So my cautionary tale when determine if you have enough. We have a good amount of assets and H waited until 70 to retire and take SS so that maxed out. That and pension pretty much replaces income. BUT H has health issues which have increased in severity in last 5 years. Currently in rehab and has been for month and likely months to come since amputation now on table. After this week will be full pay. I’m pretty confident that he will never be able to meet 60 days out of hospital/rehab to restart rehab benefits so getting very expensive. He thinks he can handle our house in wheel chair. I’m not confident.
I wanted to downsize years ago. If H has to stay in rehab or some type of assisted living and I have to maintain this house as well it will seriously draw down our assets. It is what it is but I’m tired of hearing others talk about their retirement trips and weeks spent at beach or mountain houses and I can’t seem to get away for a day or so.
Anyway just a reminder to plan for worst case where you need to maintain separate living arrangements because of health. We are lucky to have resources
Oh man…that’s tough! I am hoping things look up for you!
If you decide to sell your house and downsize, perhaps you can hire someone to help you with the organizing and prepping the house for sale? It’s a big job, but having a smaller home/apartment/condo and less stuff can be freeing..
I don’t need to spend all my money. I also don’t want to not spend it or put off what I want.
In other news, we ran into the person who we wanted to do our bathroom. She said she would come up with some numbers soon. I can’t be certain but it seemed like she wasn’t too busy. Which was the problem the last time we tried to start the process.
Okay, I thought it was going to be more difficult transitioning from a saver to a spender. Turns out that when you find the things you want to spend it on, it wasn’t hard at all.
I had expected that we were going to be slowly draining our resources during retirement, but that hasn’t happened at all, though we’re spending like there’s no tomorrow. So much for a difficult transition. What makes me feel uncomfortable is being in debt, and we can’t seem to get out of that rut.
All of our money is in retirement funds or real estate, and I just can’t come up with a clear answer of how to pay off our debt. I have this problem every year. We’re taking the max out of our 401K’s to stay in the 24% tax bracket. That jump to the next tax bracket of 32% is just too hard to swallow, if we took more money out to pay debt down. And we took a bunch out of our Roths last year, so I don’t want to do that.
Meanwhile I’m stuck in inertia, paying 7% interest on a HELOC. Which isn’t that bad, I guess.
I am the underspender, and I know exactly why: I am afraid of running out of money because of some unforeseen medical expense down the road. More than anything, I don’t want to be a burden to the kids.
We know that at our current level of spending, we have a >99% chance of success (and our version of success means leaving a good sum of money to the kids). If our annual spend increases by 33%, our chance of success goes down to 97%.
I’m sure some don’t understand our hesitation to spend, spend, spend. We are working on getting more comfortable. I mean, as it is, we don’t feel deprived. We have everything we need and spend some on what we want. We go out to eat and budget money for vacation and just bought this dumb car. The next few years, before I take SS, feel a bit lean as we are running a deficit each month and spending out of savings so as to avoid dipping into the retirement accounts, but we know that once all four income streams are turned on (two SSs and two pensions) we are good. We just want to be a little judicious for now.
I had no problem switching the paycheck spigot to our retirement funds. Drawing from that hard-earned pile is why we built it in the first place, that’s what it’s there for, so no concern about using it as it was meant to be used. It’s funding the life we planned for this last stage of our lives, and we are enjoying it anxiety free.
Interesting, though, our portfolio balance is higher today than it was when we stepped off the merry-go-round eight years ago, even after paying cash for our cabin in ‘21. We aren’t underspending; we just didn’t figure SS into our retirement income, and it’s significant enough to keep our investment withdrawals in the 2% range leaving those funds to accumulate at a higher rate. I really can’t think of anything I need or want to spend more on so, for now, I consider this excess as an additional emergency or long-term healthcare fund.
We are spending more but I understand your reluctance @Youdon_tsay. You are risk averse and there are reasons to worry about our out-of-control health care system getting even worse than it is.
We are getting two SS’s and no pension. I too am risk averse. However, I am working because I really enjoy it and had a very good year this year. I would be delighted if I remain sharp enough to work another 10+ years.
Given that our financial planners say we already have enough to retire with I’m guessing a 99% probability of our money outliving us, I should have no reason to be nervous, but I think we have no solution to the health care problem in the US and the US will at some point have to deal with its unsustainable and growing debt. According to my friend Google, Harvard economist Greg Mankiw identifies five paths to stabilize the U.S. national debt: extraordinary economic growth, government default, large-scale money creation, significant spending cuts, and large tax increases, viewing substantial tax hikes (possibly a VAT) as the most politically likely outcome. All but extraordinary economic growth, which he thinks of as extremely unlikely, will cause a contraction in the world economy and be bad for at least the equity part of retirement savings. While there will likely be a snapback, the contraction may take place over the period during which we need to draw on our retirement savings.
I looked at that article, but also the related information and July 1 podcast - listening to JL Collins interview and ordered both his books (revised his 2016 book “The Simple Path to Wealth” 2nd edition 2025, and “Pathfinders” in 2023). He talked about organizing your life to have excess money.
Part of the reasoning on purchasing the books is to share/pass along information to DDs. Establish a mindset. If DDs current cities are ‘theirs’, hopefully to make the move to owning a home at the right time with the right property. The rent houses they currently have fit their needs.
JL is an advocate of a fund like VTSAX “VTSAX is the Vanguard Total Stock Market Index Fund Admiral Shares, a popular mutual fund that offers broad diversification by tracking nearly the entire U.S. stock market (CRSP U.S. Total Market Index) with low costs, holding thousands of large, mid, and small-cap U.S. stocks in a single investment. It’s known for its very low 0.04% expense ratio, making it a core holding for long-term investors seeking broad market exposure and compounding growth, similar to its ETF counterpart, VTI, but as a mutual fund with a $3,000 minimum.”
I can totally relate to your post. We have what seems like a fairly substantial amount of money, and 2 (not so substantial, but better than nothing for sure) pensions, plus we will eventually take SS. We went to see 3 financial planners before retirement and all 3 of them said our finances looked great. BUT, I worry that medical care/assisted living/other end of life expenses will eat through our money at some point. I’d like to gift our kids, but I also don’t want to be a burden to them.
We did have an issue at first about not saving and instead spending. I had the same issue when I started paying college tuition. In both cases, I had to tell myself this is what I saved for to be able to spend on this specific thing (tuition or retirement).
Our pensions are not what we once hoped for, so I’m surprised we are able to live so nicely in retirement. (The reason is that we stared 401Ks early, and the pension reductions scared us into keeping at the max contribution.) We are trying to get into the mentality that it is OK to spend, especially on travel, in the “go go” years. Our financial adviser coaches us - “If you don’t splurge on first class airline seats, your children/heirs will”. We still can’t do that, but last trip to Europe we got economy plus… quite lovely (more legroom, only 2 of us together). LOL - still feeling guilty about that, but my much taller and larger husband really benefited from that on our direct flight from Denver to London.
My monthly income dropped when my husband died last year. We were receiving 2 SS payments, I now only get the larger one. One of his 2 pensions went away completely and the other was cut in half. We were aware of this ( and it made sense in our situation), but I am having to tap into our investment accounts a bit more. The only expenses that went down were food costs and car expenses ( including insurance). OTOH , my H was very handy so I am now paying to have things done that he used to do.
I’m not complaining. I have plenty of money. Just wanted to point out that things can change with a spouse’s death.
We do book business class on long haul flights, but I use all available resources to try to find the best ticket cost I can (google flights is a great resource for pricing and pricing history - is the ticket lower or higher right now than normal). I’ve been seeing that economy plus is often running $2-2.5k on routes we are interested in…when I can find a business class ticket for around $3k, I jump on it.
That is something I wish I had a handle on – how finances will change once dh is gone. We assume that he’ll go first based on family genetics and current health issues (he’s on two BP meds, etc.) I know that I’ll get his pension, and I would still have mine, but I’d go down to his SS, which is why he’s waiting until 70.
But I don’t feel like I have a good handle on how my expenses would go down, if at all. Certainly, there’s food and insurance costs and co-pays. Maybe car costs if we go from two to one vehicles. Travel costs would be lower, but would i even be traveling still? If anyone has a resource about that kind of planning, I’d love to see it.
My husband is 7 years older, so I think about this scenario too. If he goes before me (statistically likely) and we’re still in the house… I would likely sell. Or maybe get a roommate? Of course “downsizing” to something with less responsibility can cost more, so who knows.
We did strategically plan for him to wait til age 70 for SS. (That way whichever of us lives longer will get the higher/deferred amount.) I actually took mine age 62, to have more funds during our “go-go” years.
While DH’s death would bankrupt me emotionally, financially I would become “wealthier” because I would immediately ditch the AZ house, sell all of DH’s toys, and be free of his expensive habits/hobbies. I would only incur the additional cost of a cat. Or two.
OTOH, not sure about the price of that lighthouse on a deserted island…
for surviving spouses, don’t forget that while RMD’s will continue, your tax bracket increases from MFJ to Single, effective doubling. For example, the 22% bracket starts at $96k for MFJ, but $48k for a Single (surviving spouse).
