More frugal now that you are retired?

[tmm99]

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 Or since you have a budget, you look at yhour withdrawn money like a paycheck and spend it the same way as before (although you don't need to save anything from it anymore..)?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

 

[Katsmeow]

I am definitely more frugal. Basically, I have more time to be frugal than I did when DH and I were both working full-time.

 

[MichaelB]

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 Or since you have a budget, you look at yhour withdrawn money like a paycheck and spend it the same way as before (although you don't need to save anything from it anymore..)?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

Yes. One reason is I now have time to look for lower prices and do some things myself. Another is I no longer have to bribe DW and myself with pricey distractions to compensate for the lack and personal family time. The absence of a paycheck also motivates me to think twice before some spending decisions.

 

[Brett_Cameron]

yes, same reasons as above.

 

[MasterBlaster]

There is lots of empiracle evidence from financial planners and others that their clients spending in real terms declines with age. That is even the case when assets are substantial.

I suspect then, that (with many exceptions) frugality is a natural aging process.

 

[Accidental Retiree]

Yes. One reason is I now have time to look for lower prices and do some things myself. Another is I no longer have to bribe DW and myself with pricey distractions to compensate for the lack and personal family time. The absence of a paycheck also motivates me to think twice before some spending decisions.

Well put . Exactly. Added to that no need for the clothes, shoes, accessories, makeup, precision haircuts required in certain workplaces

Ponytails and jeans, way cheaper.

 

[tmm99]

So would you say that frugality is not out of necessity, and it is not cramping anybody's style? Nobody feels deprived because of this psychological "there is no money coming in" feeling?

 

[Mulligan]

My spending level is relatively the same now. I seem to be be aware of what I spend now, but it hasn't changed a lot. I do have time to jaw down my cable, internet, and insurance bills though. I am conscious to save $1000 out of my monthly pension as my nest egg is not big compared to others. I guess my standard of living has dropped some, as my 8 year old vehicle is now a 12 year old pushing 200k. Though recently encouraged as a person I talked to says his old beater has 300k on it and still going strong.

 

[Animorph]

+1 to the above, except we have always planned to travel quite a bit more now that we have the time and the kids are just about out of the house. So, not really.

 

[MuirWannabe]

Another is I no longer have to bribe DW and myself with pricey distractions to compensate for the lack and personal family time.

Very good point. I am also not yet retired. And I do spend at times based on this motivation exactly. But had not really thought of it before in that way.

 

[Midpack]

We're more frugal for sure, maybe even to a fault. Now that we know how efficient we can be, we've increased our budget to loosen up a bit, but we'll still tracking to the (new) budget. Of course, during the next inevitable market/economic downturn, I suspect we'll tighten up expenses again...

And regardless of what historical probabilities indicate, there are no guarantees and the money has to last 30-40 years, so we're not going to push our luck early on.

 

[Katsmeow]

So would you say that frugality is not out of necessity, and it is not cramping anybody's style? Nobody feels deprived because of this psychological "there is no money coming in" feeling?

I do not feel deprived. Now, it is also true that I do need to make more choices now than I had to make then. Back when DH and I were both working I didn't really have to think much about whether I could afford something. If I wanted a personal trainer I could do it. If I wanted someone to clean my house I could do it. I would eat out whenever I wanted to and never really pay much attention to what it cost (I did track it but it made no real difference to what I chose to do). Now, I could do some of those things. I could even do all of them, but I would need to choose to not do other things. I am quite aware that what we have has to last us forever. So, I do make sure that I stay within the spending amount that will accomplish that. All of that said, that amount is enough that I feel fine about it.

 

[NW-Bound]

My part-time but substantial income only stopped less than 2 years ago. So, I do not know how it really affects my spending yet.

Not having to go to work means less formal wear, and mostly T-shirts and shorts means less expenses, but it is because of changes in needs, not because of frugality. I feel less pressure to keep up with the Jones, because I have less contact with them. On the other hand, I spend more money in the little things that bring me pleasure like food or drink, which is really not that expensive compared to a new car or other big items.

Overall, my expenses have been about the same according to Quicken.

 

[F4mandolin]

Yes. We didn't retire with a ton of money.....if things go well in the next couple of years I might loosen up a bit. Trying to talk myself into the season long golf pass. $1500 but you can play as much as you want....worth it if you play a lot.

 

[jimnjana]

While we are spending more now, we are still frugal. Rather than putting all the "left over" money into savings, we spend it on travel.

 

[Palmtree]

Since you're not having to drive to/from work, buy work clothes and maybe eat out at lunch your expenses will drop once you are officially retired. I think an acceptable rule of thumb is that you can easily retire on 80% of your prior income. Depending on how much you used to put into retirement savings and if you had a mortgage that is now paid off, you could easily retire with 60-70% of you used to make. Make sure to budget in some travel and fun and you're all set.

 

[tmm99]

How about tipping? Do you tip less now? (This may be a strange question, but when I was in college in AZ (This was in the 80's and the average dinner plate at this restaurant cost about $10 then, so in today's dollars around $21) , I waitressed, and many of the snow birds (in their 70's I think) were very poor tippers.

 

[Accidental Retiree]

No, we tip as well as or better than before. We eat out less, appreciate it more, and make it count all the way.

We eat out now for pleasure rather than for expediency, which was the case when we worked.

How about tipping? Do you tip less now? (This may be a strange question, but when I was in college in AZ (This was in the 80's and the average dinner plate at this restaurant cost about $10 then, so in today's dollars around $21) , I waitressed, and many of the snow birds (in their 70's I think) were very poor tippers.

 

[Meadbh]

Since you're not having to drive to/from work, buy work clothes and maybe eat out at lunch your expenses will drop once you are officially retired. I think an acceptable rule of thumb is that you can easily retire on 80% of your prior income. Depending on how much you used to put into retirement savings and if you had a mortgage that is now paid off, you could easily retire with 60-70% of you used to make. Make sure to budget in some travel and fun and you're all set.

I see this is your first post. Welcome to the forum, Palmtree. As you read more of the threads, I think it will become obvious to you that forum members in general like to analyze financial data at nauseam and are way beyond heuristics such as the ones you have mentioned. Expenses in retirement bear no direct relationship to previous income. They do have a foundation in previous expenses. For example, if you are saving 70% of your income while working (as I was) the 80% rule of thumb obviously has no validity. I couldn't spend that much in my wildest dreams.

Please mosey over to the "Hi, I am..." forum to introduce yourself.

 

[bbbamI]

So would you say that frugality is not out of necessity, and it is not cramping anybody's style? Nobody feels deprived because of this psychological "there is no money coming in" feeling?

During the first year of both of us being retired, I was in a semi twist about spending money because there were no more paychecks coming in. Even though I planned retirement for several years and felt confident, it was still a bit frightening.

For example, in 2009 we went to Lowe's to buy a few plants. I was stressing a bit on whether we should buy the $3 plants or $5 plants.

DH said, 'do we really have to watch our spending that closely?'

...after blinking a few times, my answer was 'no.'

After some time went by, I felt more comfortable because our plan was working.

Neither one of us is what I would call frugal, but we do check our budget from time to time. It's really not necessary that I clip coupons...but I still do. Since we have more time to shop for the best price, it's kind of like a game...and as crazy as it sounds, I get the biggest kick out of getting senior citizen's discounts.

There may come a time when we have to cut back a bit if returns diminish...if we do, I don't ever see us feeling deprived.

To me, travelin' the world or sippin' a cold one on my patio feels more than fine....

 

[Sue J]

I've always been a careful spender and conscious saver. DH was quite the spender until he retired. Now he's much more aware of spending and has found that if he learns some frugal habits his retirement is more secure.

 

[bbbamI]

I've always been a careful spender and conscious saver. DH was quite the spender until he retired. Now he's much more aware of spending and has found that if he learns some frugal habits his retirement is more secure.

Oh my gosh....that's our story too.

When I see he's looking for a better deal or decides not to buy something, I say, 'Who are you...what have you done with my husband?!'

 

[Katsmeow]

I see this is your first post. Welcome to the forum, Palmtree. As you read more of the threads, I think it will become obvious to you that forum members in general like to analyze financial data at nauseam and are way beyond heuristics such as the ones you have mentioned. Expenses in retirement bear no direct relationship to previous income. They do have a foundation in previous expenses. For example, if you are saving 70% of your income while working (as I was) the 80% rule of thumb obviously has no validity. I couldn't spend that much in my wildest dreams.

I agree that savings have to be backed out of it. I also think that previous expenses can be a guide to future expenses. But, depending on the situation even those can change markedly in retirement. We are spending about 30% of our pre-retirement income and some of that difference is because our expenses are very different.

Before we were spending about 3 times as much overall on our home. We have downsized to a smaller house (this was a choice we wanted to make), maintenance is less, and taxes are way less.

We don't have as high kid-related expenses as we did at one time. Still high (two in college) but before we had 3 kids at home and had a lot of related expenses.

Of course, we don't have a lot of the work related expenses. Much lower auto costs since not commuting, lower clothing costs, lower dry cleaning costs, etc.

We do more stuff ourselves around the house so no cleaning service and no yard service.

We don't eat out as much. We still eat out a couple of times a week but way less than we did before.

Anyway, the point is that we actually do spend way less than we did before.

 

[rescueme]

More frugal in retirement? Not at all.

We planned to spend 100% of our pre-retirement net income, adjusted for our PROI (Personal Rate of Inflation).

Retired 6+ years for me, 2 for wife and that's exactly what we have done.

In fact, last year was quite a bit more expensive, since we "refreshed" the kitchen (new appliances, counter tops, backsplash, flooring) along with having a whole-house backup generator installed.

Our largest expense (other than last year, for home improvements) was, and remains the same in pre/post retirement, and that is for travel. For a lot of folks who retire - especially in the early years, travel is an added expense. For us (each going on our 3rd passports), it's always been part of our lifestyle, and part of the base budget.

We didn't plan on entering retirement on a shoestring and have been fortunate that our reality has matched our plan.

 

[youbet]

We're definitely less frugal in retirement.

When we were both working and pre- FI, it seemed like we questioned every expenditure, especially discretionary expenditures. After all, those were dollars that could be added to the portfolio bringing us closer to FI! Now, 7+ years into FIRE, we understand our retirement wants and needs, are comfortable with our budget and portfolio survival projections and spending is less likely to be followed by regret or buyer's remorse.

Sure, we still look for good buys and are careful not to waste, but we've got a discretionary budget we're comfortable with and really enjoy the activities that spending those dollars make possible. And without questioning whether we should have or have not spent the dollars so we'd be "closer to goal."

Said another way, pre-FIRE it seemed like no amount of spending was too small, no sacrifice too great if it brought us closer to FI. Frugal, frugal, frugal! As FIRE'd vets, we're now comfortable with our plan and worry more about letting time pass without doing things we enjoy than we are about beating the FIRE financial plan.