How much "dough can you blow"?

D

DawgMan

Full time employment: Posting here.
Joined
Oct 22, 2015
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900
I suppose I am posting this question to those of you in Fat Fire or those of you that retired after leaving a very lucrative income and standard of living. My "plan" has me retiring at the end of this year at 55. I have been fortunate to make a good living for many years while living significantly below my means. That said, I am planning for a min withdrawal of $300K/yr gross (underwriting 25% in taxes, but believe it will be much less with strategic acct withdrawals). I will most likely payoff my home mortgage the day I retire despite it being in the 3% range (still struggle with giving up the cheap money). As you can imagine, with no debt, this high of a withdrawal rate has a significant amount of discretionary spending. Plans are to do some of the usual more active traveling sooner vs. later and enjoy some of the finer things in life, and while I have 4 kids and 1 granddaughter I can burn $$ on, I really wonder how sustainable this kind of spending is after the honeymoon wears off. Are any of you Fat Fire folks consistently keeping your burn rate at a high level after 5 - 10 years? I know, 1st world problems, but more curious as to how long you kept your high withdrawal rate going before you slipped into your shorts and T-shirt and said that's all I need.

Perhaps I should ask it this way... Robbie - how many lobsters can you eat in 1 week?!

P.S. Haters don't hate...
 
Not a hater, but I don't get this idea that you have to blow money. Spend your money...if you want to. Don't feel obliged. I upgrade on things that I personally get a big bang out of, like upgrading my seat on an airplane, but not just to spend money because I can. If it doesn't matter much to me, I don't bother. Even if I can.
 
RunningBum said:
Not a hater, but I don't get this idea that you have to blow money. Spend your money...if you want to. Don't feel obliged. I upgrade on things that I personally get a big bang out of, like upgrading my seat on an airplane, but not just to spend money because I can. If it doesn't matter much to me, I don't bother. Even if I can.
Click to expand...

Sure, I get that. I suppose I am coming from the angle of those who perhaps had ambitious spending goals (i.e. more expensive travel, country club golf) when they first retired, planning conservatively for sustaining that spending level, and then perhaps realized they really didn't need/want more of the stuff. I realize its personal, but I would suggest that many of folks with this type of profile had more lofty spending desires, but eventually throttled back at some point after the honeymoon stage... maybe not. Clearly gifting to kids/grand kids/charities can fill the bucket, but I would suggest this has some impact on how some of us underwrite our desired spend, thus needed pot of dough to retire.
 
I'm having a hard time spending my $2000/month "free spending" allowance, let alone consider how to blow $300k/yr! Doubt you could sustain blowing that level of cash for many years, especially if you were a frugal saver in the past. Hard to break habits practiced over the years.
 
Buy a boat. If that doesn't use up enough cash, buy a bigger boat. Boat = "break out another thousand".

I still don't follow the "lofty spending desires" concept. I get that you might want to try nice things, take nice trips, eat good food, etc, but those are tangible things, while a spending goal is not. But I'll be quiet now and see what other responses you get.
 
If I were in that range, I'd be focusing on where to place my considerable donations.

I am closer to the "worried about cat food flavors later life" part of the spectrum... :)
 
You have said you LBYM while working, but since I don't know what you made or spent, I guess my first question is: does the $300k/yr represent a huge increase in what you have been spending, or is it close to you normal spend while working.

If it is huge increase, my guess is you will have a hard time pulling the trigger. If it is close to what you were spending, then "no problem". Either way, no "hater" here. If you can afford it, go for it.
 
RunningBum said:
Buy a boat. If that doesn't use up enough cash, buy a bigger boat. Boat = "break out another thousand".

I still don't follow the "lofty spending desires" concept. I get that you might want to try nice things, take nice trips, eat good food, etc, but those are tangible things, while a spending goal is not. But I'll be quiet now and see what other responses you get.
Click to expand...

No, you have that wrong, a boat is a hole in the water that you throw money into. :D

And I say that as a former boat owner.
 
While I'm not in the FATFIRE category, I'm sure it wouldn't be hard to spend $300K annually, assuming you have multiple homes, boats, a jet charter service, etc. At some point, even decimillionaires have to simplify their lives. Multiple vacation homes, maintaining cars in multiple locations, seems to get to be too much. My idea of simplicity is to own one 'dream home', pay for house cleaning, pool, and yard service, and maybe even grocery delivery. Eat out and travel as much as I want, as long as I travel.

But even with my more modest assets, I do see a time, around age 75 or so, where I won't be able to spend 4% of my assets without buying trinkets such as gold jewelry for my wife.

But if you want to race cars, horses, or yachts in retirement, $300K should be easy to spend.
 
Hehe, Robbie don't eat lobsters every day or wagyu either. That's "treat" stuff but I do it regularly. Tonight we're having hot dogs - :)

Blow dough to have fun and buy what you want. Don't blow dough to blow dough, don't blow dough to impress others, don't blow dough because others thinks you should.

Blow dough because you want to!
 
RobbieB said:
Tonight we're having hot dogs - :)
Blow dough because you want to!
Click to expand...
+1! I love Taco Bell, Alan Wong's and Roy's...trip tip, or ramen....doesn't have to be expensive, just good!
 
Funny you should ask since I recently added it up. I'm just over 8 years into retirement and I'm averaging about 150k per year on discretionary spending. Travel, hobbies, fancy cars, gifting to DD, etc. Some years more than others but 150k is a good average for the past 8 years. I suspect (actually I'm sure) that will start dropping off as much as 50% on a go forward basis due to lowing energy levels.

So I have no regrets spending more while I could really enjoy it. My only real regret, is waiting so long to retire. (by about 2 years)
 
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Car-Guy said:
Funny you should ask since I recently added it up. I'm just over 8 years into retirement and I'm averaging about 150k per year on discretionary spending. Travel, hobbies, fancy cars, gifting to DD, etc. Some years more than others but 150k is a good average for the past 8 years. I suspect (actually I'm sure) that will start dropping off as much as 50% on a go forward basis due to lowing energy levels.
Click to expand...

That's about where I am at. I still try to save a bit. I did buy a $75K (tax deductible) truck though.
 
DawgMan said:
I suppose I am posting this question to those of you in Fat Fire or those of you that retired after leaving a very lucrative income and standard of living. My "plan" has me retiring at the end of this year at 55. I have been fortunate to make a good living for many years while living significantly below my means. That said, I am planning for a min withdrawal of $300K/yr gross (underwriting 25% in taxes, but believe it will be much less with strategic acct withdrawals). I will most likely payoff my home mortgage the day I retire despite it being in the 3% range (still struggle with giving up the cheap money). As you can imagine, with no debt, this high of a withdrawal rate has a significant amount of discretionary spending. Plans are to do some of the usual more active traveling sooner vs. later and enjoy some of the finer things in life, and while I have 4 kids and 1 granddaughter I can burn $$ on, I really wonder how sustainable this kind of spending is after the honeymoon wears off. Are any of you Fat Fire folks consistently keeping your burn rate at a high level after 5 - 10 years? I know, 1st world problems, but more curious as to how long you kept your high withdrawal rate going before you slipped into your shorts and T-shirt and said that's all I need.

Perhaps I should ask it this way... Robbie - how many lobsters can you eat in 1 week?!

P.S. Haters don't hate...
Click to expand...

Many people and families in your situation. 100's of thousands of us in North America alone. Nothing particularly unusual.

We are in the range of $350-$400K gross, and after (Canadian) taxes and funding tax-free savings accounts for us/kids, etc, the rest will be spent on a great lifestyle including all core needs and wants. Which is exactly what happened before retirement.

The only difference pre-retirement was I earned a great deal more, paid much more tax, and saved a huge sum - the math which allowed me to stop doing all of that at a relatively young age.
 
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Frankly, try as I may, after ten years of retirement I can't even hit $50K/year. :eek:

That's ok; I am having fun, I have enough, and really it's not a spending contest. :)
 
W2R said:
Frankly, try as I may, after ten years of retirement I can't even hit $50K/year. :eek:

That's ok; I am having fun and really it's not a spending contest. :)
Click to expand...
I really don't think you're trying hard enough! :)
 
It sounds like we’re in a similar spend category, at least for the initial portion of our plan. For us, it’s easy. Two kids and a large house in MHCOL area eats that money up pretty quickly. If this represents a big step up from your current lifestyle, I can see it being hard to sustain, but that said, once you start upgrading things like travel, etc... it can be hard to go back.
 
DawgMan said:
Are any of you Fat Fire folks consistently keeping your burn rate at a high level after 5 - 10 years? I know, 1st world problems, but more curious as to how long you kept your high withdrawal rate going before you slipped into your shorts and T-shirt and said that's all I need.
Click to expand...

Retired 12+ years ago @ 48 from a very standard programming career. Started out at MediumFIRE, now at KindaFatFIRE as dividend income has increased considerably faster than inflation, now at about 130% of my final earned income adjusted for inflation.

I am a natural underspender, so I am still buying more stock as I cannot make myself spend all my income, but I indulge on things I never would have before - cruises, other travel, newer cars (2 years old instead of 10), home upgrades, fresh wild-caught salmon, poke, etc. I expect this to continue for quite a while.
 
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Buy a boat. If that doesn't use up enough cash, buy a bigger boat. Boat = "break out another thousand".
Click to expand...

A boat is a hole in the water that you throw money into. :D

And I say that as a former boat owner.
Click to expand...

+1
 

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