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.
If I understand your argument correctly, it goes like this:
If you don’t spend more than you earn, you will always be financially ok.
I never spent more than I earned.
I never had a budget.
I am financially ok.
Therefore having a budget is pointless.
Yours is a facile argument. You could’ve chosen any one of myriad topics and written the exact same thing.
Going to a doctor will not make you well.
Going to the gym will not make you fit.
Knowing about nutrition will not make you healthy.
Learning how to drive will not make you a good driver.
Having a lawn mower does not keep your lawn trimmed (particularly irksome).
So no, having a budget won’t tellyou when you can retire (although with AI integrations, that may not be true much longer). And having a financial plan will not ensure you don’t run out of money in your old age. I think If someone today were to live according to your line of thought - never spending more than they earn and not bothering with a budget - they would either end up working until they die or they’d need to figure out how to live on social security alone, and do so without a budget. (“Gee, after working until 70 my income went from $123,000 a year to $40,000 a year. I never spent more than I earned, and my apartment costs $5000 a month in rent. Can I still afford that? If not, how much can I afford to spend on rent?” Beats me.). It turns out you actually have to know how to use a budget, which includes understanding why you created it and what you hope to achieve from having done it. And then - most obviously - act accordingly. Perhaps you would not have stirred up so many negative responses here if you’d simply written this as a My Point of View piece, sharing your financial history and current reality, and how, for you, a budget never figured in. The way you wrote this piece, it appears you didn’t bother talking to anyone who actually uses a budget to some good effect; or if you did, your intent here was not to share what you learned, but to stir up controversy (cf, definition of facile). In any case, may you have a budget-free and happy, healthy 2026.
You seem to be impervious to alternative points of view. Re-read comments from others here and try this: start by accepting that what they are saying is true. You really can’t go wrong doing that because for them in fact, it is true. Next I’d suggest trying to understand how they were able to arrive at the truth they shared in their comment. One approach might be to look back at your own financial life and imagine how it may have worked out for you had you applied what their comment is offering.
I just ran a stress test scenario in Income Lab on how our plan would fare during the Great Depression using our current portfolio setup, balance and spending. The scenario timeframe covered annual spending guardrails and portfolio balance from 1929 to 1970, and showed that although we’d survive it - barely - there would be several downward spending adjustments required during the first half of that time period. The good news is that the adjustments would take us only somewhat lower than our maximum spending target, which includes around 50% discretionary spending and a 5% per year built-in aging reduction that starts during the Slow-Go years. The ending balance would be pretty near 0; and the portfolio balance during the last 5 years taking my wife to 100 (8 years after my own dirt nap at 100) would be a bit hair raising. All of which is to say that our plan would still work - with spending guardrails it always does - but doing a stress test like this emphasizes how important it is to use conservative assumptions when modeling retirement plans and have a written plan in place to follow for whoever it is that’s still be alive when things get hairy.
Good to know. Thank you for the heads up. As for using up my HSA contributions, I plan on using them to pay for Medicare premiums. I can use them to pay for parts A, B, C and D. I have enough in my account to cover around 10 years’ worth of Medicare premiums, not including any out of pocket expenses.
The most difficult thing I’ve come across about “doing the math” on Roth conversions has to do with ACA premiums that occur between retirement and Medicare. In our case, there’s an 8-year age difference, and I just started Medicare last year. The swing in premiums between Roth conversions to just the 12% bracket or not is around $7000/year for us. Multiply that times 7-8 years and the math gets tricky quickly, with assumptions piled on top of assumptions. I actually posed the question to ChatGPT, and it came back with around a 10% advantage over six years in favor of doing the Roth conversions on a total of around $350k. I then asked it what this would amount to with our life expectancy set to 95 each. It came with about $110k - again, around 10% delta on base amount. So while $35k/10% is definitely not nothing, it’s also not wildly compelling given how many unknowable variables are involved. I’ll probably continue to nibble away at it, but stop short of going for broke on getting our IRAs converted all the way.
First off, I would differentiate between budgeting and tracking spending. To me, the first is about estimating spending and/or setting spending limits, while the latter is tracking what actually happens. For the last 10 years or so we tracked spending pretty rigorously, categorizing monthly credit card transactions. Leading up to retirement we used this information to establish our “burn rate” — the combination of fixed and variable expenses — so we could better understand what was discretionary and what was not. For calculating how much we would need to retire, this was necessary — otherwise how would we know how much we would need before pulling the plug on earning? Now that we’re retired, I continue to track spending and compare it to my estimated budget amounts so I can determine whether our spending is within the planning limits I’ve established. This has been necessary since our spending has changed dramatically since we retired. We’re now spending over 50% more than we were when we were working. Our annual travel budget has increased 3x or more — an otherworldly amount to us — so we have no basis for intuiting whether we’re over or under spending. I suspect within the next 2-3 years we’ll have adjusted to our new lifestyle and no longer need to track things quite so closely. OTOH, I’m also aware that we may find ourselves in a position to spend even more if we so choose, allowing for more travel or upgraded travel options that we never would’ve considered while we were working. Or not. We feel very fortunate to have landed where we have, and do not take any of it for granted. It could all go the other way in the blink of an eye, too, so we’re also prepared for that should it occur.
Nor, do we have any societal agreement on how to deal with healthcare, eldercare, or anything else.
I don’t think that’s universally true. While we don’t have a single-payer setup like Oz and many other countries, between ACA (healthcare) and Medicare (elder care) we do offer coverage to a large swath of the population that doesn’t have health insurance coverage through their employer. (and FWIW, when I lived in Oz it was a two-tiered (or more) system for healthcare. Everyone was covered with a basic plan, but you could buy higher level plans to get access to a wider (aka better) selection of providers). As for pensions, many people do have access to some form of DC plan, which admittedly is not as good as Super, but it’s better than nothing. The trouble is many people don’t take full advantage of it while they’re young and working - they’re too busy spending on the next nicer car or next bigger house when they could be plowing as much as possible into some type of DC plan.
How many high-yield savings accounts do you have open? How many credit cards to you have? I used to move chunks of our cash savings around for a couple tenths of a percentage point in interest. I decided it was worth more to me to have all of our cash in one place - the brokerage where we also have our investment portfolio - than it was to get a couple tenths of a point in interest. Fewer emails pitching me on another great deal; fewer statements; fewer 1099s. Simple is good. Same thing with credit cards. No more chasing airline miles (they’re a pain to use anyways). No more buying gas only at this station. One card, cash back on everything. Done. Simple is good.
Comments
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.
Post: Spending Without Guilt: An Overlooked Retirement Skill
Link to comment from January 24, 2026
So you’re saying that having a lawn mower won’t keep my yard trimmed? That’s it?
Post: Can a budget do all that?
Link to comment from January 4, 2026
If I understand your argument correctly, it goes like this:
- If you don’t spend more than you earn, you will always be financially ok.
- I never spent more than I earned.
- I never had a budget.
- I am financially ok.
- Therefore having a budget is pointless.
Yours is a facile argument. You could’ve chosen any one of myriad topics and written the exact same thing.- Going to a doctor will not make you well.
- Going to the gym will not make you fit.
- Knowing about nutrition will not make you healthy.
- Learning how to drive will not make you a good driver.
- Having a lawn mower does not keep your lawn trimmed (particularly irksome).
So no, having a budget won’t tell you when you can retire (although with AI integrations, that may not be true much longer). And having a financial plan will not ensure you don’t run out of money in your old age. I think If someone today were to live according to your line of thought - never spending more than they earn and not bothering with a budget - they would either end up working until they die or they’d need to figure out how to live on social security alone, and do so without a budget. (“Gee, after working until 70 my income went from $123,000 a year to $40,000 a year. I never spent more than I earned, and my apartment costs $5000 a month in rent. Can I still afford that? If not, how much can I afford to spend on rent?” Beats me.). It turns out you actually have to know how to use a budget, which includes understanding why you created it and what you hope to achieve from having done it. And then - most obviously - act accordingly. Perhaps you would not have stirred up so many negative responses here if you’d simply written this as a My Point of View piece, sharing your financial history and current reality, and how, for you, a budget never figured in. The way you wrote this piece, it appears you didn’t bother talking to anyone who actually uses a budget to some good effect; or if you did, your intent here was not to share what you learned, but to stir up controversy (cf, definition of facile). In any case, may you have a budget-free and happy, healthy 2026.Post: Can a budget do all that?
Link to comment from January 4, 2026
You seem to be impervious to alternative points of view. Re-read comments from others here and try this: start by accepting that what they are saying is true. You really can’t go wrong doing that because for them in fact, it is true. Next I’d suggest trying to understand how they were able to arrive at the truth they shared in their comment. One approach might be to look back at your own financial life and imagine how it may have worked out for you had you applied what their comment is offering.
Post: Can a budget do all that?
Link to comment from January 3, 2026
I just ran a stress test scenario in Income Lab on how our plan would fare during the Great Depression using our current portfolio setup, balance and spending. The scenario timeframe covered annual spending guardrails and portfolio balance from 1929 to 1970, and showed that although we’d survive it - barely - there would be several downward spending adjustments required during the first half of that time period. The good news is that the adjustments would take us only somewhat lower than our maximum spending target, which includes around 50% discretionary spending and a 5% per year built-in aging reduction that starts during the Slow-Go years. The ending balance would be pretty near 0; and the portfolio balance during the last 5 years taking my wife to 100 (8 years after my own dirt nap at 100) would be a bit hair raising. All of which is to say that our plan would still work - with spending guardrails it always does - but doing a stress test like this emphasizes how important it is to use conservative assumptions when modeling retirement plans and have a written plan in place to follow for whoever it is that’s still be alive when things get hairy.
Post: Would You Raid the Piggy Bank or Mortgage the House?
Link to comment from December 13, 2025
Good to know. Thank you for the heads up. As for using up my HSA contributions, I plan on using them to pay for Medicare premiums. I can use them to pay for parts A, B, C and D. I have enough in my account to cover around 10 years’ worth of Medicare premiums, not including any out of pocket expenses.
Post: HSA Proposal
Link to comment from November 29, 2025
The most difficult thing I’ve come across about “doing the math” on Roth conversions has to do with ACA premiums that occur between retirement and Medicare. In our case, there’s an 8-year age difference, and I just started Medicare last year. The swing in premiums between Roth conversions to just the 12% bracket or not is around $7000/year for us. Multiply that times 7-8 years and the math gets tricky quickly, with assumptions piled on top of assumptions. I actually posed the question to ChatGPT, and it came back with around a 10% advantage over six years in favor of doing the Roth conversions on a total of around $350k. I then asked it what this would amount to with our life expectancy set to 95 each. It came with about $110k - again, around 10% delta on base amount. So while $35k/10% is definitely not nothing, it’s also not wildly compelling given how many unknowable variables are involved. I’ll probably continue to nibble away at it, but stop short of going for broke on getting our IRAs converted all the way.
Post: Roth Hidden Benefits
Link to comment from November 3, 2025
First off, I would differentiate between budgeting and tracking spending. To me, the first is about estimating spending and/or setting spending limits, while the latter is tracking what actually happens. For the last 10 years or so we tracked spending pretty rigorously, categorizing monthly credit card transactions. Leading up to retirement we used this information to establish our “burn rate” — the combination of fixed and variable expenses — so we could better understand what was discretionary and what was not. For calculating how much we would need to retire, this was necessary — otherwise how would we know how much we would need before pulling the plug on earning? Now that we’re retired, I continue to track spending and compare it to my estimated budget amounts so I can determine whether our spending is within the planning limits I’ve established. This has been necessary since our spending has changed dramatically since we retired. We’re now spending over 50% more than we were when we were working. Our annual travel budget has increased 3x or more — an otherworldly amount to us — so we have no basis for intuiting whether we’re over or under spending. I suspect within the next 2-3 years we’ll have adjusted to our new lifestyle and no longer need to track things quite so closely. OTOH, I’m also aware that we may find ourselves in a position to spend even more if we so choose, allowing for more travel or upgraded travel options that we never would’ve considered while we were working. Or not. We feel very fortunate to have landed where we have, and do not take any of it for granted. It could all go the other way in the blink of an eye, too, so we’re also prepared for that should it occur.
Post: Budget, What Budget? (Know Thyself)
Link to comment from September 20, 2025
Post: The Main Thing … and the scourge of complexity
Link to comment from September 2, 2025
How many high-yield savings accounts do you have open? How many credit cards to you have? I used to move chunks of our cash savings around for a couple tenths of a percentage point in interest. I decided it was worth more to me to have all of our cash in one place - the brokerage where we also have our investment portfolio - than it was to get a couple tenths of a point in interest. Fewer emails pitching me on another great deal; fewer statements; fewer 1099s. Simple is good. Same thing with credit cards. No more chasing airline miles (they’re a pain to use anyways). No more buying gas only at this station. One card, cash back on everything. Done. Simple is good.
Post: The Main Thing … and the scourge of complexity
Link to comment from August 30, 2025