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Blow that dough or keep saving for inevitable?
Old 08-28-2018, 12:53 PM   #1
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Blow that dough or keep saving for inevitable?

1st of all, I'm being serious

Amethyst pointed out something that I had not been thinking about. When is it that we make that mental shift from being savers to spenders? In my particular case I needed to come up with only about $1500 (deposited 1k to his checking & $500 to his Visa). I could easily do that out of one of my two checking accounts but then I'd want to put the money back. I retired early at 50 a little over a decade ago to part-time work. Now I've retired for good. When I eventually hit RMD and SSA in a few years my income will more than double. So why is it that I have such a hard time just spending the money? Each one of my kids will inherit a sizable sum as will my grandkids so they're fine

Does anyone know a formula for spending out of an IRA before you hit RMD? Do you just use the RMD calculator but your current date of birth?

And how did you make that bridge from saver to spender?
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Old 08-28-2018, 01:01 PM   #2
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1st of all, I'm being serious

Amethyst pointed out something that I had not been thinking about. When is it that we make that mental shift from being savers to spenders? In my particular case I needed to come up with only about $1500 (deposited 1k to his checking & $500 to his Visa). I could easily do that out of one of my two checking accounts but then I'd want to put the money back. I retired early at 50 a little over a decade ago to part-time work. Now I've retired for good. When I eventually hit RMD and SSA in a few years my income will more than double. So why is it that I have such a hard time just spending the money? Each one of my kids will inherit a sizable sum as will my grandkids so they're fine

Does anyone know a formula for spending out of an IRA before you hit RMD? Do you just use the RMD calculator but your current date of birth?

And how did you make that bridge from saver to spender?
I don't understand your post entirely? Is the $1500 to "his" accounts your only (monthly) spending? Is it spending or something else? Do you spend other money?

After you clear that up, some answers may follow?
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Old 08-28-2018, 01:14 PM   #3
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i-orp.org It's just a guesstimate and it has it's flaws. But I think the model asks if you want to leave some behind, or not.
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Old 08-28-2018, 01:14 PM   #4
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I don't understand your post entirely? Is the $1500 to "his" accounts your only (monthly) spending? Is it spending or something else? Do you spend other money?

After you clear that up, some answers may follow?
No ... I have no problem spending my pension (which BTW includes monthly saving1k for traveling). He's a kid at SFSU whose grants / scholarships did not show up before his rent is due. So my dilemma was to take from (1) non-retirement accounts or (2) IRA. This is a one-time thing .... SFSU has released his PONY Award (he's a horn) & the rest will show up FA office says .... but I'm trying to figure out how to make that mental shift.

This month it's SFSU
Next time it'll be something else
I'm beginning to think I shouldn't go without bc I'm afraid / reluctant to spend my IRA dividends
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Old 08-28-2018, 01:16 PM   #5
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i-orp.org It's just a guesstimate and it has it's flaws. But I think the model asks if you want to leave some behind, or not.
Perfect!! I set up a legacy account which holds most of my assets so I know that they'll inherit but this'll let me know if taking out dividends is too aggressive

That'll let me know if my rate is appropriate, I still have to work on my mental shift
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Old 08-28-2018, 01:29 PM   #6
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I still have to work on my mental shift
Read Robbie's posts, that should help. Plus, he just got married and that too will help blow the dough!
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Old 08-28-2018, 02:01 PM   #7
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When is it that we make that mental shift from being savers to spenders?
I don't believe this is a binary decision. I've always been both a saver and a spender.

Living beneath your means doesn't mean that you don't spend.
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Old 08-28-2018, 02:11 PM   #8
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I don't believe this is a binary decision. I've always been both a saver and a spender.

Living beneath your means doesn't mean that you don't spend.
+1

There are many degrees of LBYM. You can be just 1 or 2 rungs below where different calculators say you can spend, or you can be 3 or 4. The main thing is you are happy where you are.

If you can afford to spend more, and it makes you happy then do it.
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Old 08-28-2018, 02:29 PM   #9
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When we semi retired it took us about a year to feel comfortable spending money. 6 years later it’s not a problem. We don’t care if any is left behind because we helped the kids when they were young and needed it. Having lost 3 friends between 59-67 this is our ltime. My step son mom is now dying at 64. Life can be short.
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Old 08-28-2018, 02:36 PM   #10
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It shows as I-Orp.com and it gives me an error...


I can see the input screen pop up for a second but then get an error...
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Old 08-28-2018, 03:55 PM   #11
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I have no problem being a spender and we have told the 3 kids not to expect any big inheritance to take care of them in their retirement.

We continue to live our lives raising a 7 year old granddaughter. And it is her that we will be providing for in the long run with a special needs trust. She is going to be an experienced world traveler too.

Our youngest daughter is our problem child, and unfortunately she has poor judgement in people and cannot be trusted with money.

Fortunately, we will not have to withdraw any Rollover IRA funds until age 75 or later--other than RMDs. The RMD funds will be transferred into other FIDO accounts and saved for our children or grandchildren. And we are going to continue traveling the world as long as we are able mentally and.physically.
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Old 08-28-2018, 04:23 PM   #12
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Muhaha! Yes, it's Robbie from the dark side - Blow That Dough!

Hey, I'll tell you a secret...psst, sometimes I have to remind myself of that -

And I do still adjust a bit. I still bought my first new car but it's a 45 grand Impala and not an 80 grand Lincoln like I was planning before.

Some things were easy, like first class airfare. I would have never "wasted that dough" while I was saving, but hey I travelled a lot when I was working in the sardine section and I don't travel as much now so when I do I actually would like to enjoy it instead of punishing myself.

Baby steps. Treat yourself to a $50 lunch, you'll love it -
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Old 08-29-2018, 06:20 PM   #13
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Blow that dough or keep saving for inevitable?

... When is it that we make that mental shift from being savers to spenders?

... And how did you make that bridge from saver to spender?
I do not think that I will ever that such a shift.

We invested and saved, to get enough to buy our retirement home and enter retirement with zero debt.

My pension is small [only $1600/month] yet it is enough to support a family when we have no debt.

In retirement we continue to save. We recently got an inheritance, so we used it to buy another apartment complex. Which will also lead to more income and more Net Worth.

We track our spending closely, and we hold it to less than my pension.
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Old 08-29-2018, 08:02 PM   #14
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And how did you make that bridge from saver to spender?

Can't address Q1, but here's my Q2 response.
Back in the day, my finance and accounting classes talked about assets and liabilities in fixed and lumpy categories. Here at home, cell phones and sat TV are fixed expenses, while electric and gas are quite lumpy (but overall M2M COL is fairly fixed).

So, until SSI, our fixed expenses are covered by pensions and a small fixed monthly withdrawal from our IRA. Travel, remodeling, the soon to be new roof are lumpy expenses. Once we both start SSI next year, our IRA will be almost exclusively for lumpy stuff, as Pensions and SSI will more than cover monthly fixed costs.

But yeah, the first few taps of the IRA "barrel" were a mental hurdle. Got easier after a few.
YMMV
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Old 08-29-2018, 08:27 PM   #15
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I'm dipping my toes in the water. Booking tons of travel as the opportunities come along. With 3 kids still at home time is the primary limitation, not money. I'm doing my best to spend it all while still alive so they kids don't get ruined by an oversized inheritance

My approach is: if it's a good value, spend the money. If it will be enjoyable spend the money.

It's easy to ramp up the discretionary frivolous spending since we can always ramp it back down should the next recession wipe out half our portfolio.
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Old 08-29-2018, 10:04 PM   #16
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That's it! Strike while the iron's hot!

Chill when it cools -
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Old 08-29-2018, 11:24 PM   #17
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We've started spending more, but I thought we may spend even more. Over Christmas we flew to the Philippines in EVA Air's Premium Economy section, which seemed pretty much like first class and we loved it. So, DW and I agreed we would start spending more on flights to be more comfortable. Well, when it came dow to it, we couldn't. Earlier this month we flew to Maui (from Seattle) in economy. Maybe if it was just us and didn't include the kids (2) we would've flown first class. She is currently in Europe and is flying economy there and back. In October I'm flying to Palm Springs for a golf outing and I did upgrade to premium, which on Alaska Airlines is just extra legroom and free drinks.
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Old 08-30-2018, 06:08 AM   #18
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Baby steps. Treat yourself to a $50 lunch, you'll love it -
I guess I need to learn to crawl first. I can't see myself enjoying a $50 lunch.
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Old 08-30-2018, 07:39 AM   #19
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And how did you make that bridge from saver to spender?
For me it was pretty easy. I was a saver for most of my life (but not to the extreme) until I became FI. Once I became FI, (and while I was still working) I started to spend a bit more but I was still in the accumulation and tracking modes. Within a year of retiring I quit maintaining spreadsheets, tracking my spend and just start enjoying retirement.

I think the realization (after retiring) that I had more than enough to support my "desired lifestyle" helped me cross that bridge.
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Old 08-30-2018, 08:22 AM   #20
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I think the realization (after retiring) that I had more than enough to support my "desired lifestyle" helped me cross that bridge.
+1
For us, after a few years and having nicely survived 2008, we realized that we could slowly loosen the purse strings. You don't have to switch gears on day one. Ease into it.
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