Saving too Much

[ejman]

Well, I guess we officially have a problem a this forum.

"The people who are most effective for saving for retirement — who live frugally and manage to save a big piece of their income — get that so ingrained into their behaviors that by the time they retire with their healthy nest egg, they can’t turn the switch,” said Kitces. “They end up underspending that dollar amount all through their retirement, compounding growth takes hold, the wealth starts to build up, and they die with much, much larger nest eggs and find out that not only could they have spent more in retirement, but they could have spent more during their accumulation years.”"

How saving too much can make your retirement less satisfying - MarketWatch

 

[RobbieB]

Yup. I'm making more dough than I can spend just sitting here on my butt eating caviar and drinking champagne.

I'm upgrading the caviar to the $100/oz stuff.

 

[GrayHare]

Such a problem is easier to fix than the opposite savings situation.

 

[dallas27]

Anecdotally I would say people around here support this idea as many have stated they retired at 3-4% and now have much more than they started with, some taking out less than 2% a year.


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[daylatedollarshort]

Most of these articles imply that spending more money equals more retirement happiness, but the topic is certainly debatable, especially after a certain point. I don't think Bill Gates would be any happier spending more money on himself than he already does.

 

[Shanky]

I think the issue is great savers are good at deferred gratification. Some are so good, they defer it beyond the grave.

 

[Shanky]

Another point to think about is in order to grow your next egg to support a 2% withdrawal rate as compared to 3% or 4% may involve working 5 to 10 years longer. If you enjoy working, that is not so much an issue, but you do give up a significant portion your retirement. (Duration)

 

[FreeBear]

Another point to think about is in order to grow your next egg to support a 2% withdrawal rate as compared to 3% or 4% may involve working 5 to 10 years longer. If you enjoy working, that is not so much an issue, but you do give up a significant portion your retirement. (Duration)

+1 Exactly!

I couldn't do 10 more years of time to get to a "really safe" SWR, whatever that is, so I bailed at a "hopefully safe enough" SWR.

 

[ExFlyBoy5]

On average, however, this 4% rule is overly cautious — a “safe” rate of withdrawal is closer to 6%. This also happens to be in the best interest of the financial adviser, who oversees a portfolio that will not just serve the client, but ensure that there is a big sum of money to be managed by the estate, keeping the advisory fees rolling on in perpetuity.

6%? There is NO way I could ever see myself allowing a 6% draw, and that's with me having a good pension that more than covers our expenses!

 

[eta2020]

6%? There is NO way I could ever see myself allowing a 6% draw, and that's with me having a good pension that more than covers our expenses!

6% is mighty fine if you retire at 67

 

[ripper1]

Somebody once said.......You can never be too thin and never have too much money.

 

[haha]

Somebody once said.......You can never be too thin and never have too much money.

"A woman can never be too rich or too thin", is attributed to Wallis Simpson, Duchess of Windsor, who was certainly very thin and very rich.

I have no argument with this sentiment. Most of us will have to be happy with the thin ones, the rich ones are usually surrounded by barbed wire

Ha

 

[Danmar]

"A woman can never be too rich or too thin", is attributed to Wallis Simpson, Duchess of Windsor, who was certainly very thin and very rich.

I have no argument with this sentiment. Most of us will have to be happy with the thin ones, the rich ones are usually surrounded by barbed wire

Ha

I like the way you express yourself.

 

[Danmar]

I think there may be quite a few on this site that have over saved or are now underspending. Hard to change after a while. Our heirs will thank us.

 

[RobbieB]

Order placed;


1 Russian Osetra Caviar Karat 3.5 oz (100g) $255.00
1 Mother of Pearl Caviar Spoon - Small
1 Paddlefish Caviar Metal Tin 4.4 oz (125g) $89.00
1 CREME FRAiCHE 8oz (227g) $5.99
1 Premium Norwegian Smoked Salmon 4 oz (113g) $11.25
Subtotal: $361.24
Discount: -$10.62
Shipping: FedEx Standard Overnight


Ha, burned another $350 -

 

[YVRRocketSurgery]

I'm one of those ending up deferring my retirement by five years which I forecast will decrease my WR from 4% to 2.6%. It just gives a bit more flexibility if the missus' half of the nest egg doesn't play out as planned.
If we both meet our targets, I'm pretty sure we'll easily be able to ramp up our spend with our travel as we likely will place more value on comfort as the years go by. I don't suspect we'll come close to burning through our nest egg but it does give a level of comfort around the question of longevity and I also don't mind leaving a legacy.

 

[W2R]

This recent thread,

http://www.early-retirement.org/for...ll-never-draw-down-their-portfolio-82593.html

is quite similar and may be of interest to those who are interested in the present thread. It links to Kitces's blog article directly, instead of through Marketwatch.

 

[FreeBear]

6%? There is NO way I could ever see myself allowing a 6% draw, and that's with me having a good pension that more than covers our expenses!

Nuts, 6%, I should have retired years ago

More seriously, looking at the original Kitches article, it looks like 6% is AVERAGE historic SWR, as opposed to 4%, essentially worst case historic (assuming 30 yr retirement). Actually, I'm a big fan of his articles, especially sequence of return, but folks need to be careful not to misread or oversimplify.

In the end, I'm not too concerned about average SWR. I'm more interested in avoiding a high likelihood to eating cat food after 20+ yrs...

 

[bclover]

I think there may be quite a few on this site that have over saved or are now underspending. Hard to change after a while. Our heirs will thank us.

I think that's the issue. Most retirees keep the same traits that got u to ER. If you're a normally frugal person that's how you'll be in retirement

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[audreyh1]

I'm still learning to give myself permission to spend on stuff that I can afford. Mostly with travel. Like - it's OK to spend up for stuff that will make a trip more convenient or comfortable or enjoyable.

In other words - it's not automatic.

 

[RobbieB]

Yup, no more coach ever unless it's Southwest non-stop.

 

[DrRoy]

I think the issue is great savers are good at deferred gratification.

I definitely believe in that, and have practiced it intensely for the last 35 years. That being said, now that I have a comfortable amount of dough and plan to RE in <1 yr, I have already started opening up the spending tap. Last month, DW and I somewhat impulsively attended an Astronauts convention. We bought premium package tickets and also paid up for autographs and other neat stuff. Deferral time is over, baby. Let's have some fun.

 

[kcowan]

We managed to spend like we were rich on our recent European trip. It felt good.

The bike/barge 7 day trip was $600/day for two, and our peak hotel was €338 a night at Le Royal in Luxembourg, with the lowest being €180 at the Hyatt Regency in Cologne.

Probably once in a lifetime. When we go back we will rent a condo in Nice/Paris/Rome on VRBO or HomeAway for a month. We love to live like the locals.

The European biking trip has been on our bucket list and we did it with 2 other couples that we know from Vancouver.

(BTW the best hotels were Banks Mansion in Amsterdam, Du Danube in Paris and Casselburgh in Brugges)

 

[MBAustin]

The caviar order gave me pause.

I really miss big Chesapeake Bay hard shell crabs. There's a place in MD that ships them FedEx and about twice a year I go as far as filling in the online order form, but when the shipping charge of $75 or so shows up, I don't place the order because it seems like too much $$. But it's actually cheaper than going out to a nice restaurant, so there's really no good reason not to do it. Resolution made - when we get back from our upcoming RV trip, we're having a crab feast!

Thanks, RobbieB!

 

[RobbieB]

My pleasure!

I order softies from Maryland too and it's been awhile...

They also have oysters and clams -