Spending change after FIRE

[Taxman59]

I retired July 1, 2015. I know our spending habits from over 3 years of the same net pay being deposited in our account. I also built up our budget from zero and came within about 10% of the deposit amount (misc. cash spending). I feel very comfortable with our spending and also know that there is about 20% fluff in our monthly spending. Add to that the mortgage is about to go away, and we are in good shape. Friday night, I was doing some reading (continuing education for my CPA) on retirement planning, and it got me thinking (always dangerous). I ran FIRECalc, and it shows that I can increase our monthly spending by about 30% and still hit a 98% success rate on a plan through 95 years old!

My question for the forum is this: Should I increase our travel budget by $10-15k per year (well within our limits per FIRECalc) and enjoy retirement that much more, or should I continue to LBOM (Live Below Our Means) and likely end up with a bucket load of $$ for our sons at some time in the future? I know DW would love to travel more and take more expensive trips (can you say European River cruises, China etc. )

 

[REWahoo]

Viewing your situation from the perspective of 11+ years of retirement, my vote would be to up the travel budget and spend the money now. At this point I'm growing far more concerned about running out of health than running out of money.

 

[street]

I looks like you are in good finical shape. It would be a personal decision but I personally have a hard time living above my means. The problem is we have lived our whole life being frugal and then now we can live above our means makes for a hard decision. I can only speak for myself but I can see myself at some time if I have the good problem you have to spend more. I have only been out about one year so I am very careful and still very frugal.

 

[braumeister]

Have you factored in long term care as a possibility?
If you either have a great LTC policy, or are confident you can self-insure for it, then REWahoo's advice is spot on, as I see it.

 

[Danmar]

I find myself in a similar position after about 10 years of retirement. Have 3 choices really. Spend/gift more now, or gift more when we die, or procrastinate and see how things go. Plan on spending/gifting more now but not a crazy amount. After all for most people the whole objective of LBYM while working is to have a "nice" retirement.

My FIL just passed away at 91. They always lived below their means even in retirement. He retired with $1-2 million 30 years ago and now they have over $5 million in invested assets. His kids are quite pleased about this but it seems less than optimal to me.

I say if you would enjoy sending more and you can easily afford it, you should. Obviously you would want to be sure about this and perhaps keep some back just in case of a market crash. "Means" is a little hard to define in retirement, but anything up to about 4% withdrawal rate is probably ok.

 

[audreyh1]

We spend a heck of a lot more after retiring in spite of being huge savers while working. If the funds are there, put them to good use! Yes, if you like to travel, increase the travel budget. Travel is best done in the early retirement years since it requires good health.

 

[Taxman59]

Braumeister, we have a good to great LTC policy so that is a worry we don't have. DW is getting stoked about the additional travel $$$. I guess my LBOM lifestyle is about to change. Thanks for your input.

 

[bbbamI]

Do it now while you are in good health and still have passion.

 

[Trawler]

We found after almost 4 years of retirement in the same position and thoughts then past fall went and splurged on a two week European vacation and went all out. Was best vacation I have ever taken and worth every cent. Spent about 8K and will do another bucket list one this fall. Go for it you may not be able to next year.

 

[MBAustin]

I agree with those who vote for more travel in the short term. If there is a major market correction that affects your projected success rate in ways that concern you, then just skip it for a year or two.

Also, even if you up your travel budget significantly, it still looks to me that you are LBYM - just not as drastically as now.

Enjoy!

 

[DrRoy]

I RE in 10 weeks! To maintain 100% of our current spending, which already includes 6 weeks of travel per year, I only need a 1.5% WR to start. Now we are considering a professionally guided photography tour to Patagonia that would be around $15K. I guess that's what the $ is for.

 

[Teacher Terry]

The last 2 years we have really increased the amount we are spending on travel. We spent about 14k/year. WE have had a few friends either die or become very disabled in their 50's and 60's so not taking any chances.

 

[Souschef]

Do it now! You never can predict what will happen to your health in the short or long term!
A dear friend and neighbor of ours just passed away, and he was 3 years younger that I.
When I retried, we traveled with a vengeance. My wife had done some traveling with her late husband, but never needed a passport until she met me.
From 2007 until now, we have been on 47 trips for a total of about 480 days! However, as we have gotten older, we slowed the pace down. We have opted for travel by ourselves, in many cases using the itineraries and accommodations that the tour groups use.
We gave up on the "bags outside at 7AM" and "off the on the bus" type of travel.

 

[brett]

Our vote would be to travel now while you have the desire and the health.

We started retirement with a six month trip. Since then it has been two major trips per year, each one from 2 months to three months. Make no mistake travel takes some work. At least the way we do it.

Why stay home and look at your investment statements all day?

 

[brucethebroker]

Not so much traveling, but we do get the heck out of Dodge in the winter and spend 3 mos. where it is warm. Obviously, saving that $ would help the bottom line, but....

Livin' the dream.

 

[bradaz2488]

Only been retired for 44 months. I'm 53 and DW is 51. Right now I'm assuming no SS so FireCalc says we can increase spending 7% for 95% success rate (age 95). If I include SS then we could spend 30% more right now for a 95% success rate. It is temping to spend more now, but we are still so far from receiving SS & Medicare that I assuming the worst and hoping for the best. I suspect as we get within 5 to 7 years of SS we may (should) start spending more. The fear of running out of money still haunts me but I hope that fear becomes less with each passing year in retirement. We want to spend every cent since we have no kids. The old saying, you can't take it with you...

 

[Mdlerth]

D*** the torpedoes, full steam ahead!

I know what DW would say about wanting to travel more in retirement. Ergo, we will travel more in retirement.

It sounds like it's well within your means. Enjoy your trip(s)! Post a few snapshots when you get there!

 

[panacea]

Have fun- enjoy some while you can. You'll likely cut back anyway as you get older so you still may have a considerable amount to leave behind. Woo hoo!

 

[Willers]

I say spend it for a year and see how it goes. You can always reduce it later if it makes you feel uncomfortable.

This was our hardest decision in our first year of retirement. We had to "force" ourselves to spend more on this. We haven't regretted it!

Sent from my SM-T810 using Early Retirement Forum mobile app

 

[brett]

We have not done any group travel either. Cruises excepted plus a safari with a group of six. We simply go at our own pace nor do we feel the need to completely fill each day. Our winter trip is usually the longest because we want to avoid the cold weather.

We are fairly frugal travellers who focus on value. This can mean anything from a five star to a small B&B.

 

[RobbieB]

Blow the dough!

 

[brewer12345]

Now that I am semi-retired I take the jar of change on the dresser to the local coinstar machine and dump it in for an Amazon voucher. Then I spend it on what I usually buy on Amazon.

 

[euro]

I retired July 1, 2015. I know our spending habits from over 3 years of the same net pay being deposited in our account. I also built up our budget from zero and came within about 10% of the deposit amount (misc. cash spending). I feel very comfortable with our spending and also know that there is about 20% fluff in our monthly spending. Add to that the mortgage is about to go away, and we are in good shape. Friday night, I was doing some reading (continuing education for my CPA) on retirement planning, and it got me thinking (always dangerous). I ran FIRECalc, and it shows that I can increase our monthly spending by about 30% and still hit a 98% success rate on a plan through 95 years old!

My question for the forum is this: Should I increase our travel budget by $10-15k per year (well within our limits per FIRECalc) and enjoy retirement that much more, or should I continue to LBOM (Live Below Our Means) and likely end up with a bucket load of $$ for our sons at some time in the future? I know DW would love to travel more and take more expensive trips (can you say European River cruises, China etc. )

Absolutely, up the travel budget! Sounds like you'll make DW happy too, so only upside!

 

[W2R]

I ran FIRECalc, and it shows that I can increase our monthly spending by about 30% and still hit a 98% success rate on a plan through 95 years old!

My question for the forum is this: Should I increase our travel budget by $10-15k per year (well within our limits per FIRECalc) and enjoy retirement that much more, or should I continue to LBOM (Live Below Our Means) and likely end up with a bucket load of $$ for our sons at some time in the future?

I see no strong argument whatsoever presented in your post for not spending more. I see some great arguments for spending more (98% FIRECALC, wife longing to travel more, wanting to enjoy the money).

So, like everyone else I'd say (BASED ON THE INFO YOU GAVE US) that you should spend more. What else could one say?

Well OK, that said, you might want to think about assisted living and nursing care costs later on, and make sure you feel OK about your plans in that regard. Otherwise, it looks to me like "all systems are go" - - go travel, that is!


Bye, have fun!

 

[Teacher Terry]

We don't like group travel either except for cruises. I don't want to be told what time to get up, eat, how long I have somewhere, etc. I have friends that do bus trips and I can't imagine why anyone would do that. They say it is so they don't have to think or plan where to go, etc but I don't think it is worth it.