Poll:Big Ticket spending

[PatrickA5]

Buy as needed.

Don't really see a reason to withdraw and then save some of the withdrawal. Unless of course we're talking unspent RMDs. I've got another 10 years until RMD time and even then I imagine I'll spend it all.

 

[Car-Guy]

Can't vote since none of the options fit. I buy bigger ticket items (e.g. cars) whenever I want and just pay cash, regardless of other considerations. Life is to short (and getting shorter) to wait anymore.

 

[jollystomper]

D. Include this extra spending in the pre-retirement finances calculation.

+1

I estimated (as best as possible) the big ticket items and factored that into my planning.

Also, in the few years before I retired, I spent money on as many big tickets as possible (e.g. new roof) to minimize having to deal with them during retirement.

 

[karen1972]

D. None of the above, when we bought the new house, I came up with $120k for a down payment and I'll just figure out how to make it up so we don't run out of easily accessed money before 59 1/2. We are still young and have so many options that denying ourselves something at this point seems silly.

My honey will likely take another 6 month consulting gig, a decent reduction in maintenance costs for the next several years as its new construction, and a slight reduction in splurge spending should cover it.

Or I could stop doing the ROTH conversions and the savings with the ACA credit and lower taxes would make up a good portion of it too.

Lots of ways to slice the pie once you are truly FI and the budget already accounts for your needs and wants. I figure 50% needs, 50% wants. Unless there is something catastrophic, not really sure what else I would be spending north of $50k on.

and of course that $120k is already made up in the last 6 months of market gains (well up until this last month).. but easy come/easy go, whether stock market or spending, $50k up/down is so easy to vary in a single month.

 

[skipro33]

I do not deny myself or DW what ever it is that we desire. The discipline to not desire what we can not afford was developed over a life time of saving and managing a household budget. I don't buy an exotic car, for example, because I do not desire an exotic car. I suppose I could afford one if I did though.

When I do find myself wanting something, I do my homework and find what is the best deal at the time or may wait for a good deal. Right now, I want to upgrade my TV and I want a BIG screen. At minimum 75". I'm eyeing the new LG OLED 77". The technology is very pricey but I really don't care. I do, though, enjoy finding the bargains and rewarding a business that works to get my business by enticing me through pricing, customer service or other means.

 

[Floridatennisplayer]

Can't vote since none of the options fit. I buy bigger ticket items (e.g. cars) whenever I want and just pay cash, regardless of other considerations. Life is to short (and getting shorter) to wait anymore.

Me too. I purchased a new Mercedes with cash in April for just north of $66K.

A simple analysis was all that was necessary:
Will this purchase negatively effect my retirement in any way? Of course not.

So I bought it. No agonizing. No spread sheets. No money replacement schedule system. No reason to over complicate.

 

[Eucerin]

We have few Wants in life. In terms of Need, besides house and car maintenance and daily living necessities, not sure what else we need.

That being said, we just took a two weeks vacation in Hawaii, one week was at the resort, and the 2nd week was proud of America cruise, which total cost was 12k.
Not sure if this was Want or Need, but a relative invited us and the cost is in the budget, so we went

We had a such wonderful time together and we are planning on a 2 weeks cruise for next year

 

[Eucerin]

We both retired early and live off the dividends/interest and savings, I would say that D is more close to us

 

[brett]

We would just spend the money. Why wait, we could be dead next year.

We do no budget for large expenses, we do not deprive ourselves, nor would we wait for the market.

In fact, depending on the purchase, a poor market, down economy may be exactly the time to purchase a large ticket item. Opportunity knocks!

 

[targatom2019]

I bought two expensive toys last year while I still had a job. I retired last couple weeks and no way I could pull the trigger on those toys now with no W-2 income.

 

[38Chevy454]

Can't vote since none of the options fit. I buy bigger ticket items (e.g. cars) whenever I want and just pay cash, regardless of other considerations. Life is to short (and getting shorter) to wait anymore.

Same for me. I would be option D if it existed. I will admit psychologically it is a lot easier to pull money out when the retirement savings account balances are up. But that does not stop a purchase if that is what we decide to do.

 

[ShokWaveRider]

I did not vote as there was no appropriate category. We buy high ticket items as we do any other item, as needed or wanted. We do discuss them at nauseum before we pull the trigger(s). But we do not save or even budget for them anymore.

 

[EastWest Gal]

I answered with the majority, but I've only been retired three months, so who knows? I'll replace a car when it dies-I had to do that in 2009 and we bought 2 cars that year (one new, one used). If the roof leaks and needs replacing, that is not something one should put off.

Per I-ORP and FireCalc I have about 40% more than I normally spend annually available to me for such items. So I will withdraw as I need. I'm only dealing with after tax funds for the next 10 years anyway. So, I'm not planning. And that's kind of nice.

 

[NW-Bound]

Does the answer not depend on the definition of "big"? Or is it "BIG"?

If it is $20-30K, I buy if I need it.

If it is $100K or more, I think I would have a tough time pulling the trigger in a bear market, although what's $100K more when I lost many times that in a matter of weeks?

All hypothetical, as I have not spent $100K+ in one shot in a long long time.


PS. Nor do I routinely spend $20K-30K in one shot every few months. That would add up to real money fast.

 

[RobbieB]

The only time I spent a hundred grand is when I bought the house. And most of that was not my dough.

 

[iloveyoga]

I just buy the stuff as needed

This is what we do.

 

[audreyh1]

I'm wondering how FIRE folks (those who are retired) think about "big ticket" expenses like new cars, home improvements, and perhaps new RV's (if you're into that lifestyle). i.e. things that cost upwards of $50K and come every 5-10 years. Do you...

A. Deprive yourself of these things for the rest of your life, or
B. Allow them only if your portfolio is beating expectations, or
C. Set aside a certain amount of your SWR to "save up" for them

Putting it another way, is retirement living a constant struggle to stay within budget and say no to anything that doesn't fit?

We have recently encountered a slightly different twist on this situation.

What if you want to occasionally make a substantial gift before croaking. How do you account for it?

We have recently had a situation where one of three siblings really could use a substantially larger than usual gift due to their housing situation. It would essentially be an advance on their inheritance.

We've discussed this and I feel strongly that I'm very happy to make this as a one-off type gift, but that if we do so I also want to match the gift to the other siblings. Suddenly we are talking a far larger amount.

Normally our short-term funds, which naturally build up during good market years as we routinely underspend our annual withdrawal, would be what we tap into for a large item. But this is going to be very large, and we don't want to deplete most of our short-term accounts as we like having some excess as a cushion.

We plan to do a combination of C. take from short-term savings and E. pull from retirement portfolio which reduces future income.

Naturally, in the future when we withdraw our annual income, it will be slightly reduced because we shrunk our portfolio a bit.