Purchase list when approaching RE

[rodi]

We're in process of doing some big item maintenance on our house - replacing the 50 year old windows, updating the 50 year old bathrooms. So that's money we can spend now rather than in retirement when cash isn't as free flowing. Since we're DIYers - all materials will be purchased before retirement, (or funded), but not necessarily installed. It's up to my husband to organize the work flow. I just fund it and lend a hand when asked. (I work on it too - but he's the boss of these projects... I'm just the unskilled labor.)

Cars - we've got a fund set aside - and will continue to fund it. Our cars are older (mine was purchased in 2005, his in 1995) but both are in excellent mechanical shape... so no need to replace them till they start needing more repairs. At this point we're hoping the old truck will continue to be super reliable... and will become a vehicle for our sons to use when they start driving.

[EllisWyatt]

We're currently trying to get our "ducks in a row" and take care of the foreseeable (??) major expenses prior to retiring.

As an example: Just noticed that the big brick chimney in our recently purchased house is pulling out from the wall. Got a structural engineer out to take a look at it and -surprise, surprise - when the house was built, only 2/3 of the fireplace is on it's foundation. This didn't get caught by the home inspector.... So now have an estimate from the foundation guys to jack up the fireplace, put steel I-beams and piers (pier and beam house) and otherwise upgrade the foundation for.....$8500. Hadn't planned on that, but prefer to take care it now, w*rk a little bit longer, rather than take an early hit to the stash.

[audreyh1]

I bought a new vehicle before retiring - one more matched to our outdoor lifestyle.

We had paid off the house two years prior.

I had set aside extra funds for travel for the first two years - expecting there would be a lot of pent-up demand. And there was.

I padded, and padded, and padded the retirement fund.

We sold some excess "assets" - like some land DH had bought 15 years prior as an investment. This got rolled into the retirement fund.

We were pretty much up to date on home maintenance items.

[LinCella]

I'm going to have to purchase a w/d and refrigerator for my new place upon retirement but I don't know the dimensions of where I'm going. I mean - I know the place I'm going, but I won't be inside until I retire...also, will need mostly all new furniture. I've set aside $10k for new laminate floors, the above appliances and furniture. I plan on decorating simply and sparsely - so sick of clutter. I won't have a garage so I plan of getting rid of most STUFF prior to retirement.

[Retire44]

Wow! Thanks for all the great responses, and the variety of thoughts and actions. Keep them coming!

[Cat-tirement]

I am budgeting some funds for house repairs (e.g. new roof) that will need to be done before we can sell the house after retirement. Also a good chunk of money for relocation expenses, as we will be moving to the opposite coast. I doubt I can convince MegaCorp to pay to move me away as they did to move me here in the first place.

[inky]

Apply for any new rewards credit cards you want while you still have your job. I've heard the credit card deals requiring excellent credit can be picky about income.

[ERD50]

Quote:

Originally Posted by Retire44 Just curious if there has been discussion here about purchases to make in the year or two leading up to RE? Do people replace appliances, AC, vehicles and some of those type of expenses in the year or two before retiring?

Why would you do this? What would be the benefit?

Take a car for example. What is the difference between spending $20,000 (or whatever) in the year before you retire, or the year after? It's still $20,000.

Delaying it if you can stretches your dollar. As others have said, when retired you have more time to shop around for deals, or maybe some DIY repairs.

I fail to see ANY advantage to spending money early versus later, when there is a choice.

I am curious as to why are you even considering it, since you didn't provide any pros/cons from your POV? If these costs would delay retirement, I see that as a totally different decision - but these seem to be expenses that will occur in a few years either way .

-ERD50

[ziggy29]

Quote:

Originally Posted by ERD50 Why would you do this? What would be the benefit? Take a car for example. What is the difference between spending $20,000 (or whatever) in the year before you retire, or the year after? It's still $20,000.

I think the difference is: If you think there may be a new car purchase needed for $30,000 a couple years down the road and you want to retire, you might just work long enough to raise the extra $30K and then buy the car and retire, perhaps putting off a retirement by a few months or a year, give or take.

One can also rationalize that if they know a big expense is coming soon, we might as well work long enough to pay for it without depleting retirement savings. Judgment call, based on personal preference and comfort levels.

[ksr]

I had some dental work done while I still had dental insurance.

For the first year or two after I RE, I thought it would have been nice if I'd taken care of a couple of modest home improvements while I was still working and drawing a paycheck. As time has passed, I feel more comfortable to spend the money now if I want to, but the desire to make the improvements seems to be dwindling. I suppose this is a good thing.

[scrinch]

Quote:

Originally Posted by ERD50 Why would you do this? What would be the benefit? Take a car for example. What is the difference between spending $20,000 (or whatever) in the year before you retire, or the year after? It's still $20,000. Delaying it if you can stretches your dollar. As others have said, when retired you have more time to shop around for deals, or maybe some DIY repairs. I fail to see ANY advantage to spending money early versus later, when there is a choice. I am curious as to why are you even considering it, since you didn't provide any pros/cons from your POV? If these costs would delay retirement, I see that as a totally different decision - but these seem to be expenses that will occur in a few years either way .

+1
Unless you are buying information that might change your decision about when to retire, there is no value in spending money early. So I could see getting that last thorough physical and getting your teeth/gums taken care of before you lose your dental coverage and go down to high-deductible medical coverage. But otherwise money spent next year instead of this year has one more year to work for you earning interest/dividends/capital gains.

[traineeinvestor]

Among the items on my pre-retirement list:

1. medical check up and new glasses - my retirement date is locked in, but I still wish to maximise my recovery under the medical policy which will partly pay for them

2. buy a shredder - currently I do all my personal shredding in the office. Post-retirement, I'll have to do it at home

3. copy all my personal stuff off my work computer

4. transfer my accumulated points on my corporate Amex card to my Asia Miles account

5. delete all work stuff off my home computer

[omni550]

Not a purchase list but an excellent pre-retirement prep list (Post #9 by Nords is excellent): http://www.early-retirement.org/foru...-er-20952.html

omni

[kramer]

Yeah, I forgot about the medical stuff. In the 18 months before I retired, I got all my dental work done and eye checks and glasses/contacts. This was partly because I had that kind of insurance which I would not have after retiring. And partly because I planned to travel immediately after retirement and just wanted to have it taken care of.

[martyp]

We had the house painted, roof replaced, and replaced a skylight the first few months into ER. We have a budget for occasional expensive items such as appliances, house repairs, and cars.

[HighRoller]

Quote:

Originally Posted by Retire44 Just curious if there has been discussion here about purchases to make in the year or two leading up to RE? Do people replace appliances, AC, vehicles and some of those type of expenses in the year or two before retiring?

In our case we had a custom home built about two years before I retired so everything in the house was still pretty new. I did buy a new tractor and a new car the year before I retired so we started off with most major items as new. (except me ) We had planned this for several years before retiring along with the most important thing, which was to retire with "zero" debt.

[ERD50]

Quote:

Originally Posted by ziggy29 Quote: Originally Posted by ERD50 Why would you do this? What would be the benefit? Take a car for example. What is the difference between spending $20,000 (or whatever) in the year before you retire, or the year after? It's still $20,000. I think the difference is: If you think there may be a new car purchase needed for $30,000 a couple years down the road and you want to retire, you might just work long enough to raise the extra $30K and then buy the car and retire, perhaps putting off a retirement by a few months or a year, give or take. One can also rationalize that if they know a big expense is coming soon, we might as well work long enough to pay for it without depleting retirement savings. Judgment call, based on personal preference and comfort levels.

I understand that, but it sure seems to me that is the answer to a different question, the "Do I have enough to retire?" question.

And actually, that answer doesn't seem to apply anyhow. Whether I spend the $30,000 now and reduce my current portfolio, or plan for an added $30,000 future expense with a current portfolio that is $30,000 larger is mostly a wash (disregarding the time-value of money).

Either way, it is a $30,000 draw from the portfolio. What advantage can there be to spending any sooner than required? If there is a good reason to spend earlier (car maintenance is becoming excessive, reliability is poor), then it is a good idea to replace it independent of retirement date. I just see no meaningful correlation, and plenty of reasons to delay (get more use out the vehicle, appliances, etc), you have more time in retirement to comparison shop, do some DIY repairs etc.


I now see scrinch covered this a few posts back, agree with that -


-ERD50

[Nodak]

In the last three years before I retired I replaced the fridge, range, and dishwasher in my kitchen and also replaced the hot water heater thinking that would minimize expenses once retired. However, my plans changed once I retired and I found that I wanted to move closer to relatives in a larger town with more things to do. So now I am working on selling my home. I guess the new appliances may help to sell the house quicker. I guess one should remember the old Robert Burns line "the best laid plans of mice and men oft go astray".

[RunningBum]

Quote:

Originally Posted by EllisWyatt We're currently trying to get our "ducks in a row" and take care of the foreseeable (??) major expenses prior to retiring. As an example: Just noticed that the big brick chimney in our recently purchased house is pulling out from the wall. Got a structural engineer out to take a look at it and -surprise, surprise - when the house was built, only 2/3 of the fireplace is on it's foundation. This didn't get caught by the home inspector.... So now have an estimate from the foundation guys to jack up the fireplace, put steel I-beams and piers (pier and beam house) and otherwise upgrade the foundation for.....$8500. Hadn't planned on that, but prefer to take care it now, w*rk a little bit longer, rather than take an early hit to the stash.

This makes a lot of sense to me. If you've got some unknown expenses, get those figured out. Likewise I agree with a good medical checkup, though pre-PPACA I wonder if it's better to get the new policy with no known health issues, and get a checkup shortly into the new policy. But like W2R says, the overriding factor is your health, not HI expenses.

Other than that, it makes zero sense to me to replace something that works and you are satisfied with just to head off any possible maintenance expense down the line. Similar to others, my budget has car and home maintenance expense items, and a capital replacement item. If your car is a year or two from being ready to replace, pre-fund this. Doesn't matter if you lump it all in the same account or have a separate account. If you need $1.2M to retire and plan to buy a 30K car soon, make sure you have $1.23M. No need to spend that $30K before you need to.

[ziggy29]

Quote:

Originally Posted by RunningBum This makes a lot of sense to me. If you've got some unknown expenses, get those figured out. Likewise I agree with a good medical checkup, though pre-PPACA I wonder if it's better to get the new policy with no known health issues, and get a checkup shortly into the new policy.

Prior to PPACA, you had to deal with the HIPAA hoops: For example, going from your employer plan while employed to 18 months of COBRA, and then to an individual plan which could not impose pre-existing condition exclusions. You have to maintain essentially consistent "creditable coverage" (with gaps of up to 63 days allowed) for a period of time.

If you didn't go through those HIPAA hoops the right way, and you had a new and significant diagnosis found shortly after starting your new policy (diabetes, cancer, organ failure, et cetera) the insurer could try to fight the claim, saying you already had the condition when the policy was issued and thus excluded from coverage.

Today, for the most part, because of PPACA all you really need to do is make sure you have solid coverage lined up in to January 2014 and you should be "safe" whatever happens between now and then.