Retired, now how do I spend the money?

[W2R]

Quote:

Originally Posted by Katiek Is there something you'd like to do that you're not currently doing? Travel or another hobby? If not, then don't worry about it and just continue to enjoy life. You never know when you might develop new interests, or become involved in a cause that you want to support. If the additional money can let you do things you enjoy, great. But feeling you "need" to spend it, may just add other stresses or complications to your life.

+100 Perfect! The above reflects exactly what I was thinking.

Right now I have a little bit more than I can spend, too, but I really, really want a nicer house; so if/when I find one, that should take care of the excess and then some. Meanwhile, I try to be at peace with not spending it, and I continue to enjoy life.

[pletal]

Quote:

Originally Posted by Drake3287 Sort of a strange question but I'd love to hear from anyone else that has been in the same situation. I know it's a great problem to have and I apologize ahead of time for sounding like I'm throwing it in your face. It's not my intention. I retired recently in my mid 50's with a defined government retirement plan that pays me 100% of my final salary for life, this includes a spousal continuous option when I die plus a COLA each year. As for medical, both my wife and I have 100% paid medical/dental for life. Our financial picture is this, including my wife working until age 62 most likely. In cash savings and investments we have almost a million dollars put away and kids college costs have all been paid for by us. Our current house is almost paid off and we have no real plans to move, we live in a very sought after area. Here's the problem, each month we easily save a couple of thousand dollars with no real purpose or need and when our house is paid off it'll be another $1,200 added to that each month. We pretty much have the means to buy what ever we want but tend to not waste our money. At the same time we we're not afraid to buy things we want or need including yearly travel. I've thought about buying a vacation home but I've heard so many people say they were sorry they bought one simply because they feel like they have to use it all the time to justify the cost. Plus, if we bought a vacation home it would limit the money available for yearly trips which we love. The bottom line is, I've done a great job in saving for retirement but now I'm afraid to spend the money. This has to be a common problem for people like myself who have spent so many years saving money but find it hard to part with. I realize I should have planned this better but I was hesitent to do anything until after my kids were out of college and that financial burden was over.

I don't think you are afraid. It may not be your thing. You didn't get where you are by being foolish. I am the same way. I could spend because I could, but I am not like that. I will not retire until I know I can pull 20k a month out at a 2.8 percent return and the money will last for 40 years. Almost there. What will I do if I have that much, be tight with it. It may be in our DNA. I could think of worse things. Your money, your options . Have fun

[Persn]

Buy the vacation house. I can assure you it will resolve your "too much money" problem! No really, a few years ago we were in a similar situation. I had always wanted a place at the beach but DH was extremely skeptical. Then in 2013 we found a short sale in a great walkable/bikable location about 30 miles from our primary home. We bought it, and while we could cover all the expenses with our pensions, there wasn't much left over. And since we bought a house that needed work, the list of things to spend money on just kept growing. Problem solved!

Still, the beach house is so great that we've decided to sell the primary residence and move there. And that was my husband's idea! I'm hoping that after the first house is sold we can go back to having too much money again.

My point is, if you keep saving money now you can take advantage of opportunities when they arise. Remain open and you never know what those opportunities might be. Enjoy!

[ChrisC]

I'm puzzled by the idea that one is afraid to spend money. I understand living frugally, but seriously, this idea appears to me to foreshadow a bigger issue: how to enjoy retirement with available financial resources? You don't have to spend money to enjoy everything that retirement may offer; yet, spending money could make some things that you couldn't do before (with time constraints) easier to do with available financial resources.

With our employer driven retirement benefits (Federal and county), we've come to the conclusion that we won't really use any of our retirement accounts; little, any if, of our taxable accounts, and none of the real estate investments we are fortunate to have. If we live a long time, our estate would likely double in value and, god forbid, we might even run into Federal estate tax issues.

In our first year of retirement, we felt we spent like a drunken sailor with adding renovations and new furniture to our new home and traveling a lot. This didn't even make a dent to our financial resources. We also enjoyed stuff that didn't even take any funds, like exercising more frequently and spending decadent hours of pleasure just reading good novels or binge watching some of the exceptional programs available on Cable or Netflix. Literally, we don't have enough time to do all the things we want to do in retirement and time, not money, is the major constraint.

So what, if you haven't figured out what you can spend your money? This means, at least to us, that we are now faced with the rather enjoyable task of planning to give it away with warm and cold hands. We're now settling estate plans and we do intend to give to family, friends, and charities over the years. This could mean taking the entire family or friends on a week long vacations on a cruise or resort, taking friends out to dinner at places they would never dare dinning because of the cost, or giving money to charities.

[RAE]

Start a scholarship fund for some deserving local kids to attend college. Plenty of smart, motivated kids are unable to attend college (or struggle to do so), which is a real tragedy. You could work with your local high school to set it up (eligibility criteria, amount to be awarded each year, etc). The kids that earn the scholarships will be forever thankful.

[RockyMtn]

Pass out $100 bills to strangers each month. Watch them smile. Repeat.

[gerntz]

Vs. trying how to spend your money, figure out what you like to do & do it. If there's not enough money, do less. If there's too much money, so what? Just do what you like.

[Drake3287]

Thanks for some of the answers, I can certainly think of plenty of "stuff" to buy but that's not the problem. I think in part it's the idea of starting to spend this money that I've been saving my entire adult life. It's almost like a kid saving all his allowance but being afraid to spend it!

Part of my worry is buying a vacation home (these aren't cheap in my area) and being "stuck" with having to use it enough to justify it. Plus the thought of dealing with maintenance/upkeep/snow removal on a second home is an issue I'm sure. As for a tax write off, I'm certainly in need of a new mortgage since our primary house is almost paid off.

As for my wife, she could retire early but as much as she complaints about her job, she still enjoys it. She also gets plenty of vacation time so traveling is still easy of us to do.

[W2R]

Quote:

Originally Posted by Drake3287 Part of my worry is buying a vacation home (these aren't cheap in my area) and being "stuck" with having to use it enough to justify it. Plus the thought of dealing with maintenance/upkeep/snow removal on a second home is an issue I'm sure.

There's no rush! Maybe it would be fun for you to wait a few years and just enjoy retired life without all those hassles. In a few years, if/when you decide that you really do want a vacation home, you could buy one.

In retirement, some of us find ourselves thinking, "vacation? vacation from what?". Others want to get away.

[brewer12345]

Quote:

Originally Posted by Drake3287 Thanks for some of the answers, I can certainly think of plenty of "stuff" to buy but that's not the problem. I think in part it's the idea of starting to spend this money that I've been saving my entire adult life. It's almost like a kid saving all his allowance but being afraid to spend it! Part of my worry is buying a vacation home (these aren't cheap in my area) and being "stuck" with having to use it enough to justify it. Plus the thought of dealing with maintenance/upkeep/snow removal on a second home is an issue I'm sure. As for a tax write off, I'm certainly in need of a new mortgage since our primary house is almost paid off. As for my wife, she could retire early but as much as she complaints about her job, she still enjoys it. She also gets plenty of vacation time so traveling is still easy of us to do.

OK, Scrooge McDuck, just keep the money and roll around in it.

Seriously, if there is nothing you are aching to do with the money, just let it pile up. You have the option to do something with it later. Either that, or find some worthy causes to gift some of the surplus to. Just don't let the having of a pile of excess cash cause you stress.

[HFWR]

Quote:

Originally Posted by jim584672 Hookers 'n blow. Think that will fill out your budget nicely.

Fast cars, fast horses, and fast women. Then waste the rest...

[ChrisC]

Quote:

Originally Posted by Drake3287 Thanks for some of the answers, I can certainly think of plenty of "stuff" to buy but that's not the problem. I think in part it's the idea of starting to spend this money that I've been saving my entire adult life. It's almost like a kid saving all his allowance but being afraid to spend it! Part of my worry is buying a vacation home (these aren't cheap in my area) and being "stuck" with having to use it enough to justify it. Plus the thought of dealing with maintenance/upkeep/snow removal on a second home is an issue I'm sure. As for a tax write off, I'm certainly in need of a new mortgage since our primary house is almost paid off. As for my wife, she could retire early but as much as she complaints about her job, she still enjoys it. She also gets plenty of vacation time so traveling is still easy of us to do.

Well, some of the answers underscore the fact that some of us just don't get your angst; perhaps, it's why some suggest you just blow off the money and spend it on frivolous things. Now if you truly believe you are afraid to spend your money like the kid that hoards his penny jar, then as an adult you just haven't out-grew this behavior -- not that there's anything inherently wrong with that -- but it would not be behavior I would follow, and to me, it's just like living well beyond your means, but in reverse! The object for many of us is not to be one of the richest guys in the graveyard. You don't have to spend, spend, spend to achieve financial balance in retirement.

But I'm still puzzled by your angst. Even the kid who religiously saves his allowances or puts all his hard earned money underneath his mattress should find pleasant opportunities to spend. What's the point of accumulating the money, anyway?

[HFWR]

Certainly, as someone about to FIRE with way less than many here, I do scratch my head occasionally. But I suppose there's a limit to how low I'd be willing to go if I was able to live "higher on the hog"...

[brett]

IRetired 2 plus years ago at 58.

Similar situation, pension and financially independent. We always led a modest lifestyle.

We downsized to a condo Not because we had to but because we wanted to. A lock and go so to speak. It was liberating.

We have travelled five months out of the last twelve. Europe, Asia, Fiji, Australia, NZ. Prior to that it was six months inEurope, Africa, and Costa Rica. We have lots more on our bucket list. Experiences are now more important than things to us.

We are in good health but who knows what the future holds. So we are doing it now while we can. And it is getting easier! We don't want to end up saying "wish we had done that".

Now is the time for you to get out and do it...whatever it is

[Elbata]

Quote:

You didn't get where you are by being foolish. I am the same way. I could spend because I could, but I am not like that. I will not retire until I know I can pull 20k a month out at a 2.8 percent return and the money will last for 40 years.

OK. I did the math. You're worth ~$8.5MM.

I think one of the nicest things about having money, is not having to think about money.

[pletal]

Quote:

Originally Posted by Elbata OK. I did the math. You're worth ~$8.5MM. I think one of the nicest things about having money, is not having to think about money.

No , not worth 8.5 mm yet. I said I will not retire till I can pull 20k a month out . Just seems like a good round number

[RunningBum]

Quote:

Originally Posted by Drake3287 Thanks for some of the answers, I can certainly think of plenty of "stuff" to buy but that's not the problem. I think in part it's the idea of starting to spend this money that I've been saving my entire adult life. It's almost like a kid saving all his allowance but being afraid to spend it! Part of my worry is buying a vacation home (these aren't cheap in my area) and being "stuck" with having to use it enough to justify it. Plus the thought of dealing with maintenance/upkeep/snow removal on a second home is an issue I'm sure. As for a tax write off, I'm certainly in need of a new mortgage since our primary house is almost paid off. As for my wife, she could retire early but as much as she complaints about her job, she still enjoys it. She also gets plenty of vacation time so traveling is still easy of us to do.

You'll get used to spending down the money. It didn't take me long to change my mindset. Maybe it helped that I went part-time for a few years, so I was only saving with ESPP and a 401K match, so I transitions from saving a lot -> more or less breaking even -> living off my savings. It also helps that in good years, you can spend money and still have more than you did at the start of the year.

Don't buy the 2nd home just to get a mortgage. Tax write offs are usually less important in retirement. If you think it's going to be a headache or you find yourself going there just to use it, not because you want to, it won't be worth it.

Really, there's no need to do anything drastic now. Spend no more than you feel comfortable with at first. When you find you're way ahead of the game you'll be more at ease spending more, or giving some away.

[Bestwifeever]

Maybe your kids will have kids; then you can use your nest egg for part of their college expenses. It probably won't be enough.

[H2ODude]

Similar situation. ER was not a goal, but by 60 had had enough and several factors leave us with projected safe income far below what has been a very nice lifestyle that really doesn't deny us anything we value. Four years later, and the portfolio having grown about 25% despite 3% WR, it's really dawning on us that all the projections that we love are based on 100% success, i.e. worst case. So we've just started to care less about some of the frugalities. Traded the perfectly good 2003 Acura in for a BMW 435 convertible. Went halves with a buddy on sailboat (and I don't really know how to sail!) and just bought a new mountain bike that cost what a new car did not that long ago. Portfolio's still growing, pension is static (no COLA but possible) and WR still below 3%. Also started a charitable trust to put some of the capital gain heavy funds from the brokerage.

My point is, give it time, get used to the growing safety buffer, and just look for ways to either give it away or try some new stuff. Time is not standing still. Good luck.

[38Chevy454]

Travel or spend the money on experiences now while you have good health. Too many examples of people that have good financial health and then some medical issue comes up and then it does not matter how much money you have.

You said you don not want or need luxuries, so buying a vacation home may be a good way to increase the experiences bucket. If you do not have a nice newer car go ahead and get one.

It really is an emotional change of perspective that you need to deal with. Logically you know you have plenty and have the discipline to have it work out.

You wife needs to quit so you can both enjoy the retirement to full extent.