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Many of us have decades of practice saving, budgeting, and optimizing. But retirement requires a different skill: spending confidently—not impulsively, but without unnecessary guilt when the plan supports it.
I’m curious how others handle the mental side of spending after (or near) retirement:
What has helped you make the shift from accumulation to using your resources well?
We’ve always approached this as using a tool. Spending and saving are two sides of the same coin….
Spending was and remains about choices. Some view this from scarcity while others view it as having abundance. Even when money was tight, G and I concluded we were living in abundance. She even created an artwork T-shirt about this.
There are practical aspects to spending. We do run a budget, this indicates what financial excess may be available to spend, or none. We also discuss purchases outside the normal every day stuff. Food, utilities and so on don’t warrant a discussion except for things like meal planning. We set the thermostat for comfort, etc.
We maintain an emergency fund. It is sufficient to handle larger things, such as a HVAC replacement. We’ve been fixing the things in the house that the previous owner neglected. By doing these things we aren’t in a “robbing the piggy bank” situation when we do select items for discretionary spending.
We take the perspective we could do anything we really want. Travel, purchase “stuff” or whatever. Decisions then become about what would make a difference. Experiences are short-lived, but can create wonderful memories. I recommend sharing experiences with others and documenting them. I think there are practical aspects. While it is true I could spend all day, every day on the water, there are other things to do, too.
When travelling Europe, particularly Italy, there are many, many beautiful churches and many museums. (Schulenberg Texas has some amazing painted churches). But then, nearly all U.S. cities have wonderful museums, butterfly gardens and so on. Spending for entertainment purposes has become like streaming or sports. The choices are overwhelming and endless. This can lead to entertainment overwhelm. It is becoming increasingly difficult to wade through all the cr@p.
I’m currently unplugging by reading a couple of good books, including Andy Weir’s “Hail Mary”; there will no need to see the abridged version on the big screen.
As for regrets, I have none. I do have limitations today and that prevents me from doing some “every day” things. Well, eventually chronic illness strikes or old age occurs or both, and when our bodies break down so do our options. It is perfectly normal. My twin passed of medical complications at the age 64. A sister passed at age 57. These and other happenings led me to accelerate what I was doing, with the realization that my life was finite and would likely end sooner than would be normally expected.
Purchasing a small RV in 2013 definitely altered our lives and we’ve travelled about 6,000 miles every year since, except one which was a time-off for medical stuff. We’ve travelled and camped with it from -5F to 103F. We now live in another, larger RV part of the year near the water, and winter in the desert in a home. Note: We rented a RV first, as a trial and to determine specifically what we wanted from it. We applied what we learned.
I’ve been living in the “bonus round” for about 8 years.
Good article and good discussion.
I heard this while listening to a Jesse Cramer podcast with Jeremy Keil (Longevity and Retirement | E127). Jeremy framed the struggle with being a saver, and then trying to become a spender like this: you’re not a saver, you’re not a spender; you are a planner – – – before retirement and after retirement.
Jeremy continued…Planning before retirement your tool was saving. Planning after retirement your tool is spending. (We seem to be all planners, which is consistently on display in the many articles and thoughtful comments on HD.)
Hopefully, this resonates with you all as it did me. I found it a nice framing and thought I would pass along.
Everyone, just make sure you save for retirement, so someday you will have the option to spend more than when you were saving. At 80 years old I spend twice the amount as 10 years ago. It does take some doing to spend more than I take in.
It can take awhile to get in “retirement” mode. Your whole working life the goal is to save, save, save, reduce expenses etc. Now retired, the goal is the opposite. It took me 2 or 3 years for that to sink in. You can’t take anything with you when you die.
Purchasing a new 2025, high quality vehicle (Honda Ridgeline truck) with a 10 year extended warranty has greatly improved my peace of mind when traveling.
That was an upgrade from a 96 Chey Lumina minivan with 318K miles which needed some restoral work for rust and a cracked windshield. It was on the verge of becoming undriveable. I’ll still keeping it, the composite body panels can’t rust which is a big plus here in rust belt Wisconsin.
I few years before I retired and had no debt, I started purchasing first class airline tickets. They are so nice with the bigger seats and first-on-first off benefits and no baggage restrictions.
I’ve also have been slowly increasing my trip time.
The last two summers I’ve traveled from Milwaukee to upper Michigan to the Great Lakes Shipwreck Museum and the surrounding area including the Soo Locks.
Last summer I also drove out to the outskirts Columbus Ohio for a wedding. I’m glad I took the time to drive into and walk around downtown Columbus taking pictures. I’ll, never be there again. On the way back to Milwaukee, stopped off at the National Museum of the US Air Force at Dayton OH and then the Ark Encounter at Williamstown, KY.
I bought a 2023 Honda Ridgeline last year with funds from my HSA. That was a splurge, but I’m very pleased. And since it has all the new safety features, including Automatic Emergency Braking, my car insurance premium went down.
We started using risk-based spending guard rails about a year ago. It has been a real game changer in terms of increasing our comfort level with spending, to the point where now we are worried about spending too little.
To put this in perspective, before we started using this approach to decumulation, we were spending about half of what we are spending now. Most of the increase has been on travel.
Would you care to expound on your guard rail method (percentages, timeframes, …)? Thanks in advance.
After a lifetime of avoiding spending money on possessions, I now have scant interest in more stuff. I am more focused on experiences in retirement. During my busy career years, I acquired a mental list of activities I would like to experience during retirement. I have tried many new hobbies with my focus on experiences. (Pickleball is my favorite new activity.) I enjoy spending on multiple international travel experiences each year. Financing experiences feels very different from acquiring more stuff.
I just retired from the Air Force at age 49 and have a COLA-adjusted military pension, a COLA-adjusted VA disability benefit, and free in-state college tuition for all three of my remaining children via Wisconsin’s generous program for families of disabled vets. These streams of income cover our family’s essential and discretionary expenses, so we’re not needing to pull from our investments. My dilemma now is knowing we could increase our spending if desired, yet doing so decreases the future financial assistance we could provide for our children (home down payments, etc.), which we desire to do someday. I realize this is very much a first-world problem, but it does eat at me when I consider that I could buy that new Subaru Outback I really want, although that money invested for the next 10 years or so would make a far more life-changing impact for one of my kids in their most needy years after college and into early marriage.
Casey, in 2009 I was in almost the same position as you. Just retired from the military, but with 4 kids to get through college with the oldest in his second year. Before I retired, I bought the house I still live in and put over 50% down. My strategy was to keep my fixed expenses as low as possible in order to stretch may retirement cash flow every month. I had done much saving for college and thus we could have gotten by on my retirement income, however, we would never have gotten ahead. So, I worked sporadically over the next 10 years, made some good money at times, and this income took away any financial worries. What’s hard to anticipate, but you must, are all the unexpected expenses. At one point I owned 6 cars, paid over $800 per month for car insurance, and had a cell phone bill way over $400. During these years, kids cost money. In 2020, all my kids were off the payroll with living wage jobs and we found spending to come much easier because our expenses are way, way down–and I own a Certified Pre-Owned Outback! So good luck and be ready for the financial bogeyman should he come.
Patrick, thank you for sharing your history. I can’t imagine owning 6 cars and paying that much for insurance! Yes, kids are quite expensive. I’m inspired by your story!
The combination of delayed SS, 3 small pensions, 13 years of deferred comp conservatively invested, 3 QLACs due for turn on 77-83 and a rolling TIPs ladder supported by a retirement specialist financial planner provide my wife and I the proverbial “license to spend”. We have been able to take some wonderful trips and are planning more without hesitation or regret. Last year we pulled the trigger and had a sunroom added to our house which has been a great addition and our rescue dog considers it her personal dog house. It helped considerably that during the last 8 years after I retired at 61, I have been consulting part-time.
This is six years old and being still adhered to. I know it looks complicated but not really as most of the ins and outs are made automatically. It’s not a budget because money flows between accounts as needed. We do not track spending, but keep an eye on account balances, especially the one where most bills are auto paid. Out of habit SS payments are still deposited in the account for travel, but no travel these days.
https://humbledollar.com/2020/07/banking-from-a-to-f/
I’m retired and I have 1 money market checking account. When I get my income (SS and pensions) deposited during the month, I save it in a “Monthly Income” subaccount I created for the next month, then transfer it within Quicken to my checking account register at the beginning of the new month.
The same subaccounts feature in my “old” Quicken program has various subaccounts I’ve created for saving each month from my total income for various items (Auto expenses, Real Estate taxes and home maint, etc.). I also subtract in Quicken every credit card purchase I make during the month, so that my Quicken register total is always reflecting actual remaining discretionary cash for spending.
Most bills at the end of the month are automatic, and are entered in my Quicken register at the beg of the month, when I have the upcoming amounts that will come out on various dates (utilities, for example). When I am paying credit cards for the month, I go back into my register, add those debits for credit card purchases back into my running total, and then pay each credit card bill.
I’ve used this system for decades–probably back to when Quicken first came out for Windows in 1991. I still use a Quicken Premier 2007 CD program on my computer. I don’t use auto downloads of my banking into it–just enter by hand. That Quicken program still works fine on my updated Windows 11 computer–have downloaded it using an external hard drive each time I’ve gotten a new computer.
This is a question I’ve been pondering since retiring last year. We have have friends that spend like crazy and give to others like crazy but are in debt and poor. Other friends line comfortably simple and are very giving to others. We have an abundance with 120% of our expenses covered with our income, we still invest, we together, we help others that have real financial needs. But, I’m concerned that we’ve spent forty years as savers and that mindset is hard to change.
Didn’t misunderstand, we enjoy camping, we paid cash for our new car last month, we’re leaving for Cancun next week, and we aren’t mizers but i doubt we’d be comfortable a large purchase
Always curious. When people say “our expenses” do they mean certain fixed expenses or all spending of any kind?
I’m curious as to what you mean when you say to don’t understand what expenses are? For us “our expenses” mean what we need each month/year to pay all of our bills. Taxes, electricity, heat, has, restraunts, vacations, clothing, groceries, the money we’re still investing,etc
I think of expenses as those things we can’t really avoid, some of what you mention, plus insurance premiums of all types, loan payments if any.
Other spending like clothing, even groceries are flexible and can be broken down to necessities and other spending. Food is a necessity, but probably not everything we buy at the grocery store each trip.
I agree with you (as I usually do) . The 100% covers all of these and the other 20% is monroe we continue to invest and put into your vacation account, our new car account, and our rainey day miscellaneous spending account
For us, shifting from saver to spender seems to be a slow process. Three years ago our guaranteed income covered all our spending, last year we used a 1% distribution to cover it all. Some were inflation, some were lifestyle creep. We had a couple nice trips last year, and have another planned in May. We are at a point where we wouldn’t mind spending more, it’s just that we seem to have everything that we want.
Ahhh…a man with enough. Now that’s a great position to be in. With “enough” comes contentment, a close relative to the more mercurial happiness. 🙂
Simple. I saved my entire adult life to have a comfortable retirement. I have money, I’m going to spend it. Ironically it was me always concerned about not spending liberally while we were saving for retirement. Now that we’re retired it is my wife that is concerned that we’re spending too much. This despite my updating her quarterly on where we sit financially after calculating our portfolio and net worths. We have been retired for five years depending exclusively on our retirement accounts for income and our portfolio level is slightly higher then when we first retired. I’ve also pointed out to her in two years when we claim Social Security at 70 that income alone will exceed our yearly spending. If she thinks we’re spending too much now she’ll be shocked at how much we will be spending after we claim SS.
😁
Without a doubt, the single best choice I’ve made to reduce spending anxiety was the one-two punch of an annuity and a collapsing bond ladder. When I already know all my spending is covered, without worrying about market volatility or withdrawal strategies, spending comes easier to me now than it did when I was still working and drawing a regular paycheck.