Originally Posted by twaddle
Audrey, I think you and I are probably in similar situations. ER'd. 40's. Withdrawing < 4%. Right?
So, if we were pushing right up against 4% -- right up against our "means" -- I assume you would agree that sticking to a budget becomes pretty important.
So rather than targeting a specific withdrawal rate, I prefer to target a "sane" lifestyle. I want the illusion of a steady income and a steady lifestyle.
Well, we are running even under 3%, so my anxiety about surviving 50 years is not that high.
We don't have a child - that of course is a huge difference. But we do expect that we might have to foot medical/long-term care for one or more family members at some time in the future, and I like having plenty of "excess" in our nest egg to handle that.
As time has gone on (retired > 8 years now), I have become more open to the idea of spending more, simply because "we can afford it". This means gifting more to family/charities as well as spending more on ourselves.
I suppose this contrasts directly with your philosophy of a "sane" lifestyle. We are naturally fairly frugal (although we do have expensive tastes) so I guess we simply don't "overspend" by nature.
I'm not into "shoes" or even "clothes" for that matter so I can't help you there. Once I quite working my wardrobe shrunk considerably, which is a good thing as the fulltime RV lifestyle is not compatible with a large wardrobe. Living in an RV also precludes the "accumulation of stuff" habit, but it doesn't prevent one from spending lots of money on experiences.
There are some areas where we are currently spending almost twice what we spent 2 or 3 years ago. Eating out for example. It's something we really enjoy doing together and when we find a worthy restaurant, we will happily shell out the bucks for fine cuisine. I look at our monthly expenses sometimes and think "holy cow!" at our dining out total. But then I shrug because a) we really enjoyed the experiences and b) we are still well within our total expense limits.
I guess I just have this upper annual limit that I feel we can "afford", and if we end up well under that each year (which we have), I really don't care where it goes or who spends it.
I must say that we did go through an exercise of really streamlining and prioritizing our life a few years ago - and exercise that led directly to our current fulltime RV lifestyle and getting rid of a whole lotta stuff and curing ourselves of the accumulation habit. Basically, we just make sure we spend our $$$ on what we most care about and what brings us the most satisfaction.
So at that level, we adopted some "sanity" and it was definitely a cooperative effort.