Just 2.5 years in and we are spending pretty close to exactly what we have budgeted over the course of a year, which is a bit over what we spent the two years prior to retirement, where we were saving, paying off bills etc.
We have a bank "Savings" account where we deposit any excess each month for the months we splurge on travel, something for the house, want to help out a family member, etc. We never want to go over our annual budget, but see no point, at this stage in our lives, in trying to spend less than we can. Nice to be able to take some trips (we are now on a 5 week trip to Italy) that we were not able to do before.
We plan to stay on this course, spending 100% of our budget each year, but no more. Right now our fixed expenses are low enough that if push comes to shove, we can cut down on the travel side and extras.
We also set aside in another account each month enough to cover the things like insurance and property taxes, that come annually or semi-annually, so we always have enough to cover them when they come up.
Seems to be working so far, but as I say, we are only 2 1/2 years into it.