Post ER, the minimum acceptable situation is Within Means. Last year my personal expenses were on track but I had to pay more tax than planned, because of an unexpected bonus. This year I am LBYM. Since I do not have a pension I feel I must be more conservative.

 

[Lucantes]

One could argue that if someone's net worth is increasing that they are living within or below their means. Or perhaps if their net worth is increasing by more than the change in unrealized appreciation of their assets (is expenses are less than income).

And if their net worth is declining then they are living above their means.

I am not sure that this works for everyone, or at least I don't feel it will work for me.
I am fairly sure that my goal, upon the final end of the game (my death and my wife's death), is not to have a huge chunk of ever growing money for someone else to gain.
I am not retired yet, target is for 3Q 2017 at age 50 for both my wife and I, but my goal is to be able to enjoy what we have earned up to that point during our retirement without putting ourselves into excessive risk of running out of money before we both expire. What happens after that I do not care.
I can easily see a point of time in the future where our net worth will be decreasing, and we will not be "living above our means".