Loosening purse strings before retiring?

[silvor]

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.

 

[freedomatlast]

Well, like you said, your job could end tomorrow, but on the other hand, your life could end tomorrow, and would you want to spend that day working?

 

[Aerides]

If your nest egg/expenses allow you to spend more, without impacting your calculations, go for it.

It's a hard question to answer without actual numbers.

And while you could drop dead tomorrow, I hate that excuse for ER. You could live to be 100 as well, and don't want to be a destitute healthy 72 year old forced to go back to work either.

So, if the numbers say you can spend, have a mosey on other to the Blow That Dough thread!

 

[brett]

We were the opposite.

Our retirement plan included a significant downsize followed by an extended period of travel.

The last thing we wanted to do was put money into a home we were selling or acquire more 'things'.

 

[Out-to-Lunch]

I did a little bit of coasting before retiring.

 

[HawkeyeNFO]

What did Robbie do?

 

[pacergal]

If you are very sure of your numbers and have answered all the usual questions for your planned retirement (budget, cost of healthcare, home maintenance, replacement cost for cars, etc.), then I don't see why you couldn't "loosen the purse strings" as you say.

It's important to save for the future, but it's just as important to enjoy your life now, too. So if you want to travel more or whatever, go ahead.
We had a bit more freedom as we got closer, due to kids moving out and off the payroll. So we were able to up our travel, replace furniture, etc. before retirement. It didn't break the bank.

 

[pb4uski]

.... I'm interested to hear your thoughts.

We loosened the purse strings recently, but after 10 years of retirement. With 10 years under our belt and the same amount as we retired with despite 10 years of withdrawals for spending, a condo purchase, two car purchases, etc I'm increasingly comfortable that we have plenty so we spend more freely.

Mostly little things... like a sattelite radio subscription for traveling that we have never done before, more streaming services than we have ever had, less price sensitivity while dining out, etc. Not anything crazy though... I'm guessing a few grand a year at the most.

 

[donheff]

I would grab the match as long as I worked.

We are like pb4uski, 15 years in we are loosening up. I just booked a trip to Antarctica next February. Grand Canyon rafting is coming up in 6 weeks.

 

[Willers]

We did. DW retired before I did. We had enough, but I still liked my work at that point. We decided to stop setting aside additional dollars beyond the deductible limits (nothing more to taxable) and spend a bit more.

It actually made the decision easier for me when my awful new boss took over since I was spending more on fun activities and found they made me much happier than work did (imagine that). The additional spend on hobbies and travel also helped me determine what I was "retiring to".

I highly recommend this for anyone who has enough but still enjoys their work enough to stay on.

 

[Bamaman]

Before retirement, we had a number of assets that were aging.

With the high costs of cars today, we staggered out our autos to where we didn't need to purchase two cars at the same time. We're now going down in car prices--going from a Lexus to a Toyota, for example. Where new cars presently cost $46K average, we're buying $32K vehicles.

We also had a travel trailer kept in storage in the Blue Ridge Mountains that was far past its prime @ 20+ years old. We replaced it with a new fifth wheel trailer.

And our old 24' boat was 28 years old and the engine was just about worn our. We replaced it with a new boat--and it's kept inside a boathouse at our lake house across town.

Now we're good for another 20+ years, and at that point we won't replace any such assets. The kids can take it from there.

 

[Chuckanut]

I would recommend looseing the purse strings if you can.

I have been retired for about 10 years. Those 10 years have taken a bit of a toll on what I can and can't do. Then Covid came along and shut down to add insult to injury. Thankfully, my overall health is still good. The few maladies I have may alter my choices, but I still have plenty of choices. IMHO, the cartoon below is spot-on.

 

[monte1022]

We are considering the same thing. The numbers say we are ok end of 22, but I am strongly considering OMY for some special projects. DW will exit 12/22 and my schedule is every other week. Add in PTO and I'm off 32wks while still earning a check, vacationing lots more, and paying for some extras guilt free. Is that what you mean by "loosening the purse strings"?

All of this could change if Covid re-emerges with a vengeance, parents health deteriorates faster, or if the general unhappy feeling comes back regarding w*rk.

 

[brett]

Like others, we are letting go of the purse strings after 10 years of retirement.

Ten years of asset growth w/ low inflation has greatly enhanced our financials. We have more than we will every need.

Now it is time for us to send some of it our children's way so that they can enjoy now when they could use it.

 

[Phroig]

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.

 

[Romer]

I spent a lot in the years leading up to retirement. I made the mods to my house (Extra Garage, Solar) I wanted. We travled a lot and I bought the toys I wanted (New Land Cruiser, Camper from Australia, etc) and bought things I wanted mostly when I wanted. I saw none of that would impact my ability to retire. My wife thought I was spending too much, but didnt push it since I always showed her before a Purchase the impact of that purchase on our finances which did not impact our goals.

I have been retired for 6 weeks now and don't regret it one bit. I know, 6 weeks isn't a long time, but I don't expect that to change.

 

[NomDeER]

I think it really depends on the particulars of your situation. Is there something in particular you want to spend money on or are you just thinking that you can afford to spend, so why not? I was willing to spend more in the few years prior to retirement, but did not spend a lot more, largely because there wasn't anything I really wanted to spend money on.

Also, how important is it to you to have extra padding just in case the market crashes, inflation skyrockets more, you lose your job, or you have unexpected costs? Some people do not stress a lot about those things and others do. How much stress you have will impact the quality of your life and your health. I recently retired, and having an extra cushion has helped me not to worry about what is happening with the market or inflation. Others wouldn't worry anyway.

I think there is a healthy balance. Some people spend money they can't afford to spend or spend money on things that aren't even very important to them. Others just can't bring themselves to spend money even when they can afford to do so and there are things they would like to have or do that would make them happier. They think that the time to enjoy themselves is retirement. The sweet spot is somewhere in between and will depend on the person.

One more point. You say you are maxing out your retirement accounts and are 51 and could retire. Are you also investing outside your retirement accounts so that you have access to funds (without penalties) if you retire soon?

 

[silvor]

I think it really depends on the particulars of your situation. Is there something in particular you want to spend money on or are you just thinking that you can afford to spend, so why not? I was willing to spend more in the few years prior to retirement, but did not spend a lot more, largely because there wasn't anything I really wanted to spend money on.

Also, how important is it to you to have extra padding just in case the market crashes, inflation skyrockets more, you lose your job, or you have unexpected costs? Some people do not stress a lot about those things and others do. How much stress you have will impact the quality of your life and your health. I recently retired, and having an extra cushion has helped me not to worry about what is happening with the market or inflation. Others wouldn't worry anyway.

I think there is a healthy balance. Some people spend money they can't afford to spend or spend money on things that aren't even very important to them. Others just can't bring themselves to spend money even when they can afford to do so and there are things they would like to have or do that would make them happier. They think that the time to enjoy themselves is retirement. The sweet spot is somewhere in between and will depend on the person.

One more point. You say you are maxing out your retirement accounts and are 51 and could retire. Are you also investing outside your retirement accounts so that you have access to funds (without penalties) if you retire soon?

U
Yes. About half my money is in non qualified accounts.

 

[qwerty3656]

How have people dealt with "frivolous" purchases that their spouses are not on board with? I'm looking for a painless way to deal with my wife and I wanting to spend money on different things. Obviously, we could negotiate each purchase, but I'm thinking something like we each get [$x] a year that we can spend on what ever we want.

 

[W2R]

How have people dealt with "frivolous" purchases that their spouses are not on board with? I'm looking for a painless way to deal with my wife and I wanting to spend money on different things. Obviously, we could negotiate each purchase, but I'm thinking something like we each get [$x] a year that we can spend on what ever we want.

Frank and I are not married after 22 years together. We live next door to each other and do not mix our money at all. He pays for his stuff, and I pay for mine. When he buys something I feel is frivolous, it doesn't bother me because it's not my money (and vice versa when I do the same). He might express some buyer's remorse, and when he does, I sympathize. Or if it's me buying something frivolous and regretting it, he does the same. And then life goes on.

I don't know how to deal with that problem with a spouse. Never figured it out when I was married to my late ex. Maybe your idea of giving both of you an allowance to spend however you want, would work. Might be worth a try.

 

[Aerides]

How have people dealt with "frivolous" purchases that their spouses are not on board with? I'm looking for a painless way to deal with my wife and I wanting to spend money on different things. Obviously, we could negotiate each purchase, but I'm thinking something like we each get [$x] a year that we can spend on what ever we want.

I think those sorts of things work themselves out pretty early in a relationship/marriage, whether one is FI or not. And a good part of that is accepting that the choice of purchase is part of the person you love, even if you think it's stupid.

As long as it's not putting any major dents in your budget, it shouldn't matter if she wants another pair of shoes she might never wear, or he wants a power tool that will probably gather dust.

If the issue is overspending the budget, or taking it up disproportionately where one is spending all the fun money for both, that's a far bigger issue than just "your toy is dumb."

 

[W2R]

As for loosening purse strings before retiring, well, no, I didn't really do that. My retirement date was the day I qualified for retiree health insurance, not the day I had a certain amount saved up. I had enough to retire on a meager budget a couple of years before I retired, but had to wait.

Anyway, I decided that as long as I still had to work, I was going to see how much I could save up and then enjoy spending it after retirement. I haven't actually spent any more but I LOVE having that extra money in my nestegg, just in case. I'm a "worrier" and this gives me lots of peace of mind.

 

[pacergal]

How have people dealt with "frivolous" purchases that their spouses are not on board with? I'm looking for a painless way to deal with my wife and I wanting to spend money on different things. Obviously, we could negotiate each purchase, but I'm thinking something like we each get [$x] a year that we can spend on what ever we want.

Is this a new issue since retirement or something that has been ongoing during your marriage?
If it doesn't affect your budget in the long run, probably best to each have a certain amount you get to spend, no matter what.

DH and I have always had "spending money", we called it. $X each paycheck or each month. We could spend, save, etc for whatever we wanted.
Now, it was never a large amount, a few hundred, not thousands.
Bigger purchases we have always discussed and both agreed on beforehand.

 

[RenoJay]

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.

 

[GenXguy]

I'm OMYing it due to skyrocketing inflation, but I've actually been tightening up the purse strings in recent years leading up to retirement. I'll loosen them AFTER I retire.