A total mind shift on spending in retirement

[Focus]

Last year, I had an unexpected medical procedure that ate up my entire (high) deductible. That and my costly monthly premiums added up to a hefty total.

You'd think that would make me tighten the grip on my wallet, but it's had the opposite effect. My attitude now is: I'll be damned if I end up spending my savings on the U.S.'s overpriced health care industry. As a result, I find I'm less frugal and spending much more freely than ever before.

Has anyone else had a similar experience?

 

[fritz]

We had similar experience on ACA. Both on Medicare now. More than double previous healthcare premiums going on ACA (with high deductibles) - and one $140K procedure hit us early on in retirement. Mostly covered by insurance after hitting max-out-of-pocket costs.

Just figured that these things are inevitable in retirement and would have to deal with them as they came up. Did not expect it to come up at the start of retirement. Didn't change any spending habits and hopefully retirement continues along w/o anymore of these financial hits.....

 

[RunningBum]

No, "I'll be damned" sounds like an emotional response. I try to avoid that with respect to both investing and spending. You're not getting even with anyone than yourself.

Now, after monitoring a few years of spending and my financial state, I'm also less frugal, but it's due to having a good financial situation, not an "I'll be damned" response.

If you've got enough buffer to spend more, great. If the increased medical expenses are making a tight situation tighter, you're setting yourself up for a lot of trouble, IMO.

It's all up to you, but this post raises warning lights with me, since you asked.

 

[bloom2708]

What is worse than potential future health problems? Spending too fast and having health problems and money problems.

Keep your emotional spending in check. You probably got your "I'll be darned" spending out of the way.

 

[Focus]

No, "I'll be damned" sounds like an emotional response. I try to avoid that with respect to both investing and spending. You're not getting even with anyone than yourself.

Now, after monitoring a few years of spending and my financial state, I'm also less frugal, but it's due to having a good financial situation, not an "I'll be damned" response.

If you've got enough buffer to spend more, great. If the increased medical expenses are making a tight situation tighter, you're setting yourself up for a lot of trouble, IMO.

It's all up to you, but this post raises warning lights with me, since you asked.

I can see how you might get that impression, but don't read too much into my choice of words. I haven't changed my financial plan or bought an expensive red sports car. Not yet, anyway...

Thus far in retirement (nearly four years in), I've had to pull less from savings than expected. The medical expenses pushed me up to my original annual estimate. In a sense, it indicated that my financial plan is sound, and perhaps that helped make me feel freer about spending.

 

[RobbieB]

I was max out of pocket the last 2 years of my wife's life. Hospitals and chemo ain't cheap. But she died anyway and that was what made me less frugal.

Spend the dough while you can, you may be diagnosed with pancreatic cancer and have 2 years left.

 

[Focus]

Just figured that these things are inevitable in retirement and would have to deal with them as they came up. Did not expect it to come up at the start of retirement. Didn't change any spending habits and hopefully retirement continues along w/o anymore of these financial hits.....

Same here. Didn't expect major issues until after I was on Medicare. Life has a way of throwing us curveballs. I still have years to go until Medicare kicks in, so I'm quite concerned about what might happen with insurance coverage from here until then.

 

[aja8888]

Spend the dough while you can, you may be diagnosed with pancreatic cancer and have 2 years left.

Or two weeks like some people I knew.

 

[brucethebroker]

Retirement is no different than pre-retirement when it comes to financial surprises. You can plan all you want, but a fridge can go out, car can collapse, leaking pipe can destroy a bathroom, etc. And this does not include health issues. How did you handle those expenses during pre-retirement? Savings? Heloc? Get a PT job? Spouse goes to work? What is so different now?

I had a very good friend whose wife contracted a muscular type disease about a year into retirement. She was put into a nursing home and he spent every meal with her, 3 times a day, just to make sure someone made sure she was eating. None of their travel plans worked out and he was financially ruined over time. Now that, is a retirement crisis-not the occasional emergency spending. Just my opinion, of course.

 

[audreyh1]

I was max out of pocket the last 2 years of my wife's life. Hospitals and chemo ain't cheap. But she died anyway and that was what made me less frugal.

Spend the dough while you can, you may be diagnosed with pancreatic cancer and have 2 years left.

That certainly moderates things for me in terms of being too frugal. Mom was diagnosed with pancreatic cancer at 62 and passed less than 1.5 years later. That motivated me to retire very early when I could, and now I’m turning 59 this year! It’s a little spooky.

 

[RunningBum]

Don't deprive yourself and be too frugal, because you might be dead in a year or two.

Don't overspend, because you might still be around.

It's kind of a fine line to walk, but living like there's no tomorrow is a lot different from spending like there's no tomorrow.

 

[Moemg]

After being so sick earlier in the year I was determined to be less frugal .It only worked for a few months and then I reverted to my frugal self.It was fun while it lasted !

 

[Teacher Terry]

Bruce, so sorry about your friend. He sounds like a wonderful person who had his priorities straight.

 

[Koolau]

I'll be damned if I end up spending my savings on the U.S.'s overpriced health care industry.

Some folks go the expat route to get lower HC costs. Not my cup of tea as there are too many other things I like about living in the US which compensate for our expensive HC system. This could turn political so I'll only suggest "you pays your money and you takes your choice." YMMV

Oh, and your MC is no good outside the US. Good luck.

 

[marko]

Don't deprive yourself and be too frugal, because you might be dead in a year or two.

Don't overspend, because you might still be around.

It's kind of a fine line to walk, but living like there's no tomorrow is a lot different from spending like there's no tomorrow.

I've often mentioned the guy who told me: "Oh, you're 60? Remember that even if you live to be 90, you only have 15 or 18 good years left. After that things go downhill or you loose interest in things". I met him in a bar for just a few minutes but it changed my entire life-thinking.

At first, I took the OP's "I'll be damned" comment to mean that he/she would spend all their money and let Medicaid pick up the health tab.

 

[joeea]

Last year, I had an unexpected medical procedure that ate up my entire (high) deductible. That and my costly monthly premiums added up to a hefty total.

You'd think that would make me tighten the grip on my wallet, but it's had the opposite effect. My attitude now is: I'll be damned if I end up spending my savings on the U.S.'s overpriced health care industry. As a result, I find I'm less frugal and spending much more freely than ever before.

Has anyone else had a similar experience?

No. Frankly I don't understand how a costly medical year would make you spend more. And I have no idea what "I'll be damned if I end up spending my savings on the U.S.'s overpriced health care industry" actually means.

- Did you cancel your insurance?
- When the next medical procedure comes up, will you refuse treatment?
- Is this some sort of YOLO action, where you intend to drive your assets down to Medicaid level?

Last November, I found out I have cancer. I haven't changed my spending habits at all.

 

[Dawg52]

I can see how you might get that impression, but don't read too much into my choice of words. I haven't changed my financial plan or bought an expensive red sports car. Not yet, anyway...

Thus far in retirement (nearly four years in), I've had to pull less from savings than expected. The medical expenses pushed me up to my original annual estimate. In a sense, it indicated that my financial plan is sound, and perhaps that helped make me feel freer about spending.

I get what you mean. As I age I have loosened the budget a bit. And a medical hit can be a reminder that we do not know how much time we have left. But it is a balancing act.....got to be sure there is plenty left for the super golden years if we make it that far.

 

[athena53]

I've always been afraid of ending up old and poor and that's driven my financial decisions as an adult. To me, an unexpectedly large OOP medical expenses falls into the "oh, crap" expense category- you don't know what, you don't know when, but Stuff Happens. I have a 3% withdrawal rate in uneventful years to be conservative so I can withdraw more for such incidences.

 

[Car-Guy]

Spend the dough while you can, you may be diagnosed with pancreatic cancer and have 2 years left.

I've known 3 people diagnosed with Pancreatic cancer in the past 10 years. All were gone in less than a year.

 

[Car-Guy]

Last year, I had an unexpected medical procedure that ate up my entire (high) deductible. That and my costly monthly premiums added up to a hefty total.

You'd think that would make me tighten the grip on my wallet, but it's had the opposite effect. My attitude now is: I'll be damned if I end up spending my savings on the U.S.'s overpriced health care industry. As a result, I find I'm less frugal and spending much more freely than ever before.

Has anyone else had a similar experience?

Not due to a specific medical event, but my enhanced spending is due to the realization of my own mortality. Logistically, I should have about 15 years left. Could be <5 or could be ~25 but the clock is winding down.

 

[Texas Proud]

Just from observation I think it makes a difference in how close you came to death...


I have a sister who was in a bad car accident and was very lucky she was not killed.... she changed how she approaches life... I have heard a few comments from her that I would say leads me to think she has changed her spending habits... mostly that some items she just does not care... IOW, it is not a huge expense so if it is $20 or $50 it does not matter...


I have another sister who had a scare with medical and was in the hospital or rehab facility for about a year.... she went on a traveling spree once she got better... I do not think she would have traveled as much as she has if she had not had that scare... BTW, she is approaching visiting 100 countries.... she told me yesterday that she had planned to hit it this year on a cruise but just got info that they will not be docking at some country since it is now not safe... so it will probably be next year when she hits 100....

 

[FreeBear]

Sobering thread. Sorry for all the folks and their loved ones who have struggled with cancer and other life threatening issues.

Fortunately, nothing that dramatic or challenging for us, yet. After three years of retirement in a bull market, it has been dawning on us that we may be running out of time faster than running out of money. Our financial situation has improved in this bull market despite a fairly heavy burn rate.

During the first 2 years of retirement, I was afraid to spend anything, so arrived about 15% below budget. Last year we were hit with a $10K dental bill. At first, we thought about cutting travel a bit, but the winter blues set in. We decided "screw it, let's do it" and snow birded for almost a month. It turned out were just a bit above budget despite such a heavy burn because our total required expenses have grown more slowly than inflation, despite health insurance/health care.

So gotten lucky so far, but I realize this can change at any minute. We have enough $$ and discipline that financial ruin will come, if it does, either very slowly over decades or though some huge life changing crisis that is impossible to mitigate beforehand. I expect we will enjoy the $$ from the bull market, but naturally cut back when things eventually slow down. Instead of saving even more for a greater margin of "safety", we're learning to enjoy life while we can.

 

[misshathaway]

You'd think that would make me tighten the grip on my wallet, but it's had the opposite effect. My attitude now is: I'll be damned if I end up spending my savings on the U.S.'s overpriced health care industry. As a result, I find I'm less frugal and spending much more freely than ever before.

Has anyone else had a similar experience?

Yes. Somewhat different turning point though. For me it started with withdrawing from equity funds for the first time to rebalance and putting it in my checking account for spending. I noticed that the earth did not stop spinning. Hmmm ...

Then we had a horrible winter filled with insecurity for me when a big tree limb fell within feet of the middle of my roof, my oil deliverer decided to stop delivering oil in Dec. because my oil tank's feet were rusted, and my basement had a continuous puddle in it all winter due to seepage from outside. Sort of forced me to think "You have x in the bank. You can easily fix this" So I did.

My turning point was more seeing that I was living so far below my means that I could not relax and really enjoy retirement, and not having any rational reason for doing so.

 

[Scuba]

Our first year of ER, we spent right on budget except for one “splurge” item, but still ended the year well ahead of where we’d thought we would. Our new Fidelity FA said we could ratchet up our spending quite a bit and still be fine, which DH has taken to heart. Luckily he is pretty frugal so his ratcheting it up a bit is still not too bad. I feel like we’re still early in ER and we have a nice lifestyle, spending slightly more than we did when we were working, so I don’t feel a need to bump anything up too much. Maybe after 5 years of ER if we’re still in a really solid position, we can start “blowing more dough.”

 

[ER Eddie]

I had a somewhat similar experience in the sense that I had a very serious medical condition for which I was hospitalized for a couple months (almost died). I emerged from that experience having realized one thing -- that I should stop being so tight/frugal with money, that I should spend it more freely and enjoy it, rather than be too concerned with saving and preserving it.