When Did You Ease Up On Saving Aggressively?

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Small Savanna
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Re: When Did You Ease Up On Saving Aggressively?

Post by Small Savanna » Mon Aug 19, 2019 5:58 pm

Perhaps heresy on this site, but we let up on saving several times: first, when we had young children and my wife took a few years off to be home with them. We got by on my salary, but other than getting the full employer match on my retirement account, we didn't save much of anything. In fact, we dipped into money I had put aside before we got married.

The second time we weren't saving much on a net basis was during the two years while both our children were in college. We continued to max out our retirement contributions and do backdoor Roths, but at the same time I was drawing down our taxable account in order to afford those contributions.

Saving for retirement is important, but other things in life are important too. Spending more now might mean working a couple extra years later. There isn't an absolute "right" answer, other than doing what feels right to you, informed by an honest assessment of the implications for when you can afford to retire, and how important that is compared to what you're getting from the extra spending now.

Mako
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Re: When Did You Ease Up On Saving Aggressively?

Post by Mako » Mon Aug 19, 2019 6:03 pm

I eased up last year. I’m 40 and my plan is to retire at 57 with a Federal pension. I am refinancing now to a 15 year loan so that expense will be gone at retirement. Assuming that my pension is as expected, my portfolio (TSP, taxable, me and wife Roth IRAs) covers like 48x the rest of our normal expenses. Federal pensions are a possible political problem, but even if it were halved I’d still have around 18x current expenses in my portfolio so I’m not in terrible shape. So I figured it’s about time to let go a little. The above also doesn’t account for social security or inheritances (realistic plausible high 5 figures from each spouse’s parents, but that would probably go straight to shoring up college savings, which are adequate but not a priority).

“Easing up” means only doing up to the match for me (wife has no 401k) plus Roth IRAs plus HSA. Those things are free money that I don’t want to let go. But full $19k/year TSP plus additional taxable seems unnecessary at this time.

I have 3 kids ages 7 and under and am happy spending money on them now. Life is for living, and my mom died at 61 (and my dad had cancer at 50 but beat it) and that would be no fun for anyone. My wife and I are good at budgeting, I use YNAB and am kind of intense about spending so I’m not too concerned about creep hurting our goals, but I will constantly reevaluate.
Last edited by Mako on Mon Aug 19, 2019 6:22 pm, edited 1 time in total.

veindoc
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Re: When Did You Ease Up On Saving Aggressively?

Post by veindoc » Mon Aug 19, 2019 6:04 pm

RJC wrote:
Mon Aug 19, 2019 11:40 am
Dear Friends,

At what point do you let up on the aggressive savings gas pedal? When you are close to your number? After reaching? Never?

Financial calculators suggest that we may reach our number (~25x expenses) in 2-3 years depending on the market. We LBYM (save ~45%), however, my spouse thinks we could let up a bit since we are close to our goals. I think I am more conservative and more conscientious of potential black swan events.

What do you think?
How old are you? If you are in your 30’s and 40’s, you have plenty of time to ride out black swan events.
We stopped saving aggressively when I realized that even if we saved not a single additional dime our investments would rise to 40x expenses by retirement age. We are in our 40’s. We continue to do all the tax deferred savings because they were essentially on autopilot but stop putting as much in taxable. 529’s and extra mortgage payoff is ongoing.

Now that our kids are school age we are finding more ways to spend our money. We are naturally frugal but would like to show our kids the world so that is where some of the money is going towards.

Trader Joe
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Re: When Did You Ease Up On Saving Aggressively?

Post by Trader Joe » Mon Aug 19, 2019 6:11 pm

RJC wrote:
Mon Aug 19, 2019 11:40 am
Dear Friends,

At what point do you let up on the aggressive savings gas pedal? When you are close to your number? After reaching? Never?

Financial calculators suggest that we may reach our number (~25x expenses) in 2-3 years depending on the market. We LBYM (save ~45%), however, my spouse thinks we could let up a bit since we are close to our goals. I think I am more conservative and more conscientious of potential black swan events.

What do you think?
We never "saved aggressively". Spending and savings were balanced and aligned with income. This worked out very well.

Dandy
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Re: When Did You Ease Up On Saving Aggressively?

Post by Dandy » Mon Aug 19, 2019 6:19 pm

I kept contribution levels the same until retirement. I did invest less of other money e.g. extra cash flow/bonus etc. Education expenses and enjoying vacations with family before the "kids" left the nest empty. Need to have life balance.

It's is ok to cut back a bit after reaching your number. You've done the heavy lifting and still contributing enough e.g. to get the company match at least means you are still adding to the nest egg. You don't necessarily need to contribute mid double digits anymore.

decapod10
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Re: When Did You Ease Up On Saving Aggressively?

Post by decapod10 » Mon Aug 19, 2019 7:02 pm

Our savings rate is pretty low compared to the typical BH I think, but I'm comfortable with it. So my answer would probably be that we have never saved aggressively, at least by BH standards. We have pretty good job security, and a nice pension and retirement benefits as long as nothing happens to our company. It's funny when I read the "are we spending too much/saving too little" threads where OP gets crushed for spending too much, but we probably spend more/save less than them, lol.

Anyway, if we end up getting our full pension, we'll probably need very little of our savings and most of it will end up going to the kids anyway. If we get $0 pension, then we will probably need to cut back some during retirement, but we won't be destitute or anything. If we only get the pension that we have currently earned but the economy stays reasonable (say 4-5% real return), then we should still be able to spend 100% expenses at retirement.
It's a risk we're willing to take so we can spend a little more now. Travel is probably the biggest expense we have, and we enjoy taking vacations with the kiddos. But it's really tricky with a pension trying to decide how much to value it, and how to incorporate it into your savings plans.

I've thought about the various scenarios and how our life might look with/without pension and other scenarios using FireCalc just to give me an idea of ballpark numbers that we're not completely off track. If things go bad, then maybe we'll have to tighten the belt by reducing expenses by 30% or so at retirement. It's certainly possible this may happen, but I feel it's unlikely.

dcw213
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Re: When Did You Ease Up On Saving Aggressively?

Post by dcw213 » Mon Aug 19, 2019 7:06 pm

This is a tough question because it is all relative. I just bought my first house since my family is now outgrowing our old and cheap apartment. It feels like a shock to the system but the reality is that we have gone from extreme living below means to just simply living below means. Our previous rent was under 5% of income which allowed us to save a bunch. We recognize that now with a young family we are scaling back the savings efforts. We plan to continue to max all tax deferred and put the excess in 529s and taxable but focused more now on raising kids with less constrained spending than we held ourselves to during our first 15 years or so working. It has been a psychological adjustment, just as when we started paying for childcare.

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RJC
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Re: When Did You Ease Up On Saving Aggressively?

Post by RJC » Mon Aug 19, 2019 7:28 pm

ruralavalon wrote:
Mon Aug 19, 2019 12:52 pm
RJC wrote:
Mon Aug 19, 2019 12:44 pm
ruralavalon wrote:
Mon Aug 19, 2019 11:54 am
RJC wrote:
Mon Aug 19, 2019 11:40 am
Dear Friends,

At what point do you let up on the aggressive savings gas pedal? When you are close to your number? After reaching? Never?

Financial calculators suggest that we may reach our number (~25x expenses) in 2-3 years depending on the market. We LBYM (save ~45%), however, my spouse thinks we could let up a bit since we are close to our goals. I think I am more conservative and more conscientious of potential black swan events.

What do you think?
We eased up on aggressive savings when I retired. But we didn't really start young, we started in my late 30s. We paid off our mortgage about 10 years before retirement, and cash flowed college expenses for four four children.

So your situation seems very different. What debt do you have? Any children going to college? A savings rate of 45% is extremely aggressive. What is your age? When do you plan to retire?

Unless you plan on retiring early (the "25 x" rule of thumb is expected to work out for normal retirement age in the mid 60s), it may be reasonable to be less aggressive now.
I am 43, we still have a 30 year mortgage (focus on that next?), and are funding the kids through 529s. Honestly, I am not sure when we will retire. My spouse is motivated and loves working. I work for the Fed and so far it is interesting and quite flexible.
How many years are left on the mortgage note? What is the current balance and the interet rate?
About 24 years with a balance of ~500k (4.25%). I'm watching the rates and may pull the trigger on a refinance soon.

we1
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Re: When Did You Ease Up On Saving Aggressively?

Post by we1 » Mon Aug 19, 2019 7:37 pm

I eased up after hitting about 25x expenses. It was initially hard to give myself permission to spend the extra $$ that used to go into our taxable accounts but the extra time/comfort/memories it provides now are worth more to me than having the extra cushion at retirement. I expect to have 35x+ expenses at retirement.

bikechuck
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Re: When Did You Ease Up On Saving Aggressively?

Post by bikechuck » Mon Aug 19, 2019 7:37 pm

I eased up when I reached the age of 64 and 1/12 years old ... the month that I retired.

Topic Author
RJC
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Re: When Did You Ease Up On Saving Aggressively?

Post by RJC » Mon Aug 19, 2019 7:38 pm

veindoc wrote:
Mon Aug 19, 2019 6:04 pm
RJC wrote:
Mon Aug 19, 2019 11:40 am
Dear Friends,

At what point do you let up on the aggressive savings gas pedal? When you are close to your number? After reaching? Never?

Financial calculators suggest that we may reach our number (~25x expenses) in 2-3 years depending on the market. We LBYM (save ~45%), however, my spouse thinks we could let up a bit since we are close to our goals. I think I am more conservative and more conscientious of potential black swan events.

What do you think?
How old are you? If you are in your 30’s and 40’s, you have plenty of time to ride out black swan events.
We stopped saving aggressively when I realized that even if we saved not a single additional dime our investments would rise to 40x expenses by retirement age. We are in our 40’s. We continue to do all the tax deferred savings because they were essentially on autopilot but stop putting as much in taxable. 529’s and extra mortgage payoff is ongoing.

Now that our kids are school age we are finding more ways to spend our money. We are naturally frugal but would like to show our kids the world so that is where some of the money is going towards.
I'm in my early 40s. Yeah, I figured we can pull back a little now and still be way over by retirement age. Just trying to find that right balance.

dcw213
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Re: When Did You Ease Up On Saving Aggressively?

Post by dcw213 » Mon Aug 19, 2019 7:42 pm

RJC wrote:
Mon Aug 19, 2019 7:28 pm
ruralavalon wrote:
Mon Aug 19, 2019 12:52 pm
RJC wrote:
Mon Aug 19, 2019 12:44 pm
ruralavalon wrote:
Mon Aug 19, 2019 11:54 am
RJC wrote:
Mon Aug 19, 2019 11:40 am
Dear Friends,

At what point do you let up on the aggressive savings gas pedal? When you are close to your number? After reaching? Never?

Financial calculators suggest that we may reach our number (~25x expenses) in 2-3 years depending on the market. We LBYM (save ~45%), however, my spouse thinks we could let up a bit since we are close to our goals. I think I am more conservative and more conscientious of potential black swan events.

What do you think?
We eased up on aggressive savings when I retired. But we didn't really start young, we started in my late 30s. We paid off our mortgage about 10 years before retirement, and cash flowed college expenses for four four children.

So your situation seems very different. What debt do you have? Any children going to college? A savings rate of 45% is extremely aggressive. What is your age? When do you plan to retire?

Unless you plan on retiring early (the "25 x" rule of thumb is expected to work out for normal retirement age in the mid 60s), it may be reasonable to be less aggressive now.
I am 43, we still have a 30 year mortgage (focus on that next?), and are funding the kids through 529s. Honestly, I am not sure when we will retire. My spouse is motivated and loves working. I work for the Fed and so far it is interesting and quite flexible.
How many years are left on the mortgage note? What is the current balance and the interet rate?
About 24 years with a balance of ~500k (4.25%). I'm watching the rates and may pull the trigger on a refinance soon.
I would definitely advise you to refi now. Market rates are around 3.6%. I just got a 3.75% 30 yr fixed with credits to offset closing costs.

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willthrill81
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Re: When Did You Ease Up On Saving Aggressively?

Post by willthrill81 » Mon Aug 19, 2019 7:49 pm

Stinky wrote:
Mon Aug 19, 2019 11:50 am
At time of retirement. That's when it's time to harvest the fruits of our labors.
Bingo! :sharebeer
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

TallBoy29er
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Re: When Did You Ease Up On Saving Aggressively?

Post by TallBoy29er » Mon Aug 19, 2019 7:52 pm

Tomato Tomahto (sp?) has a pretty cool philosophy on this, which I am bound to get wrong. But as I remember, he keeps the solid amt they would need to retire on in safe investments, and the leftover goes into equities. Again, I am getting details wrong, I get that. But as it goes, the discretionary spending then, in my eyes, could ramp up.

Yah yah yah, if you hit hard times, you'll have to pull back, and that may be hard w/ lifestyle creep. But a lot of stuff can be hard in life, it doesn't mean you cannot do it. If the sh^t hits the fan for any of us, we adjust. Don't delay living your life now. There are those for whom tomorrow never comes. You've done well, enjoy life a bit.

sambb
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Re: When Did You Ease Up On Saving Aggressively?

Post by sambb » Mon Aug 19, 2019 8:00 pm

deleted

smitcat
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Re: When Did You Ease Up On Saving Aggressively?

Post by smitcat » Mon Aug 19, 2019 8:14 pm

Trader Joe wrote:
Mon Aug 19, 2019 6:11 pm
RJC wrote:
Mon Aug 19, 2019 11:40 am
Dear Friends,

At what point do you let up on the aggressive savings gas pedal? When you are close to your number? After reaching? Never?

Financial calculators suggest that we may reach our number (~25x expenses) in 2-3 years depending on the market. We LBYM (save ~45%), however, my spouse thinks we could let up a bit since we are close to our goals. I think I am more conservative and more conscientious of potential black swan events.

What do you think?
We never "saved aggressively". Spending and savings were balanced and aligned with income. This worked out very well.
An excellent & logical approach.

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ruralavalon
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Re: When Did You Ease Up On Saving Aggressively?

Post by ruralavalon » Mon Aug 19, 2019 8:22 pm

RJC wrote:
Mon Aug 19, 2019 7:28 pm
ruralavalon wrote:
Mon Aug 19, 2019 12:52 pm
RJC wrote:
Mon Aug 19, 2019 12:44 pm
ruralavalon wrote:
Mon Aug 19, 2019 11:54 am
RJC wrote:
Mon Aug 19, 2019 11:40 am
Dear Friends,

At what point do you let up on the aggressive savings gas pedal? When you are close to your number? After reaching? Never?

Financial calculators suggest that we may reach our number (~25x expenses) in 2-3 years depending on the market. We LBYM (save ~45%), however, my spouse thinks we could let up a bit since we are close to our goals. I think I am more conservative and more conscientious of potential black swan events.

What do you think?
We eased up on aggressive savings when I retired. But we didn't really start young, we started in my late 30s. We paid off our mortgage about 10 years before retirement, and cash flowed college expenses for four four children.

So your situation seems very different. What debt do you have? Any children going to college? A savings rate of 45% is extremely aggressive. What is your age? When do you plan to retire?

Unless you plan on retiring early (the "25 x" rule of thumb is expected to work out for normal retirement age in the mid 60s), it may be reasonable to be less aggressive now.
I am 43, we still have a 30 year mortgage (focus on that next?), and are funding the kids through 529s. Honestly, I am not sure when we will retire. My spouse is motivated and loves working. I work for the Fed and so far it is interesting and quite flexible.
How many years are left on the mortgage note? What is the current balance and the interet rate?
About 24 years with a balance of ~500k (4.25%). I'm watching the rates and may pull the trigger on a refinance soon.
You are age 43. If you refinance it is probably a good idea to go for a 15 year mortgage, so the interest rate will be lower and the mortgage note would be paid off before retirement.

If you don't refinance then I suggest paying down the principal on your current mortgage. The interest rate is fairly high, plus it otherwise won't be paid off until age 67.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

TheNightsToCome
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Re: When Did You Ease Up On Saving Aggressively?

Post by TheNightsToCome » Mon Aug 19, 2019 8:42 pm

RJC wrote:
Mon Aug 19, 2019 11:40 am
Dear Friends,

At what point do you let up on the aggressive savings gas pedal? When you are close to your number? After reaching? Never?

Financial calculators suggest that we may reach our number (~25x expenses) in 2-3 years depending on the market. We LBYM (save ~45%), however, my spouse thinks we could let up a bit since we are close to our goals. I think I am more conservative and more conscientious of potential black swan events.

What do you think?
"At what point do you let up on the aggressive savings gas pedal?"

I'll let you know if we get there. Only have 47 times our average annual spending at this point. :D

I had more fun as a penniless 20-something than I could ever have as a 60 yo, but the things my wife and I enjoy today still don't cost much; most cost nothing.

Waiting_for_Godot
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Re: When Did You Ease Up On Saving Aggressively?

Post by Waiting_for_Godot » Mon Aug 19, 2019 9:10 pm

mak1277 wrote:
Mon Aug 19, 2019 4:26 pm
The question doesn't fit for me. I've always "paid myself first" by spending what I wanted to for the life I wanted to live. When I didn't make much money, that meant I had credit card debt. WHen I made more, than meant I saved. Now I make (relatively) a lot, so I guess I am "saving aggressively".

I think people who save first are doing it backwards.
I consider myself very lucky that I want very little. I try to imagine the temptation to 'keep up with the Jonses', but the only thing that comes up would be eventually replacing my 2011 Hyundai Accent whenever it decided to collapse with something a little nicer, conveniently newer models of the same car are much more 'respectable.'

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teen persuasion
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Re: When Did You Ease Up On Saving Aggressively?

Post by teen persuasion » Mon Aug 19, 2019 9:19 pm

Interesting reading everyone's viewpoints on this. Seems to depend on your point of view.

We haven't set a target % to save, we've continuously ramped up our annual savings (both $$ and %) as expenses decreased (student loans and mortgage paid off) and as income increased (raises and going from one income to 2). The goal isn't to spend more, we are happy with our spending. The goal is to work less, ultimately stop working. So at times we have pulled back on working/earning rather than ramp up spending. When we paid off the mortgage 15 years early, we could simultaneously increase DH's 401k contributions to hit the max for the first time and begin max contributions to 2 new Roth IRAs, but also he could opt out of teaching summer school. A few years later when he was getting burned out, he could quit and spend months waiting for the right position to open up for him. It paid less/had more expensive medical contributions, but it was a good change for a few years, and my pay was increasing to compensate. When he got bored and wanted to resume teaching, a better paying position opened up elsewhere, and he could again make a move w/o worry because we are nearly to 25x, and could coast on my part-time income if we need to.

So we now have the option to sprint to the finish line and RE (say, 3 years max), or he could quit while I continue a bit longer (because I spent nearly 20 years as SAHM, so I'm still having fun at my job) and we coast letting the stash grow before drawing from it, semi-retired. Or he finds a fun part-time and/or seasonal job to explore other interests.

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GerryL
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Re: When Did You Ease Up On Saving Aggressively?

Post by GerryL » Mon Aug 19, 2019 10:04 pm

Just sayin... wrote:
Mon Aug 19, 2019 11:57 am
Stinky wrote:
Mon Aug 19, 2019 11:50 am
At time of retirement. That's when it's time to harvest the fruits of our labors.

We had reached our "number" before that time.
+1. Saved at the same rate up to the day of retirement, then switched to a more generous spend model. I set this as a goal a few years before retirement as a reward I could look forward to. It’s been very nice...
++1
A couple of years before I planned to retire I had Vanguard run a financial plan and discovered that I had raced way past my number -- whatever it was. I continued saving as aggressively as usual, but when I retired (a year earlier than planned) I knew I would have 4.3 years before I started taking SS (at 70). So at that point saving stopped, although I put some of my cash into 1- and 2-year CDs, and stopped reinvesting dividends in taxable accounts. Now that I am collecting SS and starting to take RMDs, I am looking at putting some of that income back into savings. But I don't expect that I will ever again be an "aggressive" saver.
Knowing how much you can afford to spend and donate is indeed very nice.

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Re: When Did You Ease Up On Saving Aggressively?

Post by MotoTrojan » Mon Aug 19, 2019 10:20 pm

dboeger1 wrote:
Mon Aug 19, 2019 5:13 pm
I'm 28 with a long way to go to reach house+25x, so still fairly young to "ease up" in a permanent way. That being said, this is the first year my wife and I have both had high paying jobs simultaneously. Prior to this, only 1 of us worked at a time. We've always been very aggressive savers (our biggest splurge was buying a new car, but even that's a fairly modest percentage of our income over the past 6 years or so, and we take several road trips per year, as well as carpool to work). We're pretty much penny pinchers, coupon clippers, you name it. We're very skeptical of just about anything that costs us money. We're the kind to manage different credit cards for different spending categories to maximize rewards. The most expensive vacation we've ever done was a single night in a hotel for about $350, and I won $150 of it back gambling, lol.

My wife recently started her new job in international sales, which more than doubled her income, but since then, her (and by extension my) stress levels have gone through the roof. She's constantly getting called into meetings at 2AM with folks in China. To be honest, I don't think this job is a great fit for her in the long run, not because she can't do it, but because it'll make her miserable. I'm a firm believer in life being too short to spend it doing something you hate. That being said, I don't think it's fair to call it quits without at least giving it a fair shot for a year. She had been aspiring to make more income for quite some time, so now that she has it, I think she should tough it out for a bit to see if she can make it work.

So as a compromise, I made the executive decision to splurge on a nice vacation next year. I've never taken a week off of work, and I always wanted to go to Las Vegas when prices are low during the week. As an added bonus, we'll be going with some of my old high school friends with whom I've kept in touch, and my wife has been wanting to meet them for years. I'm definitely planning on spoiling her with spas, nice restaurants, etc. It recently hit me that this might be our last big vacation before reaching our financial target for having children. So to me, this is less about lifestyle creep and more about recovering psychologically as a couple before the next big savings marathon.

I think it's okay to reward yourself from time to time for all the frugality along the way. After all, beyond covering absolute necessities, there isn't much of a philosophical difference between saving to splurge in retirement and saving to splurge in your 20's/30's/etc.
Your 1st time taking a week off work and you want to take the wife to Vegas? To each their own. Travel and food is certainly the only area I splurge on but I could probably use a bit more penny pinching there as we regularly go on much more expensive vacations, but we are also getting that in before having some little ones.

MrBeaver
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Re: When Did You Ease Up On Saving Aggressively?

Post by MrBeaver » Mon Aug 19, 2019 10:35 pm

I'm still many years away. I can envision a time when I would pull off the accelerator due to life events, but I do know one thing I certainly intend on:

If I hit my number and wish to keep working, I will adjust my savings rate down and my spending/giving up so that my portfolio stays at my chosen multiple (25x, 30x, etc.) of the increased spending amount. Why continue aggressive saving if I could instead give more away at that time and not sacrifice my standard of living at that time or into the future?

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Re: When Did You Ease Up On Saving Aggressively?

Post by whodidntante » Mon Aug 19, 2019 10:59 pm

z3r0c00l wrote:
Mon Aug 19, 2019 5:35 pm
1 in 5 American men won't live to see 65 and 1 in 10 won't make 55. There is a strong argument for enjoying life before retirement too. If you enjoy things that cost money, like travel, good food, music, time with family, hobbies, then I think you need to enjoy them now also. Don't mortgage the future, but don't squander the present either. Because tomorrow is a probability, not a guarantee.
Agreed. I think I'm on the spendy side for the group here. I get modest pleasure out of saving and investing but I mostly like the freedom money gives me.

smitcat
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Re: When Did You Ease Up On Saving Aggressively?

Post by smitcat » Tue Aug 20, 2019 6:15 am

whodidntante wrote:
Mon Aug 19, 2019 10:59 pm
z3r0c00l wrote:
Mon Aug 19, 2019 5:35 pm
1 in 5 American men won't live to see 65 and 1 in 10 won't make 55. There is a strong argument for enjoying life before retirement too. If you enjoy things that cost money, like travel, good food, music, time with family, hobbies, then I think you need to enjoy them now also. Don't mortgage the future, but don't squander the present either. Because tomorrow is a probability, not a guarantee.
Agreed. I think I'm on the spendy side for the group here. I get modest pleasure out of saving and investing but I mostly like the freedom money gives me.
Really good posts - seems like many folks cannot save at all and others are not able to see a balance.
We have been more or less like these posts and it has served us well and are very prepared for whenever we fully retire.

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CyclingDuo
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Re: When Did You Ease Up On Saving Aggressively?

Post by CyclingDuo » Tue Aug 20, 2019 7:07 am

RJC wrote:
Mon Aug 19, 2019 11:40 am
Dear Friends,

At what point do you let up on the aggressive savings gas pedal? When you are close to your number? After reaching? Never?

Financial calculators suggest that we may reach our number (~25x expenses) in 2-3 years depending on the market. We LBYM (save ~45%), however, my spouse thinks we could let up a bit since we are close to our goals. I think I am more conservative and more conscientious of potential black swan events.

What do you think?
No single answer fits all. What is it your spouse would prefer to spend it on at the moment? You probably have some latitude to take a nice vacation, enjoy a meal out every now and then, etc.... which is all about striking a nice balance between enjoying life now and in the present while also saving for the future. It's all about balance. Without knowing more details, I imagine you and your spouse could find a nice balance that meets your needs and will still hit your goals. Maybe spend a year in the Super Saver mode to see how it feels for her, and then dial it back up to your Advanced Super Saver mode the following year to meet your goals.

Don't forget, there are all the potential grey swan and white swan events to prepare for as well. 8-)

http://insights.cermacademy.com/2016/06 ... ry-sikich/

We've got our pedal to the metal in terms of saving and most likely will keep that up until we pull the retirement parachute ripcord. Currently in the experimental phase of living on what we think we can live on in the early years of retirement. We will use these final test years doing that and tweaking what needs to be tweaked while saving all the rest in the Advanced Super Saver to Extreme Super Saver mode (or maybe even pulling back to Super Saver mode for year or so to take a nice overseas cycling vacation while we can still pedal the climbs) according to this table from Optimize Your Retirement. Being empty nesters and a dual income household has helped us keep it in overdrive.

Image
"Everywhere is within walking distance if you have the time." ~ Steven Wright

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RJC
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Re: When Did You Ease Up On Saving Aggressively?

Post by RJC » Tue Aug 20, 2019 7:29 am

CyclingDuo wrote:
Tue Aug 20, 2019 7:07 am
RJC wrote:
Mon Aug 19, 2019 11:40 am
Dear Friends,

At what point do you let up on the aggressive savings gas pedal? When you are close to your number? After reaching? Never?

Financial calculators suggest that we may reach our number (~25x expenses) in 2-3 years depending on the market. We LBYM (save ~45%), however, my spouse thinks we could let up a bit since we are close to our goals. I think I am more conservative and more conscientious of potential black swan events.

What do you think?
No single answer fits all. What is it your spouse would prefer to spend it on at the moment? You probably have some latitude to take a nice vacation, enjoy a meal out every now and then, etc.... which is all about striking a nice balance between enjoying life now and in the present while also saving for the future. It's all about balance. Without knowing more details, I imagine you and your spouse could find a nice balance that meets your needs and will still hit your goals. Maybe spend a year in the Super Saver mode to see how it feels for her, and then dial it back up to your Advanced Super Saver mode the following year to meet your goals.

Don't forget, there are all the potential grey swan and white swan events to prepare for as well. 8-)

http://insights.cermacademy.com/2016/06 ... ry-sikich/

We've got our pedal to the metal in terms of saving and most likely will keep that up until we pull the retirement parachute ripcord. Currently in the experimental phase of living on what we think we can live on in the early years of retirement. We will use these final test years doing that and tweaking what needs to be tweaked while saving all the rest in the Advanced Super Saver to Extreme Super Saver mode (or maybe even pulling back to Super Saver mode for year or so to take a nice overseas cycling vacation while we can still pedal the climbs) according to this table from Optimize Your Retirement. Being empty nesters and a dual income household has helped us keep it in overdrive.

Image
Spouse prefers the finer things in life (e.g. luxury goods, trips, nice car, etc.). I tend to be more practical and am trying to optimize our finances. This is where sometimes we are not on the same page. However, we have been saving enough so I'm trying to pick my battles.

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Re: When Did You Ease Up On Saving Aggressively?

Post by abuss368 » Tue Aug 20, 2019 7:57 am

Stinky wrote:
Mon Aug 19, 2019 11:50 am
At time of retirement. That's when it's time to harvest the fruits of our labors.

We had reached our "number" before that time.
Well said and I could not agree more.
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

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Re: When Did You Ease Up On Saving Aggressively?

Post by abuss368 » Tue Aug 20, 2019 7:58 am

Mathematically speaking at some point all portfolios will be more impacted by investment results (i.e. gains and losses) than contributions. Contributions should become a smaller percentage over time. That is not to say they are not important!
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

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Re: When Did You Ease Up On Saving Aggressively?

Post by getthatmarshmallow » Tue Aug 20, 2019 8:28 am

RJC wrote:
Tue Aug 20, 2019 7:29 am
CyclingDuo wrote:
Tue Aug 20, 2019 7:07 am
RJC wrote:
Mon Aug 19, 2019 11:40 am
Dear Friends,

At what point do you let up on the aggressive savings gas pedal? When you are close to your number? After reaching? Never?

Financial calculators suggest that we may reach our number (~25x expenses) in 2-3 years depending on the market. We LBYM (save ~45%), however, my spouse thinks we could let up a bit since we are close to our goals. I think I am more conservative and more conscientious of potential black swan events.

What do you think?
No single answer fits all. What is it your spouse would prefer to spend it on at the moment? You probably have some latitude to take a nice vacation, enjoy a meal out every now and then, etc.... which is all about striking a nice balance between enjoying life now and in the present while also saving for the future. It's all about balance. Without knowing more details, I imagine you and your spouse could find a nice balance that meets your needs and will still hit your goals. Maybe spend a year in the Super Saver mode to see how it feels for her, and then dial it back up to your Advanced Super Saver mode the following year to meet your goals.

Don't forget, there are all the potential grey swan and white swan events to prepare for as well. 8-)

http://insights.cermacademy.com/2016/06 ... ry-sikich/

We've got our pedal to the metal in terms of saving and most likely will keep that up until we pull the retirement parachute ripcord. Currently in the experimental phase of living on what we think we can live on in the early years of retirement. We will use these final test years doing that and tweaking what needs to be tweaked while saving all the rest in the Advanced Super Saver to Extreme Super Saver mode (or maybe even pulling back to Super Saver mode for year or so to take a nice overseas cycling vacation while we can still pedal the climbs) according to this table from Optimize Your Retirement. Being empty nesters and a dual income household has helped us keep it in overdrive.

Image
Spouse prefers the finer things in life (e.g. luxury goods, trips, nice car, etc.). I tend to be more practical and am trying to optimize our finances. This is where sometimes we are not on the same page. However, we have been saving enough so I'm trying to pick my battles.
Part of personal finance is not letting the optimal being the enemy of the good. If your spouse is unhappy, that has to factor into your decisions.

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Re: When Did You Ease Up On Saving Aggressively?

Post by mmmodem » Tue Aug 20, 2019 8:39 am

As many have already said, we started easing up at 25x spending. This represents the lowest level of spending that we know we can survive. It's not the way we want to live but it's security knowing we have enough to take care of ourselves. Additional savings will be gravy. Therefore, we get to live a little.

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Re: When Did You Ease Up On Saving Aggressively?

Post by dboeger1 » Tue Aug 20, 2019 9:48 am

MotoTrojan wrote:
Mon Aug 19, 2019 10:20 pm
dboeger1 wrote:
Mon Aug 19, 2019 5:13 pm
I'm 28 with a long way to go to reach house+25x, so still fairly young to "ease up" in a permanent way. That being said, this is the first year my wife and I have both had high paying jobs simultaneously. Prior to this, only 1 of us worked at a time. We've always been very aggressive savers (our biggest splurge was buying a new car, but even that's a fairly modest percentage of our income over the past 6 years or so, and we take several road trips per year, as well as carpool to work). We're pretty much penny pinchers, coupon clippers, you name it. We're very skeptical of just about anything that costs us money. We're the kind to manage different credit cards for different spending categories to maximize rewards. The most expensive vacation we've ever done was a single night in a hotel for about $350, and I won $150 of it back gambling, lol.

My wife recently started her new job in international sales, which more than doubled her income, but since then, her (and by extension my) stress levels have gone through the roof. She's constantly getting called into meetings at 2AM with folks in China. To be honest, I don't think this job is a great fit for her in the long run, not because she can't do it, but because it'll make her miserable. I'm a firm believer in life being too short to spend it doing something you hate. That being said, I don't think it's fair to call it quits without at least giving it a fair shot for a year. She had been aspiring to make more income for quite some time, so now that she has it, I think she should tough it out for a bit to see if she can make it work.

So as a compromise, I made the executive decision to splurge on a nice vacation next year. I've never taken a week off of work, and I always wanted to go to Las Vegas when prices are low during the week. As an added bonus, we'll be going with some of my old high school friends with whom I've kept in touch, and my wife has been wanting to meet them for years. I'm definitely planning on spoiling her with spas, nice restaurants, etc. It recently hit me that this might be our last big vacation before reaching our financial target for having children. So to me, this is less about lifestyle creep and more about recovering psychologically as a couple before the next big savings marathon.

I think it's okay to reward yourself from time to time for all the frugality along the way. After all, beyond covering absolute necessities, there isn't much of a philosophical difference between saving to splurge in retirement and saving to splurge in your 20's/30's/etc.
Your 1st time taking a week off work and you want to take the wife to Vegas? To each their own. Travel and food is certainly the only area I splurge on but I could probably use a bit more penny pinching there as we regularly go on much more expensive vacations, but we are also getting that in before having some little ones.
LOL, you have a point. We could have gone anywhere I suppose. To be honest though, it wasn't like I decided to take a week off, and then decided Vegas would be the best place to spend that week. It was more a case of finally having enough PTO and alignment in our schedules to be able to meet up with my high school friends, which my wife had been asking for several years. Vegas is a desirable middle ground between coasts for us, so it works.

We've visited national parks and foreign countries enough that we're actually not so lacking of those kinds of experiences, plus we're also going to take some time to go the Grand Canyon during that Vegas trip. So yeah, I mean it's not Paris or anything, but I'm still excited, haha.

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Re: When Did You Ease Up On Saving Aggressively?

Post by CyclingDuo » Tue Aug 20, 2019 9:55 am

RJC wrote:
Tue Aug 20, 2019 7:29 am
Spouse prefers the finer things in life (e.g. luxury goods, trips, nice car, etc.). I tend to be more practical and am trying to optimize our finances. This is where sometimes we are not on the same page. However, we have been saving enough so I'm trying to pick my battles.
Plenty of books, podcasts, articles, etc... for her to understand the importance of being on the same page via answering the all important question of "Why?" when it comes to building the nest egg for the future.

That being said, there are plenty of posts and thoughts on the BH forums that once you reach a certain level of accumulated wealth, you have the latitude to enjoy some things such as a new car, vacation/trips, etc... as long as they are all cash flowed and factored into your budget. This is all certainly best worked out between the two of you, as all of our opinions and household experiences will be all over the map.

Good news is that it sounds like at least one of you is a saver while the other is a spender. Better that, than having two spenders in a household. :shock: Regardless, constant discussion between the two of you to meet your goals and satisfy some current wants/desires should always be on the table. Best to get it all worked out now as everything I have read claims it doesn't get any easier (being on the same page) going into retirement and in retirement between spouses.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

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Re: When Did You Ease Up On Saving Aggressively?

Post by mak1277 » Tue Aug 20, 2019 9:56 am

MotoTrojan wrote:
Mon Aug 19, 2019 10:20 pm
Your 1st time taking a week off work and you want to take the wife to Vegas?
Ignoring the fact that you're being unnecessarily judgmental...what's wrong with Vegas?

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Re: When Did You Ease Up On Saving Aggressively?

Post by ruralavalon » Tue Aug 20, 2019 10:36 am

RJC wrote:
Mon Aug 19, 2019 11:40 am
Dear Friends,

At what point do you let up on the aggressive savings gas pedal? When you are close to your number? After reaching? Never?

Financial calculators suggest that we may reach our number (~25x expenses) in 2-3 years depending on the market. We LBYM (save ~45%), however, my spouse thinks we could let up a bit since we are close to our goals. I think I am more conservative and more conscientious of potential black swan events.

What do you think?
RJC wrote:
Mon Aug 19, 2019 7:38 pm
I'm in my early 40s. Yeah, I figured we can pull back a little now and still be way over by retirement age. Just trying to find that right balance.
RJC wrote:
Tue Aug 20, 2019 7:29 am
Spouse prefers the finer things in life (e.g. luxury goods, trips, nice car, etc.). I tend to be more practical and am trying to optimize our finances. This is where sometimes we are not on the same page. However, we have been saving enough so I'm trying to pick my battles.
A 45% savings rate is outstanding. You are obviously both fairly frugal.

As mentioned before I suggest redirecting some of the your outstanding savings rate to reducing the the mortgage debt and interest rate.

Beyond that I believe it is reasonable for you and your wife to start enjoying some of the finer things in life, still being cautious about lifestyle creep. You are at a point where investing returns are more significant than contributions, although contributions should continue at some level.

You both enjoy your work, and plan to work until normal retirement age about 20+ more years.

As CyclingDuo pointed out once you reach a certain level of accumulated wealth, you have the latitude to enjoy some things such as a new car, vacation/trips, etc... as long as they are all cash flowed and factored into your budget.

Don't let the "optimal" get in the way of a good compromise (for example a nice, low mileage, used luxury car). "Happy wife, happy life", and she has a reasonable point about easing up.
Last edited by ruralavalon on Tue Aug 20, 2019 12:47 pm, edited 3 times in total.
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Re: When Did You Ease Up On Saving Aggressively?

Post by TeamArgo » Tue Aug 20, 2019 10:37 am

My 401K was my main place to keep our retirement nest egg. At about age 55, I noticed that the earnings were far eclipsing my annual contributions. I backed them down from 15% to just the 6% needed to obtain the company match, and started to plot out my final retirement plans. In the meantime, I used some of my newly created cashflow to make some home updates and to take a few longer vacations. A job "detour" happened that allowed me to work from home for a few years and to work in a department that I had wanted to be in for many years, but I finally retired about 4 years later.
"Love with your heart, use your head for everything else" -Captain Disillusion

MotoTrojan
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Re: When Did You Ease Up On Saving Aggressively?

Post by MotoTrojan » Tue Aug 20, 2019 10:42 am

mak1277 wrote:
Tue Aug 20, 2019 9:56 am
MotoTrojan wrote:
Mon Aug 19, 2019 10:20 pm
Your 1st time taking a week off work and you want to take the wife to Vegas?
Ignoring the fact that you're being unnecessarily judgmental...what's wrong with Vegas?
Probably inappropriate :twisted: I did toss in a "to each their own" to be fair. Probably been spending too much time on reddit where social rules are a little looser... just didn't seem like as much of a treat for the wife as poster thought.

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Re: When Did You Ease Up On Saving Aggressively?

Post by dknightd » Tue Aug 20, 2019 11:02 am

RJC wrote:
Tue Aug 20, 2019 7:29 am

Financial calculators suggest that we may reach our number (~25x expenses) in 2-3 years depending on the market. We LBYM (save ~45%), however, my spouse thinks we could let up a bit since we are close to our goals. I think I am more conservative and more conscientious of potential black swan events.

What do you think?

snip

Spouse prefers the finer things in life (e.g. luxury goods, trips, nice car, etc.). I tend to be more practical and am trying to optimize our finances. This is where sometimes we are not on the same page. However, we have been saving enough so I'm trying to pick my battles.
I think the priority should be keeping the spouse happy. That means you both have to be happy.
IMO discussions with spouse should not be battles. They should be discussions about how to keep both of you happy. If they become battles, you risk loosing your spouse - then your combined expenses go up, perhaps a lot!

When you say your are saving 45%, is that 45% of your expenses, or, 45% of your income?
I've never saved more than 25% of my income. And that seems to have been enough.

Keep in mind, if you increase your spending (in a more or less permanent way), that increases your expenses. So your 25x savings can easily become less than that if x goes up ;)

Live is just a game https://www.youtube.com/watch?v=GZLLv4s4WvI

Admiral
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Re: When Did You Ease Up On Saving Aggressively?

Post by Admiral » Tue Aug 20, 2019 11:04 am

RJC wrote:
Mon Aug 19, 2019 11:40 am
Dear Friends,

At what point do you let up on the aggressive savings gas pedal? When you are close to your number? After reaching? Never?

Financial calculators suggest that we may reach our number (~25x expenses) in 2-3 years depending on the market. We LBYM (save ~45%), however, my spouse thinks we could let up a bit since we are close to our goals. I think I am more conservative and more conscientious of potential black swan events.

What do you think?
I think the 25x expenses is ok in a broad sense. However, if you plan to retire early (let's say mid to late 50s or even 60) that is likely not adequate.

In our case (we are age 50ish) we already have saved well over 25x our projected expenses, but only after pension (available at age 60) and two social security payments are applied. However, that still leaves us with bridge years to fund: pension only from 60-67, and possibly one or no SS payments from 67-70. So our portfolio draw would be higher in those years (assuming both of us stop work.) Not terribly higher, but perhaps 5% in those bridge years. But, then it drops to 2% or less. (We also expect inheritances, though they are not included in the play.)

That said, we're now saving about $35k per year, half of it Roth, which is less than in past years. The maxing pre-tax space (including catch up contributions) was just too much of a burden on our cash flow with two kids in private school. We also spend a lot on vacations, which I believe are important. In looking at projections, I was able to see that the results of the maximal savings were not likely to make a material difference later, and that we only need a very low average rate of return (2% or less) over the next ten years to meet our goals.

So, we cut back.

You might consider using Retiree Portfolio Model to see how the future may look for you.

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Re: When Did You Ease Up On Saving Aggressively?

Post by Watty » Tue Aug 20, 2019 11:34 am

I had one year when I was in my early 50s when I went to three funerals of people that I knew that were more or less my age. I was not real close to any of them but that does get you thinking.

About the same time realized that the amount I was able to save each year was relatively small compared to any investment earnings or losses during the year. I don't recall the exact numbers but before I reduced my savings rate I might have been able to save something in the ballpark of 2% of my total portfolio each year even though I was saving a relatively high percentage of my income.

I ended up reducing my 401k contributions to 6% so I could still get my employer's 3% match so I was still saving 9% so it was not like I totally stopped saving.

That reduced the amount I was saving each years down by about 1% to around 1% of my total portfolio and I remember thinking that I had a retirement budget of spending $60,000 a year a 1% difference was only $600 or $50 a month one way or the other so it was not a real big deal and if necessary I could just work a month or two longer to make up any difference.

I then started spending more on things like travel which works out well since each trip is a one time expense and not a permanent increase in your lifestyle.

I ended up retiring just before I turned 59 but the final date was determined by my wife being 18 months from starting Medicare so she could use Cobra until she was able to go directly to Medicare.
Last edited by Watty on Thu Aug 22, 2019 8:39 am, edited 3 times in total.

1TheGame
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Re: When Did You Ease Up On Saving Aggressively?

Post by 1TheGame » Tue Aug 20, 2019 11:35 am

Perhaps because I enjoy some vigorous outdoor hobbies and have seen unexpected health problems (and early deaths) hit others, I've always placed a very high value on maximizing the number of years of good health I would have in retirement. Even though I enjoyed my job, I did not want to work longer/more than necessary just to increase my retirement savings beyond that which would provide a reasonable safety factor. So at age 55 I transitioned to part time and gradually ramped my work hours down over the next 4 years. At 55 I had 25x expenses (including a paid off house). For the first three years I still contributed the max allowable (per IRS) to my retirement plan; the employer match decreased as my salary decreased (due to fewer work hours). For the fourth year I ramped my hours down to 50%; at that point I cut back my retirement plan contributions to just get the maximum employer match (employer kicked in 10% for my 4%). After 4 years of being PT I retired (about 1 1/2 years ago). Since I went PT my portfolio continued to grow and has leveled off since I retired (not gone down). Currently at about 35x expenses and life is good! Planning to start DW SS at 62 and mine at 70 (which of course will reduce the WR).

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Re: When Did You Ease Up On Saving Aggressively?

Post by decapod10 » Tue Aug 20, 2019 11:41 am

dboeger1 wrote:
Tue Aug 20, 2019 9:48 am
MotoTrojan wrote:
Mon Aug 19, 2019 10:20 pm
dboeger1 wrote:
Mon Aug 19, 2019 5:13 pm
I'm 28 with a long way to go to reach house+25x, so still fairly young to "ease up" in a permanent way. That being said, this is the first year my wife and I have both had high paying jobs simultaneously. Prior to this, only 1 of us worked at a time. We've always been very aggressive savers (our biggest splurge was buying a new car, but even that's a fairly modest percentage of our income over the past 6 years or so, and we take several road trips per year, as well as carpool to work). We're pretty much penny pinchers, coupon clippers, you name it. We're very skeptical of just about anything that costs us money. We're the kind to manage different credit cards for different spending categories to maximize rewards. The most expensive vacation we've ever done was a single night in a hotel for about $350, and I won $150 of it back gambling, lol.

My wife recently started her new job in international sales, which more than doubled her income, but since then, her (and by extension my) stress levels have gone through the roof. She's constantly getting called into meetings at 2AM with folks in China. To be honest, I don't think this job is a great fit for her in the long run, not because she can't do it, but because it'll make her miserable. I'm a firm believer in life being too short to spend it doing something you hate. That being said, I don't think it's fair to call it quits without at least giving it a fair shot for a year. She had been aspiring to make more income for quite some time, so now that she has it, I think she should tough it out for a bit to see if she can make it work.

So as a compromise, I made the executive decision to splurge on a nice vacation next year. I've never taken a week off of work, and I always wanted to go to Las Vegas when prices are low during the week. As an added bonus, we'll be going with some of my old high school friends with whom I've kept in touch, and my wife has been wanting to meet them for years. I'm definitely planning on spoiling her with spas, nice restaurants, etc. It recently hit me that this might be our last big vacation before reaching our financial target for having children. So to me, this is less about lifestyle creep and more about recovering psychologically as a couple before the next big savings marathon.

I think it's okay to reward yourself from time to time for all the frugality along the way. After all, beyond covering absolute necessities, there isn't much of a philosophical difference between saving to splurge in retirement and saving to splurge in your 20's/30's/etc.
Your 1st time taking a week off work and you want to take the wife to Vegas? To each their own. Travel and food is certainly the only area I splurge on but I could probably use a bit more penny pinching there as we regularly go on much more expensive vacations, but we are also getting that in before having some little ones.
LOL, you have a point. We could have gone anywhere I suppose. To be honest though, it wasn't like I decided to take a week off, and then decided Vegas would be the best place to spend that week. It was more a case of finally having enough PTO and alignment in our schedules to be able to meet up with my high school friends, which my wife had been asking for several years. Vegas is a desirable middle ground between coasts for us, so it works.

We've visited national parks and foreign countries enough that we're actually not so lacking of those kinds of experiences, plus we're also going to take some time to go the Grand Canyon during that Vegas trip. So yeah, I mean it's not Paris or anything, but I'm still excited, haha.
Vegas is fun, have a good time. My wife likes it there too. Interestingly enough, Vegas can be quite relaxing. You can just roll out of bed whenever, walk to meals, shows, gambling, whatever you like to do.

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RJC
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Re: When Did You Ease Up On Saving Aggressively?

Post by RJC » Tue Aug 20, 2019 7:14 pm

dknightd wrote:
Tue Aug 20, 2019 11:02 am
RJC wrote:
Tue Aug 20, 2019 7:29 am

Financial calculators suggest that we may reach our number (~25x expenses) in 2-3 years depending on the market. We LBYM (save ~45%), however, my spouse thinks we could let up a bit since we are close to our goals. I think I am more conservative and more conscientious of potential black swan events.

What do you think?

snip

Spouse prefers the finer things in life (e.g. luxury goods, trips, nice car, etc.). I tend to be more practical and am trying to optimize our finances. This is where sometimes we are not on the same page. However, we have been saving enough so I'm trying to pick my battles.
I think the priority should be keeping the spouse happy. That means you both have to be happy.
IMO discussions with spouse should not be battles. They should be discussions about how to keep both of you happy. If they become battles, you risk loosing your spouse - then your combined expenses go up, perhaps a lot!

When you say your are saving 45%, is that 45% of your expenses, or, 45% of your income?
I've never saved more than 25% of my income. And that seems to have been enough.

Keep in mind, if you increase your spending (in a more or less permanent way), that increases your expenses. So your 25x savings can easily become less than that if x goes up ;)

Live is just a game https://www.youtube.com/watch?v=GZLLv4s4WvI
45% of income. It's aggressive but I feel like it's manageable. Spouse, on the other hand, thinks we could live it up a bit more. :oops:

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Re: When Did You Ease Up On Saving Aggressively?

Post by ruralavalon » Tue Aug 20, 2019 7:40 pm

RJC wrote:
Tue Aug 20, 2019 7:14 pm
dknightd wrote:
Tue Aug 20, 2019 11:02 am
RJC wrote:
Tue Aug 20, 2019 7:29 am

Financial calculators suggest that we may reach our number (~25x expenses) in 2-3 years depending on the market. We LBYM (save ~45%), however, my spouse thinks we could let up a bit since we are close to our goals. I think I am more conservative and more conscientious of potential black swan events.

What do you think?

snip

Spouse prefers the finer things in life (e.g. luxury goods, trips, nice car, etc.). I tend to be more practical and am trying to optimize our finances. This is where sometimes we are not on the same page. However, we have been saving enough so I'm trying to pick my battles.
I think the priority should be keeping the spouse happy. That means you both have to be happy.
IMO discussions with spouse should not be battles. They should be discussions about how to keep both of you happy. If they become battles, you risk loosing your spouse - then your combined expenses go up, perhaps a lot!

When you say your are saving 45%, is that 45% of your expenses, or, 45% of your income?
I've never saved more than 25% of my income. And that seems to have been enough.

Keep in mind, if you increase your spending (in a more or less permanent way), that increases your expenses. So your 25x savings can easily become less than that if x goes up ;)

Live is just a game https://www.youtube.com/watch?v=GZLLv4s4WvI
45% of income. It's aggressive but I feel like it's manageable. Spouse, on the other hand, thinks we could live it up a bit more. :oops:
Give in a bit, she is right you could indulge yourselves more :D .
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

smitcat
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Re: When Did You Ease Up On Saving Aggressively?

Post by smitcat » Wed Aug 21, 2019 8:22 am

RJC wrote:
Tue Aug 20, 2019 7:14 pm
dknightd wrote:
Tue Aug 20, 2019 11:02 am
RJC wrote:
Tue Aug 20, 2019 7:29 am

Financial calculators suggest that we may reach our number (~25x expenses) in 2-3 years depending on the market. We LBYM (save ~45%), however, my spouse thinks we could let up a bit since we are close to our goals. I think I am more conservative and more conscientious of potential black swan events.

What do you think?

snip

Spouse prefers the finer things in life (e.g. luxury goods, trips, nice car, etc.). I tend to be more practical and am trying to optimize our finances. This is where sometimes we are not on the same page. However, we have been saving enough so I'm trying to pick my battles.
I think the priority should be keeping the spouse happy. That means you both have to be happy.
IMO discussions with spouse should not be battles. They should be discussions about how to keep both of you happy. If they become battles, you risk loosing your spouse - then your combined expenses go up, perhaps a lot!

When you say your are saving 45%, is that 45% of your expenses, or, 45% of your income?
I've never saved more than 25% of my income. And that seems to have been enough.

Keep in mind, if you increase your spending (in a more or less permanent way), that increases your expenses. So your 25x savings can easily become less than that if x goes up ;)

Live is just a game https://www.youtube.com/watch?v=GZLLv4s4WvI
45% of income. It's aggressive but I feel like it's manageable. Spouse, on the other hand, thinks we could live it up a bit more. :oops:

"45% of income. It's aggressive but I feel like it's manageable. Spouse, on the other hand, thinks we could live it up a bit more."

Are you saying 45% of gross income?
Is this a very recent change"
Your past posts indicate much different data.

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midareff
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Re: When Did You Ease Up On Saving Aggressively?

Post by midareff » Wed Aug 21, 2019 9:18 am

The day I retired.

Topic Author
RJC
Posts: 392
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Re: When Did You Ease Up On Saving Aggressively?

Post by RJC » Wed Aug 21, 2019 9:56 am

smitcat wrote:
Wed Aug 21, 2019 8:22 am
RJC wrote:
Tue Aug 20, 2019 7:14 pm
dknightd wrote:
Tue Aug 20, 2019 11:02 am
RJC wrote:
Tue Aug 20, 2019 7:29 am

Financial calculators suggest that we may reach our number (~25x expenses) in 2-3 years depending on the market. We LBYM (save ~45%), however, my spouse thinks we could let up a bit since we are close to our goals. I think I am more conservative and more conscientious of potential black swan events.

What do you think?

snip

Spouse prefers the finer things in life (e.g. luxury goods, trips, nice car, etc.). I tend to be more practical and am trying to optimize our finances. This is where sometimes we are not on the same page. However, we have been saving enough so I'm trying to pick my battles.
I think the priority should be keeping the spouse happy. That means you both have to be happy.
IMO discussions with spouse should not be battles. They should be discussions about how to keep both of you happy. If they become battles, you risk loosing your spouse - then your combined expenses go up, perhaps a lot!

When you say your are saving 45%, is that 45% of your expenses, or, 45% of your income?
I've never saved more than 25% of my income. And that seems to have been enough.

Keep in mind, if you increase your spending (in a more or less permanent way), that increases your expenses. So your 25x savings can easily become less than that if x goes up ;)

Live is just a game https://www.youtube.com/watch?v=GZLLv4s4WvI
45% of income. It's aggressive but I feel like it's manageable. Spouse, on the other hand, thinks we could live it up a bit more. :oops:

"45% of income. It's aggressive but I feel like it's manageable. Spouse, on the other hand, thinks we could live it up a bit more."

Are you saying 45% of gross income?
Is this a very recent change"
Your past posts indicate much different data.
Good catch. I did not consider the whole picture when I previously posted "at least 3k a month". That was extra money each month that we were purposely saving that did not include 401ks, bonuses, RSUs, etc. When I put everything together, the savings rate was much more.

smitcat
Posts: 4381
Joined: Mon Nov 07, 2016 10:51 am

Re: When Did You Ease Up On Saving Aggressively?

Post by smitcat » Wed Aug 21, 2019 10:03 am

RJC wrote:
Wed Aug 21, 2019 9:56 am
smitcat wrote:
Wed Aug 21, 2019 8:22 am
RJC wrote:
Tue Aug 20, 2019 7:14 pm
dknightd wrote:
Tue Aug 20, 2019 11:02 am
RJC wrote:
Tue Aug 20, 2019 7:29 am

Financial calculators suggest that we may reach our number (~25x expenses) in 2-3 years depending on the market. We LBYM (save ~45%), however, my spouse thinks we could let up a bit since we are close to our goals. I think I am more conservative and more conscientious of potential black swan events.

What do you think?

snip

Spouse prefers the finer things in life (e.g. luxury goods, trips, nice car, etc.). I tend to be more practical and am trying to optimize our finances. This is where sometimes we are not on the same page. However, we have been saving enough so I'm trying to pick my battles.
I think the priority should be keeping the spouse happy. That means you both have to be happy.
IMO discussions with spouse should not be battles. They should be discussions about how to keep both of you happy. If they become battles, you risk loosing your spouse - then your combined expenses go up, perhaps a lot!

When you say your are saving 45%, is that 45% of your expenses, or, 45% of your income?
I've never saved more than 25% of my income. And that seems to have been enough.

Keep in mind, if you increase your spending (in a more or less permanent way), that increases your expenses. So your 25x savings can easily become less than that if x goes up ;)

Live is just a game https://www.youtube.com/watch?v=GZLLv4s4WvI
45% of income. It's aggressive but I feel like it's manageable. Spouse, on the other hand, thinks we could live it up a bit more. :oops:

"45% of income. It's aggressive but I feel like it's manageable. Spouse, on the other hand, thinks we could live it up a bit more."

Are you saying 45% of gross income?
Is this a very recent change"
Your past posts indicate much different data.
Good catch. I did not consider the whole picture when I previously posted "at least 3k a month". That was extra money each month that we were purposely saving that did not include 401ks, bonuses, RSUs, etc. When I put everything together, the savings rate was much more.
So your income varies between $350K and $450K per year.
And 45% of that would be $158K to $202K per year saved?

LiterallyIronic
Posts: 1336
Joined: Sat Dec 05, 2015 10:36 am

Re: When Did You Ease Up On Saving Aggressively?

Post by LiterallyIronic » Wed Aug 21, 2019 10:04 am

Jags4186 wrote:
Mon Aug 19, 2019 11:51 am
Easing up on savings means you need more savings.

Let’s pretend you make $100,000 and are saving $45,000/yr meaning you’re spending $55,000/yr. 25x of $55,000 is $1,375,000. If you decide to cut back your savings to 20% and increase your spending to $80,000/yr 25x is now $2,000,000. Congrats on having $1,375,000 but that is only 17x.

Strive to find a balance between spending and savings.
This assumes that all money is either going into "savings" or "spending." I disagree with this philosophy and therefore disagree with your conclusion.

Going with your example of the person who makes $100,000 and is putting $45k into retirement, let's say this person cuts back on putting money into retirement and instead puts in $20k, like your example. And the $25k difference gets thrown at paying down the mortgage. A mortgage that will be paid off by the time this person retires. Therefore this person's retirement expenses do not go up by $25k/year, even though this person decreased retirement contributions by $25k.

Admiral
Posts: 2488
Joined: Mon Oct 27, 2014 12:35 pm

Re: When Did You Ease Up On Saving Aggressively?

Post by Admiral » Wed Aug 21, 2019 10:16 am

LiterallyIronic wrote:
Wed Aug 21, 2019 10:04 am
Jags4186 wrote:
Mon Aug 19, 2019 11:51 am
Easing up on savings means you need more savings.

Let’s pretend you make $100,000 and are saving $45,000/yr meaning you’re spending $55,000/yr. 25x of $55,000 is $1,375,000. If you decide to cut back your savings to 20% and increase your spending to $80,000/yr 25x is now $2,000,000. Congrats on having $1,375,000 but that is only 17x.

Strive to find a balance between spending and savings.
This assumes that all money is either going into "savings" or "spending." I disagree with this philosophy and therefore disagree with your conclusion.

Going with your example of the person who makes $100,000 and is putting $45k into retirement, let's say this person cuts back on putting money into retirement and instead puts in $20k, like your example. And the $25k difference gets thrown at paying down the mortgage. A mortgage that will be paid off by the time this person retires. Therefore this person's retirement expenses do not go up by $25k/year, even though this person decreased retirement contributions by $25k.
As has been pointed out numerous times (to you and others) pre-paying the mortgage instead of saving for retirement is a bad idea in nearly all circumstances unless one's retirement is already fully covered.

In any case, you can call the $25k toward the mortgage "saving" instead of "spending." However, that $25k is gone (as in unavailable to be spent, or saved). True, it might lessen the mortgage liability sooner, and thus reduce the size of the eventual portfolio needed. But there are a lot of assumptions that go with such a strategy: to take one big example, future returns.

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