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View Poll Results: As a retiree, how do you plan for big ticket expenses?
Don't buy them. 10 11.36%
Buy only when my portfolio is booming 8 9.09%
Save up for them by setting aside a portion of my withdrawals 71 80.68%
Multiple Choice Poll. Voters: 88. You may not vote on this poll

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Poll:Big Ticket spending
Old 08-02-2019, 04:17 PM   #1
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Poll:Big Ticket spending

I'm wondering how FIRE folks (those who are retired) think about "big ticket" expenses like new cars, home improvements, and perhaps new RV's (if you're into that lifestyle). i.e. things that cost upwards of $50K and come every 5-10 years. Do you...

A. Deprive yourself of these things for the rest of your life, or
B. Allow them only if your portfolio is beating expectations, or
C. Set aside a certain amount of your SWR to "save up" for them

Putting it another way, is retirement living a constant struggle to stay within budget and say no to anything that doesn't fit?
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Old 08-02-2019, 04:21 PM   #2
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Quote:
Originally Posted by tophermiller View Post
I'm wondering how FIRE folks (those who are retired) think about "big ticket" expenses like new cars, home improvements, and perhaps new RV's (if you're into that lifestyle). i.e. things that cost upwards of $50K and come every 5-10 years. Do you...

A. Deprive yourself of these things for the rest of your life, or
B. Allow them only if your portfolio is beating expectations, or
C. Set aside a certain amount of your SWR to "save up" for them

Putting it another way, is retirement living a constant struggle to stay within budget and say no to anything that doesn't fit?
D. Include this extra spending in the pre-retirement finances calculation.
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Old 08-02-2019, 04:24 PM   #3
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^^^^ +1

By spending less than 3%/yr all in, I hope to have plenty of reserve for infrequent large purchases. And then, there's SS to claim too.
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Old 08-02-2019, 04:27 PM   #4
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I voted C, but am hoping that the markets are kind to me over the next four years. If so, I'll take 28% of the next egg to buy a house, and still maintain my initial standard of living/spending level.
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Old 08-02-2019, 04:29 PM   #5
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E. Pull the large amount from the retirement account, and reduce future income by recalculating your SWR.

Just another option.
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Old 08-02-2019, 04:30 PM   #6
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I just buy the stuff as needed
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Old 08-02-2019, 04:31 PM   #7
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Originally Posted by tophermiller View Post

Putting it another way, is retirement living a constant struggle to stay within budget and say no to anything that doesn't fit?
Not for us.

Since retiring 14 years ago we've purchased two RV's, a new truck and two nearly-new cars. I don't think we've said no to anything we really wanted to buy.

My poll answer is both C and D.
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Old 08-02-2019, 04:34 PM   #8
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^^^^ +1

By spending less than 3%/yr all in, I hope to have plenty of reserve for infrequent large purchases. And then, there's SS to claim too.
Forgot to say, I do not spend any differently than I did when still working.

Perhaps I can spend more now thanks to the bull market, but do not feel like it, and do not want anything. Too much "stuff" already.
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Old 08-02-2019, 04:49 PM   #9
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Quote:
Originally Posted by tophermiller View Post
I'm wondering how FIRE folks (those who are retired) think about "big ticket" expenses like new cars, home improvements, and perhaps new RV's (if you're into that lifestyle). i.e. things that cost upwards of $50K and come every 5-10 years. Do you...

A. Deprive yourself of these things for the rest of your life, or
B. Allow them only if your portfolio is beating expectations, or
C. Set aside a certain amount of your SWR to "save up" for them

Putting it another way, is retirement living a constant struggle to stay within budget and say no to anything that doesn't fit?
Struggle? Not for me! I am not wealthy, but seriously this is not a problem.

I voted "C. Set aside a certain amount of your SWR to "save up" for them", but it's not really a specific amount. I just live a slightly LBYM lifestyle, buy whatever I need or want without ramping up the lifestyle, and whatever I don't spend is what is set aside.

From David Copperfield, by Charles Dickens:
Quote:
“My other piece of advice, Copperfield,” said Mr. Micawber, “you know. Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."
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Old 08-02-2019, 04:51 PM   #10
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D. Include this extra spending in the pre-retirement finances calculation.
D for me too.

B to a small part, if things weren't going well, I wouldn't get them.

C is totally foreign to me; I only withdraw what I spend, so withdrawing and saving makes no sense because i'm already saving.
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Old 08-02-2019, 04:53 PM   #11
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C is totally foreign to me; I only withdraw what I spend, so withdrawing and saving makes no sense because i'm already saving.
RMD's could change that for you.
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Old 08-02-2019, 04:54 PM   #12
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None of the above - I buy as needed.
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Old 08-02-2019, 04:58 PM   #13
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I wish the big ticket items came every 5-10 years...

I use my cash available, and my HELOC for periods of ~3-months or less. Charge the stuff first, and get as many points as I can. Then pay off the card with my HELOC and cash available.

My Checking account has my HELOC as a reserve. When I have a HELOC balance, I typically have less than $1 in my checking account. It's all on my HELOC saving interest. As checks and bills clear, the HELOC gets hit. But I do save a lot of interest.

The rental income eventually catches up to the amount I owe on the HELOC. You can use the same technique with whatever income you have coming in.
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Old 08-02-2019, 05:22 PM   #14
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RMD's could change that for you.
I'll have little or no tIRA by 70, but even if I did, I'd consider that a transfer of money to my taxable account. Yeah, technically a withdrawal, but not for spending. I consider withdrawals what I move over to my checking account, which is where all of my expenses are funneled through.
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Old 08-02-2019, 05:42 PM   #15
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I understand that some people do set withdrawal amounts, and set aside what they don't spend. I'm not stating any opinion on that. I'm just saying that's not what I do so to say that I save from withdrawals simply isn't an option for me, unless I changed my method.
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Old 08-02-2019, 07:39 PM   #16
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I must have dyslexia as when first reading, thought the thread was "Big Speeding Ticket" .
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Old 08-02-2019, 07:55 PM   #17
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I just buy the stuff as needed
This. I don’t need permission or whatever. If I deem that I need it...just freaking buy it.
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Old 08-02-2019, 07:57 PM   #18
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I think the one and only time I had a $50k expense was for the down payment on McMansion. I had planned ahead to save cash (BUT, we are not FIRE yet).

I sure hope we don't have too many other 50k expenses.
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Old 08-02-2019, 11:06 PM   #19
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i answered "saved up...." but we do it a little differently. coming from govt i learned about sinking funds...the process of setting a target X-months or years away and setting aside, or sinking, Y-dollars each month for the number of months required to meet that target. simply put if we need say $12k in a year we set aside $1k per month for 12-months. we currently set aside ~$7600 per month into a variety of "funds": vacation, new car, entertainment, pet care, etc. when the CC bill comes in or i write a check for something i simply transfer an equal amount from the MM fund into checking to pay off the CC or "reimburse" the checking acct. i then "debit" the appropriate sinking fund. i use Quicken to keep track of all this so it's all automatic.
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Old 08-02-2019, 11:25 PM   #20
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Not yet FIRE’d, but I have a part of our annual budget that is set aside for big ticket expenses. Overall, about 10% of our annual budget consists of these big ticket expenses. I don’t expect to withdraw the funds if they’re not needed, but it’s part of our planning process.

As a cross check, I went through major house systems and expected longevity, typical car cycles, etc... and ammortized the spend out over time to make sure we are accruing an appropriate amount and the $ came in very close.

The reality is that in tough times, we would make the car last a little longer, or not do that kitchen revamp, so hopefully that gives us a bit of buffer.
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