Retired, now how do I spend the money?

[Drake3287]

Sort of a strange question but I'd love to hear from anyone else that has been in the same situation. I know it's a great problem to have and I apologize ahead of time for sounding like I'm throwing it in your face. It's not my intention.

I retired recently in my mid 50's with a defined government retirement plan that pays me 100% of my final salary for life, this includes a spousal continuous option when I die plus a COLA each year. As for medical, both my wife and I have 100% paid medical/dental for life.

Our financial picture is this, including my wife working until age 62 most likely. In cash savings and investments we have almost a million dollars put away and kids college costs have all been paid for by us. Our current house is almost paid off and we have no real plans to move, we live in a very sought after area.

Here's the problem, each month we easily save a couple of thousand dollars with no real purpose or need and when our house is paid off it'll be another $1,200 added to that each month. We pretty much have the means to buy what ever we want but tend to not waste our money. At the same time we we're not afraid to buy things we want or need including yearly travel.

I've thought about buying a vacation home but I've heard so many people say they were sorry they bought one simply because they feel like they have to use it all the time to justify the cost. Plus, if we bought a vacation home it would limit the money available for yearly trips which we love.

The bottom line is, I've done a great job in saving for retirement but now I'm afraid to spend the money. This has to be a common problem for people like myself who have spent so many years saving money but find it hard to part with. I realize I should have planned this better but I was hesitent to do anything until after my kids were out of college and that financial burden was over.

 

[brewer12345]

Philanthropy? Start an expensive hobby? Start smoking dope?

 

[nash031]

Fund the early retirement of a complete internet stranger?

 

[2HOTinPHX]

"Including my wife working until age 62 most likely" Why?
Sounds like you have the means that she could be enjoying retirement with you....

 

[aja8888]

Gambling!

Vegas trips, Louisiana, Atlantic City, Connecticut (Foxwoods..yes!)

You could easily have a lot of travel fun and blow through some big dough!

Just curious, what did you do for a living to get the 100% pension and 100% lifetime medical coverage?

 

[Cassie]

What aja88 said ^

 

[bs300]

Plan a once a month trip to somewhere you've never been.

 

[inky]

Open a donor-advised fund at Vanguard and designate a percentage to your favorite charities each year.

 

[Katiek]

Is there something you'd like to do that you're not currently doing? Travel or another hobby? If not, then don't worry about it and just continue to enjoy life. You never know when you might develop new interests, or become involved in a cause that you want to support.

If the additional money can let you do things you enjoy, great. But feeling you "need" to spend it, may just add other stresses or complications to your life.

 

[ERzeal]

I recommend reading "Happy Money" by Dunn and Norton. The book uses behavioral science to help understand how to use money to have a positive impact on your sense of well-being.


Sent from my iPad using Early Retirement Forum

 

[chris2008]

I can relate. We are in a similar situation. DH already enjoys a pension. My pension will start in 3 years. Thus we both retired in 9/2013, at age 55 and 61. We have saved more than enough to cover the gap, having carefully planned for ER and saved enough to be sure that we can afford our lifestyle "and then some" on our ongoing income.
Coming from financially responsible families we never enjoyed spending frivolously.

Our current lifestyle is exactly how we like it.
We love travelling AND our home. We do not regret spending for both.
We look out for good stuff but higher price tags do not necessarily buy more happiness for us.
We support a couple of charities.
We are happy as it is.

We feel no urge to spend more but love the feeling that we could. For example I have seen a trip to Antarctica with all bells and whistles. It would cost A LOT. But it might be the gift for my 60th birthday.

Starfting retirement together has been the best decision ever and the money we spend to cover the gap till my pension kicks in is our best investment.

 

[Khan]

Give it away.

 

[MBSC]

Do you have LTC insurance? You may need to spend today's excess during your later years for in-home care or assisted living.

 

[Travelwanted]

Open a donor-advised fund at Vanguard and designate a percentage to your favorite charities each year.

+1

 

[travelover]

Do you have LTC insurance? You may need to spend today's excess during your later years for in-home care or assisted living.

This is where I'm at. DW and I both are covered by pensions that exceed our needs, plus we have enough investments to replace the income from the pensions if we lost them.

But if either one of us needs long term care, we want to be able to pay for it without bankrupting the other spouse. Whatever is left over is someone else's problem.

 

[jim584672]

Hookers 'n blow. Think that will fill out your budget nicely.

 

[Dash man]

We recently built a nice little oasis in our back yard and love it. Redid the old patio and expanded it out and added a gas fire pit and new landscaping including low voltage lighting. We're planning on spending a lot more time outside this year.

 

[ArkTinkerer]

There are plenty of things to enjoy that cost money. There are plenty of worthwhile things you can do to help others. Someone nearby have a house fire? Local person have a medical need and lack insurance? Habitat for Humanity? College scholarships? Sponsor the local schools for a trip to a museum? Buy the school science department some equipment? Computers/internet for low income families? Sponsor a free public Shakespeare play?

 

[ER1970]

Maybe save the monthly extra $ in an investment account for your future grandkids? Will be a nice surprise gift for them when they grow up.

 

[Evergreen]

Do lots of world travel, eat in great restaurants and stay in top class hotels, you'll soon lighten the load. I'm in a similar position, aiming to get out this summer and have always been frugal, I'm wondering how I'm going to shift my savings, travelling is probably the answer. I don't need a Ferrari or a 6 bedroom house, better to spend it on experiences rather than material things.

 

[W2R]

Is there something you'd like to do that you're not currently doing? Travel or another hobby? If not, then don't worry about it and just continue to enjoy life. You never know when you might develop new interests, or become involved in a cause that you want to support.

If the additional money can let you do things you enjoy, great. But feeling you "need" to spend it, may just add other stresses or complications to your life.

+100 Perfect! The above reflects exactly what I was thinking.

Right now I have a little bit more than I can spend, too, but I really, really want a nicer house; so if/when I find one, that should take care of the excess and then some. Meanwhile, I try to be at peace with not spending it, and I continue to enjoy life.

 

[pletal]

Sort of a strange question but I'd love to hear from anyone else that has been in the same situation. I know it's a great problem to have and I apologize ahead of time for sounding like I'm throwing it in your face. It's not my intention.

I retired recently in my mid 50's with a defined government retirement plan that pays me 100% of my final salary for life, this includes a spousal continuous option when I die plus a COLA each year. As for medical, both my wife and I have 100% paid medical/dental for life.

Our financial picture is this, including my wife working until age 62 most likely. In cash savings and investments we have almost a million dollars put away and kids college costs have all been paid for by us. Our current house is almost paid off and we have no real plans to move, we live in a very sought after area.

Here's the problem, each month we easily save a couple of thousand dollars with no real purpose or need and when our house is paid off it'll be another $1,200 added to that each month. We pretty much have the means to buy what ever we want but tend to not waste our money. At the same time we we're not afraid to buy things we want or need including yearly travel.

I've thought about buying a vacation home but I've heard so many people say they were sorry they bought one simply because they feel like they have to use it all the time to justify the cost. Plus, if we bought a vacation home it would limit the money available for yearly trips which we love.

The bottom line is, I've done a great job in saving for retirement but now I'm afraid to spend the money. This has to be a common problem for people like myself who have spent so many years saving money but find it hard to part with. I realize I should have planned this better but I was hesitent to do anything until after my kids were out of college and that financial burden was over.

I don't think you are afraid. It may not be your thing. You didn't get where you are by being foolish. I am the same way. I could spend because I could, but I am not like that. I will not retire until I know I can pull 20k a month out at a 2.8 percent return and the money will last for 40 years. Almost there. What will I do if I have that much, be tight with it. It may be in our DNA. I could think of worse things. Your money, your options . Have fun

 

[Persn]

Buy the vacation house. I can assure you it will resolve your "too much money" problem! No really, a few years ago we were in a similar situation. I had always wanted a place at the beach but DH was extremely skeptical. Then in 2013 we found a short sale in a great walkable/bikable location about 30 miles from our primary home. We bought it, and while we could cover all the expenses with our pensions, there wasn't much left over. And since we bought a house that needed work, the list of things to spend money on just kept growing. Problem solved!

Still, the beach house is so great that we've decided to sell the primary residence and move there. And that was my husband's idea! I'm hoping that after the first house is sold we can go back to having too much money again.

My point is, if you keep saving money now you can take advantage of opportunities when they arise. Remain open and you never know what those opportunities might be. Enjoy!

 

[ChrisC]

I'm puzzled by the idea that one is afraid to spend money. I understand living frugally, but seriously, this idea appears to me to foreshadow a bigger issue: how to enjoy retirement with available financial resources? You don't have to spend money to enjoy everything that retirement may offer; yet, spending money could make some things that you couldn't do before (with time constraints) easier to do with available financial resources.

With our employer driven retirement benefits (Federal and county), we've come to the conclusion that we won't really use any of our retirement accounts; little, any if, of our taxable accounts, and none of the real estate investments we are fortunate to have. If we live a long time, our estate would likely double in value and, god forbid, we might even run into Federal estate tax issues.

In our first year of retirement, we felt we spent like a drunken sailor with adding renovations and new furniture to our new home and traveling a lot. This didn't even make a dent to our financial resources. We also enjoyed stuff that didn't even take any funds, like exercising more frequently and spending decadent hours of pleasure just reading good novels or binge watching some of the exceptional programs available on Cable or Netflix. Literally, we don't have enough time to do all the things we want to do in retirement and time, not money, is the major constraint.

So what, if you haven't figured out what you can spend your money? This means, at least to us, that we are now faced with the rather enjoyable task of planning to give it away with warm and cold hands. We're now settling estate plans and we do intend to give to family, friends, and charities over the years. This could mean taking the entire family or friends on a week long vacations on a cruise or resort, taking friends out to dinner at places they would never dare dinning because of the cost, or giving money to charities.

 

[RAE]

Start a scholarship fund for some deserving local kids to attend college. Plenty of smart, motivated kids are unable to attend college (or struggle to do so), which is a real tragedy. You could work with your local high school to set it up (eligibility criteria, amount to be awarded each year, etc). The kids that earn the scholarships will be forever thankful.