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My math showed retirement was safe, but it took 18 months of actual spending to finally believe it.
Looking back on the two years before I retired, I’m slightly embarrassed by how fixated I became on financial planning. I built endless spreadsheets, explored every permutation of how spending and decumulation might interact, modeled worst-case scenarios, and tweaked our burn rate whenever a new bill or idea occurred to me. I checked the numbers compulsively, several times a day. Even with all that data, I was nervous when I finally sold my business and crossed into retirement.
Theory is a nice crutch, but it took reality to make me content with the numbers. After 18 months of living on my savings alone, I’ve come to see that the spreadsheets were telling the truth all along, not just offering hopeful projections. When the realization finally landed, it was simple: hot damn, this is great. Spending without a wage is actually fine.
The clearest proof is in my spreadsheet usage. In the run-up to retirement, updating projections was a daily obsession. Today, outside of tax filing and periodic portfolio rebalancing, I haven’t opened a spreadsheet in nearly a year. The math hasn’t changed, but my need to keep verifying it has vanished.
Yeah, I know. To you long-time retirees, I’m still wet behind the ears. But I just needed a bit of real-world reassurance.
I suspect that lingering mistrust of the numbers is what keeps some people trapped in “one more year” syndrome. A spreadsheet can show a near-perfect probability of success, but if you can’t bring yourself to trust the math, that remaining sliver of uncertainty feels like a cliff edge. Often, people don’t stay in the workforce because they need the money. They stay because leaning on a weekly paycheck is psychologically easier than taking a leap of faith on a financial model.
I guess this is my slightly long-winded way of getting around to asking: how about you? Did you have that sudden realization that spending without an income is fine, and how long did it take for the trust to set in? Or are you still wrestling with that distrust of the numbers?
Mark: great post and you have caused a number of others to share their thoughts as well. I have enjoyed seeing those comments. So, I will comment also. As a long-time spreadsheet keeper, “the math” on the spreadsheets showed that my wife and I were headed towards being able to, as Richard Quinn notes, “allow us to continue to live as we always had”. We wanted to meet all our bills without tapping into investments, continue to save for travel, home improvement, new cars, etc. We didn’t want to, as Andrew Clements noted, “change our mindset” about spending. When the numbers in my spreadsheet showed that our pension income would support those goals, I notified my employer that I would be retiring and gave them plenty of time to find a qualified replacement. 6.5 years into retirement, my wife has begun social security, and the financial picture looks even better! This also reiterates another comment from Richard: “focusing on the income stream is more important” than worrying about other factors. While I still monitor spending and account balances, our “budget” basically serves to remind us where our spending goes over the planned monthly amount. Doesn’t cause any spending restrictions or panic, just lets us know planned versus actual. I enjoy entering the data and maintaining the spreadsheets, and it is comforting that the results are all in the green.
firecalc.com. I put the worst case scenarios (no SS, deflation, negative market returns, etc) into the program and when it returned 100% over every time period, I retired without worry.
No regrets.
Mark, you followed a deliberate, careful path towards your retirement. For example, your spreadsheets entries were apparently pragmatic in their estimations of future income and expenses. Many people I worked with took more of an “I can get by on X” approach, which resulted in their greeting customers at the local big box store in order to get by.
My own path was a bit different than either of those. When divorce came around 2000, my old spreadsheets became as useless as nipples on a bull. While building my new business, my gross income was less than my alimony order. My burn rate was untenable after a few years.
I soon took on a good paying part time job with a trucking company who didn’t mind if I totally took off work during my busy season. That stopped the burn and enabled contributions to retirement savings. Without a spreadsheet in sight, I began maxing my SEP, HSA, and IRA, while living on what was left over.
As the business grew I eventually retired from driving. Soon a wonderful thing began happening; I was ending the year with substantially more money in the checking account than I started the year with. I sold the business at age 70, and by waiting until that age to begin SS, my monthly income from that alone is substantial.
Today we do whatever we like and do not live by a budget, and though I know exactly how much we spend each year, I can’t tell you with any great detail what we buy. Since building and furnishing our new home three years ago, our spending has decreased each year, and is now below our guaranteed income sources.
I suspect our spending will finally increase in 2027, but what the heck, we’re 74/71, and we can’t take it with us.
When I was working, the idea of retiring one day and spending what we had worked so hard to save (via two and sometimes three jobs) seemed impossible but then at 67 my newspaper offered a retirement incentive and my wife’s payroll company made an offer she couldn’t refuse, so we took the leap. After a cautious first couple of retirement years we started to realize that, yes, we can do this. It’s been eight years and I’ve never felt better financially. And I’m feeling pretty chipper physically, too, three months after a new hip. Should have done both sooner!