How has your spending changed after retirement?

[Ballhawker]

The focus here is clearly on being ready and confident to retire financially. The question of what percentage of my portfolio can I spend per year without fear of running out of money is debated frequently. I do see lots of people report that their nest egg continues to grow (sometimes greatly) after retirement despite no longer having a paycheck.

I've searched the forum but I don't see much on how spending has actually changed for folks as the years go by after retirement. I saw this online at the Fidelity website (paraphrasing):

Take your annual income while working, and expect to spend between 55% and 80% of that every year through retirement, depending on your income, retirement lifestyle, and health care costs. If you plan an active lifestyle in retirement, expect to ratchet up your annual retirement budget by 6 percentage points compared with a less active lifestyle. Expect 15% of your living expenses to be related to health care expenses after you retire, year in and year out.

So my question to you is: what did you plan to spend when you started retirement, and what did you actually end up spending? It would be useful to know this by age since I hear a lot about the "Go-Go Years" (presumably age X to 70?) the "Slow-Go Years" (presumably age 70-80?) and the "No-Go Years (over 80?).

Very interested to hear your experience and your perspective on this.
Thanks!

Edit: I should have clarified- what I'm interested in is percentage change from pre-retirement spending. My question (more accurately) to you is: on a percentage basis, how did your spending change following retirement and by what age? For example, I retired at 55 and spent 90% of pre-retirement, at 60 that changed to 80%, etc....

Thanks!!!

 

[pb4uski]

Given that we had been regulary users of Quicken while I was working, we had a really good idea of what our spending in retirement would be. We're been retired for 12 years now. For the first few years we were restrained a little. Travel and entertainment (mostly golf) were markedly higher than when I was working. More recently, we have greater confidence that we will not outlive our money so have been less restrained on spending, but it is hard to loosen the purse strings but we try... I rationalize them by thinking of them as splurging on things here and there that make our lives easier and more enjoyable or are experiences that we will remember.

ETA: If I take our spending from our first full year of retirement and run it through the BLS CPI Calculator, the result is about what we spend annually now.

 

[audreyh1]

As our portfolio increased over time our spending also increased.

 

[sengsational]

The help text from i-orp had some helpful links. The i-orp site is no more, but the wayback machine has captured the content: https://web.archive.org/web/20220330074804/https://i-orp.com/Plans/help/ORPHelp.html#rrplan

The links don't work, but there's probably enough information to look-up the referenced papers.

 

[Gallaher]

We don’t budget. Never really have. We are just frugal.
When working I grossed about $200K per year for last 10 years of work, retired in 2017. Stay at home wife/mom/spouse…bless her.
Now of the $200k we tithed, saved for retirement, traveled, spent, lived, paid taxes. You don’t really keep all $200k…we all know that.
Upon retirement we thought we could get by on $150k gross.
We have rarely approached spending $120k year in retirement.
Don’t know what we’d spend it on. We travel, have fun, built an adventure van, read a lot.
Biggest bozo moment for me is realizing we don’t need to save anymore or pay taxes or social security even tithing is a bit different as we tithed on everything we have…..years ago. This life is easy.

 

[Al18]

We still spend below our target, but since retiring 5+ years ago we spend more on home improvements and our travel budget doubled.

 

[Dash man]

Our spending has probably doubled in retirement from eleven years ago. Mostly from helping family, charitable giving, family vacations and medical expenses. Our lifestyle hasn’t really changed, with the exception we buy nicer cars with cash and pay others to do yard work.

 

[mountainsoft]

We are spending about the same as we did pre-retirement, though we have spent more this year due to some major home repairs.

We retired April 2023, so this will be our first "full" year of retirement. I won't know until the end of the year what our total spending came too, but my mid-year estimates put us just slightly above our planned expenses, which was about what we were spending while working. We spend far less on gas and a few work related expenses, but make up for that with more recreation and eating out now. Everything else is roughly the same.

 

[Winemaker]

We still spend the same as before. But instead of 403b, 401k, Roth contributions, that money went to $18,000/yr health insurance, travel charity and wine grapes!

 

[old medic]

Our approach is we get our 2 deposits, pay the bills, then split the remains in 3rds, pay down debt, into savings, then the rest is our BTD for the month.

 

[Koolau]

When we were w*rking, we saved so much that our spending was limited - But let's call it1X. When we retired, we quickly bumped that to about 2X. That 2X was pretty much our planned spending. Now we are up to about 4X (all of this in very rough terms as it varies year by year.) Of course over 19 years of FIRE, there has been significant inflation. We've also done well in investments and have felt comfortable loosening the purse strings a bit. And, yes, the stash has continued to grow even though we've spent a lot more. Keep in mind that YMMV.

 

[Still Learning]

Retired in 2019 so just pulled our 2018 budget which Included $45,255 for annual bills and $6K for repairs/vacations. Our current budget includes $44,152 for bills and $20K for repairs/vacation.

 

[CaliKid]

For me the biggest problem is a complete unknown (other than an educated guess) about how our investments will perform going forward. On the surface we spend less than our money should produce but if we have another 2008 then I don't know. I am a nervous person by nature.

 

[Beldar]

We don't track our spending in any great detail. Our goal of ER was to at least maintain the lifestyle we had while w*rking. We have.

Quite frankly, since our portfolio has grown considerable while "retired" we can spend just about whatever we want whenever we want, although responsibility is key here. Really no need to amp up our lifestyle though.

_B

 

[brett]

Over the last 10 years or so our investment portfolio is up, up, up.

Spending? Less spending on things, on clothes (since I no longer work or wear suits, etc), vehicles or, oddly enough, dining out where we live because of frequent travel.

Far more money spent on experiences...travel. We have traveled as much as 6 months per year.

No budget, what we spend is what we spend. I add up our after tax spend each year but not for any particular reason or to determine if we are on some budget or spending too much. One reason is that our income streams handle most of our expenses other that tax installments and travel. They come from ROI.

 

[Koolau]

No budget, what we spend is what we spend.

I just watch what's in the checking accounts and refill as needed.

 

[rk911]

As our portfolio increased over time our spending also increased.

Our portfolio and net worth tripled between 2005/06 when we retired and 2021 when it doubled due to an inheritance. Our spending remained relatively unchanged during that time period. We were spending roughly 6-mos of the year traveling in our motor home. We sold the MH last year because of health issues so our spending dramatically decreased.

 

[scrabbler1]

When doing my ER plan back in 2006-2008 before my eventual ER in late 2008, I expected my overall spending to change little, if at all. I used my current spending, eliminated commutation and FICA taxes, and replaced that with health insurance costs (premiums). The rest of my expenses would either rise or fall a little bit, roughly evening out.

I split my overall ER plan into 2 parts. The first and more important part was getting from my ER age (45) to age ~60 intact using only the taxable portion of my portfolio. After that, and I have only just entered that second part (I am 61 now), my overall financial picture become even better because I gain access to my reinforcements: (a) unfettered access to my rollover IRA, (b) frozen company pension at 65, and (c) Social Security.

As a percentage of my income, that didn't really mean anything because I had twice reduced my weekly hours worked in the 8 years leading up to my ER. So, which income level should be in the denominator of the equation? Should it be the full-time amount I had last earned in 2000, the first-level part-time income amount I earned in 2001-2007, or the second-level part-time amount I earned in 2008?

Over the last 15 years, my ER spending has been fairly stable, despite some investment income and spending spikes (with income and income taxes both spiking upward at the same time). With the ACA and the HI exchanges enacted in 2014, and some health issues spiking in 2015, my HI costs have risen, then fallen, then risen again, before falling a lot a few months ago when I became eligible for a low-cost plan here in New York. Thanks to my portfolio's value greatly increasing over the years (more than doubled), I have been doing a little bit of BTD, so my total expenses have been rising again, mostly due to the non-medical, non-tax part hitting its all-time high (just a little higher than its previous high back in 2013.

 

[TheWizard]

I'm in year 12 of retirement and like several others, I don't track my expenses. But I do track my AGI and taxes paid each year.

Now in my last five years of employment, I was maxing out contributions to my 403(b) and Roth IRA which kept my AGI lower than it might have been.
In retirement, my AGI and income tax have increased every year to the point that my AGI for 2023 is almost double what it was during final working years and my income taxes for that year are a bit more than double.

My retirement income, ordered by size, comes from pension/annuity, SS, RMD (taken monthly), and taxable dividends. I generally have excess income most months and invest the excess into stock funds in my taxable account, after leveling up my checking account.

That excess going into taxable stock funds exceeds my RMD by a fair amount so I have a negative withdrawal rate.

I'm spending a lot more in retirement with lots of travel, leaving on a four-week RoadTrip soon.
I could probably compute how much I spent each year by totaling up how much I transferred from checking to my taxable settlement fund at Vanguard and then subtracting that total from my Gross Income.
But that sounds a bit too much like work.

Additionally, I bought a new car last fall for $47,000 cash taken from that accumulated excess in my taxable account. But that only happens every six years or so...

 

[Closet_Gamer]

FIRE'd seven 8 months ago ... and honestly we're spending like drunken sailors.

Biggest excess expenses: golf, physical trainer, and lots of travel to see family. The latter is accelerated because DD1 just moved across the country and our elderly parents on both sides have been very unwell. The above leads to excess shopping expenses for things like golf shirts, balls, gym shoes, ...

We're not in jeopardy though. Our plan included not renting our beach house which we are doing. That covers the cost of the beach house which frees up money for the above things. If we stopped renting the house, lots of other stuff would have to get dialed back.

 

[jebmke]

I don't have a record of pre-ER spending. We spent a lot the first 2-3 years (2008-10) and then it settled down. Anecdotally I know our travel spend is much lower in retirement than before since we travelled a lot while younger rather than wait and roll around with the bus people later in life.

 

[pacergal]

Our spending has increased. Our planned budget was/is based on our pensions, some which we still"save" every month in our cash stash. Our take home from our pensions was slightly more than our take home from work, so right off the bat we had the ability to spend a bit more. Two years after retirement, SS was added and allowed an increase is spending/saving.
Our investment retirement accounts are for LTC if needed, extra budget pulls for things we can't cash flow, charity and gifting to kids.
We traveled more right after retirement, then none with covid and just now are starting back up. But we are more homebodies, and live pretty frugally, but allow ourselves to buy pretty much what we need or want we find of value.

 

[RetiredHappy]

Not really, just on different things. Before we retired, we probably spent about $300K a year, yeah, gulp. We made about $500K to 750K a year for the last 15 years or so before we retired. We ate out 3 meals a day as we were both in very high stress jobs/work and working 7 days a week. We travelled alot and were on work vacations while we were always connected and working. We owned 2 homes in different states before we retired. We sold one home and moved a year after we retired.

After we retired, we have settled into lunch out everyday but the other 2 meals at home, except for some dinners out and entertaining friends at our home. We travel more now, 3 months a year, getting away from cold winters and hot summers. Expenses saved from not eating out all 3 meals a year have been replaced by golf. We belong to a country club and golf 4 to 5 days a week, even when we travel and play outside of our home course.

We are 61 (almost 62)/76.

 

[Flyfish1]

Our actual spending has probably decreased from my working days as we went from two homes to one, offset somewhat by going from one boat to two. Travel expenditures dramatically increased since we now have time to travel! All in all, overall expenses are slightly down from pre retirement - running about even with @RetiredHappy .

 

[Surewhitey]

Not RE'd yet but I have been tracking our spending for 10+years. While in Mexico, <$24k annually. Back in the states we've been as low as $45k up to $70k.

I expect the $70k to be a good number as we will make things more efficient but add to the unknowns. The good thing is we have been growing our stash by a 4-6 multiple of spending for the past 5 years. Probably be fine with that & small pension and SS eventually. Travel is our biggie and we will likely keep it up...