Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 07-19-2021, 11:01 AM   #41
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 12,063
Our spending has also been pretty flat with the exception of a lump bump when DH bought a new car. We're running just under 3%. (Excluding kids college bills, which are paid from 529s which I don't include in my 'nestegg' number used for withdrawal rate.)

I don't worry about needing to withdraw more - if I need the money, I'll pull it out...

I suspect, at some point I'll be like youbet and start paying for services that I currently do myself... Housekeeper, gardener (if we don't downsize to a condo), etc. Plus - as I get older, I want more perks in my travel... (minimum premium economy, better airbnb and hotel accommodations). Heck, even camping is being upgraded from tent to beater van. LOL.

Anything we don't spend will be passed onto our boys. And at this point it doesn't look like we'll spend it all.
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 6%, rental income 20%
rodi is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-19-2021, 04:00 PM   #42
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2008
Posts: 5,280
Well maybe pullback or correction in progress.

The "problem" may partially solve itself.

explanade is offline   Reply With Quote
Old 07-21-2021, 07:32 AM   #43
Full time employment: Posting here.
 
Join Date: Sep 2007
Posts: 940
Quote:
Originally Posted by Sunset View Post
There are various issues with gifting money to relatives, it's not all roses and sunshine.
Sometimes it's good, other times it's not.

Some possible issues are:
  • Relatives view the Giver as an open wallet for the asking.
As we found out one year when we didn't send the kids a check on July as we had the previous 3-4 years. DIL called wife and said "Where is it? We have included it in our budget and now we are all messed up because the check didn't come."

Had to hose down my wife after she got off the phone with DIL, to cool her down.
rayvt is offline   Reply With Quote
Old 07-21-2021, 10:07 AM   #44
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 7,497
So far our spending has gone down quite a bit since we retired. We had kids at home then and college expenses. They are employed now and off the payroll. We were pretty time strapped when working, and didn't watch the expenses very closely. Since retiring we have found many ways to live better for less. Some expenses have gone up like our earthquake insurance, but others were much less than we budgeted for like health insurance (ACA), college (tax breaks, financial aid, community college credits, transfer programs, co-op programs, etc.), our mortgage (refinanced twice when rates went down), entertainment (annual passes, free event passes at the library and seat filler memberships) and groceries (mostly just from changing where we shopped and tracking prices better). If I'd known how low we could get our expenses for a better lifestyle, I would have retired another ten years earlier.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 07-21-2021, 10:33 AM   #45
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 4,234
Quote:
Originally Posted by rayvt View Post
[/LIST] As we found out one year when we didn't send the kids a check on July as we had the previous 3-4 years. DIL called wife and said "Where is it? We have included it in our budget and now we are all messed up because the check didn't come."

Had to hose down my wife after she got off the phone with DIL, to cool her down.
That is hard to swallow. I would probably change my strategy of gifting them after that.

This has nothing to do with relatives or with your situation, but I had a female friend who was receiving a fairly expensive gift for her birthday from her male friend every year (around $300?) They were not dating, but I'm sure the guy wanted to date her. But the gifts she received were usually not something she enjoyed (wrong style, wrong colour, whatever.) After several years, she asked him if he could give her a gift certificate from a particular mall instead. The ticker is, he did. I told her I would have cut her off completely if someone said something like that to me.
tmm99 is online now   Reply With Quote
Old 07-21-2021, 10:35 AM   #46
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 4,234
Quote:
Originally Posted by Sunset View Post
There are various issues with gifting money to relatives, it's not all roses and sunshine.
Sometimes it's good, other times it's not.

Some possible issues are:
  • Inspires jealousy in relatives
  • Kills motivation to save/earn/succeed in relatives.
  • The given money is practically thrown away as "easy come easy go".
  • It supports a drug habit
  • The giver ends up with long term cancer treatments and needs the money that is gone.
  • Relatives view the Giver as an open wallet for the asking.
A good list! Gifting needs to be done with care.
tmm99 is online now   Reply With Quote
Old 07-21-2021, 10:38 AM   #47
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 4,234
Quote:
Originally Posted by explanade View Post
I'm coming up on 7 years since FIRE.

My spending rate has been flat. I'm not talking flat percentage, but flat sum.

It's been 6 years for me and my spending rate has been flat (sum-wise) as well despite inflation, except for one year I travelled more. I am planning to increase my spending...
tmm99 is online now   Reply With Quote
Old 07-21-2021, 12:54 PM   #48
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2008
Posts: 5,280
One thing about increasing spending is that I haven't done much to optimize for taxes, like the ROTH conversions.

But the only funds I have which would be eligible for ROTH conversion is my 401k, which is 7-9% of my total assets.

So still worth doing? I guess so before I start making RMDs and paying taxes. But wouldn't those conversions cause a tax hit now, as the theory is to do those conversions before you get SS and take RMDs which will increase your taxable income?
explanade is offline   Reply With Quote
Old 07-21-2021, 01:05 PM   #49
Thinks s/he gets paid by the post
Out-to-Lunch's Avatar
 
Join Date: Jan 2020
Location: Milwaukee
Posts: 1,285
Quote:
Originally Posted by explanade View Post
One thing about increasing spending is that I haven't done much to optimize for taxes, like the ROTH conversions.

But the only funds I have which would be eligible for ROTH conversion is my 401k, which is 7-9% of my total assets.

So still worth doing? I guess so before I start making RMDs and paying taxes. But wouldn't those conversions cause a tax hit now, as the theory is to do those conversions before you get SS and take RMDs which will increase your taxable income?
I don't think the decision depends on the fact that your tax-deferred accounts are a small portion of your assets. I think it only rationally depends on whether the RMDs will bump your effective tax rate up significantly over what it is now.

Having said that, if you have ~100x expenses, I am not sure I would worry too much about optimizing!
__________________
The closing years of life are like the end of a masquerade party, when the masks are dropped. -Arthur Schopenhauer, philosopher (1788-1860)
Out-to-Lunch is offline   Reply With Quote
Old 07-21-2021, 01:37 PM   #50
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 11,146
Quote:
Originally Posted by explanade View Post
One thing about increasing spending is that I haven't done much to optimize for taxes, like the ROTH conversions.

But the only funds I have which would be eligible for ROTH conversion is my 401k, which is 7-9% of my total assets.

So still worth doing? I guess so before I start making RMDs and paying taxes. But wouldn't those conversions cause a tax hit now, as the theory is to do those conversions before you get SS and take RMDs which will increase your taxable income?
Yes, of course it's a tax hit now to convert now. Is it worth it? Depends on your current tax rate vs. future. Pay those deferred taxes now, or later. Your choice. I would do it, spread over the remaining years until you start SS, assuming your current tax rate is the same or lower than you forecast your future tax rate. You can't spend any of that 401K money until you pay the deferred taxes, either via conversions or withdrawals.
RunningBum is offline   Reply With Quote
Old 07-23-2021, 08:53 PM   #51
Dryer sheet aficionado
 
Join Date: Mar 2012
Posts: 25
Quote:
Originally Posted by explanade View Post
I'm coming up on 7 years since FIRE.

My spending rate has been flat. I'm not talking flat percentage, but flat sum.

Meanwhile the value of assets are up over 80%, not even adding up the money I've withdrawn.

Or more accurately, I've mostly lived off dividends and the savings I had 7 years ago. I've not sold shares other than some minor numbers for tax loss harvesting.

So in the first year, my spending represented maybe 2% of total assets.

In 2020, with reduced spending from the pandemic, spending is less than 1% of asset value at the end of 2020 (market was down a lot around April and May and had gone up a lot by the end of the year).

In 2019, which was my highest spending year since RE (and also the highest spending year ever), it was 1.7% of total asset value at end of 2019.

So at about half way point in 2021, I would be on pace to spend less than 1.2% of my current assets, as of Friday.

In dollar terms, I've been at the same level, give or take maybe $10-15k?


It's not that I'm necessarily trying to LBMY. The first few years were tentative, uncertainty about living only on retirement assets, uncertainly about the market direction, which had already risen a lot in the 5-10 years before I FIRE'd, even accounting for the 2008 Financial Crisis.


But do I need to pick a higher withdrawal rate and stick to it no matter what?

A lot of folks seem to rebalance at the start of the year so they're selling their SWR calculated against their ending asset value at the end of the previous year?

I'm 60 so there would be SS to add to the spending in a couple of years and RMDs in no more than 10 years.
I am pulling just enough to stay in same tax bracket. Part of that is converted to a Roth. The more converted to a Roth the less I have to worry about the RMD down the road.

You still have a few years to convert so that the RMD doesn't bump the tax bracket any higher that necessary.
JeKa is offline   Reply With Quote
Old 07-23-2021, 09:33 PM   #52
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 29,945
Over the past 5 years we’ve consistently upgraded our travel experience each year (better accommodations, better transportation, more custom/private tours, etc.) and so far it’s been well worth it.
__________________
Retired since summer 1999.
audreyh1 is online now   Reply With Quote
Old 07-24-2021, 02:21 AM   #53
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2008
Posts: 5,280
Quote:
Originally Posted by audreyh1 View Post
Over the past 5 years weíve consistently upgraded our travel experience each year (better accommodations, better transportation, more custom/private tours, etc.) and so far itís been well worth it.
I have as well, with greater travel budgets.

This last trip, I used taxis and minimized buses, not just to spend more but avoid being in crowded situations.

Still old habits die hard, I kind of gulped at a Ä60 taxi but kept using them.

Still look at menu prices though spending more on meals isnít that extravagant, though thereís obviously big markup on beer and wine.
explanade is offline   Reply With Quote
Old 07-24-2021, 05:02 AM   #54
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 29,945
Are you flying first class yet?
__________________
Retired since summer 1999.
audreyh1 is online now   Reply With Quote
Old 07-24-2021, 10:46 AM   #55
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2008
Posts: 5,280
Business class. A lot of airlines have gotten rid of FC.

One time I flew it, it wasn't especially memorable.

I got to sit at FC lounge in London and order a custom omelet breakfast.

Bigger pod, further spaced apart from others.
explanade is offline   Reply With Quote
Old 07-24-2021, 01:47 PM   #56
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 29,945
Oops, that’s what I’m meant for international flights - business class.
__________________
Retired since summer 1999.
audreyh1 is online now   Reply With Quote
Old 07-24-2021, 02:10 PM   #57
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2008
Posts: 5,280
Well the little market pullback on Monday didn't last long. Markets more than recovered and now my NW is at an all-time high.

Flying out Monday but that's an award ticket. Then another trip end of August (if they don't shut it down by then).

Maybe one more this year unless travel is shut down again.
explanade is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Flat Rate Program mickeyd Other topics 10 08-19-2010 05:57 PM
Utility Flat Rate mickeyd Other topics 15 08-15-2009 08:44 PM
2008 Actual Spending and 2009 Budgeted Spending dex FIRE and Money 122 03-17-2009 02:49 PM
(Utility) Flat Rate Program mickeyd Other topics 3 08-22-2008 08:03 PM
I yam Cb (pronounced C flat)... Cb Hi, I am... 1 06-25-2002 10:39 AM

» Quick Links

 
All times are GMT -6. The time now is 08:13 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.