Loosening purse strings before retiring?

[tmm99]

I had to loosen up a bit at the beginning of my retirement as I was moving from one country to another, but after that, I tightened up as I was a bit worried about how things would go, but after about a year, I realized that I was in a pretty good shape, so I started spending a little more. And last year (five years after I retired), I spent more money than any other year since my retirement as my nest egg is bigger...

I'm sure you'll find a good balance, looking at your asset and your spending, etc.

I have been spending more in retirement than when I was wo*king as I no longer need to save for retirement.

 

[Aiming_4_55]

I was planning for FIRE at age 55, but hit my number plus 25%. I've started to loosen the purse strings at about age 50. My extra spend is not on everyday expense so that stays constant, but more on the special vacation, extra trip or convenience spending so I enjoy my personal time more. I turn 53 this year and just coasting, I wish I could spend my entire income to enjoy myself, but it would be strange for me.

 

[jollystomper]

The main "loosen the purse strings" actions we took before I retired were home improvements. We figured why not spend on these large one time expenses, while I was still working, that we can enjoy for the long term. We still had a good savings rate after the expenditures.

I had a good amount of work travel the years before retiring, and was able to take DW along on several trips to combine work with vacation time. Megacorp paid for my airfare and hotel during the business events, so adding on the additional expenses for DW was not a big deal.

 

[SecondCor521]

I chose to loosen the purse strings before retiring because I was measuring my 25x number based on my current spending and I wanted my retirement spending to be "the normal amount", not "the economizing in order to accelerate FIRE amount".

It turns out I don't really spend much and deliberately trying to spend more stresses me out. And in some areas I enjoy the game of trying to save just for the sake of the game.

Lately I get to play a new game called "how to best handle the excess". Still learning that one.

 

[TheWizard]

I think I lived a balanced life in the decade or two prior to retiring in 2013.
By that, I mean I always did adventurous vacation travel each year, sometimes doing five weeks total of which only four were paid.

I bought new cars every so often, starting in 1975. I would keep them until they pretty much broke down at some point after 100k miles.
Eventually I changed to having two vehicles: a pickup and a convertible. (Still do.)

I increased my 403(b) contributions by a percent or two (of salary) most years until I maxed out for the final decade of work.

I basically figured that my tax-deferred and Roth IRA contributions would pay for retirement, so no need to save additional in a taxable account.
So that's where the money came from for stuff like recreational travel and new vehicles.

As a result, I didn't retire as early as I might have, maybe five years additional employment (wild guess).
But as I said, I think my approach allowed a better balance...

 

[freedom2022]

I plan to retire in a few years.
We have cash at hands. Covid prohibited us to travel since two years ago.
Inflation was going to take off. Stock market was more likely to go down.
So, we decided to spend the money: Jacuzzi hot tub, luxury car, replace flooring etc.
All paid in cash, no debt, no interest payment.

If you have saved enough, you may want to enjoy some of the money now.

 

[googily]

I’m still working (for the health insurance), but I believe I have enough, so my purse strings are looser. For me, this means being less frugal (splurging) while dining out or traveling. I haven’t gone and bought a bunch of expensive toys I don’t need.

Ditto, on all counts.

I am undertaking an upgrade to my house that will cost probably $50k, while I still work 30 hours a week. In my situation, I am far more concerned about dying with too much than too little.

 

[marion10]

We had a few years between getting the kids through college and when we retired. We each had five weeks of vacation and we took some great trips and cruises. I am glad we did- COVID came right after I retired and my husband has develop some health problems.

 

[Delawaredave5]

I've always "spent freely" for my life priorities (kids, education, health, travel, experiences, charity, ice cream).

I've always been "extremely frugal" for everything else I don't care about (materialistic cr*p, clothing, cars, home beautification, "keeping up with neighbors", etc).

I don't see my pursestrings changing - either pre-retirement or retirement.

 

[richardf]

Reasons not to

Has anyone here ever "loosened the purse strings" before you retired?

I'm 51, I COULD retire, but for various reasons I don't want to yet.

I'm still maxing out all my retirement accounts (41k) and getting an extra 9k in matching and pension at work. I am finding it more difficult to justify since it seems like...why? I hit my goal, why not spend a little? But...I've always maxed my accounts and am finding it difficult to change course. Although I think, "my job could end tomorrow", but maybe that's just an excuse.

I'm interested to hear your thoughts.

Health care will eat your lunch, loss of benefits from Social Security. I’m eighty and if had to do over I would go to 70. Just imagine 1st month after you are 70 you get full social security, full pension from work and your regular check if you continue to work.

 

[RxMan]

We’re approximately 5 years from retirement and we just picked up a new Class B RV in January. It’s by far the biggest non-essential purchase we’ve ever made. But we knew we wanted an RV in retirement and we asked ourselves why wait.

Financially it was a horrible decision. But we don’t want to wait until retirement to enjoy ourselves. Going on a long weekend trip to the mountains in GA in a couple of weeks. It will be great to get away.

 

[HI Bill]

Yes, sold a $300K condo, and bought our first-ever house, $1M. Quite the adjustment, especially considering the increased property taxes and operating expenses! Well worth in IMHO, for the two of us!

 

[DrRoy]

Not before RE, but we did after as the market continued to rise and we were overfunded. We have done several remodeling projects on the house, spend lavishly on travel, and bought a $54K new SUV in Dec.

 

[Midpack]

I’d only suggest that all retirees go on their planned retirement spending budget a year to two before pulling the trigger to be sure it’ll work if it’s lower (was in our case). We’re deliberately spending significantly more now after years of great returns, but I’m sure we’ll clamp down when the next real downturn hits. I don’t see any need to up spending before retirement but if you can afford it by all means…

 

[tmitchell]

I OMY’d for a couple years and started thinking of my income as a way to strategically deploy money on things I value but also might have trouble doing in RE. We took two really expensive trips before I pulled the trigger and I put 40k in a DAF that I started deploying this year. I wish I had set aside the cost of a trip to Antarctica as well, so now I’m strategizing how to know that one off the list with a smaller budget.

It’s important to remember you could die before you finally retire, and you have the luxury to enjoy your excess now while you’ve still got teeth. I say go for it.

 

[W2R]

I’d only suggest that all retirees go on their planned retirement spending budget a year to two before pulling the trigger to be sure it’ll work if it’s lower (was in our case). We’re deliberately spending significantly more now after years of great returns, but I’m sure we’ll clamp down when the next real downturn hits. [...]

Excellent advice! I spent less before retirement so I could get used to it, and also save up some money for the future. After the first few years of ER I started spending a little more. Lately I've started paying more attention, and cutting back on some unnecessary discretionary expenses. If the predicted economic downturn hits, the adjustment in lifestyle won't be intolerable.

 

[anothercog]

I’m 50. I’ve been OMY’ing since I joined this board about ten years ago. At this point I don’t think twice about spending but curiously my wants have mostly dissipated. I simply lost most of the desire for stuff.

Ditto. My DW is helping my in-laws purge. They have so much crap. At this point if I’m considering a tangible purchase I’m also considering the burden of getting rid of it.

 

[Figaro]

Definitely started loosening. FIREd in 2021, and unretired 2022.

But on last trip, things that I normally don't spend on, I spent. Like and experience of a mountain coaster, spending on alcohol souvenir, a quick fast food snack of fries from Five Guys, a random soda from the store, and I was even going to splurge on a couple of $15 fancy milkshakes in a mason jar (who the heck am I? Good thing the line was too long to knock me out of that rut- I won't tolerate waiting in queue for that experience! ). It's all pretty spendy pants for someone who was accustomed to just minimal expenses on travel.

When out to eat at a restaurant, I know all prices are much higher than what I'd traditionally be comfortable paying for, but I just roll my eyes now and don't even bother with looking at the pricing. Just whatever looks good. We still cook most meals from home so the restaurant meals are extra special for.us now.

I still haven't gotten myself to pay for premium gas for my premium gas recommended vehicle - I haven't paid for premium grade for 13 years (I still drive that car).

Whenever I'm at Costco...I'm amazed at how nice the Tvs are 4k vs 1080p and 77" vs 46" and for half the price I paid for my last one back in 2008 - still works, and I don't need another TV to sit in front of.

I can afford everything almost but I don't really need to spend it on everything.