Are you guilty of spending too little ?

[imoldernu]

Giving the article consideration.

Ummm.. How much for a personal trainer?

...and what is it?

 

[daylatedollarshort]

Going forward I am trying to use money more for investing, appreciating assets, and buying already depreciated consumer goods. I think one of our better past spends was a pre-owned whitewater canoe we used for many years and then were able to sell for what we paid for it.

I am not sure I agree with even the happiness studies on spending money on experiences. We do a lot of things I think are fun for free or very low cost. We had a lot of exciting weekend river trips with meetup type groups with the canoe and they didn't cost any money except for gas for the car.

Maybe it helps to be easily amused.

 

[travelover]

If I knew how much my last few years were going to cost me with certainty, I'd feel a lot better about spending more now.

 

[NW-Bound]

As I retired this year and less focused on financials of saving, this running out of time idea has begun to come more and more to the forefront. I don't think the idea is that you should spend it because you have it. But rather if there is some thing or some travel or some giving that would make your life better and more enjoyable, it might be better to go ahead and enjoy it now, rather than keep waiting for a time that will never come. I have to admit that we have a budget and are planning to spend less than 4%, but while we are not spendthrifts, we do happily blow some money on things we use, travel, entertainment and pursuing adventures as they arise.

I ... personally have a hard time with anything over 4%, too many unknowns, and just don't want to have to ever become a Walmart greeter.

I originally planned to spend 3.5%, but after sitting down to figure out our SS, am quite comfortable going up to 4%. After spending 1% on the maintenance and update of our homes this year, I am still at less than 4%.

I would not throw money away, meaning spending it without thinking about what to get in return, but on the other hand have stopped worrying about running out of money. If things get really bad, out of control, and we have to get rid of the homes and live full-time in a small motorhome, so what? Fewer expenses, and less things to take care of, and more travel... I would still find a way to enjoy life. As long as one has life, with some reasonable health, money is secondary.

Me worry?

 

[Mulligan]

I originally planned to spend 3.5%, but after sitting down to figure out our SS, am quite comfortable going up to 4%. After spending 1% on the maintenance and update of our homes this year, I am still at less than 4%.

I would not throw money away, meaning spending it without thinking about what to get in return, but on the other hand have stopped worrying about running out of money. If things get really bad, out of control, and we have to get rid of the homes and live full-time in a small motorhome, so what? Fewer expenses, and less things to take care off, and more travel... I would still find a way to enjoy life. As long as one has life, with some reasonable health, money is secondary.

Me worry?

I am going to have to start staying out of Lowes and Home Depot. It is amazing what kind of maintenance and updating I am creating for myself whenever I walk in there. I have blown way past the 1% yearly thing. Before I started going in those places a few months ago, I thought my house was still in great shape.


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[CaliforniaMan]

I originally planned to spend 3.5%, but after sitting down to figure out our SS, am quite comfortable going up to 4%. After spending 1% on the maintenance and update of our homes this year, I am still at less than 4%.

I would not throw money away, meaning spending it without thinking about what to get in return, but on the other hand have stopped worrying about running out of money. If things get really bad, out of control, and we have to get rid of the homes and live full-time in a small motorhome, so what? Fewer expenses, and less things to take care off, and more travel... I would still find a way to enjoy life. As long as one has life, with some reasonable health, money is secondary.

Me worry?

+1 Good points. I think I am getting there, but may take a while, only 6 months into retirement after a lifetime of working and saving (ok, spending and saving). Strange change in me, recently had a couple of opportunities (work related) which in the past I would have jumped at. Now have absolutely zero interest in, regardless of the amount of money.

One thing that struck me a few weeks ago, I was checking my high school reunion website, was the large number of deceased classmates. Women as well as men. Strange feeling, the cute girl in Latin class (public school, yes Latin), who let me copy her homework before class every morning, until she wised up and saw how lazy I was, the guy with the crazy socks I used to joke with, the guy I played army men with in grade school, many others. I will not see at the next reunion. Makes you really think about what is important. And after you have enough to live it is certainly not money.

 

[EastWest Gal]

You need to research a sleep number bed with full tilt control. If you have or get acid reflux it's worth every penny. And no those nice non name brand mattresses are not even close. Quality mattresses are like good books. You can't just judge them by their cover.


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We researched and got a sleep number bed a couple of years ago. After we got it I talked about it at work. Virtually every partner already had one. It is very comfortable. And a slight tilt helps with reflux and snoring.


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[Walt34]

I was just playing around with the SS estimate calculator a few days ago and was a bit surprised a the number it gave. This was a good surprise. For some reason I remembered one much lower as being the estimate.

So it looks like we're going to have more income than we planned on and I'll have to think up something to do with it. That's a nice problem to have.

 

[NW-Bound]

The point that I have been trying to make here on this forum, for the past year or so ever since I survived an unexpected serious life-threatening disease, is that for those of us who are in the late 50s and above, the health risk is much more serious than the finance risk.

I can say that because for most people who manage to save and invest to have enough to either actually retire or contemplate doing so, they would know to manage and cope if some economic hardship happens. We are no dumb lottery winners who happen to get a windfall then blow it all on trinkets.

If people get so worried about having to live on less in their old age, meaning monetary issues, I wonder how devastated they would be if they suddenly discover some health problems, and they may not get to that old age after all? Not all of us will get to the 90s, let alone the 100s.

Just a few days ago, I talked with a fellow RV'er. His wife has flown back home due to some pain, and he's driving the RV home alone. They now suspect stomach cancer. They had planned to get a boat to sail the world. She is only 52.

 

[AnIntentionalRoad]

That article is nuts.

An expensive mattress? That's one of the things you should splurge on? (Don't get me wrong - if your mattress is crappy, replace it - but you can get very nice mattresses that are as good as the name brand ones, for a lot less. My sister just replaced hers - top of the line materials, totally researched what she wanted - and got a local furniture store brand that is equivalent to the big name brands for half the cost.)

As someone still new to retirement - so nervous about the budget... reading this article does not make me want to spend more. Especially when they suggest a 4-6% WR.

DW and I were in a furniture store last weekend and just randomly started trying out some of the mattresses. They were just OK. Then we looked at the price tags ans the top of the line mattress was priced at $15,000 but was "on sale" for $6,999.

We quickly moved on.

 

[Birchwood]

Guilty with this, sometimes.
Although, I had some legacy spending to help my daughter and even a education account for my only grandson. That made us feel good.
We're on 2-3% WR w/o problems.
We avoid big ticket items like cars, and will drive the Honda and Ford truck until about 100K miles.
We'll split a Subway footlong and drink water with it followed by an apple!
We're spending more on gas on road trips but stay in cheaper motels.
No first class plane ticket.
But we'll spend a lot on health care if we have to.

We don't want to be the richest folks in the graveyard. We just want to maintain our simple life style, and buy some nice experiences.

 

[H2ODude]

The point that I have been trying to make here on this forum, for the past year or so ever since I survived an unexpected serious life-threatening disease, is that for those of us who are in the late 50s and above, the health risk is much more serious than the finance risk.

I can say that because for most people who manage to save and invest to have enough to either actually retire or contemplate doing so, they would know to manage and cope if some economic hardship happens. We are no dumb lottery winners who happen to get a windfall then blow it all on trinkets.

If people get so worried about having to live on less in their old age, meaning monetary issues, I wonder how devastated they would be if they suddenly discover some health problems, and they may not get to that old age after all? Not all of us will get to the 90s, let alone the 100s.

Just a few days ago, I talked with a fellow RV'er. His wife has flown back home due to some pain, and he's driving the RV home alone. They now suspect stomach cancer. They had planned to get a boat to sail the world. She is only 52.

Good stuff. People seem to be overly optimistic in assessing their longevity (or the good years they can live a good lifestyle) yet so pessimistic in assessing markets. All of us here seem to live in the 95-100% success probability with a life in the 90's. I'll admit that's me, but I am really starting to question that. I've always been a pessimist in most planning (hey, I'm an engineer) but I always assume spending today's rate when I'm 92. Yeah, if I'm in a home. Won't be traveling but I suppose it could happen. I've lately been playing with slightly less than total market pessimism and the results are eye opening. Maybe the fact that I pulled the plug in 2011 and portfolio is up over 25% after withdrawals underscores that no, the worst does not always happen. I know, someone will trot out that if this was 2010 and I'd pulled the plug in 2006 I'd have a different perspective.

In the end we all have to do what is comfortable. However, I suspect there are a number here that will have one of those "Crap. If I knew THIS was going to happen I would ...taken those trips, had the beach house, eaten really great food, drank better wine, etc" moments. But, I'd guess we're all actually doing what feels best for us and that's what matters. Now really though, drinking cheap wine or national beer by the case?

 

[NW-Bound]

... In the end we all have to do what is comfortable. However, I suspect there are a number here that will have one of those "Crap. If I knew THIS was going to happen I would ...taken those trips, had the beach house, eaten really great food, drank better wine, etc" moments. But, I'd guess we're all actually doing what feels best for us and that's what matters...

Even before I got diagnosed with that disease which I overcame, I often asked myself that if I suddenly learned that I had only a short time left to live, I would regret anything. And the answer was no.

I have been thinking that other than the regret of not being able to live longer, I could not have done much better. I would not regret not getting that fancy car, or that big home. I already had enough travel. I could have spent more for my travels, like paying for better aircraft seats, but these benefits were really marginal, meaning they would not enhanced my experience at the destination. I doubt that on a deathbed, people would regret these things.

What I am saying is that it's OK to scrimp, as long as you would feel comfortable with leaving all that money behind if your longevity is not as planned. In my case, my wife or heirs will enjoy that, and I do not have to spend it all. But on the other hand, I am not going to let money worry keep me from enjoying life (let's see if I can still say the same if my WR happens to grow way beyond 4% due to market ebbs ).

 

[Elbata]

From H2ODude

People seem to be overly optimistic in assessing their longevity (or the good years they can live a good lifestyle) yet so pessimistic in assessing markets.

Ain't that the truth.

I know there are some great threads on this forum, but I think if I was to refer someone to read one thread and what this forum is about, this would be it. Quintessential of how ERs think.

 

[Mulligan]

Even before I got diagnosed with that disease which I overcame, I often asked myself that if I suddenly learned that I had only a short time left to live, I would regret anything. And the answer was no.

I have been thinking that other than the regret of not being able to live longer, I could not have done much better. I would not regret not getting that fancy car, or that big home. I already had enough travel. I could have spent more for my travels, like paying for better aircraft seats, but these benefits were really marginal, meaning they would not enhanced my experience at the destination. I doubt that on a deathbed, people would regret these things.

What I am saying is that it's OK to scrimp, as long as you would feel comfortable with leaving all that money behind if your longevity is not as planned. In my case, my wife or heirs will enjoy that, and I do not have to spend it all. But on the other hand, I am not going to let money worry keep me from enjoying life (let's see if I can still say the same if my WR happens to grow way beyond 4% due to market ebbs ).

That is kind of where I am at. I decided since I probably spend 85% of my time at my home (my preference) I might as well spend some money on my home. And that means busting out the wallet for hard wood flooring, bathroom reno with emphasis on an awesome shower and throwing the never used jet tub out the window, along with extending my deck and putting a hot tub on it. I swear my bones find the fountain of middle age after I sit in a hot tub for an hour.


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[robnplunder]

I really don't think you'll be able to change your spending habits substantially. But it is fun to think about, isn't it?

I can help W2R and others with spending. PM me if you want ideas. Small consulting fee applies. Don't respond all at once. I have a full time job still.

 

[razztazz]

That is kind of where I am at. I decided since I probably spend 85% of my time at my home (my preference) I might as well spend some money on my home. And that means busting out the wallet for...............

I love this thread. When I get out of the hospital next week, depending on the results and prognosis, I will take this into consideration. I might not have 30 yrs left. Or even 20.

 

[48Fire]

Nope, not me.

 

[ejman]

The point that I have been trying to make here on this forum, for the past year or so ever since I survived an unexpected serious life-threatening disease, is that for those of us who are in the late 50s and above, the health risk is much more serious than the finance risk.

I can say that because for most people who manage to save and invest to have enough to either actually retire or contemplate doing so, they would know to manage and cope if some economic hardship happens. We are no dumb lottery winners who happen to get a windfall then blow it all on trinkets.

If people get so worried about having to live on less in their old age, meaning monetary issues, I wonder how devastated they would be if they suddenly discover some health problems, and they may not get to that old age after all? Not all of us will get to the 90s, let alone the 100s.

Just a few days ago, I talked with a fellow RV'er. His wife has flown back home due to some pain, and he's driving the RV home alone. They now suspect stomach cancer. They had planned to get a boat to sail the world. She is only 52.

Good point. I live in a small town in SW Oregon that publishes the Obits in the daily paper. It's amazing to see how few (very- very few particularly males) make it to the late 90's or 100's that seemingly everyone at this forum (including moi) plan for. Most everyone is checking out in late 70's - mid 80's as per normal mortality schedules. ( and gulp, quite a few around my current age (64)! quite Amazing!

 

[meierlde]

The issue becomes that while the most recent numbers show that at 65 a male can expect 17.2 years and a female 19.9 years some will be on the long end of the tail. For expense planning purposes one needs to do this. Here is the census bureaus life expectancy by year spreadsheet Life Expectancy - The 2012 Statistical Abstract - U.S. Census Bureau (the link goes to a page that allows one to get a pdf or a spreadsheet).
Using the overall values at 70 it is 15 years,75 11.7 80 8.8, 85 6.5, 90 4.6 etc.
So the average person will die leaving money on the table as one should plan at at least the 75% point of the life expectancy curve.

 

[daylatedollarshort]

I love this thread. When I get out of the hospital next week, depending on the results and prognosis, I will take this into consideration. I might not have 30 yrs left. Or even 20.

I hope your prognosis is excellent. That must be a tough wait to find out.

 

[scrabbler1]

My SWR has been falling since 2011, my third year of ER, for two reasons: The first is my HI premiums have fallen thanks to the ACA, and the second is the growth of my portfolio has exceeded the growth, if any, of my expenses. My ER was in the 2.5% range but us around 2% now.

If I want to go on a little spending spree once in a while, I don't worry because it is not a regular thing. Earlier this year, I had to shell out about $800 for things which would cause my SWR to rise about 0.1% for the year, hardly anything alarming.

From Fidelity's RIP program, my financial outlook only improves once I turn ~60 and can begin tapping into my "reinforcements" which are (1) unfettered access to my IRA, (2) my frozen company pension, and (3) Social Security. My only really somewhat challenging years will be those in my late 50s. So if i can keep my SWR this low for a few more years, so much the better. And I can still go on a spree now and then.

 

[Lancelot]

I've always been conservative with money so I tend to underspend. Living abroad has also been a factor in my lower with drawl rate since its cheap to live here. But it can also be expensive; it just depends on the person and their lifestyle.

There is a difference between not spending much but having the ability to do so.

No fancy motorcycle, car, Rolex or McMansion is worth my freedom...