Living on a lot less

[justin]

Quote:

Originally Posted by BUM On thing about being ER'ed is that You Have Time To Save Money.

And spend money! I find that right now my wife and I have no time to shop. Between our two jobs, my night classes, and chasing around our 8 month old daughter, we find it hard to squeeze in the weekly 1 hour Super Walmart shopping spree. We are currently putting some home improvement projects on hold due to not having enough time to complete them. When we have free time, we'll spend more money.

[markplus4]

We started off doing OK....but backsliding has crept in. 8-9% portfolio returns over the last 4 years has helped mask our profligate ways. I guess we've started subscribing to the theory of spending more if returns are good....I'm sure we'll get our comeuppance one of these years.

We downsized to a 1500 sq ft house, but found it a bit too small, with a college aged daughter still at home. So now we're at a 2200 sq ft home in a golf community, although long term it should pay out. Health care can hurt more than you think, if you're on the hook for it. We had a couple unexpected issues. Eating out and mini trips can be addicting...but fortunately we don't spend much on stuff/toys. We thought it would be easier going from a 100K lifestyle to a 45K one, but we find 70K much more fun. Need to reread Your Money or Your Life!

[Jarhead*]

Quote:

Originally Posted by HaHa True, but is this more fun than working? Maybe if you are a coalminer, otherwise it isn't clear to me. Ha

Ha: My wife and I have spent far more on ourselves since I retired. (Hard to be self-indulgent when raising a family and 70 hour weeks).

The trick now is to get to the finishing line.

Beings we only have to run a 440 at this stage,
keeping our fingers crossed.

[wildcat]

Quote:

The only thing I have heard about this was from Gillette Edmunds book, "How to retire on less than a million dollars." In it, he pointed out that he had never met anyone who had successfully retired and then cut back. He said it let to both unhappiness and eventually going back to work.

Hey Petey, good to see you here.* Interesting point.* I haven't read the book but I wonder what it was based on---what kinds of cost increases, what kinds of lifestyles did these people lead after retirement and what kind of planning did they do.* If that statement is accurate then the avg US citizen 50s-60s is in big trouble.

[haha]

Quote:

Originally Posted by markplus4 *Need to reread Your Money or Your Life!*

Right. That really seems like fun!*

ha

[Sheryl]

I have been tracking expenses for about 1 1/2 years. It has been very eductional to see. My weak points are classes - Spanish, Tennis, etc. and I only see that (or the desire for that) increasing in ER.

We will be doing way more home improvement projects once we have time (and there is A LOT to be done!).

And we will be traveling. We refuse to RE until we are sure we have enough to enjoy lots of travel.

So I have started doing budgets based on what we spend now PLUS allowing increases for those things.

Just 3 weeks ago started tracking groceries more carefully. (Obsessively, SO would say). So far getting thru a week on under $100 is just not happening. I'm not trying to really reduce, just be reasonable so it will be interesting to start focusing on that.

[Zipper]

Ex, the 440 brings back long ago memories.

I recall it being the toughest of all races.

The "rubber legs" effect at the finish line was always a wierd feeling :P

One of the Profs at Western told us your legs will give out before your heart does so "let 'er rip!

I still run................but no 440's!

[MRGALT2U]

Quote:

Originally Posted by wildcat Hey Petey, good to see you here.* Interesting point.* I haven't read the book but I wonder what it was based on---what kinds of cost increases, what kinds of lifestyles did these people lead after retirement and what kind of planning did they do.* If that statement is accurate then the avg US citizen 50s-60s is in big trouble.

The "statement" is bunk. I cut back very severely, I don't know anyone as happy to be retired as I am, and I am never going back to work. I may be prickly and easily annoyed, but my retirement? Why I'm happy as a pig in slop.

JG

[SteveR]

Quote:

Originally Posted by MRGALT2U The "statement" is bunk.* I cut back very severely,* I don't know anyone as happy to be retired as I am, and I am never going back to work.* I may be prickly and easily annoyed, but my retirement?* Why I'm happy as a pig in slop.* JG

JG, with all due respect, I believe your lifestyle is far from the one being suggested in Wildcats' post. His reference was to the "average 50-60 year old" in retirement. Based on many polls done by various media sources (and taken with the appropriate grains of salt) it would appear that most (not you or most of the people on this forum) will be in for quite a shock when they try to live at the same level in retirement as they did before without adequate resources to fund that kind of spending.

Based on personal observation of my peers and family, I would agree that most people are not saving and investing enough to maintain their current lifestyle over the 25-30 years they will spend in retirement (assuming retirement at age 65ish). They will have to lower their spending to match their level of income (which they have yet to do in their working life) or will have to continue to work at some level to have the income needed to support their lifestyle.

If everyone were as frugal as you and some of the others here, the economy would come to a screeching halt.

[haha]

Quote:

Originally Posted by SteveR Based on personal observation of my peers and family, I would agree that most people are not saving and investing enough to maintain their current lifestyle over the 25-30 years they will spend in retirement (assuming retirement at age 65ish).* They will have to lower their spending to match their level of income (which they have yet to do in their working life) or will have to continue to work at some level to have the income needed to support their lifestyle.*

I meet a number of people who have good pensions. They tend to assume that with a pension they don’t need savings, so they go wild on very large houses, $100,000 motor homes, big boats. Stuff they might never have bought when still working. I guess for the retired government workers this will work out OK. But the others could get gradually poorer due to our old friend inflation.

Also, although folks on this board seem pretty immune to "stuff envy", some of these retired couples can be quite the snobs based on nothing more than the costliness of their crap. At least when you are still working you have a reality that you must deal with. If you are retired it seems possible for some people at least to get pretty far out.

Ha

[Martha]

Isn't it much easier to be free with the spending when you are working? I am much more worried about spending if I have to rely only on our investments for income. I anticipate I will reduce spending when I fully retire simply because I am a worrier.

[Jay_Gatsby]

Quote:

Originally Posted by Martha Isn't it much easier to be free with the spending when you are working?* I am much more worried about spending if I have to rely only on our investments for income. I anticipate I will reduce spending when I fully retire simply because I am a worrier.*

Although I don't speak from personal experience, I think people who are working are worried that they don't have enough to spend as they would like (or will need) in retirement, whereas those who are retired are convinced that they do.

[justin]

Although travel expenses may go up in retirement, when you have plenty of time to travel (if you want), you are more able to save money on travel. Off-peak vacations can save lots of money. This applies to hotels, cruises, airline tickets, beach rentals, even admission tickets and restaurants. You may be able to drive somewhere instead of fly and save a little money. Or take the train. Spend a few extra hours but save $100 or $200. And enjoy the scenery while you're at it.

Tues/Thurs cheap plane tickets are hard to take advantage of when you have to use your weekends for vacation when you are working.

[MJ]

Being a worry wart and a past poor investor, I had concerns about my nest egg, while I was working and now being recently retired, I still have the same concerns.
When I was working, I worried about saving enough money to last me 40 years.
Now that I have been retired for 8 months, I have the same worry. I know the concerns is more perceived than real but my emotions are still dominating me. Like unclemick, it may take a couple of years (hopefully less) to feel more comfortable. I haven't gone "spending" crazy and am still LBYM.
Of course, there is always the option of going to a shrink to "fix" my perceived worry. It would only cost $25k and then with $25k less in my nest egg, I would definitely have something to concrete to worry about.

MJ

[Martha]

Quote:

Originally Posted by MJ Being a worry wart and a past poor investor, I had concerns about my nest egg, while I was working and now being recently retired, I still have the same concerns. When I was working, I worried about saving enough money to last me 40 years. Now that I have been retired for 8 months, I have the same worry. I know the concerns is more perceived than real but my emotions are still dominating me. Like unclemick, it may take a couple of years (hopefully less) to feel more comfortable. I haven't gone "spending" crazy and am still LBYM. Of course, there is always the option of going to a shrink to "fix" my perceived worry. It would only cost $25k and then with $25k less in my nest egg, I would definitely have something to concrete to worry about. MJ

Xanax.

We both share the defective work gene and it looks like we share the worrier gene. My prior strategy to dealing with it was to simply ignore all matters regarding investing and leave them to my spouse. I am someone who likes to make decisions based on facts and I feel there is never enough facts to make good investment decisions. So I worry instead.

[greg]

Quote:

Originally Posted by Martha Xanax. We both share the defective work gene and it looks like we share the worrier gene. My prior strategy to dealing with it was to simply ignore all matters regarding investing and leave them to my spouse. I am someone who likes to make decisions based on facts and I feel there is never enough facts to make good investment decisions. So I worry instead.

Xanax, Shmanax! Worry is the beginning of keeping the bad stuff at bay. If you're worried about bad things happening in a foriegn country, don't go there or prepare yourself for what might happen so that you know what to do if/when it does. If nothing bad happens, what a pleasant surprise and trip. If you're worried about your retirement portfolio not outlasting you, fix it so that it does (or be prepared to fix the spending side). Worry isn't a bad thing; it's just a natural part of me that shouldn't be suppressed. It tells me that there is still plenty more to do. That's a good thing.

--Greg

[Michael Moore]

Quote:

Originally Posted by HaHa I meet a number of people who have good pensions. They tend to assume that with a pension they don’t need savings, so they go wild on very large houses, $100,000 motor homes, big boats. Stuff they might never have bought when still working. I guess for the retired government workers this will work out OK.

Since my pension is a bit under half what my final salary was, I'm sure not going to throw myself back into the debt briar patch if I can avoid it. I've had some post-retirement expenditures that were already in the budget, and some others that are being financed by converting other resources into the new one (selling some stuff and using that money for the new stuff = no actual change of financial status).

Even with a pension, you still have to be able to last through the month until the next check shows up.

cheers,
Michael

[MJ]

Quote:

Originally Posted by Apocalypse . . .um . . .SOON Xanax, Shmanax! Worry is the beginning of keeping the bad stuff at bay. If you're worried about bad things happening in a foriegn country, don't go there or prepare yourself for what might happen so that you know what to do if/when it does. If nothing bad happens, what a pleasant surprise and trip. If you're worried about your retirement portfolio not outlasting you, fix it so that it does (or be prepared to fix the spending side). Worry isn't a bad thing; it's just a natural part of me that shouldn't be suppressed. It tells me that there is still plenty more to do. That's a good thing. --Greg

I agree. Worry can be good. My father is a control freak and worries about anything he doesn't understand (drives me crazy) but I attribute his longevity (95 1/2 and lives alone) to his worry gene (which I share). That's why I worry about my money lasting at least 40 years.

MJ

[cj]

Quote:

Originally Posted by Martha Isn't it much easier to be free with the spending when you are working?* I am much more worried about spending if I have to rely only on our investments for income. I anticipate I will reduce spending when I fully retire simply because I am a worrier.*

I agree with Martha, or I should say my DH would definitely agree with her.* I've told my boss I'm definitely leaving 5/1/2006.* I am so OK with that, but DH is the worrier.* He keeps saying, "let's get <fill in the blank with something he wants to buy> while you're still working" (since I have always had the bigger salary).* I keep telling him we'll be fine, and have run our numbers through FireCalc every which way, including totally without Social Security, and it always comes up that we're 100% covered.* But DH will say every so often, "we have to cut back on our groceries" or other things.* And I have to remind him that we are already so careful about what we spend in some areas that there isn't much room to cut back!* I can see him wanting to stay home all the time to avoid spending any money.* *:P

I do think that it will be hard to move from saving mode to spending mode, as we have been diligent savers for more than 30 years.* I'm hoping to get over that quickly!

CJ

[Nords]

Quote:

Originally Posted by Apocalypse . . .um . . .SOON Worry is the beginning of keeping the bad stuff at bay.* Worry isn't a bad thing; it's just a natural part of me that shouldn't be suppressed.

Good post, Greg.

I don't worry about Murphy's Law. I worry constructively. I know that Murphy's Law exists and that it will find me every chance it gets. When it does, I won't be surprised or disappointed but I will be ready.