How are you spending your SS money?

[audreyh1]

I’m solidly in the spend more as more becomes available camp. This includes gifting. Some goes to heirs while I’m alive.

 

[5Miler]

How will ceasing your IRA distributions affect your situation when RMDs kick in?

I guess the rest of the story is I started Roth conversions in the same amount when I cancelled my IRA distributions, up to the top of the 12% bracket. I pay the taxes on the conversions out of the withholding for my Social Security. Just sorry I didn't think to start my conversions earlier. I should be in the 22% bracket (or whatever that bracket reverts to) when RMDs start in 2026.

DGF is another story. She just turned 65 and we used a large portion of her Roth account managing income for ACA over the past 10 years so we need to work on that. If she was to start RMDs today she would be in the top third of the 22% bracket so I think some Roth conversions may be in order for a variety of reasons.

 

[tmm99]

It's true that we (all) knew SS was coming - eventually. Still, when it started, it seemed quite a shock. We suddenly had more money than we knew what to do with. That's a good problem to have. It was easily solvable for us as we knew of needs we could meet with the excess. Still, the initial influx of "new" money was quite startling to us. YMMV

That's kind of my sentiment as well.

When I was doing my retirement planning, I included SS (sometimes at a much lower rate to stress test), but I have been using the same WR each year (for the most part) up until now without counting on the future SS. So the new money coming in like this is kind of startling and shocking, although I knew it would happen sometime in the future. It is a good kind of shock for sure.

 

[tmm99]

Thank you all for posting and sharing how you're (or you will be) spending your excess SS money! I will keep the withdrawal rate from my portfolio the same as before and spend the SS money on discretionary stuff. I will most likely have over 1/2 of the money in my portfolio left in the end even if the market performs poorly doing it this way, so I should be good. I can always save the SS money and spend that for living expenses instead if the market tanks even further.

I think I will probably park my SS money somewhere as it comes in, and then decide on what I want to splurge it on. Right now, I can think of five different ways to spend the same money! (I will need to prioritize.) Once the fund gets big enough, I will be able to do spare-of-the-moment, last-minute activities that may cost a lot of money without thinking much about it, which is kind of nice.

 

[Koolau]

I guess the rest of the story is I started Roth conversions in the same amount when I cancelled my IRA distributions, up to the top of the 12% bracket. I pay the taxes on the conversions out of the withholding for my Social Security. Just sorry I didn't think to start my conversions earlier. I should be in the 22% bracket (or whatever that bracket reverts to) when RMDs start in 2026.

DGF is another story. She just turned 65 and we used a large portion of her Roth account managing income for ACA over the past 10 years so we need to work on that. If she was to start RMDs today she would be in the top third of the 22% bracket so I think some Roth conversions may be in order for a variety of reasons.

Sounds like you are on top of things. Thanks for the reply and best luck in your FIRE journey. Roths are the gift that keeps on giving (IMHO.)

 

[foxfirev5]

As long as I have more money coming in than I'm spending, I'm good. The source doesn't matter.

 

[Route246]

I've just looked up the cost of flight to Japan in Business Class. Business Class is about 5 times higher in cost compared to Economy. That's definitely in the BTD territory.

We both fly frequently to Asia using business class. Can you cite budgetary numbers for the 5x assessment?

For instance, we figure coach SFO-NRT is usually something like $1200-$2000 with restrictions depending on the season on UAL/JAL/ANA. Other airlines slightly cheaper. Business class for the same route and time can be had for maybe $4000-$5500 with no restrictions.

You do get what you pay for. Just curious about what airline you're using, what route you're taking and what time of year you're travelling.

 

[Gumby]

If I recall correctly, when we purchased our seats for JFK to HND, it was about $3000-3300/person for Economy and $7000/person for Business Class (round trip). That's on All Nippon Airways for this November.

 

[RobLJ]

I purposefully withdrew a higher % amount (5-6.8%) before SS, which starts next year for me. It will be about 1/3 of our former withdrawal, so it will allow us to reduce the withdrawal rate to 3% or so.
We don't spend nearly everything withdrawn (we'll get close this year because of Scotland and installing a heat pump and a couple other unusual spends), since I"m withdrawing to the top of the 12% tax bracket, so more things like flying to Europe business class and gifting the grandkids more for their college. This will accelerate when DW starts withdrawing (she is 4 years younger), since our SS combined will more than pay for our essential expenses. Mine alone will almost pay for that. I'm encouraging traveling wherever she wants while I am able.

 

[tmm99]

We both fly frequently to Asia using business class. Can you cite budgetary numbers for the 5x assessment?

For instance, we figure coach SFO-NRT is usually something like $1200-$2000 with restrictions depending on the season on UAL/JAL/ANA. Other airlines slightly cheaper. Business class for the same route and time can be had for maybe $4000-$5500 with no restrictions.

You do get what you pay for. Just curious about what airline you're using, what route you're taking and what time of year you're travelling.

These aren't the dates I checked yesterday (I don't remember exact dates - I was just browsing then...), but I've just checked for random dates in April of 2025. Economy costs $1,741CAD and BC is $8,729CAD, so BC is a little over 5X Economy. I always go for Air Canada as that's the only airline that flies direct (non-stop) from Toronto to Tokyo. Yesterday, I don't know which dates (my friend wanted to go either in Oct or April or summer), but the cost was Economy $2,000ish CAD and BC $10,000ish CAD, so the difference was about the same (5X).

 

[tmm99]

If I recall correctly, when we purchased our seats for JFK to HND, it was about $3000-3300/person for Economy and $7000/person for Business Class (round trip). That's on All Nippon Airways for this November.

I would definitely go for BC at this point if the price difference was that close! Maybe this is a Canadian thing - BC seems so much more expensive here!

BTW, $3,000 from JFK to HND for Economy seems VERY expensive. Maybe that was the cost for Premium Economy?

 

[anethum]

I saw similar 5X higher prices for Business class tickets on United & Air France nonstop between DC & Paris when I flew Economy class in late spring this year. I just put in random dates for flights on Tuesdays on that same route in September and got a regular Economy RT fare of $1,050, and Business RT of $6,970. Premium Economy is $4,326 which I find even more shocking than the Business fare. I just can't see spending that sort of money for Business or Premium Economy for just 8 hours on a plane, regardless of whether or not I can afford it.

 

[Gumby]

I would definitely go for BC at this point if the price difference was that close! Maybe this is a Canadian thing - BC seems so much more expensive here!

BTW, $3,000 from JFK to HND for Economy seems VERY expensive. Maybe that was the cost for Premium Economy?

Possibly faulty memory. I knew I was going business class, no matter what, so I was not paying a great deal of attention to the alternatives. I have flown economy overseas many times, and it was miserable every time. After flying business class (for the first time) to Cairo two years ago, I swore I would never fly economy overseas again, and I have not. Thankfully, we have the money to do it.

 

[Koolau]

Possibly faulty memory. I knew I was going business class, no matter what, so I was not paying a great deal of attention to the alternatives. I have flown economy overseas many times, and it was miserable every time. After flying business class (for the first time) to Cairo two years ago, I swore I would never fly economy overseas again, and I have not. Thankfully, we have the money to do it.

It's good to know your limitations. Long flights are really a pain. Nice that we have money in our dotage.

 

[Jeb-NY]

We hire things done that we use to do ourself but didn't like doing. Go out to eat more and leave bigger tips if the staff is nice. Give more to charity. Buy more things we use to consider a bit over the top but would be nice. Bigger checks to the son for birthdays and Christmas. Buy what we want for our hobbies. We both waited to 70 to start SS, considering it an annuity with good survivor benefits and didn't worry if we drained as much money out as possible. Now with RMD and SS we have plenty since we have always been frugal.

 

[jollystomper]

We will likely spend some of it on increased "warm gifting" to our children and grandchildren.

Maybe I will decide at that time to stop doing outside lawn work and hire someone to manage our lawn property. Even though I solve so many problems of the world during my "meditation" time on the riding mower .

 

[Koolau]

We will likely spend some of it on increased "warm gifting" to our children and grandchildren.

Maybe I will decide at that time to stop doing outside lawn work and hire someone to manage our lawn property. Even though I solve so many problems of the world during my "meditation" time on the riding mower .

I almost cut down DW's new blue spruce that way (back in the day.) I was thinking and not watching where I was going. One of the hazards of meditation, I guess though YMMV.

 

[W2R]

I am one of the lucky few who feel no compulsion to spend every last cent. I have a lifestyle that is just right for me, so I spend enough for that lifestyle. That means there is money left over every month. When something big and unexpected comes up, like when I needed my new roof, the money is there from the leftover money of past months.

 

[youbet]

When we're grocery shopping, we spend SS money on items from odd numbered aisles and pension money on items from even numbered aisles. Liquor is purchased from portfolio bux.

 

[Dtail]

Fiance is receiving SS but not me yet. I consider all the monies fungible and just add it to our available monthly monies we can spend.

 

[Koolau]

I am one of the lucky few who feel no compulsion to spend every last cent. I have a lifestyle that is just right for me, so I spend enough for that lifestyle. That means there is money left over every month. When something big and unexpected comes up, like when I needed my new roof, the money is there from the leftover money of past months.

I actually think quite a few of us here aren't compelled to spend down our stash too quickly. If we die with "too much" we still enjoyed our lives and spent on what we wanted/needed. I don't think I'll have any regrets about spending too little (though I'm sure others would spend differently than I do.)

For some things, I fling open the purse strings but for most things, I'm STILL after value for my money. Not a bad habit IMHO but YMMV.

 

[Koolau]

When we're grocery shopping, we spend SS money on items from odd numbered aisles and pension money on items from even numbered aisles. Liquor is purchased from portfolio bux.

Now THAT's a new strategy to me!

 

[thatguy]

I could spend more but there could be unknowns ahead. Are one or both of us gonna need LTC? We don't have close family that could help us. Are we gonna want to buy into one of those life care CCRC communities? We know which ever of us is the survivor will loose one pension & one SS, so withdrawals will be more important. I like having a little excess.

 

[flyingaway]

Las Vegas is for surplus money.

 

[old medic]

Not collecting any yet, been waiting nearly a year on my SSD claim.