Update on finances in retirement...
- Thread starter CindyBlue
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Koolau
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I think that you are right, that we in the ER community below our means whatever we earn. It doesn't mean we enjoy life any less, though!
To be honest, I knew I wouldn't track each and every expense to see what my spending habits were, even though I knew I must in order to see if retirement was going to be possible - I know myself pretty well! That's why I opened that separate checking account for a "practice retirement" year - that way there was no fooling myself about what money was truly going out. I feel lucky that I'd been able to save the money in order to do it. While I've always been pretty cautious about spending, watching that account dwindle over the months sure made me think a lot more about what I was spending - it was hard for me to just "spend normally" on things other than bills so I'd get an accurate account of what I spent in a normal year.
The knowledge I gained from that year has made me more willing to spend on hobbies now that I am retired, because I know I can. Spending money to buy things such as that special yarn for weaving or another pickleball paddle isn't quite as painful as it was most of my life!
This sounds like an excellent strategy for those new to ER. Thanks for sharing. By now, I have ceased worrying too much about spending, but, at first, it was a little scary to spend with little coming in. YMMV
dreambig
Confused about dryer sheets
Thank you CindyBlue for sharing. We have modest savings in 403b and SEP accounts and are letting them grow. We are three years retired and so far, living on a pension alone, with another small pension starting in 4 years @ 62 and then eventually SS for one of us @ 70. Having friends that are working 8 years longer to get to fat FIRE and Reading posts from those with very large portfolios and net worth can be a bit intimidating. Like you, we do all the things, but in a frugal way. There are many paths to retirement. Again thanks for sharing.
youbet
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I frequently run into the opposite scenario. Friends and relatives lived a pricier lifestyle that DW and I. Nicer cars. Fancier house in a more upscale neighborhood. More frequent and expensive travel. Etc. Yet they retired in good shape at reasonable ages from careers they enjoyed. Making more money, especially early in life, so you can live big and still save/invest seems to be their common denominator.
We're happy as is, feel fortunate and are glad for everyone who fared better financially. But we've learned it's not smart to assume that just because folks have that big house or fancy cars that they're not LBYM and investing/saving for FIRE. They're just more highly compensated and can afford what they're doing.
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Congratulations! Enjoy, enjoy this freedom of FIRE! You have planned and saved well. 
TheWizard
Thinks s/he gets paid by the post
That's kinda what I did.
I put my tax-deferred savings on cruise control, eventually maxing them out during working years.
I then spent the rest with wild abandon.
Things worked out fine...
youbet
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Sounds like my son. He'll never have a pension (engineer at a private company) but he's maxed his 401k from the get-go and in the 20+ years he's been employed, it's grown pretty nicely. As long as he and his DW continue to max the 401k's, I figure they'll be OK.
Koolau
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Just for contrast (and giggles) to CindyBlue's thoughtful FIRE plan AND execution, I'll once again mention my BFF who is 77. His NW is NEGATIVE $0.5 Million. His "planning" is determining more-or-less monthly what credit he is eligible to access (IOW paying on a credit card last month must mean there is room THIS month to take out more credit!)
He has lived like this for many years and seems comfortable with it. I (and most of us here) could not live like that. Still, who is to say? He WILL win the "Who has the most toys upon death?" contest. YMMV
He has lived like this for many years and seems comfortable with it. I (and most of us here) could not live like that. Still, who is to say? He WILL win the "Who has the most toys upon death?" contest.
YMMVJust for contrast (and giggles) to CindyBlue's thoughtful FIRE plan AND execution, I'll once again mention my BFF who is 77. His NW is NEGATIVE $0.5 Million. His "planning" is determining more-or-less monthly what credit he is eligible to access (IOW paying on a credit card last month must mean there is room THIS month to take out more credit!)
He has lived like this for many years and seems comfortable with it. I (and most of us here) could not live like that. Still, who is to say? He WILL win the "Who has the most toys upon death?" contest.
Holy cow, I could not live like that! How can this even be done??
Koolau
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
This guy enjoys life more than anyone I've ever known. Somehow, he juggles all his bills and continues to find credit. He even did one of those "write-down" deals where his creditors "had" to forgive him 10's of thousands of dollars in credit card debt. That was a few years back and now he's got more CC debt than before. I guess I blame the creditors as much as BFF. YMMV
ncbill
Thinks s/he gets paid by the post
Pension or other source of income (e.g. hefty Social Security monthly retirement) not reachable by creditors?
Koolau
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Yes. He has a small pension and good his and hers SS. Somehow, he decides he needs MORE than that. YMMV
Bamaman
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I just love it when a plan comes together. Congratulations Cindy Blue on having the self control to execute your long term savings and spending plans. It speaks well for living in moderation.
I just printed out a page on Fidelity's website outlining my RMD's that must be withdrawn in 2022. I guess I shouldn't complain as the RMD's will finally make me have to pay some state and more federal income taxes. No more 12% income taxes.
I just printed out a page on Fidelity's website outlining my RMD's that must be withdrawn in 2022. I guess I shouldn't complain as the RMD's will finally make me have to pay some state and more federal income taxes. No more 12% income taxes.
I am sure not looking forward to having to take RMDs..I have a few years left before I have to do it, but I know our taxes will go up! But I owe it , so ...sigh...
QCDs make me feel doubly good. I'm avoiding taxable income and contributing to worthy causes at the same time.
Koolau
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
This past week, I took our 4th yearly RMD. You get used to it. We HAVE begun to spend more now that we are taking RMDs.
We have the 401(k) administrator deduct 20% for taxes. We rarely have to send a check to the IRS any more. Not sure that is wise manipulation of our finances, but it is relatively painless.
Heh, heh, each time I go to the bank after an RMD hits our account, the bank teller tries to get me to open a CD with them. YMMV
That's a good idea!
TheWizard
Thinks s/he gets paid by the post
With proper planning, your AGI and taxes needn't go up.
Just do properly sized Roth conversions in the years before RMDs and then there's a seamless transition in your AGI at age 72.
Bingo....
