Trying to land the plane with minimal turbulence...

[DawgMan]

So, perhaps I know some of the obvious answers before I ask the questions, but I will do it anyways in hopes to pick up some trade secrets from those of you who where in a similar situation, but made the "landing smoothly".

Here it goes... my target ER on paper is end of 2019. The math says I can do it IF my wife joins the TEAM! Quick back ground to my questions... Self employed, married 30 great years, 4 great kids (2 married, 1 recently graduate college, #4 about to be a senior in college)... oh, and I will be a grandpa in Sept! Since child #1 came along, wife has been a "domestic goddess". She has blindly trusted me to run the finances since day 1 (has had no interest). We have always LBOMs and still have a relatively fat lifestyle, especially the last 5 -8 yrs. We engage in budget discussions annually, but short of a "we need to cut back" conversation, that is the extent of her financial interest. Income over the last number of years has been excessive so she has become accustomed to what I would call many indulgences (i.e. shoes, clothes, fancy travel). I have not made any noise about this since I am still tracking on the big picture. So now, I am trying to use these next roughly 2 years to pull the rains back so we have a soft landing when we go to a "fixed income" retirement. I suppose I am partially responsible for "creating the monster", but I also wanted to let her enjoy some good stuff while the chips were coming in. I suppose I am looking for successful strategies to ween her off some "things" that don't necessarily move the "happiness needle" once I launch. In a way, she has been RE for 28 years so it will be new experience for her to adjust from my variable/lucrative on average income over the years to a somewhat fixed income lifestyle. BTW, I am still planning on a RE income that is very close to how we live today, its just that any excess margin will come from excessive returns vs income. Help me land the plane with minimal turbulence!

 

[Aerides]

As a woman who likes nice things, how much are we talking for this cut back?

Are you going from Neiman Marcus open ended spending to $100 a year at marhalls? Ritz Carlton trading in for Motel 6? Or something more reasonable (ie, 30% of discretionary). It sounds like you need to get a little more specific with her, and just lay out ideas for what will work and what won't, and ask for her input. And never underestimate the ability of a nice pair of new shoes to move the "happiness needle" if that's her thing

I wouldn't ever hint that you consider her to have been RE for 28 years or that will be a non-starter. (You could not have paid me enough to stay home with 4 kids).

 

[DawgMan]

As a woman who likes nice things, how much are we talking for this cut back?

Are you going from Neiman Marcus open ended spending to $100 a year at marhalls? Ritz Carlton trading in for Motel 6? Or something more reasonable (ie, 30% of discretionary). It sounds like you need to get a little more specific with her, and just lay out ideas for what will work and what won't, and ask for her input. And never underestimate the ability of a nice pair of new shoes to move the "happiness needle" if that's her thing

I wouldn't ever hint that you consider her to have been RE for 28 years or that will be a non-starter. (You could not have paid me enough to stay home with 4 kids).

Ok, RE may have been the wrong description as she did what she loved, and did it well, as a SAHM. We rare talking Niemans habits. Don’t get me wrong, she works it good, but apparently once you have tasted the good stuff, it’s hard to go back. There is probably $20k min of discretionary I would like to see her ratchet back in RE subject to some bonus market returns in RE.

 

[ivinsfan]

Why are you talking to us about this instead of her?

There is no magic bullet here, lay your cards on the table, say you are anxious for the both of you to enjoy a comfy retirement. Say flat out when my salary stops we'll need to make some adjustments to our annual spend rate. Ask her what's most important to her , fancy trips, newer cars or clothes and shoes. Let her start to pick and choose and you do the same with your personal spend and see if you can meet in the middle.

If you have hinted or even said cutbacks are coming and your spouse is resistant then that is another issue.

Now I'm going to hope the misogynists don't come out of the woodwork, In one post you said your wife you raised your 4 children has been "retired" for 28 years and seem to give us the impression that she has no common sense or doesn't understand money and budgeting. That she trust you to run the finances doesn't mean she doesn't understand spending and budgeting. And I forgot you said you "created the monster" she apparently spent within the family budget you both set and agreed to but now it's suddenly a big problem.

 

[Ready]

There is probably $20k min of discretionary I would like to see her ratchet back in RE subject to some bonus market returns in RE.

Ouch. If I were her I'd be telling you to forget about this ER nonsense and keep working until you can maintain the lifestyle you have been accustomed to prior to ER. I can't even begin to imagine how I would cut back on $20K of expenses every year, especially if I was already practicing LBYM.

 

[RobbieB]

Me too. Spending way up since I retired -

 

[HI Bill]

All of a sudden, I feel very lucky, that my non-working wife is more frugal than I am. Really, a talk about budgets in retirement is in order, and along with being very clear about reductions in spending...good luck!

 

[Aerides]

We rare talking Niemans habits. Don’t get me wrong, she works it good, but apparently once you have tasted the good stuff, it’s hard to go back. There is probably $20k min of discretionary I would like to see her ratchet back in RE subject to some bonus market returns in RE.

Ok you're talking my language, but dang $20k is a lot to rein in. Could you have a go at setting a budget of say $5k and asking her to work with that? So that new purse is 1 per year instead of 3, and wait for the end of season sales to get the prada shoes on sale, etc. (And I'm quite sure that some of her spending has been on gifts for you.) And eventually she'll realize she has enough purses. Since I RE'd 2 years ago the only new shoes I've bought are sneakers. And I'm someone who, years ago, designed her own custom closet with a central wall for about 50 pairs of shoes. Now I dust them more than wear them lol.

She might be fine with a budget, if she just hasn't had to think about it before, she can probably find she can do quite well by timing and sales and picking her battles. She might not even be quite aware of how much her expenses have added up. But yes you need to start talking with her yesterday.

And I do mean WITH not TO. Make this more about you asking her for input than laying down the law. You've supported this for a while, so you have to take a lot of ownership here. I'd approach her from "here's how we can get to the goal" and what that means for both of you to give up.

 

[Scrapr]

I'm staying out of this. But will be looking in as I may be in the same situ

 

[Mdlerth]

Turbulence, shmurbulence. First priority is make contact with air traffic control

Let's make sure I understand what it is OP is asking, because I'm not at all sure I understand.

RE income will be roughly comparable to pre-RE income in both scale and variability, although the variability will be a function of different factors than it was before. DH's calculations therefore predict a need to have a ready option for rapid reduction of discretionary expenses. A large part (maybe all) of the forecast expense reduction will come from budget categories currently administered by DW. DH fears DW will resist.

Have I got it about right so far?

Okay then, here are a few points to consider. The first one is: talk to DW. If you two have only ever held cursory chats about finances, then it's time to have some more detailed ones. Maybe, based on her trust in you, she will be on board with whatever you propose. Or maybe not, but you can't know for sure until you've had the talk.

And do not talk just about $$. You guys have to make sure you both understand each other's needs and wants; how you propose to nurture yourself, your spouse, and the relationship. Given your characterization of her "indulgences" (sic), it's not clear that this exchange has ever occurred. For example, if she has come to regard "fancy travel" (sic) as Quality Time with Prince Charming, it's not an indulgence - it's a raison d'etre.

You mention that your household income already is variable. How does DW react today when a given month's commission/bonus/incentive falls short of the prior one? If she's used to this happening, she might surprise you just how accepting of it she would be when it happened in retirement. Maybe she would welcome a few less material things if RE meant more time with her beloved.

At all times, remember your mutual love is a million times more important than money or clothes or toys or trips. Never, ever be motivated by the idea that you need to "win" a discussion with your spouse. No victory is more hollow than that one.

Keep your focus on communicating with honesty and affection. Be prepared to learn some things about DW you didn't know before. Keep an open mind regarding her priorities; it's possible that once you understand where she's coming from, you'll decide she was right all along.

I look forward to reading your updates. Pax vobiscum.

 

[Hermit]

I don't think you understand the gravity of the situation...

If you are going to be a grandpa soon, it is very likely DW will become a grandma. Add another $5k to $10k to the spending to take care of little trinkets for the new little darling. (Only somewhat in jest on this.)

 

[Jerry1]

I don't think you understand the gravity of the situation...

If you are going to be a grandpa soon, it is very likely DW will become a grandma. Add another $5k to $10k to the spending to take care of little trinkets for the new little darling. (Only somewhat in jest on this.)

Nothing to jest about at all. It's real as real can be. DW was going through a major medical situation. I felt it should have made her realize how precious time was. I asked her about going back to work after the event (she did not) and he answer was surprising. The first statement from her mouth was "what if I want to spend money on the DGK's? I want to know that I have money to do that if I want."

I assured her we were on the same page with the grand kids, but I was shocked to see that this was her concern. I was thinking more along the lines that she dodged a bullet and we better make something of our time left and going back to the grind, for any reason, wasn't worth it.

Bottom line, there will be money spent on grand kids and if the adult children are not doing great financially, even more will be spent in the name of doing it for the grand kids.

 

[tb001]

Ok, RE may have been the wrong description as she did what she loved, and did it well, as a SAHM. We rare talking Niemans habits. Don’t get me wrong, she works it good, but apparently once you have tasted the good stuff, it’s hard to go back. There is probably $20k min of discretionary I would like to see her ratchet back in RE subject to some bonus market returns in RE.

Heh. Good luck with that... It is hard to go backwards after you’ve gotten used to these kinds of extras without a lot of motivation for the change. And from some of what I’ve read here, the increased togetherness can be a negative as often as a positive.

How old are you? Are you close to traditional retirement age? If my DH were 62 and asking me to cut back so he could lean back a bit, honestly I’d have a very different take than if he were 42. How long has this level of discretionary spend been going on? Are there areas of the budget where you have discretionary spend you can cut too, like less expensive car, etc...? If you could get to 10k cuts from each of you that might make it more palatable.

FWIW, I’m looking at similar cuts to discretionary spend, but doing it so I can be a sahm. There’s a lot of positive in it for me and for our family. I’m just hoping DH is truly on board with some of the cuts...

 

[Gumby]

The old saw that has kept me going for the last 34 years - happy wife, happy life. You need to have a talk, and by that I mean mostly you listen and she talks, about what she wants out of life now and in the future and how she sees things playing out with your plan. Then you'll know what you should do.

 

[DawgMan]

Appreciate everyone's 2 cents...

ivinsfan - yes, we are talking and I had already suggested to her I would provide the needed data so we could both independently/jointly determine priorities and hopefully agree on a plan that matches reality. I suppose I am looking for more confirmation on some of the obvious approaches to this as well as any tried and true alternatives. And yes, she has common sense, but zero interest in the family budget.

Aerides - I need you on speed dial. What do you charge for hourly counseling? Perhaps you could talk her off a LOUIS VUITTON cliff!

Ready - I am sure that thought has crossed her mind!

RobbieB - You are my hero!

Mdlerth - You are close. Think about it this way. My income (100% commission) varies from year to year, however, I have been very fortunate that it has generally exceeded (often significantly) our annual budget, which included putting a set min $$ away for RE. Majority of the excess would go into long term RE focused investments with a portion of it earmarked for "other" (i.e. home renovation, fancier trips, new car, goodies for the wife) which we would discuss. Our fortunate situation of this "excess", especially the last 5 + years and then transitioning to a "fixed" (all my RE income will come from my investments) that is dependent upon investment returns for any excess is where the big change is. While our RE budget accounts for some level of excess and might be considered excessive by many on this site, it will require some pull back by DW on a few things. Your other points well taken.

Hermit/Jerry1 - Yes, the GK pandora box has already been opened which is another bogie I am dealing with... which is causing some stress on my previously planned RE budget. Kinda of like weddings...suckers cost some dough!

tb001 - Agreed, going from LOUIS VUITTON to Keds (hope I did not offend anyone) is not the easiest path. I'm 54, but not sure that should weigh to heavy into the decision. While I feel an obligation to provide properly for our future, I don't think I should feel guilty for wanting to RE early if I feel confident a very "reasonable" standard of living has been accounted for.

I feel confident we will find a solution that works for both of us, but just want to take the time now to make a soft landing. I figured some of you had some battle scars based on what did and did not work. Help a brother out!

 

[DawgMan]

The old saw that has kept me going for the last 34 years - happy wife, happy life. You need to have a talk, and by that I mean mostly you listen and she talks, about what she wants out of life now and in the future and how she sees things playing out with your plan. Then you'll know what you should do.

Roger that!

 

[freedomatlast]

My plan is to also RE towards the end of 2019. We have also had an increase in spending over the last few very profitable years and also recently have a grandchild.

My plan to RE includes Firecalc and other retirement calculators indicating I am safe to spend in excess of 200% of our current annual expenses. I plan to spend more in retirement than we do now.

So while I would encourage some cutting back in successive years of a negative return market, I would be confident we wouldn't have to slam on the brakes.

 

[splitwdw]

Dawgman, I'm not retired yet so maybe I've missed something. I may be "saying" this the wrong way. I thought when you retire, you have saved enough to pay for your essentials and discretionary. If your retirement savings take a hit from the markets then you cut the discretionary (Louis Vuitton). It sounds like you have to cut the discretionary so you can retire.
Don't think you can claim "LBOM" with Louis Vuitton as one of your expenses.

 

[mystang52]

Whether the message will sink in, I don't know. But you "just" need to show the numbers. Net Income = X. Current expenses = Y. Oh, yeah, expenses will now equal Y + grandkids costs (I know this very well!). As long as X exceeds Y, you'll be solvent. Then the decision becomes how much of Y is negotiable to make the ER emotionally comfortable.

 

[MBAustin]

First, take Gumby's advice. Then work out a plan together.

One option might be to have her set up a personal checking account (and debit or credit card) for her discretionary spending and fund it with a set amount per year. Then she can decide how much to spend on what and when. You agree at the beginning of the year what the amount is based on the investment returns, etc. She can save $$ from good years for leaner years or not.

There are lots of other possible solutions, but the key is that you work it out together.

 

[samclem]

It will be important that this really is a team effort. If you are the "bad guy" that stands between DW and the trinkets,trips that she wants, you will both be very miserable. You can't be the cop, and she can't feel like she needs to hide things, etc.
Maybe a quarterly sit-down with real numbers would make it "our situation" and not "your problem." I'd budget the "must do" spending, then some "us" fun spending, and a budget for each of you that can be spent however each person wants, no need to ask/check. If the pot runs dry, you both have to agree up front what you'll do. Big ticket items (roof, car, etc).. figure out where the money will come from now.
If she refused to be part of this and just says "tell me what I can spend", then she is (knowingly or not) making you the warden, and that's not good.

 

[mrWinter]

Why are you talking to us about this instead of her?

So we can all advise him before he does talk to her that whatever he do, he absolutely should not start the conversation by saying to his DW that she has been RE for 28 years!!!

 

[Red Badger]

The old saw that has kept me going for the last 34 years - happy wife, happy life. You need to have a talk, and by that I mean mostly you listen and she talks, about what she wants out of life now and in the future and how she sees things playing out with your plan. Then you'll know what you should do.

+1 (*1000000)

DW has zero interest in her money. She was a SAHM as well. So, when my sh!t filter was full, I started conversations with her about "less stuff - more experiences." And yup, I needed to listen to her. She wanted some sizable home upgrades (that were justified/needed). We negotiated some compromises such as cabinet refacing in lieu of new cabinetry (and several other like concessions). And we travel farther and longer than we used to. Will continue that as long as health permits.

10 months into retirement and we're still together.

 

[FI_RElater]

...to continue the airplane analogy

when a pilot checks the aircraft , the fuel needs to not only make it to the destination, but there needs to be reserves to potentially make it to an alternate airport
So if you haven’t planned for reserves, you may need more than just the one year (so 55 won’t be your landing). figure on about 20% reserves for safety, 10% doesn’t give you that much

AFA SO’s buy-in, how has she been informed as to possible budget in the past? Was she only informed when she went over? if so, it sounds like there’s been a significant communication gap for some time; you BOTH need to determine possible landing sites.
(a wheels-up landing (divorce), even when you walk away, is still a crash)

 

[Shanky]

We did about a 2 year, "live on retirement budget" before I did retire. Similar situation, wife stopped working after 2nd child, so 29 years since she worked for pay. We now spend 100K-200K less per year than when I was working. A lot of that was kids, living in expensive state, pricey country club, yacht, taxes etc. We now do all of the same things, but less than 1/2 of what we used to spend. Low cost housing (Moved from "Silicon Valley to Florida), no state income tax, smaller boat, cheaper country club etc. And life is better, because I actually have time to enjoy our more modest indulgences.