Poll: Below, Within or Beyond

[Ozstache]

My experience is similar. I lived well below my means pre-ER. As a result of that conditioning, I now struggle to spend up to my means in ER, despite most of my income coming from a COLA government pension that is as close to being impervious to market conditions as you can get. It's hard to break old habits!

 

[Katsmeow]

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

Do you apply that to people who are retired and not earning income and who are in the distribution phase?

I would not.

 

[Hermit]

This was hard for me to answer since I'm still adjusting to retirement and decumulation, vs accumulation...

+1

I have moved across country, am building a house, and my son appears to be making a career of college. With those expenses, I have been living well above my means since retirement. If you just look at my living expenses, I am living well below my means. There isn't a lot to do that costs money when you live in an isolated area. I voted for above my means right now.

 

[travelover]

+1

I have moved across country, am building a house, and my son appears to be making a career of college. With those expenses, I have been living well above my means since retirement. If you just look at my living expenses, I am living well below my means. There isn't a lot to do that costs money when you live in an isolated area. I voted for above my means right now.

Sounds like your son is the one living above his means.

 

[Hermit]

Sounds like your son is the one living above his means.

That would be above MY means.

 

[eytonxav]

ditto what REWahoo said

 

[Hyper]

I (ret) think and the wife especially thinks we live WAY below our means. I tend to be wound tight about $, hopefully I will get more comfortable but honestly if we did spend it would be just to spend. We don't really need or want for anything. Also I think past (horrible) bosses have a contributing effect on my thinking. I'd rather not go through that again.

 

[Options]

Interesting. Was just reviewing my records last night and was surprised to see I haven't increased my spending in over 10 years. I just keep finding ways to live on less without doing without. The best in life does not cost a lot of money.

 

[daylatedollarshort]

+1

I have moved across country, am building a house, and my son appears to be making a career of college. With those expenses, I have been living well above my means since retirement. If you just look at my living expenses, I am living well below my means. There isn't a lot to do that costs money when you live in an isolated area. I voted for above my means right now.

Before too long we will not have any kids in college, we will have two Social Security checks coming in and we will have a downsized house or condo. It will make a huge difference in our budget.

We don't live in an isolated area but there are a lot of free things to do near us and we have mainly inexpensive hobbies.

At least I know the college kiddo #1 is at has a maximum number of units each under grad student can take. So we will have at least one graduated and off the payroll before too long, even if it takes reaching the max credit limit.

 

[Lsbcal]

After the VPW thread and running the calculator, I know we are living too far below our means. Will work harder to spend in 2015.

 

[Dhickman57]

Before ER. Below means
After ER. Below means. Income from rentals, not drawing from 401K yet. Will step spending up in a few years when more income is received from 401K & Soc Sec.


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[kcowan]

12 years retired. Every year my net worth grows in spite of my best efforts.

DW seems to be better attuned to spending but now that we have all new appliances and a newer car, I think the rate of savings will increase. We are starting to increase our charitable giving to see if we can reach a balance.

 

[Lsbcal]

... We are starting to increase our charitable giving to see if we can reach a balance.

I tipped the newspaper guy this year and have gotten more liberal with tipping in general. Also helped DS with a bill for elective eye surgery. Might as well spread the wealth a bit.

 

[audreyh1]

After the VPW thread and running the calculator, I know we are living too far below our means. Will work harder to spend in 2015.

More gifting, to family and charities, and upgrading some of our activities is how we've ramped it up a bit. We'll probably buy a higher end car than we would have a few years ago. We enjoyed some nice hotels while traveling in Europe.

You'll know we're feeling very flush when we consider first class airfare. We're nowhere near that since we could do a second two-week Europe trip for the cost difference in airfare.

 

[audreyh1]

12 years retired. Every year my net worth grows in spite of my best efforts.

DW seems to be better attuned to spending but now that we have all new appliances and a newer car, I think the rate of savings will increase. We are starting to increase our charitable giving to see if we can reach a balance.

Same here, knock on wood!!! Because all it takes is another 2008 to hit that net worth hard.

Our spending has not grown to match our income.

 

[Walt34]

Prior to retirement we lived below our means.

At the moment we are living slightly above our means drawing down some savings.

When SS starts in spring of 2016 or perhaps a bit later we'll probably be living below our means but we'll try to ramp it up to within our means. Most likely by spoiling the grandnieces rotten.

 

[Katsmeow]

I think that in retirement, the definition of living above means should be changed. That is, we might think that declining net worth is living above means while in the accumulation phase. Fine.

But, in the withdrawal phase I would argue that the definition should whether your remaining funds are unlikely to last until the end of life. That is, if your net worth in going down because you are 60 and withdrawing 10% each year then you are living above your means as the portfolio is very unlikely to survive.

On the other hand, a 90 year old who is withdrawing X% per year and whose net worth is going down but the 90 year still has enough to fund her for years is not living beyond her means...she is doing what she saved her whole life to be able to do.

 

[W2R]

12 years retired. Every year my net worth grows in spite of my best efforts.

Same here, although it has only been five years for me and the market has been outstanding every year. When we have the next crash I expect my net worth to drop temporarily.