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THIS HAS BEEN A YEAR of living large in the Kerr household.
I just finished adding up the numbers for 2024, and between my son’s wedding in Colorado in June, my own wedding in October, our honeymoon afterward, a vacation to Key West, a new car for my new wife, and various long-overdue repairs to Rachael’s townhouse, I spent upwards of $60,000 on items I hadn’t budgeted for in 2024.
The tally doesn’t include the $9,000 I spent on a hot tub for the mountain house. That purchase was financed by the last of my restricted stock grants that I took with me when I retired from my former employer three years ago.
Those are hefty expenses for a 65-year-old who is no longer employed full-time. All I can say is, thank goodness for my part-time gig as a writer for corporate executives. If I didn’t have that money coming in, I would have burned through most of my liquid cash and had to tap my retirement savings earlier than planned. As it stands, I was able to cover my financial splurges, while ending 2024 with roughly the same amount of cash as I started.
More to the point, if I didn’t have the work income, I wouldn’t have done all the things I did over the past year. Rachael and I would have had a much simpler and less expensive wedding. We would have put down less and financed more of the cost of her new car. We would have skipped the Key West trip and put off the house repairs a little longer.
But that’s why I continue to work part-time—to fund experiences and other discretionary items during the early part of my golden years, while I hold off drawing down my retirement savings. Those savings are sufficient (knock on wood) to provide a comfortable, albeit not cushy, income over the course of a 20- to 25-year retirement. I figure the longer I can delay tapping retirement savings, the longer they’ll last me in my later years.
The same is true for Social Security benefits. While I could begin drawing benefits now, I’d take a hefty haircut compared to what I could get if I wait until my full retirement age of 66 years and 10 months. On top of that, I’d have to pay higher taxes on my Social Security benefits because of my earned income, and I might lose much or all of my benefit to the Social Security earnings test. So, why not wait another year and a half and thereby avoid the haircut?
In the meantime, I’m acutely aware of time’s winged chariot at my back and I have no interest in postponing trips and experiences I’ve long wanted to do. As Jonathan’s recent cancer diagnosis has brought home to HumbleDollar readers, life is fragile and we best live it now.
That’s what I’m doing with my current income. I could try to sock some of it away. But frankly, I’m done with the accumulation phase of my life. As long as I can maintain a healthy emergency fund in my money market account, I intend to spend every after-tax penny I make on trips, gifts and, yes, occasional luxuries. I’ve worked hard all my life. Why not enjoy it while I can?
Take our wedding celebration in mid-October. Yes, we could have made a trip to the courthouse and saved more than $15,000. But what an event it was. We had 90 relatives and friends from as far away as Hawaii and England. How often does that happen—other than at wakes and funerals?
Likewise on getting a hot tub. I’ve always wanted one, and soaking in that tub for 20 minutes does wonders for my aching neck and joints.
Interestingly, retirement has taught me a few things about myself that I didn’t fully appreciate before. All my working life, I’ve avoided spending money on extravagances that others in my income bracket might have had no trouble with, such as going on expensive trips or shelling out tens of thousands of dollars for a country club membership.
I told myself I was being responsible, thrifty, frugal. How could I spend on extravagances when I had three kids to put through college and a retirement fund to build?
But you know what? I like the finer things in life as much as anyone else. To enjoy those luxuries, I just needed the psychological comfort of a solid financial cushion.
Now, I’m there and I’m opening the valve on my spending. I am, I hope, doing it responsibly. Only time will tell.
Author and blogger James Kerr is a former corporate public relations and investor relations officer who now runs his own agency, Boy Blue Communications. His debut book, “The Long Walk Home: How I Lost My Job as a Corporate Remora Fish and Rediscovered My Life’s Purpose,” was published in 2022 by Blydyn Square Books. Jim blogs at PeaceableMan.com. Follow him on Twitter @JamesBKerr and check out his previous articles.
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A $9,000 hot tub for the mountain house financed by restricted stock grants. My that does sound nice!
I so identified with your emotional connections about your splurges in the wake of a relatively frugal life! As an arts administrator, I never made as much as many of my friends in the corporate world. And I saved as much as I could. I stopped working completely 4 years ago with as big a nest egg as I could muster. And we launched our life of full-time travel.
I’m easing into not worrying so much about our budget and enjoying some luxuries. This year we took the COVID-delayed world cruise we’ve dreamed about since 2015. We ate at 7 Michelin-starred restaurants. We rented a 5-bedroom ski condo for a family T-Day in Copper Mountain. And I sprang for first-class airfare! We head to Lima on the pricey Oceania Marina next week. Experiences that have no price tag.
Our combined social security payments of $70K annually (I waited until I was 70, living off investments for 3 years) plus an additional $30-$50K of investments make for a good life. And, miracle of miracles, my nest egg is actually LARGER than it was when I quit in August 2020. We are die-with-zero people and I can’t seem to spend enough money to make that happen.
Live your life. Live your life.