Should I spend every nickel before I die?

[Enuff2Eat]

A friend of ours in her early 50ies, nickel and dime all her life and now, coming down with a deadly cancer. Her internal is almost destroyed. Although she is very wealthy and can buy the best medical support but she doesn't have that much time left. DW and I are almost like her in a sense of being very very frugal people but now looking at our friend. We wonder if we should spend every nickel before we die and just leave the kids with the life insurance? 1/4 of a mil to be exact.

Here are examples of the things that we want but always "afraid" to buy...

1) a spanking new house with almost zero repair and maintenance. We live in 20 yrs old house that needs ... yes everything upgraded.

2) a spanking new and fun car which is age appropriate. I drive a 10 yrs old vw and she drives a clunker caravan 11 yrs old.

3) a spanking new and fast laptop and others electronic toys.. Our laptop is adequate and as loud as a subway train. Our camera, camcorder and gps are all old and outdated but functional.

4) a spanking new exotic vacation trip to a place other than grandma, aunt k, or uncle S house. We love them all but we there because it;s nice to see them and cheap.

5) unlimited of LIVE shows.. yes our flat screen TV is perfect for high def sunday football or dances with the stars but heck seeing in LIVE must be twice the fun..

6) and many many more....

thanks for letting whining..

enuff

 

[Koolau]

Always wondered about this myself. How DOES one "come out even"? So far, I fear running out of money MORE than I fear dying "rich", having forgone some pleasures I COULD have afforded. If anyone has an idea on this, I too would like to hear it.

Guess it's a good problem to have.

 

[NW-Bound]

Hey, maybe the perennial splurgers know something we LBYM'ers don't!

 

[shotgunner]

Enuff2eat, I can certainly relate to your feelings and observations on mortality and money. Like you I am very frugal. Truth of the matter I think most people who can FIRE or are working to FIRE are frugal by nature. I doubt I can change that expect of my personality and ever be comfortable, it's who I am, I suspect your the same. Perhaps when something bad like this happens to a friend or coworker you can use it for a point of pause and reflection of your own mortality and pick something from your wish list to celebrate your good fortune of health and wealth. If it were me, I would book a vacation to some place you have always wanted to go.

 

[Buckeye]

Are your kids encouraging you to spend it?

 

[RonBoyd]

We wonder if we should spend every nickel before we die and just leave the kids with the life insurance?

Yes. Life Insurance for the kids? Spend that too. Let em get their own.

http://www.early-retirement.org/forums/f36/allow-lots-of-debt-in-the-final-years-46305.html

(somewhat more) Seriously though, your thoughts are those of everyone who comes face-to-face with his/her own mortality. You are fortunate, however, because generally it comes shortly after a visit with a physician. My time came ten years ago when the doctor told me I had Atrial Fibrillation and "they" were unsure how I had survived a 1/2 mile run up a hill without suffering more than "out of breath." Eventually, I came to accept that my condition was not life threatening (with medication) and that moderation, in financial matters, was probably the best course of action. Nontheless, LBYM became less attractive after that moment.

In fact, because of that (and subsequent threats that life throws at one every so often), I came to fully understand the wisdom in Mark Twain's words:

“Sing like no one's listening, love like you've never been hurt, dance like nobody's watching, and live like its heaven on earth.”

 

[Walt34]

We wonder if we should spend every nickel before we die and just leave the kids with the life insurance? 1/4 of a mil to be exact.

That's what I told my mother to do when at one time she was fretting about leaving an inheritance. "Mom, you've more than paid your dues. Spend it. None of us (me and two sisters) are rich but we're all making it on our own." My two sisters agreed.

So Mom finally did "let go" and take some trips and do some fun stuff that she'd been putting off for decades, including buying a brand-new car.

And I wonder where the idea comes from that parents are supposed to continue supporting their offspring even after death. At some point everyone has to take responsibility for themselves.

Getting the timing right to run out of time and money at the same time is the toughie. I'm still trying to figure that one out.

 

[W2R]

A friend of ours in her early 50ies, nickel and dime all her life and now, coming down with a deadly cancer. Her internal is almost destroyed. Although she is very wealthy and can buy the best medical support but she doesn't have that much time left. DW and I are almost like her in a sense of being very very frugal people but now looking at our friend. We wonder if we should spend every nickel before we die and just leave the kids with the life insurance? 1/4 of a mil to be exact.

Here are examples of the things that we want but always "afraid" to buy...

1) a spanking new house with almost zero repair and maintenance. We live in 20 yrs old house that needs ... yes everything upgraded.

2) a spanking new and fun car which is age appropriate. I drive a 10 yrs old vw and she drives a clunker caravan 11 yrs old.

3) a spanking new and fast laptop and others electronic toys.. Our laptop is adequate and as loud as a subway train. Our camera, camcorder and gps are all old and outdated but functional.

4) a spanking new exotic vacation trip to a place other than grandma, aunt k, or uncle S house. We love them all but we there because it;s nice to see them and cheap.

5) unlimited of LIVE shows.. yes our flat screen TV is perfect for high def sunday football or dances with the stars but heck seeing in LIVE must be twice the fun..

6) and many many more....

thanks for letting whining..

enuff

Well, I wouldn't buy them all at once! I'd prioritize them and buy at a rate that seems reasonable to you, given your financial situation.

Thank you for the laugh concerning your "old" 1989 house. My present home was built in 1972, and although I could afford a brand new home I will be looking for a comfortable, older home built in the 1960's - 1970's when we move north. I have lived in a new home and there is work involved with them as well, since the kinks haven't yet been worked out and there is so much to do to make them less sterile and more comfortable. But each to his/her own.

A lot depends on the kids themselves. Are they doing well? Will they be OK after you are gone? These are unknowns to us here on the board. Your kids could be wildly successful, wealthy doctors and lawyers or they could be disabled, a mother who has put off education to have her kids first and has no skills yet, a father who ended up with a large family more or less by surprise and is working long hours to support them, or they could be otherwise struggling financially.

What about your old age? What if you live to 105? Your kids will inherit something if you die before your financial plan dictates.

The sad situation with your friend is not really a reason to completely abandon the ideas of delayed gratification and LBYM. It might be a good reason to re-examine your priorities and the degree to which you LBYM.

 

[walkinwood]

Instead of splurging and putting yourself in a financial hole, why not use the currently available rules of thumb for SWR spending from your portfolio and live within those "means" (I am assuming that you're living below it.)

I like the philosophy behind "Your money or your life" by Dominguez. He advocates that you monitor what you spend on and question each category to see if "you" feel you're getting your money's worth. He doesn't advocate a fixed budget but rather that you spend on what gives you the most satisfaction. I highly recommend the book if you haven't read it.

 

[Orchidflower]

My biological father was one of the few people I know who DID plan to spend every penny he ever earned and did before he died. I guess he had a great time? He always said he'd never leave anything to anyone, and, believe me, he made plenty (i.e., $425K even about 30 years ago) over his lifetime...till he just died of old age. Interesting choice, tho.

 

[DayDreaming]

I don't have kids so can't really comment on the idea of leaving an inheritance for your family, but: I really hope that my own parents are not pinching pennies so that they can leave me something. I've done well on my own, and really hope that my parents are enjoying their own savings.

 

[Bikerdude]

We wonder if we should spend every nickel before we die and just leave the kids with the life insurance? 1/4 of a mil to be exact.

To do this you have to set a DOD (date of death). I chose a date that is 10% longer than anyone in my family. If I'm still around at that date I would sell my real estate and rent. That should get me another 5 to 10 yrs down the road. If at this point I'm still around I really don't care as I'll probably be drooling on myself staring out a window somewhere. Sorry kids, I spent it.

 

[Independent]

We wonder if we should spend every nickel before we die and just leave the kids with the life insurance? 1/4 of a mil to be exact.

Yes, spend it.

The whole point of a retirement spending plan is to avoid both extremes. Some people spend so fast that they are sure to run out of money. Others are so conservative they never get to enjoy the things they saved for.

Hence we come up with all these strategies (4% SWR, percentage withdrawals, deferring SS, annuities, bucket/want matching, etc.) to give ourselves permission to spend without worrying that we'll outlive our money. Pick a strategy that makes you comfortable spending, then go for it.

 

[growing_older]

I'm all for spending on things you really want and having a life. But one of the things I want most is freedom to have the time to do my own things, so living frugally DOES get me something great that I want.

As for living in a McMansion and driving shiny new cars, those do sound like fun things, but I'm also aware there is a strong culture of marketing to make those seem more attractive to me.

 

[Bestwifeever]

Spend it.

The most expensive thing on your list, a new house, is something you can leave to the kids anyway.

 

[TromboneAl]

1) a spanking new house with almost zero repair and maintenance. We live in 20 yrs old house that needs ... yes everything upgraded.

2) a spanking new and fun car which is age appropriate. I drive a 10 yrs old vw and she drives a clunker caravan 11 yrs old.

3) a spanking new and fast laptop and others electronic toys.. Our laptop is adequate and as loud as a subway train. Our camera, camcorder and gps are all old and outdated but functional.

4) a spanking new exotic vacation trip to a place other than grandma, aunt k, or uncle S house. We love them all but we there because it;s nice to see them and cheap.

From my analysis, the thing you desire most, and which is free, is spanking.

 

[ProspectiveBum]

From my analysis, the thing you desire most, and which is free, is spanking.

Priceless!

 

[LoftyNotions]

From my analysis, the thing you desire most, and which is free, is spanking.

It's only free if you can talk DW into it.

I can't begin to imagine what it would cost if DW caught you and whomever you paid.

 

[Nords]

We wonder if we should spend every nickel before we die and just leave the kids with the life insurance? 1/4 of a mil to be exact.

We tell our kid that the only way to immunize her against affluenza is to spend her inheritance before we die.

Recent market paranoia notwithstanding, you could probably spend at a 3-4% SWR and still have more than you need. If you really wanted to hedge your bets you could fence off $100K for long-term care.

What's the purpose of the life insurance-- estate planning? If you're not earning income then I'm not sure that your life has any financial value!

As for the list, the challenge is figuring out what would really add value to your life and what's just chasing an unachievable fantasy.

1) a spanking new house with almost zero repair and maintenance. We live in 20 yrs old house that needs ... yes everything upgraded.

I think that new house wish is a fantasy and a money trap.

Instead of upgrading your current house, imagine if you had to fight with the new house's builder to have all the little things fixed (or at least built to spec). And then you had to landscape. And then you had to live with all the other houses in the neighborhood competing for the same builder & landscapers. And then over the next year or two you find what serious defects the developer never addressed, either by negligence or by mistake. The HGTV show "Holmes on Homes" is story after story about new homes built like crap.

I think a 20-year-old house is the perfect sweet spot for being in a good neighborhood with known issues and a definite idea of what you need to do to make it your "dream house".

2) a spanking new and fun car which is age appropriate. I drive a 10 yrs old vw and she drives a clunker caravan 11 yrs old.

Compared to the repair bills you may encounter down the road, that seems like a great idea. Except for the "age appropriate" part!

3) a spanking new and fast laptop and others electronic toys.. Our laptop is adequate and as loud as a subway train. Our camera, camcorder and gps are all old and outdated but functional.

This is an even cheaper upgrade than the cars. We replaced our four-year-old Pentium desktop with a dual-core model and the difference is amazing. We had no idea we were living in such penury. It was under $500, including the 23" flat-screen LCD monitor. TiVo has changed our lives, too. You could probably replace most of your electronics for under $2000.

4) a spanking new exotic vacation trip to a place other than grandma, aunt k, or uncle S house. We love them all but we there because it;s nice to see them and cheap.

Can't help you there... unless they go on the exotic vacation with you?

5) unlimited of LIVE shows.. yes our flat screen TV is perfect for high def sunday football or dances with the stars but heck seeing in LIVE must be twice the fun..

Don't know if I can help you there either! Spouse enjoys closed-captioning and being able to suspend the action. I've seen enough "live" to really appreciate "rewind".

 

[W2R]

You could probably replace most of your electronics for under $2000.

I did that in August, 2008 after receiving most of my inheritance. That was my splurge. The cost was about $1,500. BUT - - I have a caution. If you have more than one computer, space out the replacements. Just get one new one now, and replace the other in a couple of years. I am saying this because I have two new computers with Vista, and Windows 7 is coming soon and I will have NO excuse to buy a new computer with that OS.

 

[Achiever51]

Yes, spend it.

The whole point of a retirement spending plan is to avoid both extremes. Some people spend so fast that they are sure to run out of money. Others are so conservative they never get to enjoy the things they saved for.

Hence we come up with all these strategies (4% SWR, percentage withdrawals, deferring SS, annuities, bucket/want matching, etc.) to give ourselves permission to spend without worrying that we'll outlive our money. Pick a strategy that makes you comfortable spending, then go for it.

At the risk of being labeled a heretic, I always thought that the idea was to live below my means before retirement so that I could live AT my means once I had the freedom to do the things that are most meaningful to me.

IF you have the means to cover your expenses and a reasonable cushion to cover the unexpected, why wouldn't you want to take that trip, buy that item that you've always wanted or perhaps even needed but delayed buying, eat that special meal, help out someone in need or do whatever it is that would give you the most joy? There will come a time, believe it or not, when you won't have the energy to do some of these things...or have the health to enjoy them. But assuming you have the financial means available, what are you waiting for?

IMHO, there is nothing as sad as a life that ends with regret..."woulda, coulda, shoulda" is a woeful way to live one's life. If I wanted to delay living my life to the fullest...I would have continued working.

 

[unclemick]

After a long and thrilling career as a cheap SOB (her words) - post Katrina trying to switch to the you can't take it with you mode - I found it terrifying, scary and thoroughly uncomfortible - almost to the point of seeing a shrink and taking anti-depression meds. But since that cost's money I avoided that.

Even with some pssst Wellesley type Norwegian widow stocks and balanced index funds we were fortunate to have a few minor dips this last decade to make me all warm and fuzzy and point - ah ha see we got to be frugal(that's high class for for cheap).

Unfortunately balanced index/time in the market/I'm not getting any younger - means spend more(no heirs).

I passed up my favorite Salvation Army Store - bought a winter coat(1/2 price) at Sears and a Stetson hat at Dilliards and new tires at 60k miles for my Equinox. Actually gave my 250k GMC- with rusty fender to someone who needed a vehicle.

heh heh heh - Trying to force myself to enjoy spending more - but it's hard. .

 

[youbet]

We wonder if we should spend every nickel before we die and just leave the kids with the life insurance?
Here are examples of the things that we want but always "afraid" to buy...

If you want to spend but leaving something for the kids sounds nice too, you can have it both ways........

I have three grandkids, one with special needs. I told my son I'd pay for college for all three and additionally set up a significant trust fund for the one with special needs (if he doesn't go to college, the $$$ can just be added to his trust fund). There, that money is spent. What's left we plan to be as daring about spending as our conservative dispositions will allow us. Having those family commitments funded makes us feel like we've done our thing for the next generation and we can set our sights on enjoying the rest.

Of course, if we're killed by a grizzly on our next canoe camping trip, DS stands to get much more than we committed. And so be it........

 

[Independent]

Independent The whole point of a retirement spending plan is to avoid both extremes. Some people spend so fast that they are sure to run out of money. Others are so conservative they never get to enjoy the things they saved for.

At the risk of being labeled a heretic, I always thought that the idea was to live below my means before retirement so that I could live AT my means once I had the freedom to do the things that are most meaningful to me.

I think my wording was too broad. I should have said, "The whole point of distribution spending plans like 4% SWR, .... " I agree with you regarding the accumulation phase.

I was talking about how to live AT your means after retiring.

 

[chinaco]

Be prudent and make sure you reserve enough money to support a decent lifestyle as long as you think you will live... spend the excess. You earned it, therefore you deserve to enjoy it.

Personally I would not take the money and just blow it... but I would not deprive myself either.