Accumulation to Withdrawals--the Mindshift

[RetireeRobert]

Just ruminating on the fact we spent three decades accumulating, saving, investing, LBYMing to get to FIRE.

Now we are FIREd and loving it. And now we are in a new phase of using some of those assets we saved up. Something of a mindshift all right.

So far, I have not experienced any unease. I feel comfortable, I don't worry about using all the assets up before I use my time up. I do wonder once in awhile, after I hear of someone with unfortunate medical episodes, if I am living on borrowed time so to speak, never having had any serious medical problems to date. But then I think we have good health insurance, so why worry. And I don't.

Instead I think of being fortunate enough, we will likely be able to leave the kids something of a financial legacy, something to make their lives a bit easier down the road. Given the state of pensions for young folks nowdays, I am comforted we may be able to ameliorate a bit of that problem they may face. But I think, I don't want them to get it too soon--don't want to take away from them the satisfaction of making their own achievements. But something, after that "battle time" for them and that time of achievement for them, to just ease their way a bit afterwards--to give them a reserve, a cushion.

At any rate, my thinking has shifted largely from accumulating, to "what do we do with it now". One of the answers I have arrived at, is to keep growing our assets, see if we can accumulate some substantial additional real wealth. Not only to be able to pass a bunch of it on down to the kids, but also what we might be able to do charitable contributionwise. Perhaps the start of some type of foundation that might go on into perpetuity. What kind of results and in what fields would we want to accomplish something that way. And do we really need all that much to get something started charity foundationwise?

A real mindshift, from minimum wage working fulltime years ago and living in a slum apartment, to now.

We are fortunate indeed.

What kind, if any, of mindshifts have some of you other ER's experienced?

 

[Moemg]

It is a mindshift .For years I thought of the money as on paper but not real but when you start spending it is real .It is your allowance for being good and saving for years .

 

[Nords]

Perhaps the start of some type of foundation that might go on into perpetuity. What kind of results and in what fields would we want to accomplish something that way. And do we really need all that much to get something started charity foundationwise?

Fidelity's donor-advised fund only needs $5000.

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[donheff]

Instead I think of being fortunate enough, we will likely be able to leave the kids something of a financial legacy, something to make their lives a bit easier down the road. Given the state of pensions for young folks nowdays, I am comforted we may be able to ameliorate a bit of that problem they may face. But I think, I don't want them to get it too soon--don't want to take away from them the satisfaction of making their own achievements. But something, after that "battle time" for them and that time of achievement for them, to just ease their way a bit afterwards--to give them a reserve, a cushion.

I feel the same way. So far both kids have been pretty responsible and the older one is on his way to FIRE. But defined benefits plans, like my Federal pension, are not in the works for them so their road will be tougher than mine. If my son REd at the same age I did, I would be 81. At that point I should be in a good position to tell him whether he will have a good safety blanket coming down the pike in a few years. Assuming I make it to 90 (or die earlier but DW makes it to late 80s) my daughter would be 52. Not a bad time to get a boost in the retirement portfolio. We always caution them that there is no guarantee of an inheritance. If we need it to live a comfortably profligate lifestyle we will burn it up.

 

[ChrisC]

I'm around 3-5 years from an optimal retirement, but I've been transitioning into a mindshift of sorts. I've been thinking that I need to look beyond our needs and the needs of our parents and children, and look at potential grandchildren, other relatives/friends and charities.

The mindshift for me isn't just about using financial resources differently, but also altering the use of my time -- my most precious resource -- differently. Many of us have some sort of ephiphany about what we should do for the rest of our lives, which is a mindshifting experience. And for some, this means getting things right and straight with your family and friends.

 

[RetireeRobert]

The mindshift for me isn't just about using financial resources differently, but also altering the use of my time -- my most precious resource -- differently. Many of us have some sort of ephiphany about what we should do for the rest of our lives, which is a mindshifting experience.........

Very good point. In large part the working years are used building up that "accumulation" of time known as retirement. Then we start "withdrawing" that time during retirement to use, to "spend" on activities other than work.

So it is a good question, what do we "spend", what do we "withdraw", our retirement time for?

Thanks for bringing up this different perspective.

 

[audreyh1]

I have been retired 8 years. It really did take me a couple of years to get used to living off investments rather than drawing a salary. I think I experienced a slight underlying feeling of disquiet - a low grade of anxiety - barely conscious of it, but it was there. Eventually as I realized that:

a) we tended to spend well within our means, and

b) my moderate/conservative investment portfolio did in fact behave rather well and even grow over time, no matter how volatile in the short term (and there were some doozy years like 2000-2002),

that low-grade anxiety went away. Now it seems perfectly "normal" to live off investments, and working for a salary seems like the odd idea. The sometimes dramatic vacillations in net worth just seem like no big deal because it's all so temporary.

And I parrot ChrisC's point of view:

A big part of the transition/paradigm shift for me (and the original motivation to retire) was realizing that my time had become far, far more important to me than accumulating more money.

Time is an extremely valuable commodity, and none of us knows how much of it we have left. I was no longer willing to trade my personal time (or my sanity or health) for money.

Now the focus is not so much on "what do I spend the money on" but rather that now that my time is my own, how do I streamline my life to get the most for my time, to do the things most important to me, to live the kind of life I really want?

It comes down to establishing priorities, of course. To really discovering what is most important in my life right now. By having the "luxury" of a life of leisure (and it truly is), we can really focus on these most important things.

Audrey

 

[Eagle43]

What Audreyh1 said, although I have pensions/ss as well as investments.

I've not been retired as long, but the feeling that ole Eagle doesn't have to jump for no sumbeech is priceless. It took a while, probably a year before I felt really secure. That was just my poor upbringing making me nervous. No more. It's a great feeling and you will adapt, some more easily than others.

 

[Retire Soon]

Livings off of our investments is new to us as well. We retired 18 months ago, with a modest pension and savings in our 401k, etc. It's definitely a new mindset. I've heard it said many times that the worst time to retire is the beginning of a bear market. Well, we've escaped that so far, but I think it's on the horizon. On the NBC news last night, Jack Bogle was interviewed and he said, "There is a 75% chance of a recession.' Since, he's my guru, I value his opinion. But, just the same, I feel fortunate that we'd didn't begin our retirement with a bear market.

 

[RetireeRobert]

On the NBC news last night, Jack Bogle was interviewed and he said, "There is a 75% chance of a recession.' Since, he's my guru, I value his opinion. But, just the same, I feel fortunate that we'd didn't begin our retirement with a bear market.

Fortunate to be able to adjust your portfolio to be sure it is in line with your risk tolerances. And perhaps give you a little time to plan any extraordinary expenses so your portfolio doesn't take an extra big hit the first few years of your retirement.

 

[OAG]

He was also on CNBC last week saying virtually the same thing. Additionally, he said the market swings of late are because 80% of those in the market today are speculators and the 20% that are actually investors (for the long haul) should just check their AA. He also said he had not touched his AA for the past 5 years and did not anticipate touching it in the next 5 years. Was nice to see someone talk calmly and matter of fact like among all of the hyping commentators on TV of late.

 

[Ed_The_Gypsy]

A real mindshift, from minimum wage working fulltime years ago and living in a slum apartment, to now.

So true. Still, I might be back in that apartment again some day.

 

[SteveR]

Turning off the accumulation switch and turning ON the withdrawal switch really happens before you ER. I started funneling cash from investments to MM accounts to cover 4-5 years of living expenses a few years before I officially ERd. We are living on this cash pile while we ride out the market. We have liquidated some toys to pay for home upgrades prior to our sale. We hope to recoup these when the house sells next year. The economy here is still very robust and there are worker shortages not job shortages so housing is still in demand as new folks move into the area and others move up.

Our next major financial issue will be SS and we are waiting to see what happens and where we are to see when we take it. (Don't even think about commenting on SS in this thread).

Next is when to start draining the IRA (former 401k) kitty.

If we manage to stay in decent health we should leave the kids a nice starter stash which should help them ER.

Like ChrisC said, ER is also about doing what you want rather than what a boss wants you to do. It is about spending time with family and friends while they are still here. Time is a cruel taskmaster and once an opportunity is lost it cannot be regained. Spend quality time with your spouse and your family and friends...you don't know when you won't be able to do so anymore.

 

[RetireeRobert]

Time is a cruel taskmaster and once an opportunity is lost it cannot be regained. Spend quality time with your spouse and your family and friends...you don't know when you won't be able to do so anymore.

Or like they say, not many people find themselves at the end of their lives regretting "that I didn't spend more time at the office".