Spending after Retirement

[tmm99]

Yes, I never dreamed we would be "spending" the amount of money we have available. Our budget is covered easily with pensions and SS, with some left over. Our investments are there if needed.
We are blessed to be in this position.

We're not getting SS yet and my pension is tiny, but I can relate. This year, we had to get a new car (major repair cost on the old one we didn't want to do), a new roof (lost shingles during wind storms), a new fridge (the old one died), two new computers (one died, one was too slow), and new wills done. Our assets are modest, and these spendings are necessary spendings, but we can easily handle those mostly unexpected expenses without fretting over stuff. I feel blessed too.

 

[ProGolferWannabe]

If someone would have told me I would spend 6 figure number in retirement I would have called them a fool! I was just looking back this evening at some numbers so far this year.



Each of the last two years with charity, gifting, buying land, and buying cars etc. etc. and not including our living expenses 6 figures for each of the years.



I'm a very frugal, thrifty and saver by nature. My confidence in spending has loosened up and not sure why. I'm not always happy about spending money that I worked so hard to get. Lol



I have a couple more larger checks I will write yet in 2021. I hope 2022 is just back to our normal expenses. I will not be spending anything out of just living life and essentials. I Hope!



Anyone else seem to be spending more than you ever have in retirement and yet feel secure finically and at easy doing so?

I would not consider the purchase of land as “spending”. In my mind that is just reallocating your assets from cash to real property/land. I would deduct that amount form any calculation of spending.

 

[Backpacker]

Coming up on 2.5 years retired for me, and 2 years for DW. We intentionally kept cost down until just recently. I'm 57 DW is 54, we've been ratcheting up spending now that sequence of return risk is mitigated a bit. Pretty much been living off her 48k (before tax) annual pension. We've got about 1.6M invested so we can BTD with little risk of running out of cash. We did both a front and back porch addition on our house last year. Considering a 50k pole building for next year. Hardest part is getting my brain wrapped around spend vs. Saving!

 

[TheWizard]

Soufflez cette pâte!

I wish I knew French...

 

[MissMolly]

I wish I knew French...

Blow that dough!

 

[Dtail]

Spending a lot less now, then we did 5-10 years from retirement, but that was the plan and it works for us, as I will never ever work again.

 

[DawgMan]

Funny, I have been in semi-retirement for the last 2 years. Since Covid freed up more or less in 2021, I took the governor off this year to see how spending would play out free willy. Results through 2021 so far... I have spent about 10% more than "planned", but over 50% of that was pure discretionary. Some items were definitely non-occurring (i.e. new HVAC, remodels, furniture, 529 plans for G-Kids, extra travel), but I suspect something will come up every year. We also are doing allot of intentional fancy pants travel and with 4 kids, 3 G-Kids, it's easy to blow some $$.

It's a new muscle that needs to be worked out... spending $$ you have after being so thrifty for many years. Not easy, but my DW is definitely comfortable in her new world! My new motto... if you got it, spend it! (AKA... BTD!)

 

[1242Vintage]

We spent a ton of $$$ on home improvements (roof, kitchen & bath remodels, landscape improvements, deck replacements, exterior paint, etc) in the couple years leading up to retirement. And that was on top of very spendy kids higher education and living costs.

In retirement we are spending much less. Average spend is $6k per month.

 

[martyp]

After the first year of retirement I was pleased to see that I was spending less than expected. Ten years later I am still not spending much. I expect that to change next year when I build a house and buy a car but that is an easy to justify aberration. In that ten years I started getting Social Security and both my pension and SS are cost of living adjusted. I stopped paying for long term health insurance. I move to Thailand where the cost of living is much less than where I used to live in California. Spending decreased during Covid not to mention three Covid relief checks. It really just keeps getting better.

 

[COcheesehead]

We have a heavily padded budget and will come in about $40,000 under in our spending this year with building a house, buying a new car and having unexpected surgery. I will roll that excess budget into 2022 or else we will die with too much. I have already decided that any international flights from now on will be at least via business class.

When you are in the planning stages, I guess it’s better to over estimate than to under estimate, but now that we are living the “the plan”, reality is easier than I expected.

 

[NW-Bound]

Anyone else seem to be spending more than you ever have in retirement and yet feel secure finically and at easy doing so?

Not I. I mean the spending part.

You made me look. I spent less than 1/4 of what FIRECalc says I can.

We have not seen anything we care to spend money on.

I don't mind spending more on travel, but have been spending $0 lately due to Covid.

I have been looking again at more solar panels and lithium batteries, but man, that's buying more work.

Maybe I will upgrade my wife's PC, despite her protest that she does not use it much, and does not care for a faster one. But I looked on Costco and so many things have been sold out. Ah, I no longer think setting up a PC is fun work anyway.

 

[street]

I remember my mother saying, "at my age I'm not going to save anymore". I'm starting to realize how she felt as I age, and why not spend and splurging is okay. If you can, why not.

Like so many of you that posted said, it is just things that come up in life you need. Those things just add up fast.

 

[skyking1]

Not retired yet, but having read many threads here I get the impression that spending is going up, in a big way!
Right now we don't have the time to enjoy our money and covid has definitely kept us home. Once we retire it will be an effort to stay within a budget. Any budget

 

[RobbieB]

Never had a budget, never will. I just sorta add up all the bank stuff at the end of the year and say OMG! This is way beyond the 4%!

And it really didn't matter in the least. More worry about nothing.

Got new cars, new patio, new paint, new furniture, new landscape, 3 new sheds, a new used boat in a new slip.

Anyway, if you be planning your "budget" around what you were spending while working...

Lets just say you're gonna have a lot more time on your hands -

 

[DrRoy]

Anyone else seem to be spending more than you ever have in retirement and yet feel secure finically and at easy doing so?

Absolutely. I used to make a bit into 6 figures, but spent less than that because I saved so much. Our 1st year of RE, I spent a record amount around $100K. This year, including some big remodeling projects and travel, we will be approaching $200K. Next year will be down as we have no projects, but we would like to buy a new car. The problem is, we can't get exactly what we want because the car co. does not accept custom orders right now.

I'm OK with the higher spending because even with what I have taken out for spending, our investments are up about 45% in the last 4.5 years, and still not above 3% WR.

 

[TheWizard]

Well that's odd, Dr Roy, since Ford in particular is promoting custom factory orders in TV ads lately

Two of my last three Fords have been custom ordered.
My next one will be also, once the new AWD hybrid Mustang convertible comes out...

 

[Sunset]

I don't consider roth conversions or buying property as spending , it's just asset movement.

I track my spending, but don't worry about spending too much as we are below 4% , this year it's really dropped off, and looks like I'll spend just $25K

My spending does not include DW's but I estimate she spends ~$20K / yr. on avg.

 

[street]

I don't consider roth conversions or buying property as spending , it's just asset movement.

I track my spending, but don't worry about spending too much as we are below 4% , this year it's really dropped off, and looks like I'll spend just $25K

My spending does not include DW's but I estimate she spends ~$20K / yr. on avg.

I agree with that statement. In actuality both Roth and Land are an investment and are still assets like you said.

 

[Exchme]

This is our first year of retirement. Core spending is pretty much as expected. We had some "one-off" expenses, but our spending projection left room for that and I'm sure other "one-offs" will occur in the future.

Our first year of Roth conversions mean our taxes didn't go down at all - the models say that's the right thing to do, but still annoying.

We're going to have trouble with BTD. Thought about putting in a pool, but of the neighbors that have them, only the ones with young kids actually use them. We're not big adventurers anyway and COVID has made travel too exciting for us.

So the new and probably recurring item for us is gifting to the kids. We woke up to the fact that the estate tax exemption is scheduled to be cut in half in 2026 and the current tone from Washington makes me think that will happen. It's not clear that we'll ever get even to the lower estate exemption amount, but those cases in FireCalc where wealth heads to the moon show it should be considered. So at least while markets are good, we'll gift up to the gift exemption limit.

 

[Palmtree]

Well into our fifth year of retirement. Due to a frugal lifestyle, a pension and a few other things we were able to retire in our mid 50's. We never make a lot or spent a lot in the past so, even though all the programs say we can spend over 125k per year, we struggle to spend even 75K. In fact, the first three years of retirement it was closer to 60K per year. After being careful the first few years, we were mentally ramping up and getting ready to flex our spending muscles on some serious international travel when Covid shut that down. Since we can't do the planned travel, our new plan to relax and be more opne on spending the dough on things that improve our life. A new van, good food, good wine, upgraded computers, and whatever else makes us happy. Just last week I ordered a E-Bike just to get me out of the house more.

 

[MRG]

Eight years in and it's been all over the place. First few years we lived way below our working years with ~2.2% withdrawal. Some was just concern about a downturn and a desire to keep health care reasonable.

Last year I was bored during the pandemic and spent some money actually had more income than any working year. Next year we'll pay IRMMA because of it. I have 1.5 years until FRA planning on waiting till 70 for SS. By the projections we can spend as much as my peak earnings years until our end.

 

[2017ish]

***

Anyone else seem to be spending more than you ever have in retirement and yet feel secure finically and at easy doing so?

Yes, as planned we are spending (after taxes) a bit more than double what we spent annually after our youngest finished college. Spent a bit less the past two years because travel deals were abundant.

Not concerned because over half our spending is travel, and wine is another large category. Obviously these discretionary expenses can be slashed when demanded by our percentage of portfolio plan.

(Was a bit concerned the first full year, when DW had too much fun planning and travel came in 70% above "budget," but we luckily had deferred income to cushion that....)

 

[Getyoung]

I am now into 5 years of retirement (best job I've ever had!) I have not really tracked my spending, but I am spending more in retirement than when I was working. I have a very good pension and have been a saver and investor most of my adult life. Being a naturally frugal spender, now I try to keep telling myself if I want something, just go buy it. It is still hard to do though. We had started to take some wonderful trips to Europe etc, but that has obviously ended.

My daughter and her husband just bought a house and I matched their money for a down payment, i love to be in a position like that and not worry about it.

 

[Lstansbury]

3 months into retirement and still scared to death to spend any money beyond what was already put aside (new refrigerator came today, already paid for before I quit working) plus my monthly normal budget of about $5.25K per month. I hope this feeling starts to abate, I've got about $2 million in assets, if you count my pensions as NPV of $1 million -- they put out $4500 per month for the rest of my life. And I'm not taking social security for a while. Retirement is supposed to be for fun, not so much anxiety!

Part of the issue is that I'm looking at huge retiree health costs right now ($920 per month), but that will drop to about $550 per month starting next year. I'm still reeling from the $920/month. And I'm planning on Roth conversions next 3 years, which, as a single person, will push me to the top of the 22% tax bracket.

So, staying cautious for a bit longer before I join BTD. Or maybe that's just an excuse, I've been saving so long that it's really hard to let go.

 

[COcheesehead]

3 months into retirement and still scared to death to spend any money beyond what was already put aside (new refrigerator came today, already paid for before I quit working) plus my monthly normal budget of about $5.25K per month. I hope this feeling starts to abate, I've got about $2 million in assets, if you count my pensions as NPV of $1 million -- they put out $4500 per month for the rest of my life. And I'm not taking social security for a while. Retirement is supposed to be for fun, not so much anxiety!

Part of the issue is that I'm looking at huge retiree health costs right now ($920 per month), but that will drop to about $550 per month starting next year. I'm still reeling from the $920/month. And I'm planning on Roth conversions next 3 years, which, as a single person, will push me to the top of the 22% tax bracket.

So, staying cautious for a bit longer before I join BTD. Or maybe that's just an excuse, I've been saving so long that it's really hard to let go.

Do you really need to do the conversions? You could drop your HC costs in those years. Your assets are small enough that the future tax bite may not be worth the cost today. Fidelity’s retirement planner will show you anticipated RMDs. It helps to see reality vs the tax boogie man who may or may not appear.