More frugal now that you are retired?

[traineeinvestor]

A little bit, but this was planned and isn't really necessary:

• We cut from our usual three holidays a year to two for 2013 and may or may not do the same this year.
• My term life policy was cancelled.
• I'm spending less on lunches and snacks from places near the office.
• I tend to uses buses instead of taxis because I now have the time.
• Our home redecoration project was deferred for another year.

 

[mickeyd]

Are you more frugal than when you were wo*king?

We are definitely LESS frugal than when we were wo*king~ mortgage paid off, no car payments, kids no longer @ home, lots of guaranteed income stream cash (SS/pensions), untapped passive investments, expenses less than income, future SS income will increase about 500% in November.

All of these goodies are now available because we were MORE frugal when we were wo*king.

 

[Koolau]

We are definitely LESS frugal than when we were wo*king~ mortgage paid off, no car payments, kids no longer @ home, lots of guaranteed income stream cash (SS/pensions), untapped passive investments, expenses less than income, future SS income will increase about 500% in November.

All of these goodies are now available because we were MORE frugal when we were wo*king.

Pretty much same for us as far as why we "used to be" frugal.

Now, one could say we are MUCH LESS frugal - or probably more accurately, we spend a lot more money now that we are retired. We still very carefully evaluate all expenses to insure that they give us the value/pleasure we are paying for.

The single biggest expense (compared to our old life) is housing. Decent housing easily costs 4 times as much here as our old life (either purchase price plus maintenance or rental costs, which ever way one chooses to live in Paradise). Most other consumer goods cost 1/3 more simply due to their being shipped 2500 miles or more to get here. So, living about the "same" as before costs considerably more. That probably qualifies us as no longer frugal. Still, it was in the plan and we are working the plan and the plan is working (so far). If the time comes that the plan no longer works, we believe we can use a back-up plan (as simple as moving back to the old life is the "default" back up.) No plans for that at this time. YMMV

 

[martyp]

I am somewhat more frugal than before in the sense that before ER I spent what I wanted vs now I am more conscious of having a budget. The first year was just trying to live on a budget for the first time to see what it was like. It turned out to be no problem at all and in fact is somewhat liberating.

 

[Ozstache]

Only 3 months in here, so still a noob. I'm currently more frugal than prior to retiring, for many of the reasons already stated: more time to find good deals, fear of my money not lasting 45+ years, frugality so ingrained it is hard not to be.

On this last point, we just recently increased our spending budget by about 37% as we realised we had been far more frugal than required last year with our ER test run budget. Nearly a month into it, we are still tracking to the old, much lower, budget and are having to dream up ways to spend more money without considering it wasteful, and it is hard! We've an OS holiday coming up next month where we will get some higher expense runs on the board, so I'll see how I go then.

 

[Birchwood]

More or less the same. I have been living with a budget, no matter how much I earned. The transition to ret. means that we expect to have the same budget. We wonder that perhaps, should loosen the purse string at some point. Some big travels, and perhaps to replace the car and truck.
The frugal habit remains for most part the same.

 

[Bestwifeever]

Good thread. We went super frugal in late 2007, about a year before we retired. We played the "how low can you go" game in terms of a budget (we did not track our expenses otherwise, I admit). Once we figured out that bare bones level, and yes pb&j sandwiches were involved, we knew we could ratchet things up (we were not going to be happy if we had to live at that bare bones level). But most of our previous spending had involved our kids, who by then were on their own, so we really did not know how to spend money on ourselves.

Six years later we are moving to less frugal as quickly as possible.

 

[NW-Bound]

Speaking of splurging, other than travel, I do not really know what to spend a lot of money on. I am indifferent to fancy cars, and electronic toys. I may spend some money on home remodeling, but do not look forward to the hassle of it. Even with travel, I would have to space it out even if I had more money, or it becomes a chore. And I can only eat and drink so much.

Still like to have more money though. Just counting it (with Quicken) is a pleasure, though I am not stingy to the point of not giving large gifts and charity donations.

 

[Gumby]

Pretty much same for us as far as why we "used to be" frugal.

Now, one could say we are MUCH LESS frugal - or probably more accurately, we spend a lot more money now that we are retired. We still very carefully evaluate all expenses to insure that they give us the value/pleasure we are paying for.

Our plan has always been to spend substantially more in retirement (starting in a little over 4 years) than we do now. The primary driver will be travel, since we'll have much more time to do it. But, like you, we didn't get here by being stupid with our money, so we won't be wasteful.

 

[misty57]

I really had to think about the answer to the OP's question. DH has been retired for less than a year. We had been fairly frugal throughout his working years, FIRE being our main goal. I learned how to shop smart so that we could save more.

We still shop smart (no reason not to), but since there is no longer the need to save for FIRE, we spend more freely than we did before - lobster from Costco, eating out when we feel like it, airline tickets for a long weekend stay, etc. DH does receive a non-COLAd pension that, although substantially less than what he brought home when working, still feels like earned income. I think I'd be hesitant to spend so freely if there was no pension that covers most of our everyday expenses.

 

[Khan]

I was very frugal before and after retiring. I wondered what to do with my extra money, then started giving it away. 2013 was over the top with air travel and upgrading my future home. Expenses should decline much once I am part of one household.

 

[scrabbler1]

One condition of my ER was that my day-to-day lifestyle would be no different than it was when I was working, even working part-time. So I can't say I became more frugal after I retired. I have tweaked my budget at the margins over the last 5 years but nothig big. In fact, it is likely I would have those changes even had I still been working.

 

[SJ1_]

I am not retired yet, but if I had no earned income and if I had to rely solely on my saved money (plus SS at some point, but with no huge pension that could replace say 80% of my current expenses), I would be.

Are you more frugal than when you were wo*king? Or since you have a budget, you look at yhour withdrawn money like a paycheck and spend it the same way as before (although you don't need to save anything from it anymore..)?

Just curious.

Our daily living budget has been the same for years.
Our vacation budget has gone up a lot.

 

[mpeirce]

Our daily living budget has been the same for years.
Our vacation budget has gone up a lot.

Same here. Our daily living expenses haven't changed one bit (we both worked at home so no commute or business attire costs that went away).

We travel a whole lot more - who had the time before!

(For us there are no more "vacations", just travel)

 

[sanfanciscotreat]

I kept track of our expenses for four years before retiring four years ago (eight years of records as of now). No real increase in expenses except for inflation. We spent less than half of our gross income, not including bonuses and stock options which went directly into the retirement fund. Now spending less than 1.5% of investable NW. We plan to increase our expenditures by moving from the Gulf Coast to the mountains of Western NC, resulting in an average of 10 degress temperature reduction yearround. Yes, there will be higher expenses for heating and some other items, but the results will be well worthwhile. Also can indulge in more canoeing/kayaking/fly fishing than I can now. We decided to move now so that we can enjoy the outdoors while we can still get around well physically; that may not be the case in ten years.

 

[audreyh1]

No.

I finally had time to spend more.

 

[Rustic23]

As I said in an earlier post we are spending more. I thought about this and there are some reasons.

Savings, pensions, and SS replaced about 75% of our pretax income in retirement. However when you take out taxes, both higher income tax, and SS, medical cost, (medicare is cheaper) and you begin to compare disposable income the number is closer to 90%. Then when you take into consideration we are no longer savings for retirement, along with the cost to work, i.e. lunches, transportation, cleaning bill, etc. the bottom line we have considerably more disposable income, and we have begun to spend it!

 

[NW-Bound]

Spend, spend, spend...

Better do it now when the money still brings some pleasures, before old age creeps up on you if it has not done so already. Lurking around the corner are illnesses, physical limitations if not disabilities, diet restrictions, etc... Let's party!

If I were not so lazy, I would spend the time to figure out our SS, then to adjust my WR upwards from 3.5% to spend more on travel.

 

[Major Tom]

Frugal does not accurately describe my spending patterns in the year or so immediately following my cessation of work - "moderate tightwad" would be a better description. I came into ESR via a lay-off and am living on a lower stash than I was aiming for. However, my desire to seek more work was shaky at best, so I decided to see if I could make a go of it on my modest portfolio.

My penny-pinching ways would even have me declining social invites because they entailed a $10 door fee, or would require me to spend $10-15 on food and drinks. This was not as bad as it sounded because, truth be told, it was a good excuse for my INTJ personality to avoid going to things I didn't really want to attend anyway.

After a year or two of being a major Scrooge, two things happened -

1) I realized I could ease up a bit and occasionally spend on frivolous things, and
2) I also discovered (at no great surprise) that living on less than I had previously was actually quite pleasant. My transportation and food costs were lower in ESR than when I had been working, and I hadn't exactly been breaking the bank then either.

With the exception of a very minor part-time gig (which probably involves no more than a few days work a year), I stopped working almost 5 years ago, and have been withdrawing the same amount from the portfolio for almost 3 years now (no cost of living increases in the withdrawals so far). The plan is to continue to withdraw the same amount for as long as I can (within reason) in the hope that I can increase the withdrawals quite substantially later on. Given that my current WR is ~2.5% of the portfolio starting value (~2.1% of the current value), and also considering that a moderate amount of SS will feature in my future, I think there will be more spending money available at some point

 

[Major Tom]

Better do it now when the money still brings some pleasures, before old age creeps up on you if it has not done so already. Lurking around the corner are illnesses, physical limitations if not disabilities, diet restrictions, etc... Let's party!.

Well, what an optimistic start to the week

However, these things do have to be considered. At the age of 50, I already have early onset arthritis in both knees which threatens to slow me down later on. I want to wait a few more years before beginning the big full-term RV'ing adventure but at the same time, don't want to wait too late in case the old legs make ambulation a lot harder.

Our bodies can be a bit of a PITA, but we have to deal with what we've got!

 

[NW-Bound]

Eh, nobody ever accuses me of being optimistic.

And I have been disappointed a few times. I have always chuckled when reading about people's plan to live to 100. The fully ambulatory 90 year old ones you see at the airport, surely who would not want to be like that. But I have seen the 70-year old in really bad shape in nursing homes and hospitals. Those, the public does not see too often, and also not the ones already ended up in urns, or sprinkled around places.

Spend, spend, spend...

 

[Chuckanut]

I did not retire so I could pinch pennies or be profligate.

I figure I have X many years left, and X-n years left where I can still do things like enjoy a good meal without worrying about my health, play with the grand-kids, and take a 5-8 mile day hike in a national park.

Alas, I don't know the value of either X or n. So, if something comes up that requires spending a few dollars or maybe even a small pile of dollars, and it won't cause me to lower my quality of life in the future, I will spend it.

Of course, I still look for a deal where I can get it.

Oh, I do seriously think about the things I spend money on. Fewer bright, fancy things, more experiences is the direction I am leaning.

 

[NW-Bound]

Speaking of RVs, I have noticed more used RVs being offered now, and at better prices than 2 or 3 years ago. I suspect that with the booming economy, more people are upgrading to newer ones, hence the better availability in the used market.

 

[REWahoo]

Speaking of RVs, I have noticed more used RVs being offered now, and at better prices than 2 or 3 years ago. I suspect that with the booming economy, more people are upgrading to newer ones, hence the better availability in the used market.

I think another reason is the manufacture of RV's came to a literal standstill in 2009/2010, reducing the number of used units on the market the past couple of years. RV production rebounded nicely in 2012/2013, which helped ease the pricing pressure.

 

[Walt34]

I think another reason is the manufacture of RV's came to a literal standstill in 2009/2010, reducing the number of used units on the market the past couple of years. RV production rebounded nicely in 2012/2013, which helped ease the pricing pressure.

You're probably right. When I was looking into a travel trailer (never could convince DW) one dealer flat-out told me he was just trying to stay in business and while he couldn't take a loss on it he wouldn't make anything either.