Creating a paycheck in retirement

[MrSmee]

Thanks all for the detailed but varied responses. That gives me plenty of material to set up a system. I definitely prefer the self imposed control that a periodic and automatic process provides.

 

[meleana]

We keep cash in an on line savings account and transfer it to our checking maybe 2 or 3 times per year to meet our projected budgeted expenses.

I also get some money through a required RMD from an Inherited IRA- enough to cover 3 months expenses. And we throw in some tax refund money each year which isn’t a lot but it helps.

We are delaying our SS and keeping our income low to do Roth Conversions. No monthly pensions.

If we need a lot of cash for something like a big/ special vacation, we will take it out of savings also, which we are doing for the first time this year.

 

[steveark]

Paycheck

We have $5K transferred from my Vanguard IRA and $4K from Empower transferred to checking every month. It's just like when I was working.

 

[Samething]

At 62 and single I am mindful of my MAGI for my ACA subsidy. I transfer funds every 6 months from my taxable brokerage account and/or Ally account to my CMA at Fidelity. Also a my dividends get deposited there. Then I add funds from my tIRA monthly based on my projected expenses. I keep @ $2000 cushion in my checking account for unexpected expenses.

 

[Retired Expat]

Control spending

Let me start with this: DW and I are NOT good at controlling spending. If we have money in our pocket, we spend it.

So I have always controlled our spending by limiting how much we had each month. For a while we even went to cash only.

In retirement I would like to replicate that. Generate a weekly pay check from our withdrawal buckets and split it into His, Hers and Ours. That would not include the lumpy items from the budget like large purchases or travel, but just the impulse buys and discretionary stuff.

I'm curious how others manage the retirement paycheck. Do you have scheduled withdrawals into spending accounts? Set amounts? How do you manage it as a couple? What are the technicalities of doing that from multiple providers(Fidelity and Schwab)?

"Discipline" might be the answer but I only get that by imposing it systematically.

I will have a short, medium and long term bucket strategy but I don't want easy access to that short term bucket all at once.

Arranged our investments such that things like real estate have rents deposited automatically and expenses paid from one account. At the end of the month remaining funds are transferred to the “spending checking” plus any additional funds to live on from investment accounts which always earn interest or dividends and we never touch the principal. If we ever need to draw from investment accounts beyond that 1% WR we take a hard look at why. We will transfer out funds for special purposes like a major purchase or a big trip but they all go into and out of one account that pays one credit card and we look at what that does to our retirement projections. So we never feel like there is all this money just sitting there to be spent. We never use cash as that is just water that dribbles out of your hands with no record keeping or benefit like cash back or miles and as we travel a lot mostly every expenditure earns miles.

My father as he got older lost his financial awareness and would spend like crazy. We replaced his credit card with a Debit card from a controlled account and transferred a couple hundred in every day for meals and such. There are many ways you guys could add some speed bumps to the spending process that might just give you pause before buying something!

And sure self control and a frugal mindset can’t hurt! Like being on a diet, must learn to not order dessert! Or cocktails! It pasta and potatoes.

Good luck! (Oh why did I mention pasta? Serious cravings kicked in!)

 

[RBDan]

I am not yet old enough to collect SS or my frozen company pension although I am barely old enough to take withdrawals from my rollover IRA. My income comes from monthly dividend payments from a large holding in a corporate bond fund. I treat that like a monthly paycheck which I use to pay the bills. I have been using this system since I FIREd in late 2008, nearly 15 years ago.

@scrabbler1 What corp bond fund do you have? I am looking for a bond fund so I will add it to my list to research.

Thanks!

 

[davidfin]

Quarterly stock sales from my brokerage acct., all long term capital gains fund expenses. Monthly auto deposit of my “paycheck” to my checking acct. from the cash balance in my brokerage acct.

Monthly auto transfers from checking into tax acct. (income & property taxes) and insurance acct. Surprising how much insurance costs on an annual basis.

 

[Reese]

I'm pretty risk-averse and a keep it simple person. Whatever is up is what I sell. 60/40 VTSAX/VBTLX