Financially speaking... are you living like you thought you would be living?

[gcgang]

Actually, given the markets over the past 7-8 years it would be quite surprising if retirees weren't doing better than planned?

+1

If you've retired in the last 10 years, and you're not in a better position than you thought you'd be at this point when you retired, you're doing something major wrong.

Live it up while you can! Time to eat those nuts you've been squirreling away.

 

[OHjosh]

I am barely into year 2 and have four more to go until SS, 3 to MCare, and 2 yrs to annuities. (I am living off my IRAs and 401ks.) It appears I am living on $35K a year quite nicely. So far I have $50K more in NW than I did when I started (NW is now $630K). I hate the idea of spending $100K to get there, but with ill mom and hard relationship (plus a job I hated!), I had to get off the hamster track.

From 66 on, I will start growing back the nest egg and will have more than I have now if I reach 70. (My assumption/hope is to make 5% and take 4% year.)

It is all pretty conservative, my advisor and my head say so. But when/how does that nagging fear go away? Is it a tincture of time thing? (PS: I know the health care issue is a large part of it.)

 

[imokurok]

Just a quick thanks to OP and all posters. Great insights. OMY phase; 4 yrs to Mcare.

 

[Mdlerth]

Thank you all

I've been a member here for a year now, after having lurked for a year or so before that. Long threads of successful stories like this one give me a lot more confidence that my own accelerated path to RE will prove satisfactory.

I have learned a lot on these pages. Some of it is financial strategy, but a larger part deals with summoning the courage to take the Big Leap when the curves converge. Three years ago I forecast a glide path of clocking out at 65; that is now likely to be more like ~60. Four or five extra years of living life instead of delaying it is worth a big "thank you".

Of course, there is always the possibility that none of this is real. I've never actually met any of the people here. The whole forum might be a North Korean scam. Every other FIRE poster could be a fictitious personality, cunningly created by armies of commie hackers, determined to see me (and other suckers) forgo the paycheck and step off the capitalist treadmill so as to tank the economies of the West, leaving us bankrupt and weakened so they can slip it to us.

But as Linus Van Pelt wrote to the Great Pumpkin, "If you really are a fake, please don't tell me. I don't want to know."

 

[chris2008]

4 years in. We retired with DH at age 61 and me at age 55.
We lived a reasonable but good life before, with tracking expenses, travelling and occasional extras and we are lucky to continue living like before, but with more time to spend as we like and to be together.

We ERed to make sure that we have time enough to enjoy our savings.
Yes, you can always want to save more as the future and its risks are unknown.
But we felt that there is just as much risk attached to OMY.
Nobody can guarantee that DH or I will live many more years in good health.
Whatever will happen tomorrow, we have had these 4 years.

Oh yes, and so far we have lived mostly on DH's pension and interest/dividends.
Net worth almost as 4 years ago.

 

[Danmar]

Oh yes, and so far we have lived mostly on DH's pension and interest/dividends.
Net worth almost as 4 years ago.

Surprised your net worth hasn’t increased a fair bit, given you are only spending divs and interest? Mine certainly has.

 

[chris2008]

@Danmar: Your comment shocked me.
Then I realised that my calculation of net worth does not show my payments to future pension which I self fund since ER.
Sorry!

 

[texcurtis]

Been retired almost 3 years and life is better than I had thought. The first year was recovering from some exhausting years of hunting & gathering. Years 2-3 have been about shedding the working life skin & starting the next phase of life, which has been rediscovering my creativity & deepening my relationships.

So far, expenses have been as expected with net worth being higher than expected. Somehow I was focused on how to make the money last & didn't really consider I might have more resources, a nice place to be in.

 

[dm]

A little over 10 years here. Retired when I was 50. Was a little concerned 07-08, but stayed the coarse and no regrets.

Spending more now than planned, I took up flying and bought a plane. I didn't see that coming. We also moved south.

As with others, the market has outperformed my expectations so I'm in much better shape financially than when I retired.

We were always LBYM types, but I'm thinking it's time to splurge a little while we are still healthy. Take a few more nice vacations, buy a few toys. Our net worth has grown quite a bit and I'm not sure what I'm saving it for at this point.

 

[Danmar]

@Danmar: Your comment shocked me.
Then I realised that my calculation of net worth does not show my payments

Not sure why my comments would shock you? Seems self evident to me that this would be the case?

 

[AltaRed]

I retired almost 12 years ago in early 2006 at age 57 because FIRECALC said I could do so comfortably. Went through a divorce in 2008 and held tightly on the reins through the financial downturn. Despite all that, I and my recent SO are enjoying a lifestyle that considerably exceeds what I thought it might be post-divorce.

Consistent with the common theme here, capital markets have been good since the 2008/2009 meltdown and the (mostly) buy and hold portfolio/net worth has responded in kind. Our spending is now more than double what we first planned on allowing us to enjoy whatever it is we want to enjoy without spending stupidly on things that don't matter.

My experience suggests it takes about 5 years into retirement to fully adjust to withdrawal from asset accumulation and to get into a rhythm of (and confidence with) activities and spending that stands the test of time. Absent a Black Swan event that impacts everyone, I have no qualms about financial standing projections for the distant future.

 

[imoldernu]

In order:
Retired for 28 yrs in 1989 @age53
Left previous employer in 1984, to my own business
No AA or use of any retirement calculator; just dozens of spread sheets.
Didn't expect to stay retired. Worried about return of cancer and wanted to live before dying.
Have lived a lifestyle far beyond what we expected.
Funny about the plans. Not the way we planned it, but we're on budget which included inflation.
Lots of surprises, both on the upside and the downside but no worries about the market as the $$$ were/are in IBonds, CD's which paid well in the good years, a small annuity and a few stocks that we never traded from a profit sharing plan.The early days... mid 80's early 90's, returns were in the 10% area, across the board.

Basic formula to check solvency is simple:
Total assets divided by life expectancy now 11 years to age 92... plus social security, equals what we can spend. We have been well under with our actual expenses for most years.

Very happy, no regrets.

more details here:
http://www.early-retirement.org/forums/f27/sharing-23-years-of-frugal-retirement-62251.html

 

[truenorth418]

Financially I am far better off now than when I retired in autumn 2011. My portfolio is up over 80% thanks to an extended consulting gig, an inheritance, and the run-up in the stock market. As a result, I am spending over 60% more per year than my first year of retirement and far more than I ever spent during my working years. Most of the extra spending is going towards travel, although like others I am also spending more on health insurance and other health-related items.

 

[DawgMan]

In order:
Retired for 28 yrs in 1989 @age53
Left previous employer in 1984, to my own business
No AA or use of any retirement calculator; just dozens of spread sheets.
Didn't expect to stay retired. Worried about return of cancer and wanted to live before dying.
Have lived a lifestyle far beyond what we expected.
Funny about the plans. Not the way we planned it, but we're on budget which included inflation.
Lots of surprises, both on the upside and the downside but no worries about the market as the $$$ were/are in IBonds, CD's which paid well in the good years, a small annuity and a few stocks that we never traded from a profit sharing plan.The early days... mid 80's early 90's, returns were in the 10% area, across the board.

Basic formula to check solvency is simple:
Total assets divided by life expectancy now 11 years to age 92... plus social security, equals what we can spend. We have been well under with our actual expenses for most years.

Very happy, no regrets.

more details here:
http://www.early-retirement.org/forums/f27/sharing-23-years-of-frugal-retirement-62251.html

OP here. I have been MIA from this site for a while, but really appreciate the great insight from everyone. As stated previously, good wisdom from you grey beards.

imoldernu - you are The Godfather of ER! You need to write a book or get your own show!

Good stuff everyone!