Living it up a little before retiring?

[daylatedollarshort]

I think it is okay to spend more on extras when you are working full time. You don't want to live too much for the future.

We have found that without megacorp jobs and hours, we can find lots of ways to live well for less, but that would have been harder to do when we were both commuting and working 40+ hours a week. Then we had more money than time.

 

[robnplunder]

robnplunder, I'm 20 years younger than you (and, coincidentally, about 20 years from being FI), but I absolutely expect to do something like that once my time has come. Once FI, if I don't hate my job by then, maybe I'll just keep working for a while and treat myself to some luxuries I'm currently denying myself. I'm thinking nicer used car, bespoke suit and shirts, hand-made shoes, Brioni ties, big-screen TV, fancy dining, posh travel etc. Stuff I don't really need, and will probably never have the budget for in retirement either, but that I'd like to have tried at least once.
I could of course afford some of it today, but it would severely delay becoming FI, and that's my #1 priority for the next two decades (or however long it will take).
I guess it will depend how much I dread being at work in my 50s. If I feel that I'm wasting my life in the office, I'll walk away with no regrets in my off-the rack shoes and suit, drive my used Toyota to my modest home, and watch a ballgame for free on my old laptop via an Internet streaming site.

It looks like you are very much on your way to FIRE. If this forum existed when I was 30, I would have FIRE'd 5 years ago. At age 30, I didn't have a long term investment strategy with FIRE in mind.

 

[jollystomper]

We have done this a bit, buying or upgrading things that were in good condition but felt like "now that we are FI, let's slightly loosen things". Also, our youngest child college expenses will likely be only 70% of what we had saved, so our "personal account" budget line item a raise from a portion of that. We have also been more generous with charities and event (weddings, graduation) gifts.

We are still LBYM, but at this point we don't think saving/investing 30-35% of our income this year vs 40%+ is going to break us.

 

[2B]

It looks like you are very much on your way to FIRE. If this forum existed when I was 30, I would have FIRE'd 5 years ago. At age 30, I didn't have a long term investment strategy with FIRE in mind.

+1

I got layed off from mega-corp in my early 50s. Up until then I hadn't really given much thought to retirement other than I was saving with that as the ultimate goal. After the layoff I looked diligently for a new position and eventually ended up making about half as much in a job well below my prior level. With lots of free time, I found this forum. I discovered that with my last kid out of college DW and I were FI but at the low end of our desired lifestyle. After 2 years, I moved to a pay level higher than my old position. Now I'm the perennial OMY-er. We've repositioned ourselved for retirement. DW already has but is very busy with other things. I'm "on the edge" with any decision best made right at the beginning of the year (for tax reasons).

 

[RetiredAndFree]

Our before and afters have been very different, much to my surprise. Like the OP, I was concerned that moving onto a rigid budget after FIRE would feel oppressive. To my surprise, it actually feels decadent, even though it's more modest than what we spent pre-retirement.

The reasons are several I think.

1) We enjoyed tons of employment perks, both dining and entertainment, during our working years, and pretty much got it out of our systems. That included lots of fancy foreign travel, orchestra section theater tickets, attending NBA playoffs, the Superbowl, MLB playoffs, NHL playoffs, and pretty nice dining. (I add that not to brag, but to give a basis for where we started.) You know what? I don't miss any of it. In the absence of work related stress, I find I don't need to ratchet up the intensity of our leisure time as an offset. Less stress means we are entertained at a much less intense level these days. So, while we still do all of these things to a degree, we now do them less often, less expensively or differently. Meaning, as an example, we attend college games now, instead of professional games. Just as much fun, but a lot less expensive. The same with dining and entertainment. We do much of it now utilizing discount deals, with one or two yearly splurges rather than a dozen.

2) We now have the time to research how to do everything less expensively.

3) We now have the time to enjoy the many free things there are to do out there.

4) We now have the time to slow down and enjoy everything we do to it's fullest, meaning we no longer try to shove as many things into our day.

It's hard to explain how much changes in that first year, all of it for the better in our case, but I can tell you that concern about finances pretty much fell to the bottom of our list once we passed the one year mark.

 

[SJ1_]

First post here.

I have been saving all my life (51 years and ticking) and want to retire soon (around 55) before I get too old to enjoy retirement. But I am afraid that once I retire, I won't be able to spend money freely even if I have enough. So, while I have a cushy job, I am trying to live it up a little before FIRE. By this, I mean doing things that I would not normally do while I was in "save" mode: dining at top rated restaurants, buying luxury car, playing in fancier golf course, traveling abroad on tour (no backpacking), etc.. Of course, I am doing/will be doing these without reducing my future retirement fund. In fact, I will still be saving but at lesser rate and will retire with $2M in the asset. Has anyone else done this - splurging before retirement b/c once retired, you just can't (or reluctant to do so)? Opinions? Thoughts?

No. Right after I retired a friend wanted to meet me for lunch to discuss
workin$ part time from home. On the way over I keep thinking what would I do with the extra $$. None of these "luxuries" seemed worth it, they
actually seem more like traps. we are very happy with our lifestyle.

 

[RISP]

It looks like you are very much on your way to FIRE. If this forum existed when I was 30, I would have FIRE'd 5 years ago. At age 30, I didn't have a long term investment strategy with FIRE in mind.

Man, I sure hope you are right.

 

[RetiredAndFree]

No. Right after I retired a friend wanted to meet me for lunch to discuss
workin$ part time from home. On the way over I keep thinking what would I do with the extra $$. None of these "luxuries" seemed worth it, they
actually seem more like traps. we are very happy with our lifestyle.

My experience was identical. I got a call about a job a couple of months into retirement, as did my DH, and we quickly came to the same conclusion as you. When we worked, though we didn't really understand it at the time, the quick fix luxuries alleviated the crazy level of stress our jobs created. Without the stress, we no longer 'needed' the luxuries. Quite a revelation.

 

[kaudrey]

Welcome, Robnplunder!

I am 44 and my DH is 39, so we have a bit of time. I won't go into my whole story. But, to us everything is a balance. A few years ago, I realized that the amount we were saving was really quite a bit more than we would need, even in my worst case scenarios. So, I loosened the purse strings a bit.

We have always traveled; I have never NOT traveled due to savings issues. But, we are not extravagent travelers. We go to great places, but on a budget. But in addition to that, we bought a cabin in the woods to use on weekends. It meant another mortgage, and less savings, but we've had it for 3 years now and I don't regret it for a second. It is our oasis while still working.

We go to nice restaurants, but not as much as some of our friends, and we pack our lunches. The list can go on - we enjoy life now, but still set and reach our savings goals, so that we can continue to enjoy it later.

Will I have a problem spending when I am not earning an income? Maybe. I could definitely see it as a big adjustment. But we'll have a budget that will allow for travel and other fun stuff, and if we are sticking to that budget, I think we'll be ok.

 

[robnplunder]

Welcome, Robnplunder!

A few years ago, I realized that the amount we were saving was really quite a bit more than we would need, even in my worst case scenarios. So, I loosened the purse strings a bit.

Thanks, very nice reply.

I have loosened up (or trying) my purse quite a bit but still keeping things in balance (I still pack my lunches, etc). My LBYM habit of 51 years is keeping things well in check.

 

[Live And Learn]

I struggle with this also. Intellectually I understand that its all a matter of timing, but emotiionally I feel its better to spend it while still w*rking, because if its a bad decision or if I end up regretting the spend I can just do OMY to make up for it !

 

[Marc]

I am definitely living it up BEFORE retirement. We have three trips totaling $150K in next 18 months; been saving up for almost a year for them. I have increased my travel budget at expense of additional retirement savings beyond the $43K (including employer match) that I continue to make. I will still make Roth contributions by taking money out of taxable brokerage accounts that are earmarked for retirement.

This travel also defers building up "cash" accounts to a full year's spending in preparation for retirement. So, instead of retiring at 58 it might be 59 or 60 or even longer if I still enjoy work and can travel as I want.

This is a choice we made to "practice" retirement.

Marc

 

[Meadbh]

For me, living it up a little while earning was part of what made the hard work worthwhile. It was great to eat at the best restaurants in major cities, go to the spa, buy designer business wear, etc. These things contributed to good working relationships and getting things done, and made business travel bearable. Without those constraints, the costs of such activities don't seem worth it. In particular, eating out is something I do much more selectively now that I have the time to become a better cook. A social group that I participate in has a regular monthly restaurant visit. I've said no to the next one because the restaurant chosen has bad reviews. I would much rather invite a few friends over for dinner and make a tasty and healthy dish. That, to me, is living it up, these days.

 

[daylatedollarshort]

I would much rather invite a few friends over for dinner and make a tasty and healthy dish. That, to me, is living it up, these days.

It is nice to have more time to cook. I have a French cook book on loan from the library right now.

 

[NW-Bound]

I am definitely living it up BEFORE retirement. We have three trips totaling $150K in next 18 months; been saving up for almost a year for them...

Wow! I remember exchanging posts with you about your nice portfolio return this year. Still, that's a lot of money for some very posh travels, which will take a bit of time off work too.

I would not have the audacity to spend that much on travel unless I were a decamillionaire, and I got the impression from your other posts that you are not either.

Your travel plans will make a good topic for a thread on the travel forum. Hope to read about them there.

 

[seraphim]

In the last few years, we got ready so we could splurge in retirement: bought a new camper, nice canoe, paid off debts...

Now we just load up the bikes and canoe into the camper and go when and where we wish. Just came back from around taladega national forest. Michigan last month and two months in Alaska starting last June. Now we have more time to spend, but the major costs have already been taken care of - while we still worked.

Whatever is best for you.

 

[martyp]

There's nothing wrong with enjoying better things once in awhile, but I don't agree with your rationale on the money.

If you are spending on extras instead of saving, you are reducing your retirement fund. Not a problem, since you plan to save enough for retirement and enjoy the extras, but the fact is that you could either retire a bit earlier, or be able to enjoy some extras in retirement if you weren't spending it now. It's just a choice. Some people would rather take retirement ASAP. I preferred to work a bit longer to put away enough to enjoy some nice things both while working and in retirement, though I don't go overboard.

I have the same kind of reaction when I hear about people who do things like move up putting on a new roof just before retiring, or replacing their car early. There's no difference between spending that money in retirement or while working, except that by deferring it until it is actually needed you put off the next time replacement needs to be done.

Ongoing expenses like fine dining and entertainment actually are a bit different, so maybe it is best to do it now and use retirement as a signal to live with fewer luxuries.

I agree with RunningBum. Spend what you want to spend when you want to spend it but don't think the pre-retirement spending is any different from post-retirement spending.

 

[NW-Bound]

Splurging on luxuries like travel or fine dining will make the work more tolerable and helps keep your sanity while you are waiting for that time to check out.

Spending money on necessities like a new roof or a car that needs replacement also serves as a motivation to stick it out for a few more months to get some extra income. In that sense, it is helpful.

 

[Meadbh]

I am definitely living it up BEFORE retirement. We have three trips totaling $150K in next 18 months; been saving up for almost a year for them. I have increased my travel budget at expense of additional retirement savings beyond the $43K (including employer match) that I continue to make. I will still make Roth contributions by taking money out of taxable brokerage accounts that are earmarked for retirement.

This travel also defers building up "cash" accounts to a full year's spending in preparation for retirement. So, instead of retiring at 58 it might be 59 or 60 or even longer if I still enjoy work and can travel as I want.

This is a choice we made to "practice" retirement.

Marc

I know someone who estimates he spends $40K on each family vacation, so I can envisage how you could get to $150K in three trips, especially if they include 3 month luxury cruises, for example.

Meanwhile, back at the ranch, I am trying hard to stay within the $8K travel budget that I established for 2013. Three trips down, one to go!

 

[martyp]

Splurging on luxuries like travel or fine dining will make the work more tolerable and helps keep your sanity while you are waiting for that time to check out.

This a good point. I discovered that some of my wants disappeared and/or changed after I retired. A lot of the stuff I was doing was to compensate for the stress at work. Once I retired and the stress went away I thought about things differently.

 

[NW-Bound]

When I was still working part-time and my wife was still toiling at her megacorp, for a few consecutive years we had 2 foreign trips and 2 domestic trips a year. I still enjoyed my work and the pay that came with it, but my wife had such tough times at work that she did not have enough travel.

So, despite being a manager and with plenty of work, she managed to offer herself for some reduced work hours, in exchange for less pay of course, to help the group budget. They called it "buying extra vacation". She traveled with some friends without me.

Ever since quitting, she does not have that urge to get out of town anymore.

PS. So, my wife has been to places that I have not been, like Bali, Komodo Island, Kuala Lumpur, Singapore, and some places in Argentina, etc...

 

[robnplunder]

This a good point. I discovered that some of my wants disappeared and/or changed after I retired. A lot of the stuff I was doing was to compensate for the stress at work. Once I retired and the stress went away I thought about things differently.

That is bad. Although my job gives me tons of stress, I'd like to splurge to reward myself for being a die hard LBYMer for life.

 

[Marc]

I know someone who estimates he spends $40K on each family vacation, so I can envisage how you could get to $150K in three trips, especially if they include 3 month luxury cruises, for example.

Meanwhile, back at the ranch, I am trying hard to stay within the $8K travel budget that I established for 2013. Three trips down, one to go!

Almost half of this is for a cruise from Kangerlussuaq Greenland to Nome Alaska through the Northwest Passage; a trip that has been on our bucket list for years. It is way too expensive but would be a big regret if we didn't take advantage of the ice conditions.

After 9-11 we realized life is too short and that although we have always saved for retirement, we need to enjoy every day of life. We found luxury cruising in 2002 and have saved each nickel so we can travel as much as vacation time (and elderly parents) allowed. We have also been lucky to have had two overseas assignments that have also been great for travel. I am afraid when i actually commit to retirement, I might be afraid of spending $50K+ on a single trip, so I am a candidate for OMY.

Marc

 

[robnplunder]

After 9-11 we realized life is too short
Marc

To me, it was after my younger brother's death this year that ingrained this on me. I tried to splurge on him while he was alive, e.g, taking him to fancy golf course (one I would not play if it wasn't for my brother) when he was still able. When he passed away, I decided to splurge a bit when I can. Life is too short, cliche but very true.

 

[RetiredAndFree]

I'm fascinated that so many of us have landed on the same thing in retirement; that is that the luxuries we rewarded ourselves with during our working years quickly lose a good chunk of their appeal when the daily stress of working is removed.

I really thought I'd lament the loss of many of the perks of our job, and we thought we'd continue to travel in the same way post-retirement as we did pre-retirement. No one was more surprised than me when slowing down and touring the USA and Canada with our RV in tow became more alluring than flying or cruising off to another continent. In fact, cruising has pretty much lost all appeal, primarily because of the at-sea days. I needed those at sea days when I was decompressing from work, but now I find them annoying. I want to explore when I leave home, not pay to relax. I'm already relaxed!

It's all just very interesting . . .