Planning to spend more in the go go years?

[FreeBear]

With the market the way it is, I'm selling 2% and putting into the travel fund. That brings me to about 5.5% WR for this year and will fund nice travel for at least 3 years. I'm 66 and DW is 62 an NOW is the time to do it.


I'm sure we will be just fine in our 80's.

I like your thinking! Doing the same thing, rebalancing into cash during the rising equity market to fund vacations over the next two years.

 

[HI Bill]

Beach, read the stories about if you miss or fall behind on properties taxes because you are old and forget they refuse to let you pay penalties and catch up. They are targeting seniors to take their homes by foreclosure. Really horrible true stories.

I read one such story last week. Really sad, but the folks either did not pay property taxes or insurance, over long periods. It’s important to get these things on auto pay before your memory gets too bad. And don’t take out a reverse mortgage at an age where you might outlive the payments.

 

[kcowan]

Beach, read the stories about if you miss or fall behind on properties taxes because you are old and forget they refuse to let you pay penalties and catch up. They are targeting seniors to take their homes by foreclosure. Really horrible true stories.

Situations that cause heartburn

When you own a home, the expenses and maintenance never end. You need to be especially diligent with a reverse mortgage in place. Your loan can come due — meaning you have to repay all the money or risk foreclosure if you don’t keep up your end of the bargain.

Your home serves as collateral for a reverse mortgage, which protects your lender. As a result, your lender wants to make sure the home is worth as much as possible. A leaky roof might not bother you, but rotting boards and mold inside your home could be an issue when the next buyer does an inspection. You also need to keep up with property taxes and HOA dues. Otherwise, you’ll have liens on your property. Lenders even demand that you keep adequate insurance. If your home is damaged or destroyed, it needs to be rebuilt so that it’s worth enough to pay off the loan.

Tip: If you tend to let things slide, find a way to stay on top of the expenses and maintenance items your lender requires. Budget for regular upkeep so you can pay for repairs when needed. Set up automatic electronic bill payments for your insurance premiums and property taxes so you have fewer things to keep track of.

Also some have terms that mandate renewals before the term is up (with much worse terms). Buyer beware!

 

[audreyh1]

With the market the way it is, I'm selling 2% and putting into the travel fund. That brings me to about 5.5% WR for this year and will fund nice travel for at least 3 years. I'm 66 and DW is 62 an NOW is the time to do it.


I'm sure we will be just fine in our 80's.

We did this before retiring.

 

[isisdave]

We retired four years ago at 66/65 and since then have spent, by design, about 40% of the beginning nest egg on travel. It was a little scary, but Firecalc and other models said it would be OK. The relatively good performance of the stock market over the last four years helped too.

DW claimed spousal benefits right away, and in January I started my own retirement benefit at 69.5 years. Plus, in April, we paid off the mortgage on an office we own, so started getting $2000/mo more cashflow from that -- kind of like a 3rd SS check. We still have the house in case of calamity.

We have been go-go-going, traveling 4-7 months each year, mostly to Europe (petsitting!) and will continue this at least a few more years if health continues. Plan B is the RV phase. Plan C is two hydraulic ramjet rocking chairs and a terabit Internet connection.

 

[arch57]

I am really glad to see this thread about spending in the go-go years as many evenings I browse the ER threads and get worried by the really frugal types and wondering if we are doing something out of the ordinary. My DW has been retired 6 years and on July 1st it will mark 4 years for me and man that time has flown by! She's 60 and I will be 62 in November.
Over the past 4 years our average WR has been about 5.6% because we have been very active with home improvements as that is one of our passions. We also own a second home on a small lake in Maine and I just replaced all the windows and sliding doors as well as ditched the crappy hollow doors for solid pine 6-panel doors and retrimmed all the doors and windows in clear pine craftsman style. So we like to spend but also get a good deal and I will do most of the work myself where my skills allow. I a feel blessed to be able to be healthy and have enough energy to work on these projects and this summer replacing all the decking with cedar. So yes we had windows and doors that functioned, the deck is solid but looks like crap so we enjoy spending money we worked hard for and enjoying the pride of remodeling.

I have plenty of friends, neighbors, relatives and even parents to use as spending "models" and have seen them spend less, travel less and just slow down as they reach their mid 70's. They complain about the RMD's and where to park the money so it just accumulates.

So our plan has always been to enjoy the things we like and spend accordingly. That also includes taking SS early (yes I've read all the threads about waiting until 70) but with my pension and our SS in the next 2 years we finally will cover all our "mandatory" expenses and thus leave our nest egg withdrawals for truly discretionary spending. That also will lower the WR to something we control rather that our current situation where my pension covers only 55% of our mandatory spending so we're tapping funds for boring things like property taxes and health insurance.

 

[NorthNola]

Ok, since I sparked this dialog, I will ratchet it up a little and ask where your indulgences are, more specifically where you know there was no way in hell you would have indulged yourself before due to that frugal gene we all have. It will be relative and could be as simple as flying first class. I will start with a recent experience... I have always been a "buy a 2 - 3 yr old used car guy" to minimize the depreciation hit. None the less, I like cars and have justified buying some nicer cars accordingly (currently own a 2015 BMW 650 Grand Coupe I bought 3+ yrs ago... love it!). Nice cars are probably my biggest vice, yet I live significantly below my means. So fast forward to this past 7 days... I am in the BMW dealership shopping for a car for my wife (new X5) with plans to indulge myself in this $80K car. My frugal nature says "don't do it dumb ass!" but my "hey, you deserve this and can easily afford this" side say just do it if you really want it. I will ratchet it up 1 more level... saw the new M850 Coup on the showroom... absolutely beautiful. $125K... I actually thought about it for a minute...

Ok, so where are you just saying WTF, let;'s do it/buy it?!

For me it was upgrading my 2nd home. Took about 40k to upgrade from a 2 bedroom 850 sq ft condo to 3 bedrooms and 2 bath 1150 sq ft with beautiful private outdoor space. Can now invite guests to come visit. Monthly mortgage and hoa fees slightly higher but 6 months in it was totally worth it!

 

[NW-Bound]

I am really glad to see this thread about spending in the go-go years as many evenings I browse the ER threads and get worried by the really frugal types and wondering if we are doing something out of the ordinary...

I often talk about frugality here, but also mentioned that I splurged for a 2nd home that cost the same or perhaps more than my primary home 15 years ago, when I was much younger and had 1/2 the money I do now. I was still working part-time then, so that helped. It was great to have that when my son was young and I taught him to ride a dirtbike. Together, we spent many weekends exploring the trails of the surrounding National Forest. My son just turned 30, and if I bought the high-country home now it would not have the same value.

So, I am done with splurging now, having done my share earlier. But people who are LBYM most of their life should let loose the purse string now. Never mind the frugal talk here.

 

[W2R]

I often talk about frugality here, but also mentioned that I splurged for a 2nd home that cost the same or perhaps more than my primary home 15 years ago, when I was much younger and had 1/2 the money I do now. I was still working part-time then, so that helped. It was great to have that when my son was young and I taught him to ride a dirtbike. Together, we spent many weekends exploring the trails of the surrounding National Forest. My son just turned 30, and if I bought the high-country home now it would not have the same value.

So, I am done with splurging now, having done my share earlier. But people who are LBYM most of their life should let loose the purse string now. Never mind the frugal talk here.

+1 I agree so much, especially for those of us who are older than 50 or 60. The extremely young retirees are probably better served by being frugal for a few more years, just in case.

I am so glad that I bought my dream home in cash, exactly four years ago today. My quality of life has been phenomenal ever since, due to suspending LBYM in order to make that large cash purchase.

 

[NW-Bound]

And it was while driving to/fro the 2nd home in the high-country boondocks, and passing by a small town with an RV dealer by the highway that I had the idea of buying an RV.

That was 5 years after buying the 2nd home. I knew nothing about RV'ing until then, hence had to spend a lot of time researching what the black and gray tanks were about. That second-hand class C allowed me to go to corners of North America that I would not visit otherwise. It's been 10 years, and I still have it.

Six years ago, I had a health scare that could have been the end of me. Modern medicine saved me, at the cost of $200k (mostly paid by my insurance, except for my $30K deductible). I was telling myself then that if it was time for me to go, I was still more fortunate than many people. No regrets.

 

[Dtail]

+1 I agree so much, especially for those of us who are older than 50 or 60. The extremely young retirees are probably better served by being frugal for a few more years, just in case.

I am so glad that I bought my dream home in cash, exactly four years ago today. My quality of life has been phenomenal ever since, due to suspending LBYM in order to make that large cash purchase.

I think there is still a decent amount of LBYM blood in you, but you appear to be very happy and living your life the way you want.

 

[NW-Bound]

It's all about happiness, and some people can get theirs cheaper than others.

I am getting to be a better bargainer with myself all the time.

 

[ychuck46]

Not a conscious decision

We are both 65 now and seem to be traveling quite a bit. Not making a conscious effort to spend more now or anything, particularly since we are only touching about 2.5% of our assets per year. That still allows us to travel 4-5 months out of the year since we set ourselves up with a lot of timeshare points over the years. Life ain't too bad.

 

[Bir48die]

I do access my portfolio balance and it does scare me a bit to push the 5% WR. I do know this year of travel is one that won’t be matched in a number of years. In addition we have put some money into improvements of which much is sweat equity. I am of the thought that “do them while you’re financially able”. At some point in 4-5 years we’ll splurge for a travel trailer instead of climbing in and out of a camper at 70+ years and that will be our second home as they say.

 

[NW-Bound]

... I am of the thought that “do them while you’re financially able”...

I am already thinking about the physical ability...

 

[Karl]

I retired in 2011. DW in 2014. She is 63 and I am 65. Both in good health. We have traveled extensively since 2015. WR has averaged 7% the last 4 years - that included replacing 2 10+ year old cars with newer used cars. This year I am on medicare and DW filed for SS – that will add 14k to the bottom line. Next year DW goes on medicare and I will file on her SS – adding another 14k to the bottom line. WR in 2020 should be 3%. In 2024 I file on my SS at 70. Income won’t be a problem then – not sure what we will do with RMD $.
3 of our 4 parents died by 75. We decided to spend on what we wanted (mainly travel) while we could. Do not want any regrets. We are going to kick up dust until we are dust.

 

[LRDave]

We are 61 and 59. This 1st year, we are playing our cards "close to the vest" - being frugal and no big travel. This works out for us, as we have tons of "sweat equity" things to do at our forever home. Also, we have an older dog that needs our care.

DW starts her pension in August 2020 and I can start SS in May 2020. This will cover our nut. I plan on making the the 4 years after that a running party of travel.