Frugal and retired - anyone alse?

[Sunset]

My husband is waiting until 70 to claim his social security, so we only have 2 very small pensions and my social security. We need to take a little out of our nest egg, but try to keep it small.
When we have his social security at 70 and minimum distributions at 72, we're going to feel very rich!
We are going on a 2 week European vacation soon, because although we are very healthy, the future is guaranteed to no one.

You can take money out of retirement funds before you are forced to do so via RMD's.

We are doing this before SS, mostly as Roth conversions.

You can calculate out the taxation you will pay at age 72 with SS and RMD's , added to what you currently get.
It's possible that you could take out money now and pay 12% tax, instead of leaving it in and taking it out at age 72 and paying 22% taxes

Ignore me if you already know about doing roth conversions or leveling of income to reduce the tax torpedo or RMD effect.

 

[DrRoy]

I was, but after 6 years of RE I’m getting over it. Just spent $400 on some art glass yesterday.

 

[jgman]

You can take money out of retirement funds before you are forced to do so via RMD's.

We are doing this before SS, mostly as Roth conversions.

You can calculate out the taxation you will pay at age 72 with SS and RMD's , added to what you currently get.
It's possible that you could take out money now and pay 12% tax, instead of leaving it in and taking it out at age 72 and paying 22% taxes

Ignore me if you already know about doing roth conversions or leveling of income to reduce the tax torpedo or RMD effect.

I've been thinking about this also. Do I claim SS at 62, or withdraw from my 401k and postpone SS until later. I guess it depends on whether I can generate a return greater than SS which I believe is 8 percent. Although, I'm guessing I'll want the SS money earlier for travel or other activities before I get to old.

 

[athena53]

I was, but after 6 years of RE I’m getting over it. Just spent $400 on some art glass yesterday.

I can be that way. Seeing the pot continue to grow, even after withdrawals, 9+ years in I'm less afraid of going broke and more afraid of Missing Out.

ETA: the legacy of Grandma Athena stories I leave with my grandchildren is one of my biggest priorities. The kids are 9,6 and 4 and I'm 70. Most of the stories will involve simple things like the conversations we had, visits to Starbucks for cake pops, the kid-friendly place I take them for haircuts...but a few involve plane tickets and hotels. DS (my only child) has told me that anything I leave them will go to the grandchildren and I'd rather leave them a smaller pile of money and more stories.

 

[pb4uski]

I've been thinking about this also. Do I claim SS at 62, or withdraw from my 401k and postpone SS until later. I guess it depends on whether I can generate a return greater than SS which I believe is 8 percent. Although, I'm guessing I'll want the SS money earlier for travel or other activities before I get to old.

It's not whether you can generate a return greater than SS and the return on SS is NOT 8%. Beyond your full retirement age your benefit increases 8% annually (simple, not compounded) so if your FRA is 67 then your age 70 benefit will be 124% of your PIA (FRA benefit). If you take earlier than your FRA it is discounted. If your FRA is 67 and you take at 62 you only get 70% of your PIA, so the discount averages 6% annually. Think of it .. if you take at 62 you only get 56% (70/124) of what you would get at 70.

One way of thinking about it is if you forgo 8 years of 70% age 62 benefits, then you get 121% more ((124/56)-1), COLA adjusted, for life starting at 70 plus you get another 8 years to do low tax cost Roth conversions.

You may want to visit opensocialsecurity.com

 

[Kings over Queens]

Raises hand. It is hard to un-frugal.

Old habits die hard.

Here are 2 basic, but very real examples for me and my wife. Not yet retired, but very close.

We are traveling, doing the baseball stadium thing, at Loan Depot Park in MIA on Tuesday, wife refused to spend 7.50 for a bottle of water. I typically wouldn't spend money on beer either, but a beer and hotdog is my thing at a baseball game. She took my cup, rinsed it, and filled with water.

Last night a Tropicana field, looking at parking options, and took the lot that was $5.00 cheaper than the "premier" parking right next to the stadium.

 

[Koolau]

Old habits die hard.

Here are 2 basic, but very real examples for me and my wife. Not yet retired, but very close.

We are traveling, doing the baseball stadium thing, at Loan Depot Park in MIA on Tuesday, wife refused to spend 7.50 for a bottle of water. I typically wouldn't spend money on beer either, but a beer and hotdog is my thing at a baseball game. She took my cup, rinsed it, and filled with water.

Last night a Tropicana field, looking at parking options, and took the lot that was $5.00 cheaper than the "premier" parking right next to the stadium.

I think I'd skip the dog and beer and spring for the close-in parking instead. BTD indeed!

 

[candrew]

I prefer the term "thrifty".

 

[Kings over Queens]

I think I'd skip the dog and beer and spring for the close-in parking instead. BTD indeed!

It wasn't more than a couple football fields in length. If we can't walk a little bit we're in trouble.

 

[Car-Guy]

Maybe I'm more frugal than I thought. Yesterday I dropped Sirius XM on one of my vehicles. Really small dollars but I just got tired of their tactics and the dance. And I told them that when I cancelled the service... A day later and I'm glad I did. So now, it's listening free to a local radio station or music memory stick.

 

[Looking4Ward]

^^ That brings up a good point. I have noticed over the last 30 years that most people, at least where I live, now hire out their landscaping needs. Curious, I requested quotes from several local landscaping companies to see how much I am saving by doing it all myself. I was shocked at the results. These are average prices I was quoted for the listed services for lawns my size:

1. Lawn mowing only: $300 per month
2. Lawn mowing + leaf removal: $400 per month
3. Lawn mowing + leaf removal + flower bed / shrubbery upkeep: $600 per month

The "per month" charges are for Mar - Nov only, as everything here goes dormant Dec - Feb. I was told that most people select option 2. So they are paying $4,800 per year to not have to mow their own lawn once per week Mar - Sep, and to not have to pick up and dispose of their own leaves Oct - Nov. Over a 5-year period that is $24,000. I'm literally blown away that anyone considers that amount of money reasonable just so they don't have to spend an hour or two every week on these chores that are part of owning a house. My lawn isn't even large, only 7,500 square feet. I only bag when mowing during Oct/Nov to pick up leaves (lots of trees around me). When not bagging it only takes me 45 minutes to mow and weed whack, once per week. When bagging, 1.5 hours. Annual total time spent is around 40 hours. If I were paying a landscaping company to do the work it would come out to around $120 per hour. Where I live that's what doctors and lawyers charge! I have a Master's Degree in Computer Science and a great job, and I barely earn half that amount. I guess I should consider switching jobs!

Personally, I think people who are physically sound are crazy to pay these amounts. From the age of 10 to 14 I mowed lawns in summer, to save money to buy a car. I would mow 2-3 lawns per day, and only charged $10. That was the early 80's, sure, but $10 in 1984 is not $75 today, not even close.

If I weren't doing the work myself I would not be out earning money instead. I do the work when time allows. Sure, I might be able to do better spending that time researching stocks for investments, but's only a maybe, it's not a sure thing.

Am I crazy?

Are you crazy? Not at all.

I ER'd over 9 years ago when I was 53. I've lost girlfriends because I was "cheap". My friends are less flattering and call me a tight a$$.

I just turned 63 and I've loosened up a bit. I've bought and sold several expensive toys in the years since but kept a rather large boat. My mom suddenly passed away earlier this year at 81 and that brought me some additional perspective because she was even more frugal than me and frankly didn't enjoy much of her last decade of life.

I've bought two homes this year, one by the marina close to my boat and another down at the Texas coast near the ocean. I don't intend to rent out either one of them, have 3/4 equity in all of them, and have done several things to keep the carrying costs low.

Like you, I maintain my own yards. I also wash and wax my own 42' boat rather than pay hundreds a month to have someone else do it like most of my dock neighbors do. Not only am I saving thousands each year on just those two items, I believe I'm adding years to my life by staying active that way.

Case in point - just had a complete physical. Aside from high cholesterol (which I've always had and refuse to take statins) my lab results are in the range of a 30-40 year old male.

So I plan to continue performing the laborious tasks that I am capable of rather than pay someone else. I still clip coupons and get excited to see how much I'm going to save on groceries every Wednesday when the sales at Randall's and HEB come out, but this year I'm going to spend more on experiences (travel) and since I became an empty nester last month I can now take advantage of lower prices during off-seasons. Just booked two fishing trips to Florida and airfare was only $105 round trip per person.

I'm still frugal. But I am sacrificing less.

 

[pacergal]

WE are pretty frugal in most aspects, but when it comes to bringing joy, money is well spent.
Last weekend DH took "the boys" to Seattle to watch a baseball game. DGS asked if he could get room service for dinner. The excitement and smiles he had were priceless and well worth a few extra bucks.

 

[PatrickA5]

^^ That brings up a good point. I have noticed over the last 30 years that most people, at least where I live, now hire out their landscaping needs. Curious, I requested quotes from several local landscaping companies to see how much I am saving by doing it all myself. I was shocked at the results. These are average prices I was quoted for the listed services for lawns my size:

1. Lawn mowing only: $300 per month
2. Lawn mowing + leaf removal: $400 per month
3. Lawn mowing + leaf removal + flower bed / shrubbery upkeep: $600 per month

The "per month" charges are for Mar - Nov only, as everything here goes dormant Dec - Feb. I was told that most people select option 2. So they are paying $4,800 per year to not have to mow their own lawn once per week Mar - Sep, and to not have to pick up and dispose of their own leaves Oct - Nov. Over a 5-year period that is $24,000. I'm literally blown away that anyone considers that amount of money reasonable just so they don't have to spend an hour or two every week on these chores that are part of owning a house. My lawn isn't even large, only 7,500 square feet. I only bag when mowing during Oct/Nov to pick up leaves (lots of trees around me). When not bagging it only takes me 45 minutes to mow and weed whack, once per week. When bagging, 1.5 hours. Annual total time spent is around 40 hours. If I were paying a landscaping company to do the work it would come out to around $120 per hour. Where I live that's what doctors and lawyers charge! I have a Master's Degree in Computer Science and a great job, and I barely earn half that amount. I guess I should consider switching jobs!

Personally, I think people who are physically sound are crazy to pay these amounts. From the age of 10 to 14 I mowed lawns in summer, to save money to buy a car. I would mow 2-3 lawns per day, and only charged $10. That was the early 80's, sure, but $10 in 1984 is not $75 today, not even close.

If I weren't doing the work myself I would not be out earning money instead. I do the work when time allows. Sure, I might be able to do better spending that time researching stocks for investments, but's only a maybe, it's not a sure thing.

Am I crazy?

Yes, you are crazy.

After 30 years of doing all of my own yard work, one of my greatest enjoyments is watching someone else do it. Especially in the Fall when there are 3 or 4 guys blowing leaves at a time. I used to bag 20 or 30 bags of leaves every week during October/November. Oh, and this year we had 30+ days over 100 with heat indexes around 115. I sat in my cool house feeling sorry for the guys. We pay what I consider a lot of money, but probably no more than half of what you're quoting. I'm pretty frugal in some things, but my landscaping costs are worth every penny.

 

[Koolau]

It wasn't more than a couple football fields in length. If we can't walk a little bit we're in trouble.

I guess I'm in trouble then. Using a cane now and hoping for some intervention soon due to back issues. YMMV

 

[marko]

My late mom was horrified by frugal folks who deprived themselves and it carried over to me. By deprived, I mean people who could afford things, wanted things but went without (like her multimillionaire father).

She didn't spend money she didn't have, but fortunately, she had a lot to spend. A classic "If you don't spend it, your heirs will" story.

DW and I are quite happy to "outsource" as much as we can (landscaping, house cleaning, boat work, car washing, window washing, pool clean/maintenance, etc) in order to have time for ourselves. Plus, the pros tend to do a better and faster job.

"YOLO so live well" but to each his own. BTD, IMO.

 

[OldShooter]

Sirius?!? The last two vehicles we bought have had 6 month free service but we never even turned it on. Any discretionary thing that picks my pocket on a regular basis I don't consider "small dollars." I have NYT at a buck a week; that is about the only one I can think of. Heat, light, internet and cell phone I don't consider discretionary but I pay close attention to their costs.

 

[pb4uski]

We avoided satellite radio for years, but did subscribe on one of our long cross country trips. So much better than having a printout of the NPR stations in each state and having to try to find the nearest one every few hours. A small extravagance at $7/month or whatever it is.

 

[NW-Bound]

^^ That brings up a good point. I have noticed over the last 30 years that most people, at least where I live, now hire out their landscaping needs. Curious, I requested quotes from several local landscaping companies to see how much I am saving by doing it all myself. I was shocked at the results...

Personally, I think people who are physically sound are crazy to pay these amounts...

If I weren't doing the work myself I would not be out earning money instead. I do the work when time allows...

Sometimes, it's not the money but one has to do some physical activities to stay fit. I don't go to a gym, but work in the yard for some exercise.

For older retirees, if a physical activity is not hazardous like getting on your roof to work on your chimney, or climbing on a tree with a chainsaw, there's nothing wrong with doing some work around the house. I get job satisfaction out of it too.

Similarly, we enjoy eating out when we travel to foreign lands, but at home we get more enjoyment out of preparing food ourselves and making many different dishes we found on the Internet.

 

[jgman]

It's not whether you can generate a return greater than SS and the return on SS is NOT 8%. Beyond your full retirement age your benefit increases 8% annually (simple, not compounded) so if your FRA is 67 then your age 70 benefit will be 124% of your PIA (FRA benefit). If you take earlier than your FRA it is discounted. If your FRA is 67 and you take at 62 you only get 70% of your PIA, so the discount averages 6% annually. Think of it .. if you take at 62 you only get 56% (70/124) of what you would get at 70.

One way of thinking about it is if you forgo 8 years of 70% age 62 benefits, then you get 121% more ((124/56)-1), COLA adjusted, for life starting at 70 plus you get another 8 years to do low tax cost Roth conversions.

You may want to visit opensocialsecurity.com

Good info...thanks!

 

[FLSUnFIRE]

Maybe I'm more frugal than I thought. Yesterday I dropped Sirius XM on one of my vehicles. Really small dollars but I just got tired of their tactics and the dance. And I told them that when I cancelled the service... A day later and I'm glad I did. So now, it's listening free to a local radio station or music memory stick.

I signed up for the free 3 month trial before my road trip. It just ended and they cut me off promptly. If they call, I'll ask for the 5yr for $150 I've heard of but that's all it's worth to me as I only use it driving (already have streaming apps thank you), don't drive that much, and the stations get repetitive. I'd like it for my road trip next year so perhaps would pay for that month then cancel if no great offer comes my way.

 

[Gumby]

I am neither excessively frugal nor a spendthrift. I am, however, well aware of how much I spend and I try to choose my spending wisely.

If I do not believe that something is beautiful or know that is is useful and necessary, I do not need it in my house and do not buy it. But when I do buy things, I will pay well for quality. I buy anything I want at the grocery, but I don't ever waste food if I can help it. I grow my own vegetables because I enjoy it, but I get monthly deliveries of expensive locally grown pasture fed meat. I drink wine with dinner every night, but a $15-20 bottle is just fine for my taste.

I am willing to pay for services when it is necessary and/or improves my life. So I have a cleaning lady and pay her well and I call in a guy to fix my furnace. But I am healthy enough to mow my own lawn and enjoy doing it, so I don't have a lawn service. And I do most of my own car maintenance, because I have the knowledge, the tools and the space to do it. I am willing to spend money on vacations, going to the theater, museums and other such experiences because I enjoy them, but I don't go to casinos, nightclubs or professional sporting events because I don't and they are expensive.

 

[athena53]

We are traveling, doing the baseball stadium thing, at Loan Depot Park in MIA on Tuesday, wife refused to spend 7.50 for a bottle of water. I typically wouldn't spend money on beer either, but a beer and hotdog is my thing at a baseball game. She took my cup, rinsed it, and filled with water.

I can be that way. This morning a friend met me at the airport to see me off. The only concession landside was Dunkin’ Donuts. I was thinking of splurging (diet-wise) on a doughnut but they were $2.05 each- before about 12% in taxes. I had coffee. He had both coffee and a doughnut.

Now I’m at O’Hare swilling champagne (but hey, lounge access was “free”) and I just spent $91 on a bottle of scotch at Duty-Free.

 

[statsman]

Maybe I'm more frugal than I thought. Yesterday I dropped Sirius XM on one of my vehicles. Really small dollars but I just got tired of their tactics and the dance. And I told them that when I cancelled the service... A day later and I'm glad I did. So now, it's listening free to a local radio station or music memory stick.

We had been on a $5/mo Music & Entertainment deal for about four years leading up to our promo ending the end of July. When I called (yeah, I hate that dance), that $5/mo deal was off the table. The best Sirius XM would offer was a $6/mo deal, but it was less than the Music & Entertainment plan, excluding some higher profile stations (Beatles, Tom Petty, etc.). We continued with the cancellation.

They've tried numerous times since August 1 to contact us about a $6/mo offer. At least 10 emails, 3 mailers, and a phone call. Along the way, the deal became $6/mo for the Music & Entertainment plan. In early September, the offer was for two years at that cost. We still haven't bitten.

I signed up for the free 3 month trial before my road trip. It just ended and they cut me off promptly. If they call, I'll ask for the 5yr for $150 I've heard of but that's all it's worth to me as I only use it driving (already have streaming apps thank you), don't drive that much, and the stations get repetitive. I'd like it for my road trip next year so perhaps would pay for that month then cancel if no great offer comes my way.

I tried to get their 3-year/$99 deal for the Music & Entertainment plan with their Chat representatives a couple of weeks ago, but they claimed that was only for new vehicle owners. A complete lie since I've read enough posts from individuals getting that offer and the 5-year/$150 deal you mentioned, and none of them had purchased a new vehicle or a different used vehicle.

I actually found a couple of local FM stations that I wasn't aware of that carry some music we like. Along with the USB thumb drive holding some 1200+ songs, we're perfectly fine to let Sirius XM waste their time with the same $6/mo offer we keep refusing. I am not so sure this is about being frugal. It's more about having to deal with Sirius XM and their yearly song & dance.

 

[rodi]

I am not as frugal as some here, and more frugal than many. Sometimes for reasons other than money.

When I was expecting our first son I let coworkers know I was not adverse to hand me down kids gear/clothes/furniture... We got a crib, changing pad, and a boatload of clothes from that little exercise. Still had to buy the breast pump, stroller and carseat - but saved a boatload on what we would have had to spend. I passed the stroller, crib, and breast pump on to coworkers who had the needs when we were ready to get rid of them.

Similarly I let friends with kids a few years older that I was amenable to hand me down clothes and toys. Again - a bonanza.

When the kids got to an age they wanted to pick their own clothes we went to thrift stores. Both still love thrifting, and probably half their clothes were purchased used.

Frugal - you betcha.

Travel - always been a DIY planner... searching for the deal... staying in airbnb's because, especially when we had kids, they were cheaper, and we had more space. We did a tour to Machu Picchu/Galapagos in fall 2022 - and DH let me know he wasn't interested in tours... Just a travel style preference. We've stayed at some amazing high end places we lucked into on VRBO/Airbnb.

But travel is definitely our biggest single line item at the moment... trying to travel as much as possible before we're too old to enjoy it.

We do our own yard work, home maintenance, cleaning, taxes, gardening. When we need to hire help - we try to hire our college sons so at least the money is going towards their next year's spending money.

Do I feel deprived... Far from it.

 

[Teacher Terry]

I have always been frugal mainly due to necessity but spend on what I value. Almost 3 years ago I got divorced which cut my income in half. I had to cut my expenses to match. I sold my house and bought a condo. That’s been a great move not only financially but I have made 4 really good friends in my building.

I spent money on what’s important to me which is my dogs and travel. I have went to Europe this year and last. I also am back consulting and will make around 9k. I really enjoy the clients and that has enabled me to not have to spend savings on some big expenses such as 2k in vet bills. I still drive my 15 year old car that only has 69k miles on it. It’s probably my last car.