kz said:
Do you base your 'living' on your income? Are you still saving money in retirement? Do you budget your expenses in retirement?
We've lived on a budget for so long that I don't even know how to live anyway else. I still separate accounts for short-term, long-term and health care expenses. We still save 15+% of our pensions each month and stash any money earned from part-time work in our Roth IRAs.
I'd love to hear what others are doing when living on their retirement incomes.
As Cut-Throat says, what are we saving it for?
We base our living on what we enjoy doing, which after years of LBYM doesn't require a lot of money. We didn't ER until there was enough SWR to support that lifestyle, so to some extent we base our living on our income, but arriving at this point was an iterative process. Today we don't deny ourselves, I spend more on books & eating out, and we spend more on fundraisers.
We don't try to save money, but we pick up loose change on the sidewalk. We ER'd on the assumption of an 8% mortgage but over the last four years we've refi'd that down to 5.375% and enjoyed the extra budget room. Having a teenager around the house tends to make you very conscious of setting a good example so we probably still focus on saving & LBYM. I didn't hesitate to buy new tae kwon do sparring pads, for example, but I haven't told our kid that I've bought them yet. I'll wait until the old pads have reached their end of life, and if there's a sudden failure then we won't have to scramble for replacements. However teenagers (ours in particular) have a very difficult time stashing assets for later use so I won't burden her with the knowledge of their existence until the time has come.
I think it makes great sense to stash money in a Roth IRA while you're spending your taxable accounts. Your income is extremely low and your taxable accounts can support your spending needs while you're deferring taxes on other income.
It does bug me that we won't use our full IRA eligibility this year. It's the first time in over 20 years that we'll have failed to max out. On the other hand I hope I'll train myself out of this feeling soon... I don't think it'll be worth feeling bugged about unused IRA eligibility when I'm in my 60s.
We still keep a budget. The habit isn't very burdensome, it sets a good example for our kid, and there's no benefit to NOT keeping a budget. It's also very useful, years later, to be able to research what we spent on a particular project or appliance.