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Many times in the past I’ve proclaimed that our guaranteed sources of income fully fund our retired lifestyle. An exception was in 2023 when we had a new home built, but that was more like moving money from the IRA bucket into the real-estate bucket.
We have been taking a 3% distribution from the IRAs, mostly from my account due to the Required Minimum Distribution (RMD), and end up transferring excess funds into non-qualified savings and brokerage accounts.
At ages 73 and 70, I know it’s okay to spend that money, but like many other HumbleDollar readers, I struggle to shift into spend down mode.
Last week, I dusted off the old Excel Spreadsheet and did a look back at our spending versus income so far this year. I was surprised to see that so far this year we have actually spent about a third of the 3% distribution.
My first thought was to do a deeper and more detailed dive into where the money went. We use credit cards for as many things as possible in order to collect cash back, and aside from the general category breakdown from the issuer, I have little clue of how specific purchases add up. Are we falling prey to lifestyle creep?
My next thought was to not worry about it, we’re having a good time. Even if we spend the entire 3% we’ll probably die with more money than we have now.
I’m not going to go crazy buying junk I don’t need, and I’m still using digital coupons at the grocery store, but I seem to be getting more comfortable dipping into the nest egg.
Does anyone think that I should head over to the Ford dealer and pick up that new Mustang I’ve been looking at? You know, while I can still get in and out of it.
Thirty years ago, during my midlife crisis, I wanted to check out the new Corvette. I was saved from buying it as it took me 20 minutes to get out of it. I’ve had two spine surgeries since then.
No new cars for me. I finally have one that fits me.
One thing that has saved me a great deal of money over the decades is my total disinterest in hot cars. I was cured by the new Cougar XR-7 I bought in 1985, in which I had to replace the turbo five times in five years. And being the West Coast warehouse for skin cancer, I have no interest in convertibles. Today I view the automobile strictly as an appliance for getting from one place to another, and while I consider my pulse robust, there isn’t a car in the world that can quicken it.
Besides, I drive too fast as it is.
Well the burning question is how much the distribution is? For sure our big expense items are travel, remodeling the house and certain stores my wife likes.
Tom, I don’t want to reveal the size of the distribution. Probably two main components of the excess spending were a trip to Florida and some dental work, with the former being much more fun. Still,I consider both to be money well spent.
Ok Jonathan will disagree, but I’m going to argue