Retirees-anyone miscalculate how much was needed?

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Icecakes
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Retirees-anyone miscalculate how much was needed?

Post by Icecakes » Mon Sep 11, 2017 7:56 pm

From reading bogleheads it strikes me that many retirees here seem to be pleasantly surprised at how much less they needed than what they factored in their accumulation phase.

I do wonder if anyone here has retired but had to really reduce spending due to unplanned higher than anticipated retirement expenses (or spending) when they finally retired?

Or has everyone been pleasantly surprised?

motorcyclesarecool
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Re: Retirees-anyone miscalculate how much was needed?

Post by motorcyclesarecool » Mon Sep 11, 2017 8:49 pm

I have a feeling it could be a self de-selecting sample, and all the successes we see introduce "survivor bias" into the picture.
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BanquetBeer
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Re: Retirees-anyone miscalculate how much was needed?

Post by BanquetBeer » Mon Sep 11, 2017 9:01 pm

Surely those who needed more money didn't die - they just went back to work! (And this have access to internet at least 8h a day)

Although the people I meet here and on ER tend to be on the conservative side (30-40x expenses) so we will see what this gets.

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Re: Retirees-anyone miscalculate how much was needed?

Post by TomatoTomahto » Mon Sep 11, 2017 9:12 pm

We have also had a pretty long bull market.

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VictoriaF
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Re: Retirees-anyone miscalculate how much was needed?

Post by VictoriaF » Mon Sep 11, 2017 9:46 pm

TomatoTomahto wrote:
Mon Sep 11, 2017 9:12 pm
We have also had a pretty long bull market.
Yes, the bull market, and also low inflation.

Some people retired in 2007 and may have discovered that their assets declined significantly soon afterwards. But most likely they have attributed it to a global calamity rather than to their poor planning.

Victoria
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Re: Retirees-anyone miscalculate how much was needed?

Post by heyyou » Mon Sep 11, 2017 11:37 pm

(1) We retired when my pension credits caught up to our spending amount, so we had inadvertently been practicing living on our initial retirement budget, a pleasant surprise in retirement.

(2) When saving diligently for retirement (progressively saving more most years), 25 times that spending level is far less than 25 times your income. We saved most of our pay raises that last decade of working. When the mortgage was paid off, we continued making the payment, but sent it to our taxable savings. We didn't feel that we were sacrificing anywhere, our cars were still reliable, and our house suited us, so we just didn't need more of those. We were savers, just doing what savers do, then we stopped needing to keep our jobs.

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Re: Retirees-anyone miscalculate how much was needed?

Post by Sheepdog » Tue Sep 12, 2017 5:52 am

I didn't miscalculate. I continued to spend on average in retirement as I was in the average of my last 5 years in employment (income tax ignored because it was expected to be less.) In that last 5 years I traveled including some international. In that last 5 years I bought an automobile....etc. I expected my lifestyle would remain the same....and it has with some inflation increase which has been better than I would have surmised. Spending is variable year to year and that was expected so how much I withdraw is variable....just as expected.

EDIT to show our actual history: Spending statistics: My last year employed, 1998,we spent $57,831 not including income taxes. The average of the 1st 5 years, 1999-2003, retired was $57,850 again not including taxes. The last 5 years,2012-2016, the average was $62,289 (including some international travel, but no automobile purchase).
Last edited by Sheepdog on Tue Sep 12, 2017 6:10 am, edited 1 time in total.
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Re: Retirees-anyone miscalculate how much was needed?

Post by Yooper » Tue Sep 12, 2017 6:08 am

Regular ongoing expenses are a little more than what I thought they would be, and of course there are expenses that I hadn't really thought about before, so we're spending more than I'd planned on. But things are rolling along just fine. If I had to do it again I'd pad my "Retirement Calculations" spreadsheet with an extra 15% just to be on the safe side.

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Re: Retirees-anyone miscalculate how much was needed?

Post by MikeG62 » Tue Sep 12, 2017 7:06 am

I would say that our actual retirement spending (in our 2nd year of retirement - DW and I retired in our early 50's) is higher than I thought it would be 10 years pre-retirement (as I was retirement planning).

The absolute largest driver is travel - we travel "a lot" more in retirement than I thought we would. To color that, our 2018 travel plan has us spending about 60 nights out of town - all in high end hotels and resorts.

Aside from that, I would add that our general monthly CC spending is running higher than I thought too. I would attribute the primary reason for this to our retiring with more $ than I had thought we would have. So there is no real need for us to manage our spending (as I thought we probably would do to some degree). We are choosing to live up to the level of our means whereas while working we lived well below the level of our means (although far from frugally). We actually are spending more money in retirement each month/year than we spent while working.

So my advice for anyone in the planning phase would be to build a detailed spending budget and track what you spend in a fair amount of detail. Update it annually. This will ensure that you really know what you spend, versus using some crude assumption like you'll need 80% of your pre-retirement income. Then build in an assumption that you will have lots of free time and may well want to travel or do things that cost money. You will save money in some areas versus what you spend now (such as lunches at work and dry cleaning) and more (maybe a lot more) in others.

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Re: Retirees-anyone miscalculate how much was needed?

Post by dbr » Tue Sep 12, 2017 7:42 am

We have spent more on things we didn't know were going to happen, but those were also provided for by allowing a contingency that such things might materialize.

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Re: Retirees-anyone miscalculate how much was needed?

Post by RadAudit » Tue Sep 12, 2017 7:54 am

I don't think I've mis-calculated on how much I need (Last salary [gross] + 3% / yr.). I may have mis-calculated on how much I'd spend. (Guessed a little low.) But, I definitely missed on how long this bull market would run. So, every thing seems to be working out OK - so far.
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Re: Retirees-anyone miscalculate how much was needed?

Post by TheTimeLord » Tue Sep 12, 2017 9:26 am

I think after a couple years people tend to settle down and their initial spurt of trips and activities ebbs. Also with more time on your hands things like cooking likely become more enjoyable and provide a large savings as do reductions in fuel costs etc.
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Re: Retirees-anyone miscalculate how much was needed?

Post by carolinaman » Tue Sep 12, 2017 9:40 am

We have spent a lot more on home improvement and maintenance than planned. Kitchen remodel and other remodeling was discretionary. Replace HVAC, ductwork, french drain and tree removal was not. Some of this was expected but getting this much in short timeframe was not.

Medical has been lower with medicare, except for dental, which required some expensive procedures that were uninsured.

Our expenses are well below pension and SS income, so we were able to cover all of these one time expenses.

The answers to this question might well be different for a non boglehead audience.

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Re: Retirees-anyone miscalculate how much was needed?

Post by 10YearPlan » Tue Sep 12, 2017 9:54 am

Not retired yet. BUT...as a worker bee, I know that time off = opportunity to spend $, so I am concerned that an abundance of free time will equate to spending more money than I can possibly predict. I need to find some inexpensive hobbies in the next 5 years, I suppose.

I like the idea of just padding the amount I think I need by 15% or so. But am concerned that doing so may subject me to OMY syndrome indefinitely.

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Re: Retirees-anyone miscalculate how much was needed?

Post by ColoradoRick » Tue Sep 12, 2017 10:56 am

I was miserable the last 4 years of my 39 year career (rest were great!). I'd tracked our expenses for 10 years prior. I was so unhappy at my job that in consultation with my wife I was prepared to live on 80% of what we lived on before, even with 25X yearly income. We were pretty conservative the first 2 years (2013 & 2014) and didn't travel much. With the continuing bull market and watching our friends' health decline, we made a conscious effort to travel more than we had originally planned. So now we spend about 20% than we were. We spend about 4.5% of our YE 2012 original nest egg and 3.6% of our current assets. I know that would make most BH nervous, but our kids are good with money and after talking to a friend who is a financial advisor, he said that most retirees spending drops a lot at 75-80 years old. We are frugal and could cut back if we had to, and we do give to those less fortunate, but with our blessings we don't want to look back and wished we'd have lived more at age 85. Our kids are welcome to what's left, but a legacy isn't driving our lives. Its trying to be good stewards/enjoying life/giving back some in time & $$. If you and your wife are frugal and don't keep up with the Jones you can adapt. Also depends on how much you enjoy/hate job.

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TheTimeLord
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Re: Retirees-anyone miscalculate how much was needed?

Post by TheTimeLord » Tue Sep 12, 2017 11:04 am

10YearPlan wrote:
Tue Sep 12, 2017 9:54 am
Not retired yet. BUT...as a worker bee, I know that time off = opportunity to spend $, so I am concerned that an abundance of free time will equate to spending more money than I can possibly predict. I need to find some inexpensive hobbies in the next 5 years, I suppose.

I like the idea of just padding the amount I think I need by 15% or so. But am concerned that doing so may subject me to OMY syndrome indefinitely.
To me OMY is the cure not the disease (LOL!). The last thing I want to do is checkout early only to figure out 5 years in that sticking it out another 18-24 months would have made a huge difference in what I am able to do and afford. But everyone is different and that extra padding might not have the same value to others.
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Re: Retirees-anyone miscalculate how much was needed?

Post by CnC » Tue Sep 12, 2017 11:35 am

My dad retired at 55 and immediately cut his spending by 25-35%.

He has been retired for 7 years now just living off his pension and now is getting his social security and is happy as a clam.

Sad & lucky thing was that mom died before he turned 62 but since he retired at 55 he got to spend 5 good healthy years spending every day with her in retirement and he wouldn't trade that for a million dollars.

We still speak at least monthly about how he would have felt like such a chump waiting until he was 62-65 to retire and not get to spend quality time time with his wife. He was a car hauler so he spent a lot of time away from home.

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Re: Retirees-anyone miscalculate how much was needed?

Post by bligh » Tue Sep 12, 2017 11:45 am

TheTimeLord wrote:
Tue Sep 12, 2017 11:04 am
10YearPlan wrote:
Tue Sep 12, 2017 9:54 am
Not retired yet. BUT...as a worker bee, I know that time off = opportunity to spend $, so I am concerned that an abundance of free time will equate to spending more money than I can possibly predict. I need to find some inexpensive hobbies in the next 5 years, I suppose.

I like the idea of just padding the amount I think I need by 15% or so. But am concerned that doing so may subject me to OMY syndrome indefinitely.
To me OMY is the cure not the disease (LOL!). The last thing I want to do is checkout early only to figure out 5 years in that sticking it out another 18-24 months would have made a huge difference in what I am able to do and afford. But everyone is different and that extra padding might not have the same value to others.
The flip side to that is if you end up having health issues or possibly die sooner than you hoped. Obviously we all hope we aren't the unlucky ones, and that we are running marathons in are 90s, but you have to balance the risk of running out of money with the risk of running out of time.

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Re: Retirees-anyone miscalculate how much was needed?

Post by VictoriaF » Tue Sep 12, 2017 12:10 pm

bligh wrote:
Tue Sep 12, 2017 11:45 am
TheTimeLord wrote:
Tue Sep 12, 2017 11:04 am
10YearPlan wrote:
Tue Sep 12, 2017 9:54 am
Not retired yet. BUT...as a worker bee, I know that time off = opportunity to spend $, so I am concerned that an abundance of free time will equate to spending more money than I can possibly predict. I need to find some inexpensive hobbies in the next 5 years, I suppose.

I like the idea of just padding the amount I think I need by 15% or so. But am concerned that doing so may subject me to OMY syndrome indefinitely.
To me OMY is the cure not the disease (LOL!). The last thing I want to do is checkout early only to figure out 5 years in that sticking it out another 18-24 months would have made a huge difference in what I am able to do and afford. But everyone is different and that extra padding might not have the same value to others.
The flip side to that is if you end up having health issues or possibly die sooner than you hoped. Obviously we all hope we aren't the unlucky ones, and that we are running marathons in are 90s, but you have to balance the risk of running out of money with the risk of running out of time.
It's even stronger than that. If you are destined to die on a specific date, the later you retire the less time you have between the retirement date and your death date. BUT, the date of death is usually not a destiny. The sooner you retire, the healthier you start living and the farther your date of death moves. Thus, an early retirement is a win-win on both ends of your retired life.

Victoria
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TheTimeLord
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Re: Retirees-anyone miscalculate how much was needed?

Post by TheTimeLord » Tue Sep 12, 2017 12:14 pm

bligh wrote:
Tue Sep 12, 2017 11:45 am
TheTimeLord wrote:
Tue Sep 12, 2017 11:04 am
10YearPlan wrote:
Tue Sep 12, 2017 9:54 am
Not retired yet. BUT...as a worker bee, I know that time off = opportunity to spend $, so I am concerned that an abundance of free time will equate to spending more money than I can possibly predict. I need to find some inexpensive hobbies in the next 5 years, I suppose.

I like the idea of just padding the amount I think I need by 15% or so. But am concerned that doing so may subject me to OMY syndrome indefinitely.
To me OMY is the cure not the disease (LOL!). The last thing I want to do is checkout early only to figure out 5 years in that sticking it out another 18-24 months would have made a huge difference in what I am able to do and afford. But everyone is different and that extra padding might not have the same value to others.
The flip side to that is if you end up having health issues or possibly die sooner than you hoped. Obviously we all hope we aren't the unlucky ones, and that we are running marathons in are 90s, but you have to balance the risk of running out of money with the risk of running out of time.
I agree with possible health issues although if you have those the additional funds may be even more important for the care you need. I have never understood the death argument since I don't believe I will be lying in a grave regretting not having done some trip or activity. Now living 10 years with a mobility issue I likely would have lots of regrets. But again if you have something debilitating you are likely to need more money for the cost of care so it is a tough call. Personally I think the key to OMY working is not so much the additional savings but delaying the drawdown of your retirement portfolio. Maybe you find a happy middle ground where you take half of the money you would normally be saving and use it to maximize your vacation days and just be happy you aren't drawing $X out of your portfolio this month to pay for living expenses.
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TheTimeLord
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Re: Retirees-anyone miscalculate how much was needed?

Post by TheTimeLord » Tue Sep 12, 2017 12:16 pm

VictoriaF wrote:
Tue Sep 12, 2017 12:10 pm
bligh wrote:
Tue Sep 12, 2017 11:45 am
TheTimeLord wrote:
Tue Sep 12, 2017 11:04 am
10YearPlan wrote:
Tue Sep 12, 2017 9:54 am
Not retired yet. BUT...as a worker bee, I know that time off = opportunity to spend $, so I am concerned that an abundance of free time will equate to spending more money than I can possibly predict. I need to find some inexpensive hobbies in the next 5 years, I suppose.

I like the idea of just padding the amount I think I need by 15% or so. But am concerned that doing so may subject me to OMY syndrome indefinitely.
To me OMY is the cure not the disease (LOL!). The last thing I want to do is checkout early only to figure out 5 years in that sticking it out another 18-24 months would have made a huge difference in what I am able to do and afford. But everyone is different and that extra padding might not have the same value to others.
The flip side to that is if you end up having health issues or possibly die sooner than you hoped. Obviously we all hope we aren't the unlucky ones, and that we are running marathons in are 90s, but you have to balance the risk of running out of money with the risk of running out of time.
It's even stronger than that. If you are destined to die on a specific date, the later you retire the less time you have between the retirement date and your death date. BUT, the date of death is usually not a destiny. The sooner you retire, the healthier you start living and the farther your date of death moves. Thus, an early retirement is a win-win on both ends of your retired life.

Victoria
You know there is research, although not conclusive, that suggest early retirees die sooner. But I believe there is also research that points to them living longer to. Either way death is immaterial unless you believe after you die you will lie there either cherishing your memories or regretting things you have foregone.
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Re: Retirees-anyone miscalculate how much was needed?

Post by VictoriaF » Tue Sep 12, 2017 12:23 pm

TheTimeLord wrote:
Tue Sep 12, 2017 12:16 pm
You know there is research, although not conclusive, that suggest early retirees die sooner. But I believe there is also research that points to them living longer to.
I've read about this research, and I attribute the findings to people not thinking their retirement through. Most people retire to low-cost-of-living areas with nothing to do and any activity requiring driving. Most people have TVs, and when there is nothing to do outside, they stay inside and watch TV.

When I advocate the beauty of retiring in Washington DC, it raises a storm of responses from people who hate cities and describe the pleasures of local outdoors. It's impossible to argue about one's preferences, but my subjective observation is that I am much more active and engaged when I am in a close physical proximity to intellectually stimulating places, and when I don't have the fall-back in the form of a TV.

Thus, I think that the research on retirees early death does not apply to me. I also hope that most Bogleheads retire on their own terms and become healthier in retirement, however they do it.

Victoria
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Re: Retirees-anyone miscalculate how much was needed?

Post by Hyperborea » Tue Sep 12, 2017 12:29 pm

TheTimeLord wrote:
Tue Sep 12, 2017 12:16 pm
You know there is research, although not conclusive, that suggest early retirees die sooner. But I believe there is also research that points to them living longer to. Either way death is immaterial unless you believe after you die you will lie there either cherishing your memories or regretting things you have foregone.
It would be interesting to see the research and how the equalized the groups. I wonder if many of those in their early retirement sample retired early because of health issues that already existed. Those existing health issues would be the cause of the early demise and not the early retirement. Those who can continue to work are less likely to have a health issue severe enough to impact that work. So, correlation and not causation.

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TheTimeLord
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Re: Retirees-anyone miscalculate how much was needed?

Post by TheTimeLord » Tue Sep 12, 2017 12:35 pm

Hyperborea wrote:
Tue Sep 12, 2017 12:29 pm
TheTimeLord wrote:
Tue Sep 12, 2017 12:16 pm
You know there is research, although not conclusive, that suggest early retirees die sooner. But I believe there is also research that points to them living longer to. Either way death is immaterial unless you believe after you die you will lie there either cherishing your memories or regretting things you have foregone.
It would be interesting to see the research and how the equalized the groups. I wonder if many of those in their early retirement sample retired early because of health issues that already existed. Those existing health issues would be the cause of the early demise and not the early retirement. Those who can continue to work are less likely to have a health issue severe enough to impact that work. So, correlation and not causation.
I would think your suspicion plays a part in it, but from what I remember financial status is typically the biggest factor. A well off early retiree probably goes to the doctor sooner, more likely to make preventive care visits (and dental) and more likely to have access to health facilities and trainers. Not there are low cost alternatives to gyms, but I would guess when you are talking about large populations you would see the trend.
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Re: Retirees-anyone miscalculate how much was needed?

Post by marcopolo » Tue Sep 12, 2017 1:07 pm

MikeG62 wrote:
Tue Sep 12, 2017 7:06 am
So my advice for anyone in the planning phase would be to build a detailed spending budget and track what you spend in a fair amount of detail. Update it annually. This will ensure that you really know what you spend, versus using some crude assumption like you'll need 80% of your pre-retirement income. Then build in an assumption that you will have lots of free time and may well want to travel or do things that cost money. You will save money in some areas versus what you spend now (such as lunches at work and dry cleaning) and more (maybe a lot more) in others.
Thanks for the very helpful advice. Do you have a feel for what percentage increase might be reasonable to factor in?
We are hopefully about 18 months away from very similar situation to what you describe. So, i view it as the final planning stages.

I have been tracking spending very closely for a number of years using Quicken. But, we are planning to move to a different part of the country in retirement, plus it will be just as the kids leave home, so extrapolating from current spending is taking some guess work. I have tried to account for that, as well as activities/travel to take advantage of more free time. I am planning that the reduction due to kids expenses going away will offset the slightly higher cost of living area. Then adding in an additional 15% of current expenses to account for additional expenses. Is that in the right ballpark for your situation? Hopefully, that gets us in the right ballpark. Trying to add in additional layers of contingencies in case i miscalculated.
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Re: Retirees-anyone miscalculate how much was needed?

Post by marcopolo » Tue Sep 12, 2017 1:10 pm

TheTimeLord wrote:
Tue Sep 12, 2017 11:04 am
10YearPlan wrote:
Tue Sep 12, 2017 9:54 am
Not retired yet. BUT...as a worker bee, I know that time off = opportunity to spend $, so I am concerned that an abundance of free time will equate to spending more money than I can possibly predict. I need to find some inexpensive hobbies in the next 5 years, I suppose.

I like the idea of just padding the amount I think I need by 15% or so. But am concerned that doing so may subject me to OMY syndrome indefinitely.
To me OMY is the cure not the disease (LOL!). The last thing I want to do is checkout early only to figure out 5 years in that sticking it out another 18-24 months would have made a huge difference in what I am able to do and afford. But everyone is different and that extra padding might not have the same value to others.
The problem is if you take this to its logical conclusion, would you ever retire? I guess if your work is so fulfilling that you would rather do that than anything else, it would make sense. But, do realize that there is an opportunity cost with that decision. Everyone has to find the right balance for their own comfort level.
Once in a while you get shown the light, in the strangest of places if you look at it right.

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Re: Retirees-anyone miscalculate how much was needed?

Post by TheTimeLord » Tue Sep 12, 2017 1:42 pm

marcopolo wrote:
Tue Sep 12, 2017 1:10 pm
TheTimeLord wrote:
Tue Sep 12, 2017 11:04 am
10YearPlan wrote:
Tue Sep 12, 2017 9:54 am
Not retired yet. BUT...as a worker bee, I know that time off = opportunity to spend $, so I am concerned that an abundance of free time will equate to spending more money than I can possibly predict. I need to find some inexpensive hobbies in the next 5 years, I suppose.

I like the idea of just padding the amount I think I need by 15% or so. But am concerned that doing so may subject me to OMY syndrome indefinitely.
To me OMY is the cure not the disease (LOL!). The last thing I want to do is checkout early only to figure out 5 years in that sticking it out another 18-24 months would have made a huge difference in what I am able to do and afford. But everyone is different and that extra padding might not have the same value to others.
The problem is if you take this to its logical conclusion, would you ever retire? I guess if your work is so fulfilling that you would rather do that than anything else, it would make sense. But, do realize that there is an opportunity cost with that decision. Everyone has to find the right balance for their own comfort level.
Balance is always the issue before or after retirement. But I think once one is truly Financially Independent it might be worth seeing what it would be like working knowing you are fine if you were let go, taking vacation off the surplus in your paycheck that you would have previously saved, etc. In other words try maxing out your workalike before you decide you need to chuck it all because you don't have enough time. Maybe you start hiring folks to clean the house, mow the lawn and take care of most of your honey dos to buy yourself more free time?
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Re: Retirees-anyone miscalculate how much was needed?

Post by 10YearPlan » Tue Sep 12, 2017 2:04 pm

TheTimeLord wrote:
Tue Sep 12, 2017 11:04 am
10YearPlan wrote:
Tue Sep 12, 2017 9:54 am
Not retired yet. BUT...as a worker bee, I know that time off = opportunity to spend $, so I am concerned that an abundance of free time will equate to spending more money than I can possibly predict. I need to find some inexpensive hobbies in the next 5 years, I suppose.

I like the idea of just padding the amount I think I need by 15% or so. But am concerned that doing so may subject me to OMY syndrome indefinitely.
To me OMY is the cure not the disease (LOL!). The last thing I want to do is checkout early only to figure out 5 years in that sticking it out another 18-24 months would have made a huge difference in what I am able to do and afford. But everyone is different and that extra padding might not have the same value to others.
I don't disagree. I am just concerned I might OMY myself forever. I need to determine what is enough, knowing that I will need plenty of buffers and safeguards and hedges to save me from myself.

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Re: Retirees-anyone miscalculate how much was needed?

Post by Christine_NM » Tue Sep 12, 2017 2:05 pm

I spent $31k in 2005, my first year of retirement. This year I am on track to spend twice that. It's still less than my retirement income, so no problem. The portfolio is intact, waiting for me to get really old.

I do not buy a lot of stuff the way you do when younger and forming a household. As mentioned above, I buy services -- cable, housekeeping, yard work, plus handyman, plumber and electrician for trivial stuff because I do not want to use ladders at home alone anymore and because I like doing what I want to do and being able to farm out the rest. I couldn't do that so much when working because, duh, I was sending extra money to Vanguard.

As for buying experiences, I prefer the kind that are cheap or free, like a short drive or a long walk.
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Re: Retirees-anyone miscalculate how much was needed?

Post by TheTimeLord » Tue Sep 12, 2017 2:23 pm

10YearPlan wrote:
Tue Sep 12, 2017 2:04 pm
TheTimeLord wrote:
Tue Sep 12, 2017 11:04 am
10YearPlan wrote:
Tue Sep 12, 2017 9:54 am
Not retired yet. BUT...as a worker bee, I know that time off = opportunity to spend $, so I am concerned that an abundance of free time will equate to spending more money than I can possibly predict. I need to find some inexpensive hobbies in the next 5 years, I suppose.

I like the idea of just padding the amount I think I need by 15% or so. But am concerned that doing so may subject me to OMY syndrome indefinitely.
To me OMY is the cure not the disease (LOL!). The last thing I want to do is checkout early only to figure out 5 years in that sticking it out another 18-24 months would have made a huge difference in what I am able to do and afford. But everyone is different and that extra padding might not have the same value to others.
I don't disagree. I am just concerned I might OMY myself forever. I need to determine what is enough, knowing that I will need plenty of buffers and safeguards and hedges to save me from myself.
That is a legitimate concern, but instead setting financial goals, try lifestyle goals. This assumes you can only truly have OMY syndrome if you are truly financially independent. Want to be healthier or fitter set a goal workout at a good gym or hire a trainer. Then after 6 or 9 months evaluate if you achieved your goal or if your job limited your progress significantly. Want to go with your spouse somewhere book it. After the trip decide if your job enabled the trip or prevented you from staying as long as you want. In 9 to 12 months you should be able to determine if your job is a plus or a minus in your life. Find your balance not mine or someone else's.
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Re: Retirees-anyone miscalculate how much was needed?

Post by bligh » Tue Sep 12, 2017 4:12 pm

TheTimeLord wrote:
Tue Sep 12, 2017 12:14 pm

I agree with possible health issues although if you have those the additional funds may be even more important for the care you need. I have never understood the death argument since I don't believe I will be lying in a grave regretting not having done some trip or activity. Now living 10 years with a mobility issue I likely would have lots of regrets. But again if you have something debilitating you are likely to need more money for the cost of care so it is a tough call. Personally I think the key to OMY working is not so much the additional savings but delaying the drawdown of your retirement portfolio. Maybe you find a happy middle ground where you take half of the money you would normally be saving and use it to maximize your vacation days and just be happy you aren't drawing $X out of your portfolio this month to pay for living expenses.
This gets into whether you think/believe you will have a conscious existence after you are dead or not.

Anyway, using that line of thinking instead of taking on that 100% certain loss of healthy, active and energetic years through work, you can take on a small possibility of losing a few unhealthy, tired and lower quality years through suicide if you run out of money. It's not like you will be sitting there regretting the lost years of life in old age. If the worst case happens, most likely you will not even need to end it all, but instead just spend a few years in poverty in your old age. Hopefully you'll be too busy playing with your grandkids and to care that you are living in a small 1 bedroom or driving an old beater.

Another factor you don't consider is loved ones. You may cease to exist and therefore have no regrets about the loss of your own life, but your loved ones, perhaps a spouse, will miss the time they didn't get with you because you were busy getting your withdrawal rate down to bulletproof levels. It could also go the other way, perhaps your spouse/loved one is the one that passes away before you do and now you have money and time in your old age but you no longer have the person you wanted to spend it with. Sure you may move on and find someone new, but this is someone else.. no matter what you will never get back the time lost with that other person.

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Re: Retirees-anyone miscalculate how much was needed?

Post by bligh » Tue Sep 12, 2017 4:18 pm

VictoriaF wrote:
Tue Sep 12, 2017 12:10 pm
bligh wrote:
Tue Sep 12, 2017 11:45 am
TheTimeLord wrote:
Tue Sep 12, 2017 11:04 am
10YearPlan wrote:
Tue Sep 12, 2017 9:54 am
Not retired yet. BUT...as a worker bee, I know that time off = opportunity to spend $, so I am concerned that an abundance of free time will equate to spending more money than I can possibly predict. I need to find some inexpensive hobbies in the next 5 years, I suppose.

I like the idea of just padding the amount I think I need by 15% or so. But am concerned that doing so may subject me to OMY syndrome indefinitely.
To me OMY is the cure not the disease (LOL!). The last thing I want to do is checkout early only to figure out 5 years in that sticking it out another 18-24 months would have made a huge difference in what I am able to do and afford. But everyone is different and that extra padding might not have the same value to others.
The flip side to that is if you end up having health issues or possibly die sooner than you hoped. Obviously we all hope we aren't the unlucky ones, and that we are running marathons in are 90s, but you have to balance the risk of running out of money with the risk of running out of time.
It's even stronger than that. If you are destined to die on a specific date, the later you retire the less time you have between the retirement date and your death date. BUT, the date of death is usually not a destiny. The sooner you retire, the healthier you start living and the farther your date of death moves. Thus, an early retirement is a win-win on both ends of your retired life.

Victoria
I agree with this. I am living this right now.. I have been working long hours this year and I have done it at the expense of my workout schedule. But to add even more weight to the argument, I would point out that 5 years in your 40s or 50s (for some even early 60s) is nothing like the 5 years in your 80s or 90s. The state of your body, your mind and its senses is no where NEAR the same. Is it wise to be sacrificing those high quality years so you can "enjoy" your low quality ones?

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Re: Retirees-anyone miscalculate how much was needed?

Post by tennisplyr » Tue Sep 12, 2017 4:27 pm

Retired in early 2011....a pretty good time. Also downsized my home last year. Those two factors have buoyed me pretty darn well. Expenses are fine and we're pretty reasonable people, we should be fine. PS, just weathered Hurricane Irma so we're grateful and have a good perspective.
Those who move forward with a happy spirit will find that things always work out.

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Re: Retirees-anyone miscalculate how much was needed?

Post by The Wizard » Tue Sep 12, 2017 5:12 pm

4.5 years into retirement, things have been quite okay.
Like some others, I spend more on travel now. I don't really sit around calculating, I just try to manage cashflow to keep things under control.
I've just paid for a 8-day trip to Jamaica over Halloween so my checking account is a bit below par right now.
The New Year's trip to Southern California is under control at this point as is the March trip to Spain and Morocco.

Right now I'm trying to nail down a 9-day dive trip to Bonaire with my adult son in late April.
A month later, late May, is a 5-day high school reunion trip to Kansas, also under control.

Next July/August is a ~two-week hiking trip to northern Italy but no plane tickets (to Milan?) bought yet. So that needs work before long.

I don't know what my travel expenses add up to over 12 months, but it's a decent amount. I could definitely use an extra $1000 per month to expand things further but I'm doing ok now...
Attempted new signature...

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Re: Retirees-anyone miscalculate how much was needed?

Post by blixet » Tue Sep 12, 2017 5:16 pm

I figured I wouldn't be spending enough. And sure enough... Now we are trying our best to rectify this. :beer

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Re: Retirees-anyone miscalculate how much was needed?

Post by DrGoogle2017 » Tue Sep 12, 2017 5:31 pm

Too early to tell, I only retired two years and the market has been up. If there is a black swan event, I'm sure I could frugal myway to be another Mr Mustachio follower.

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Re: Retirees-anyone miscalculate how much was needed?

Post by blueblock » Tue Sep 12, 2017 7:03 pm

Icecakes wrote:
Mon Sep 11, 2017 7:56 pm
I do wonder if anyone here has retired but had to really reduce spending due to unplanned higher than anticipated retirement expenses (or spending) when they finally retired?
Yes, I need to go back to work in order to afford an iPhone X. :wink:

More seriously, I had a good handle on my anticipated expenses, which proved to be very close to actual. I'm only 2.5 years into retirement, so who knows what might happen going forward, but right now, I'm doing a little better than planned on expenses, thanks to a market with "upward drift." If that changes, I'll spend less (e.g. yard services, snow removal, house cleaning, etc.).

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Re: Retirees-anyone miscalculate how much was needed?

Post by TheTimeLord » Tue Sep 12, 2017 7:50 pm

bligh wrote:
Tue Sep 12, 2017 4:12 pm
TheTimeLord wrote:
Tue Sep 12, 2017 12:14 pm

I agree with possible health issues although if you have those the additional funds may be even more important for the care you need. I have never understood the death argument since I don't believe I will be lying in a grave regretting not having done some trip or activity. Now living 10 years with a mobility issue I likely would have lots of regrets. But again if you have something debilitating you are likely to need more money for the cost of care so it is a tough call. Personally I think the key to OMY working is not so much the additional savings but delaying the drawdown of your retirement portfolio. Maybe you find a happy middle ground where you take half of the money you would normally be saving and use it to maximize your vacation days and just be happy you aren't drawing $X out of your portfolio this month to pay for living expenses.
This gets into whether you think/believe you will have a conscious existence after you are dead or not.

Anyway, using that line of thinking instead of taking on that 100% certain loss of healthy, active and energetic years through work, you can take on a small possibility of losing a few unhealthy, tired and lower quality years through suicide if you run out of money. It's not like you will be sitting there regretting the lost years of life in old age. If the worst case happens, most likely you will not even need to end it all, but instead just spend a few years in poverty in your old age. Hopefully you'll be too busy playing with your grandkids and to care that you are living in a small 1 bedroom or driving an old beater.

Another factor you don't consider is loved ones. You may cease to exist and therefore have no regrets about the loss of your own life, but your loved ones, perhaps a spouse, will miss the time they didn't get with you because you were busy getting your withdrawal rate down to bulletproof levels. It could also go the other way, perhaps your spouse/loved one is the one that passes away before you do and now you have money and time in your old age but you no longer have the person you wanted to spend it with. Sure you may move on and find someone new, but this is someone else.. no matter what you will never get back the time lost with that other person.
Actually it would depend on whether you think/believe you have a conscious existence in the afterlife that has nothing better to do than look back at your previous life. Worried about your loved ones, you made them wait until you were 50+ before your started living and now all you want to do is sleep in and putter around the yard. They wanted to spend time and do things with while you were working but you were all no we have to save for retirement. Why is it BH seem to believe they have no ability to have a life and a job at the same time? Your 20s, 30s and 40s are great years, why waste them saving for retirement? Answer, because in life there is a balance and you have to play the odds. Sure there is a small chance any one of a thousand terrible things might happen to you, but do you base your plans on that or what is more likely to happen. I figure your view is by far the majority view here but I just wanted to give a voice to folks who see the definite advantages to continuing to work once they are financially independent. Especially those who realize they can use the money they would have been saving before they were financially independent to do a lot of cool stuff while still working and bank the money they would have withdrawn for expenses had they retired.vive la différence
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Re: Retirees-anyone miscalculate how much was needed?

Post by TheTimeLord » Tue Sep 12, 2017 7:53 pm

The Wizard wrote:
Tue Sep 12, 2017 5:12 pm
Right now I'm trying to nail down a 9-day dive trip to Bonaire with my adult son in late April.
Haven't been, very jealous. You going to be based on land or on a live aboard? Man I hope you have the best time.
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Re: Retirees-anyone miscalculate how much was needed?

Post by The Wizard » Tue Sep 12, 2017 8:04 pm

TheTimeLord wrote:
Tue Sep 12, 2017 7:53 pm
The Wizard wrote:
Tue Sep 12, 2017 5:12 pm
Right now I'm trying to nail down a 9-day dive trip to Bonaire with my adult son in late April.
Haven't been, very jealous. You going to be based on land or on a live aboard? Man I hope you have the best time.
Land. Buddy Dive again for the 6th or 7th time.
I like shore diving and Bonaire and the official currency there is the USD...
Attempted new signature...

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Re: Retirees-anyone miscalculate how much was needed?

Post by 2015 » Wed Sep 13, 2017 1:34 am

bligh wrote:
Tue Sep 12, 2017 4:18 pm
VictoriaF wrote:
Tue Sep 12, 2017 12:10 pm
bligh wrote:
Tue Sep 12, 2017 11:45 am
TheTimeLord wrote:
Tue Sep 12, 2017 11:04 am
10YearPlan wrote:
Tue Sep 12, 2017 9:54 am
Not retired yet. BUT...as a worker bee, I know that time off = opportunity to spend $, so I am concerned that an abundance of free time will equate to spending more money than I can possibly predict. I need to find some inexpensive hobbies in the next 5 years, I suppose.

I like the idea of just padding the amount I think I need by 15% or so. But am concerned that doing so may subject me to OMY syndrome indefinitely.
To me OMY is the cure not the disease (LOL!). The last thing I want to do is checkout early only to figure out 5 years in that sticking it out another 18-24 months would have made a huge difference in what I am able to do and afford. But everyone is different and that extra padding might not have the same value to others.
The flip side to that is if you end up having health issues or possibly die sooner than you hoped. Obviously we all hope we aren't the unlucky ones, and that we are running marathons in are 90s, but you have to balance the risk of running out of money with the risk of running out of time.
It's even stronger than that. If you are destined to die on a specific date, the later you retire the less time you have between the retirement date and your death date. BUT, the date of death is usually not a destiny. The sooner you retire, the healthier you start living and the farther your date of death moves. Thus, an early retirement is a win-win on both ends of your retired life.

Victoria
I agree with this. I am living this right now.. I have been working long hours this year and I have done it at the expense of my workout schedule. But to add even more weight to the argument, I would point out that 5 years in your 40s or 50s (for some even early 60s) is nothing like the 5 years in your 80s or 90s. The state of your body, your mind and its senses is no where NEAR the same. Is it wise to be sacrificing those high quality years so you can "enjoy" your low quality ones?
Before retirement, I never let anything get in the way of my workout, regardless of my work schedule. Then again, I have been working out since I was 20 years old. Once, when I was overloaded with work and personal responsibilities, a friend told me to simply skip the gym for a while. My response was that the gym remains non-negotiable. In life, there's what you say and then there's where your shoes are. If you are really committed to your physicality, you won't need to read some hokey blog post (I'm looking at you, Seth Godwin) to do what you need to do when you need to do it whether you feel like it or not. This includes prioritizing your health, your workouts, and your diet. It's all a matter of Intention.

I do not at all subscribe to the physical limitations people put upon themselves as a result of aging. When friends told me one's metabolism slows down after age 50, my response is that mine sped up. When these same (overweight) friends state it's harder to get off the floor after age 60, I tell them I spring off the floor as easily as I did at 20 (did so today at the gym), when they tell me one's energy levels decline as one gets older, I tell them how I regularly go dancing, dancing intensely for four hours straight without ever needing (or wanting) to get off the dance floor. I have no intention of having "low quality years" as I age. In fact, recent research has shown that aging athletes experience extended healthy lifespan into late age, going into decline only in the last year or so. My intention is to follow their high performance health lifestyle by continuing my lifelong attention to diet, exercise, and optimal health. Aging is a mental disease, a socially contagious one at that, and I believe one must inoculate oneself against it by taking responsibility for one's choices.

I agree with the above excellent advice to track spending for at least 5 years before retirement. Personally, my weekly spending fell by about 25-50%, probably a result of reduced commuting expenses, drycleaning, and all those Mochas I had to bribe myself with to keep working.

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Re: Retirees-anyone miscalculate how much was needed?

Post by freebeer » Wed Sep 13, 2017 2:05 am

VictoriaF wrote:
Tue Sep 12, 2017 12:10 pm
...The sooner you retire, the healthier you start living and the farther your date of death moves.
Is there data that supports the proposition that early retirees live longer? I have heard this type of thing stated but I have also heard that a lot of early retirees soon die ... and everything I've heard has seemed anecdotal in nature.

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Re: Retirees-anyone miscalculate how much was needed?

Post by DrGoogle2017 » Wed Sep 13, 2017 9:43 am

freebeer wrote:
Wed Sep 13, 2017 2:05 am
VictoriaF wrote:
Tue Sep 12, 2017 12:10 pm
...The sooner you retire, the healthier you start living and the farther your date of death moves.
Is there data that supports the proposition that early retirees live longer? I have heard this type of thing stated but I have also heard that a lot of early retirees soon die ... and everything I've heard has seemed anecdotal in nature.
Not necessarily live longer. I know a few people would watch TV all day and dont do any exercise. Maybe less stress.
But my brother said after a reunion with all of his ex-coworkers, they all ended up with a 50% SWR, aka divorce. Some of it due to boredom.

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Re: Retirees-anyone miscalculate how much was needed?

Post by MrNewEngland » Wed Sep 13, 2017 2:11 pm

What is OMY?

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Re: Retirees-anyone miscalculate how much was needed?

Post by dbr » Wed Sep 13, 2017 2:19 pm

MrNewEngland wrote:
Wed Sep 13, 2017 2:11 pm
What is OMY?
One More Year It is a syndrome where fear, uncertainty, and doubt cause a person to year after year imagine that one more year on the job will take them out of the tunnel and into the promised land. Naturally the outcome is to continually never resolve the issue and to fritter away one's time not where one really wants to be.

When I approached retirement there were some solid financial realities that included the fact that the company pension formula increased the pension amount by about 12% a year between ages 55 and 61, that family situation had some timing going on that came to the same ages, and that there was a project I wanted to finish that was coming to completion. You could call that a perfect storm of "now I retire" but it worked out. If it hadn't worked out I still think I would have taken the bull by the horns and gotten out.

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Re: Retirees-anyone miscalculate how much was needed?

Post by VictoriaF » Wed Sep 13, 2017 10:05 pm

freebeer wrote:
Wed Sep 13, 2017 2:05 am
VictoriaF wrote:
Tue Sep 12, 2017 12:10 pm
...The sooner you retire, the healthier you start living and the farther your date of death moves.
Is there data that supports the proposition that early retirees live longer? I have heard this type of thing stated but I have also heard that a lot of early retirees soon die ... and everything I've heard has seemed anecdotal in nature.
I have seen articles that sitting is killing people. Most modern jobs are sitting. Daily commute is sitting.
I have seen articles that exposure to blue light of electronic devices interrupts people's sleep. Lack of sleep is killing people.
I have seen articles that a large percentage of employees are not satisfied with their jobs, ranging from lack of motivation to extreme stress.

Retirement gives you an opportunity to sit less, sleep more, become more physically active, get more exposure to daylight, and most importantly, pursue personally meaningful goals.

There are hard statistics, there are anecdotal statements, and there is simple logic: When you are in control of your life you can make it happier and healthier than when you don't have control

Victoria
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Re: Retirees-anyone miscalculate how much was needed?

Post by smitcat » Thu Sep 14, 2017 6:45 am

"I have seen articles that sitting is killing people. Most modern jobs are sitting. Daily commute is sitting.
I have seen articles that exposure to blue light of electronic devices interrupts people's sleep. Lack of sleep is killing people.
I have seen articles that a large percentage of employees are not satisfied with their jobs, ranging from lack of motivation to extreme stress."

I would agree with all of these.
I do not see how you would need to retire to correct any of them.

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Re: Retirees-anyone miscalculate how much was needed?

Post by carolinaman » Thu Sep 14, 2017 6:54 am

2015 wrote:
Wed Sep 13, 2017 1:34 am
I agree with this. I am living this right now.. I have been working long hours this year and I have done it at the expense of my workout schedule. But to add even more weight to the argument, I would point out that 5 years in your 40s or 50s (for some even early 60s) is nothing like the 5 years in your 80s or 90s. The state of your body, your mind and its senses is no where NEAR the same. Is it wise to be sacrificing those high quality years so you can "enjoy" your low quality ones?
[/quote]

Before retirement, I never let anything get in the way of my workout, regardless of my work schedule. Then again, I have been working out since I was 20 years old. Once, when I was overloaded with work and personal responsibilities, a friend told me to simply skip the gym for a while. My response was that the gym remains non-negotiable. In life, there's what you say and then there's where your shoes are. If you are really committed to your physicality, you won't need to read some hokey blog post (I'm looking at you, Seth Godwin) to do what you need to do when you need to do it whether you feel like it or not. This includes prioritizing your health, your workouts, and your diet. It's all a matter of Intention.

I do not at all subscribe to the physical limitations people put upon themselves as a result of aging. When friends told me one's metabolism slows down after age 50, my response is that mine sped up. When these same (overweight) friends state it's harder to get off the floor after age 60, I tell them I spring off the floor as easily as I did at 20 (did so today at the gym), when they tell me one's energy levels decline as one gets older, I tell them how I regularly go dancing, dancing intensely for four hours straight without ever needing (or wanting) to get off the dance floor. I have no intention of having "low quality years" as I age. In fact, recent research has shown that aging athletes experience extended healthy lifespan into late age, going into decline only in the last year or so. My intention is to follow their high performance health lifestyle by continuing my lifelong attention to diet, exercise, and optimal health. Aging is a mental disease, a socially contagious one at that, and I believe one must inoculate oneself against it by taking responsibility for one's choices.

I agree with the above excellent advice to track spending for at least 5 years before retirement. Personally, my weekly spending fell by about 25-50%, probably a result of reduced commuting expenses, drycleaning, and all those Mochas I had to bribe myself with to keep working.
[/quote]
********************************************************************************
I commend 2015 for doing all that he does to take of himself. However, despite those efforts, when people reach their 60s and above, medical conditions and physical limitations tend to occur with almost everyone. It is a rare person who will not have some physical challenges as they approach old age. I have always exercised, tried to eat a sensible diet, drink very little alcohol and do other things to care for my health. I feel that I am very fit - for a 73 year old person. I can still play 18 holes of golf walking and do many other things other people my age cannot. I feel blessed to do that. I jogged for many years but can no longer do so because of lower back issue and bad knee from a soccer injury many years ago. It seems every time I tackle a major home improvement project, I incur some issue. Wrist tendinitis, elbow tendinitis, shoulder issues as well as lower back. These are usually resolved with cortisone and PT. But I never experienced these issues until the past 5 years or so. I have to pace myself nowadays and not try to be superman.

People who intend to retire near normal retirement age (60s) and who plan a vigorous retirement to include lots of physical activity, need to realize they may have limitations in doing all of that.

I will conclude with this story. I went to my urologist a few years ago for annual checkup. His first question was "how is your stream?". I thought for a moment and said that it was ok, but it was not like it was 25 years ago. He replied "do you have anything that is working like it was 25 years ago". I hate a doctor with a sense of humor.

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Re: Retirees-anyone miscalculate how much was needed?

Post by TheTimeLord » Thu Sep 14, 2017 7:55 am

VictoriaF wrote:
Wed Sep 13, 2017 10:05 pm
freebeer wrote:
Wed Sep 13, 2017 2:05 am
VictoriaF wrote:
Tue Sep 12, 2017 12:10 pm
...The sooner you retire, the healthier you start living and the farther your date of death moves.
Is there data that supports the proposition that early retirees live longer? I have heard this type of thing stated but I have also heard that a lot of early retirees soon die ... and everything I've heard has seemed anecdotal in nature.
I have seen articles that sitting is killing people. Most modern jobs are sitting. Daily commute is sitting.
I have seen articles that exposure to blue light of electronic devices interrupts people's sleep. Lack of sleep is killing people.
I have seen articles that a large percentage of employees are not satisfied with their jobs, ranging from lack of motivation to extreme stress.

Retirement gives you an opportunity to sit less, sleep more, become more physically active, get more exposure to daylight, and most importantly, pursue personally meaningful goals.

There are hard statistics, there are anecdotal statements, and there is simple logic: When you are in control of your life you can make it happier and healthier than when you don't have control

Victoria
And then there is seeing what you want to see. I believe the statement in red is 100% TRUE. What I have trouble believing is that someone has lived there whole live feeling they don't have that control will be suddenly feel they now have control by leaving the workforce. I am more inclined to believe they will just find new masters. There are people who would like to be/do something and there are people who want to be/do something, those that would like to/do be fantasize and talk but rarely act or followthrough those that want to be/do take actions and find a way. I would be surprised if more than a small percentage of individuals take any more control of their life in retirement than they did prior to retirement. That said I am speaking about large populations and people are individuals and individuals can always be an exception (or exceptional).
Run, You Clever Boy!

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Re: Retirees-anyone miscalculate how much was needed?

Post by mak1277 » Thu Sep 14, 2017 8:26 am

TheTimeLord wrote:
Tue Sep 12, 2017 7:50 pm
Why is it BH seem to believe they have no ability to have a life and a job at the same time? Your 20s, 30s and 40s are great years, why waste them saving for retirement? Answer, because in life there is a balance and you have to play the odds.
You always trot this out, but you're subject to the same faulty logic on the other end of the spectrum. Why do you seem to believe that people who want to retire early aren't already "having a life"? Maybe we have so many hobbies and things we want to do outside of work that our pesky job interferes more than we'd like. Maybe it *really* stinks having to cross you fingers for good weather on the 2 days you have off each week to enjoy your outdoor hobbies, when you just sat through 3 or 4 perfect days being chained to your desk. Maybe a 5-day trip isn't enough for you and you want the ability to take a 2- or 3- or 4-week vacation, but you only have a limited number of vacation days.

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