Eating Dessert Early in Retirement

[Chuckanut]

Here is an aticle on what may happen to one's income if one spends extra $$'s in the early retirement years to do the things one wishes to do while still healthy and able.

In Retirement, Should You Eat Dessert First? - Registered Investment Advisor

The author also offers a planner to help figure out how things will work if one wants to follow such a plan.

http://basic.esplanner.com

Looks like another way to grind up some time after I am formally retired.

 

[Midpack]

A pleasant aside, according to the first link, most of us here are still YOUNG! . Gotta like that!

One framework for thinking about this is the new taxonomy of aging. Where once turning 65 made you “old,” demographers now identify three groups.

• The “young-old” are those between 65 and 74;
• The “old” are between 75 and 84;
• The “old-old” are 85 and older.

FWIW, I've owned ESPlanner for several years. It's a good tool, and income smoothing is a topic worthy of consideration in planning, but ESPlanner is not for the (data) faint of heart. FIRECALC and most other retirement calculators are child's play by comparison...

 

[W2R]

Interesting article, especially for those who want to be world travelers after they retire.

Personally, I have no desire to travel and actually, I find that almost everything that I want to do is free or nearly so. Guess I'm pretty lucky.

 

[Goonie]

Thanks for posting that, Chuckanut. Interesting read that I'll have to delve into more when I get a chance!

My folks had taken, normally, two 2 week vacation per year before they retired in 1987 (he at 62 Ma at 60). After retirement they planned on travelling roughly twice that amount, maybe a bit more plus some 2 or 3 day trips added to the mix. My Dad, especially, wanted to get in as much travelling as possible, as soon as possible in order to go most places that they wanted to before it got to the point where they couldn't travel anymore.

That worked out great for the folks for about the first 6 or 7 years after retirement. But then it got to the point that Dad couldn't travel anymore, except for maybe a 2 or 3 day trip somewhere nearby. And that wound down after about 1 1/2 to 2 years, when he couldn't go much of anywhere, except to a restaurant.

They didn't go berserk spending tons of money, but they did spend quite a bit more immediately after their retirement than down the road a few years. And because of their level-headed 'splurging', my Mom (who is 85) can still travel as she pleases. In fact now that I'm retired too (5 years next month), since she and I have very similar tastes, we travel quite a bit together, and either take turns paying for the trips, or as is more often the case, split the costs between us. We're currently on our annual 3 week Florida & Nashville trip, and I'm paying for all the meals & snacks and for all of the gas, while she is paying for all of our hotel & resort costs. Last year we did it just the opposite.

It works out well for me too, since I did most of my major traveling before I retired, and the traveling we do now is plenty enough for my desire!

 

[ripper1]

Interesting article, especially for those who want to be world travelers after they retire.

Personally, I have no desire to travel and actually, I find that almost everything that I want to do is free or nearly so. Guess I'm pretty lucky.

You sound like my wife. I guess that is why we have money.

 

[ksr]

Personally, I have no desire to travel and actually, I find that almost everything that I want to do is free or nearly so. Guess I'm pretty lucky.

Me too! Actually, I question myself from time to time as to whether I'm being too frugal and denying myself something. But, with the exception of a few home improvements which I am making over time, I can't really think of any other ways I want to spend money.

 

[Amethyst]

We won't be taking a lot of cruises and tours...I did enough traveling for work, and we spent 3 years as a family living in another country. But we do want to live in 2 places after retirement, and want both to be very nice places. So we expect to spend quite a lot up front for that. In fact, our issue is not so much retirement income, as having enough up-front cash to set things up as we'd like, without being forced to borrow large sums.

Amethyst

 

[ripper1]

As far as travel goes nowadays where does one go. It is getting dangerous now to go to Mexico and who would want to go on a cruise anymore. There is plenty to do and see in the good ole USA. We're just going to get into taking road trips and junkets here and there.

 

[Goonie]

..... There is plenty to do and see in the good ole USA. We're just going to get into taking road trips and junkets here and there.

+1

I'd like to travel and see everything that we have here in the States, before I go explore in other countries again! Don't get me wrong, I know that many other countries have a lot to offer, but I prefer to drive and sightsee along the way. I've been to 39 of the lower 48, so only 9 to go!!! I want to see the USA in my Chevrolet!!!

The only exception to that being, as I posted in another thread the other day, I would like to visit Cuba when my Nanny....oops, I mean Uncle Sam says that I'm allowed to (legally)!

 

[Chuckanut]

As far as travel goes nowadays where does one go. It is getting dangerous now to go to Mexico and who would want to go on a cruise anymore. There is plenty to do and see in the good ole USA. We're just going to get into taking road trips and junkets here and there.

There is no place left to go. Decent travel only involves Mexico and cruises and they are now both too dangerous. Other places are a waste of time or just like the USA. <- note sarcasm smiley

Dessert can involve many different things, activities, and lifestyles. To each his own. Enjoy the dessert.

 

[Mulligan]

There is no place left to go. Decent travel only involves Mexico and cruises and they are now both too dangerous. Other places are a waste of time or just like the USA.

It depends on what you want to do I guess. I like short week long or less junkets and I do it on the cheap. Just spent 6 days in Aspen and skied a few days. What an awesome place to visit. I am a destination travelor, flying directly into town and using public transportation everywhere I go ( thats part of the adventure to me). I have never felt unsafe anywhere I have been. Although I have never had an urge to travel to a dangerous area. Cruises do not interest me in the slightest. When I want to go to Caribbean, I wait for an air deal, and fly directly there.

 

[Gone4Good]

Interesting article, especially for those who want to be world travelers after they retire.

Except I've found traveling full-time to be less expensive then sitting in my old house.

 

[Chuckanut]

Except I've found traveling full-time to be less expensive then sitting in my old house.

G4G, I would be interested if you have some numbers that show us that. If you do, then I may be gone for a long time.

 

[REWahoo]

G4G, I would be interested if you have some numbers that show us that. If you do, then I may be gone for a long time.

While you're waiting for a reply, here's a recent blog post from E-R.org member heyduke you may find informative:

On the Road of Retirement: First Year Expenses for Fulltiming… How much is enough money to fulltime in an RV?

 

[Gone4Good]

G4G, I would be interested if you have some numbers that show us that. If you do, then I may be gone for a long time.

We share a lot on our blog, but we haven't gotten around to posting detailed financial information. I don't think we ever will.

But other people do. Warren from Marriedwithluggage dropped by not too long ago to post about the cost of their around the world trip (12 months, $24K). Kevin and Ruth account for their RVing budget, where they spend less than $1K per month during the winter in Mexico. RV-Dreaming has a very detail budget showing $35K in 2011 spending (and less in prior years).

There is plenty of information out there. But take it all with a grain of salt. You may or may not be happy traveling the way these people do. But it is possible to travel the world, and even expensive destinations like the U.S. for ~$30K per year or less.

 

[foxfirev5]

As far as travel goes nowadays where does one go. It is getting dangerous now to go to Mexico and who would want to go on a cruise anymore. There is plenty to do and see in the good ole USA. We're just going to get into taking road trips and junkets here and there.

Absolutely! That's good enough for me. I've been enough places to realize that there's plenty here for the rest of my life.

 

[Gone4Good]

While you're waiting for a reply, here's a recent blog post from E-R.org member heyduke you may find informative:

On the Road of Retirement: First Year Expenses for Fulltiming… How much is enough money to fulltime in an RV?

Another good one.

 

[Independent]

From the financial planning perspective, it seems to me that extensive "travel while we're young" is simply something to budget like other one-time expenses. For example, I figured $x to see our youngest through college plus $y for kids' weddings and housewarmings. I just set that aside and calculated level spending for the rest.

I expect most people here have at least considered that approach.

 

[Danmar]

We won't be taking a lot of cruises and tours...I did enough traveling for work, and we spent 3 years as a family living in another country. But we do want to live in 2 places after retirement, and want both to be very nice places. So we expect to spend quite a lot up front for that. In fact, our issue is not so much retirement income, as having enough up-front cash to set things up as we'd like, without being forced to borrow large sums.

Amethyst

That has turned out to be our issue as well. After retirement we bought places #3 and #4 for cash. The balancing act was to leave enough in the portfolio to generate the income needed to live well including the 4 houses. I think we are on track.

 

[Danmar]

There is no place left to go. Decent travel only involves Mexico and cruises and they are now both too dangerous. Other places are a waste of time or just like the USA. <- note sarcasm smiley

Dessert can involve many different things, activities, and lifestyles. To each his own. Enjoy the dessert.

No kidding. I am always surprised at some of the "provincial" attitudes displayed re travel outside the good ole "US of A".

 

[Gone4Good]

No kidding. I am always surprised at some of the "provincial" attitudes displayed re travel outside the good ole "US of A".

It's not too surprising. Only 30% of US citizens even have a passport. And that number basically doubled when we started requiring passports for entry into Canada and Mexico. I'd gather that nearly 80% of US residents have never left the continent, and don't care to.

 

[TromboneAl]

Interesting article, especially for those who want to be world travelers after they retire.

Personally, I have no desire to travel and actually, I find that almost everything that I want to do is free or nearly so. Guess I'm pretty lucky.

Same here, but I would feel differently if I had a private jet and a personal assistant.

 

[haha]

It seems to me that instead focusing on the attractions or lack of attractions of travel, the question should be strictly about overspending early in retirement and (planned) underspending later. I would think for most frugal people this would be a very unattractive idea.

Why live very cheaply when you and your wife and perhaps your children are really young, (admiringly called LBYM) then overspend after you no longer have an income?

When you are young you can learn difficult sports skills, new languages, etc effectively to high level of expertise. Even when you are "early retired" unless that is quite early indeed, and you really have a great deal of money, about all you can do is mass market tourist stuff in travel, or big home splurges or remodels or other definitely middle-aged activities.

I notice that others have framed this as a separate money stash, just like money earmarked to put children through college. Then it is completely different, you work extra to get this extra money for these early indulgences. You spend it,and that's that. Seems fine to me if that is what appeals.


Ha

 

[Nords]

It's not too surprising. Only 30% of US citizens even have a passport. And that number basically doubled when we started requiring passports for entry into Canada and Mexico. I'd gather that nearly 80% of US residents have never left the continent, and don't care to.

*Ahem*.

Which continent would you be referring to? Some parts of the U.S. have never been a part of the Mainland, and 1.3 million U.S. residents can't be all wrong...

It's OK. You can visit here without a passport, and we'll even accept your American dollars in exchange for goods & services. Mahalo.

 

[Alan]

From the financial planning perspective, it seems to me that extensive "travel while we're young" is simply something to budget like other one-time expenses. For example, I figured $x to see our youngest through college plus $y for kids' weddings and housewarmings. I just set that aside and calculated level spending for the rest.

I expect most people here have at least considered that approach.

Exactly. Whether it is travel or other big expenses, it shouldn't be a problem if it is planned and budgeted.

For us it is travel, mostly in the USA, Canada and Europe, but we plan a 3 or 4 month trip to Australia and New Zealand in a couple of years.

We'd rather do this in our early years while we both have our health and energy.