We both retired last year and are very slowly getting used to spending instead of saving.
One thing that has made a difference is we were living on about 50% of our gross pay, and we had quite a bit in cash savings, so given that and the pensions we’re not pulling from 401k yet.
When we first met with the fin advisor, we had one detailed spreadsheet of what we earned, received as gifts, saved, and spent and another on what we expected to spend - housing, timing of new vehicles/RV, travel, and so on in retirement. Inheritances are considered gravy and not in the actual planning.
Even though we have more than enough to cover the rest of our lives and live comfortably in retirement, the initial planned withdrawals still give me pause (H is ok).
Thank you for posting @BunsenBurner - John Bogle was truly a towering guy in finance who has made a big impact with creating index funds. Huge for the industry and for us peons. The story is quite interesting - especially how Vanguard opportunity came about (he was founder of The Vanguard Group) after he had personal challenge/being ousted from the mutual fund company where he had the first part of his career. Also that he had a heart transplant in 1996 and lived so long with it - and perhaps dying of cancer, but at respectable age of 89.
John Bogle was the best friend the average investor ever had. A hero, who could have been a billionaire many times over, but chose instead to do the right thing in the right way.
John Bogle, Fred Rogers, who else rises to that level?
RIP John Bogle. I decided to play it safe and cashed out my brokerage account and put it in CDs and paid off the new car. I plan to leave the Roth and inherited funds, which are mostly in equities. I can handle market volatility - but only if I am debt-free! (And we are small potatoes in terms of assets compared to most folks here)
My husband just retired 2 weeks ago, at age 66. I’m still working and we can live on my salary, so we have time to ease into the financial changes. But the situation feels odd to both of us, especially him. He’s extremely reluctant to spend money. I keep trying to get him to buy some casual clothing – he only has enough for a weekend, but now he needs it seven days a week – but he can’t bring himself to go to a store and actually spend anything.
It’s also taking my husband some time to figure out what to do with his days. There’s more to retirement than financial planning.
Yes, retiring TO something you love seems to work better than just retiring and having nothing planned.
H had no trouble figuring out which deferred maintenance projects he wants to do. I run my nonprofit, which keeps me busy. He still keeps in touch with some of his work friends, which he and they enjoy.
Taking courses at local CCollege and/or adult school may help, volunteering, many of us also do varying amounts of caregiving, exercising, old & new hobbies, travel, etc.
Agree ^, but I was unable to retire to something because the job was all consuming. But, I had plans and carried through with them. Started university classes as an older person for free audit. Started a more regimented exercise program with our now grown puppy. Knew I wanted to volunteer, and found a great one. Also we are traveling much more for pleasure and family. Chores at home seem easier and doing more upkeep. Definitely eating better because we can plan food. Coming on 3 years retirement.
H told the registrar at Uni ‘we are juniors this year’. We are going to be a ‘super senior’ for years. I still have a lot of classes I want to take. All my classes which are one per semester are totally out of my comfort zone and completely different than my past profession.
Making plans was the key, then thinking how to execute them, then actually doing them.
My first job after college was at Vanguard, and it launched me into pension and 401k administration. They threw a big party in early 1985 when they got to $10 billion in assets.
And a timely one at that, just when 401k’s and IRA’s were replacing traditional pensions to support retirement. Thanks to him, we muggles can invest like a pro and do pretty well. Can you imagine what it would be like if all that IRA savings and 401k’s had only FA’s to rely on? We will be paying fees through the nose. The fees would be higher had Vanguard not suppress them with the competitive pricing. There are good people in the world.
I attended that party – had just started working there after temping there briefly. They hired lots of young liberal arts types and launched them into careers!
My oldest son, 28, recently became regular with USPS and began having mandatory retirement money taken out. His pension got over $400 in it in just the 5 weeks he was regular before the end of the year and now I am trying to convince him to fund a Roth as well. To that end, I disclosed to him how much I have in my retirement accounts and he was gobsmacked. I’d have more but I took out 2 home purchase loans, bought a mink coat in my single days, paid for the Bnai Mitzvot and a year of private school for D (the only loan I regret). I think he is seriously reconsidering doing a Roth.
I have some pre-1986 after tax IRA money. It’s less than $10K now and it is going to pay for my big vacation when I retire in, hopefully, a little over 5 years.
One thing that is strange for me is that I recently became old enough to take money out with a tax penalty. Luckily, I don’t need to and can let it grow but I will have to seriously think about starting to take out when I retire so that I don’t wind up having to take huge mandatory minimums and get slammed on taxes when I am 70. I have two pensions as well, so I will probably wait till 70 to take SS. My age for that is 66 and 10 months. I am probably going to encourage H to take at 65 if he can take on my record then since his is very low - there are no records of several years of his earnings from before we married so his benefit is greatly reduced. He has no pension since he is self-employed and his SEP has about 20% of what mine does.
My older son started contributing to retirement, and more than just enough to get company match - yeah. He doesn’t tend to pay attention to my advice, so I was really happy when he shared a picture indicating he did it.
I also asked if he could spare money to contribute to a ROTH - told him I might match his contribution. (In other years I contributed for without him matching, but this year I don’t think I will).
Younger son went so far as to change his payroll allocation to 80% going to retirement the last pay period or so of the year. I think a large chunk went in right as the market dropped, but as he said, he got decades to get it back.
We just went to a retirement planner for the first time ever. 30 pages of charts, graphs and numbers that she handed out to us. It was a little overwhelming and intimidating, but we did learn a bit. She told us we need to spend more in retirement. I think we were looking on getting by our pensions, savings and social security (if it exists), and not tapping into our 401K monies, but she told us we should consider spending it down. That’s a hard thing to consider, going into your retirement savings. But obviously, that’s what it’s for.
My husband read a Bogleheads investment book, maybe the one recommended by @IxnayBob a little while ago. He thinks we should consider rebalancing, and he’s probably right. I’m about 2% in bond funds, and the rest in fairly aggressive stock funds. Thinking about getting a 80/20 split, because we really are hoping not to tap into it for a long time. But I’m not sure how to go about the rebalancing, for the initial adjustment. Maybe a little at a time. Right now our bond fund options are only Vanguard Institutional Total Market Index and Vanguard Inflation Protected Security (not enthusiastic about) and Vanguard Retirement Savings Trust II. We have way too much Primecap.
If anyone has any suggestions about how to get to a reasonable balance, suggestions are appreciated!
One of the things I’ve read is turn off any auto investments and put all new money into the category that is low (in your case bonds). That can help some. When you sell to rebalance, you do have to consider taxes as well. I honestly don’t rebalance, just look at what we have andde use what to do with “new money” savings—where it should go—stock index fund or bond index fund.
@HImom , “rebalancing” with new money is good for at least three reasons: it avoids taxable events when selling for rebalancing , it avoids the proliferation of small tax lots, and it reduces the chances of inadvertent wash sales.