Early Retirement Extreme Forums

Headed back to the hideout for some weeks this coming weekend so thought I'd cram in a bit of an update to my last update. Two-factor authentication sort of hobbles my ability to keep current on my financial accounts while there and I'm pretty much caught up for the first time in a while.

Seems I'll get through my first full year with 0% withdrawal rate from the stash. There's some fuzzy math there because I set aside some of the net proceeds from selling my house to buy toys (outfit fishing yak, replenish/upgrade fishing "stuff", and certain music toys) as well as fund the upgrades to the cabin, so it never made it into the stash as I count things. If I'd have put it in the stash and taken it back out year 1 (7/30/21-7/29/22) would be characterized by about a 0.7% withdrawal rate. And in that hypothetical scenario calendar 2022 projects to about 1.1% once all the cabin upgrades are paid for. Even that's not bad for a year characterized by drunken sailor behavior.

But the official number is 0% because my intent with the calculation is to monitor how much I tax the funds I specifically set aside for retirement living expenses, aka the stash. That I have a little extra floating around from a windfall (getting more for selling my house than anticipated) is neither here nor there to me. Ultimately it's about maintaining a streamlined understanding of where I'd be if I had to rein in and go into "defensive spending mode". "Aggressive spending mode" was planned for this year. I've undershot the plan somewhat because I haven't bought a house yet so have deferred some spending on furnishings and such that I also set aside house proceeds for along with the cabin and self-gifted retirement present toys. That may come later this year or next. After that I'll go into "neutral spending mode" which is basically as long as I come in close to the annuity, all is well. That requires moderate frugality which is my set point anyway, and is what I'm planning for the long haul. "Defensive spending mode" is clinging to every dollar to prevent going under.

My one year anniversary will come next week so I'll probably take some time to put down non-financial thoughts in the coming days and the hideout is a good environment for that. I haven't spent much time reflecting and I'd like to have something to say when people ask me how's retirement going or what its like being retired aside from the normal platitudes like, "I wish I'd done it sooner" and similar.

Spending like a drunken sailor... I think there's a lot to be said for putting the portfolio to work. Part of that is maximizing enjoyment of your healthiest years. I'd encourage you to spend more, maybe set a minimum bar of consuming the entire annuity. Force yourself to gamble money on potential quality of life improvements. Maybe even go to annuity + 0.5%. Some of that spending will be inefficient. Okay. That's the price of learning to maximize your wealth.

We're about halfway into year 2. While there was a spike in transition related costs, those seem to have settled. Our spending has become more efficient. The habit of looking for frugal gains doesn't go away, there is more time to invest, and those gains compound. Now - despite inflation and the market downturn eroding purchasing power, our consumption has never been higher. Life is richer.

Scott 2 wrote: ↑

Fri Jul 22, 2022 1:40 pm

Spending like a drunken sailor... I think there's a lot to be said for putting the portfolio to work. Part of that is maximizing enjoyment of your healthiest years...

Scott 2, good thoughts ...

Back in the 2011-2014 time frame I went through the process ratcheting down my lifestyle expenses from typical for my income demographic* to something that had me on the path to a somewhat early retirement (which at the time was initially couched as surviving long-term involuntary unemployment). Then during the 2015-2017 time frame I experimented with how low I could push spending without feeling deprived and miserable. During the mentioned stretch of time (2011-2017) I never operated at either extreme such that I hit misery. But before that when I was married we were far enough out along the overspending continuum that I know the misery inherent to extremes inherent to that direction.

What I learned wasn't especially profound--there was somewhat of a relative maxima in contentedness well below where I was in 2010 and slightly above where I pushed things in the 2015-2017 phase, and even that at my farthest push downward I could still be content. Then in the 2017-2021 time frame I sort of relaxed into my "natural" spending as tempered by all the knowledge gained prior. I made that level my notional baseline for retirement planning. That's roughly what I referred to as "neutral spending" above.

But things change and I have enough margin to allow things to drift around in the interest of maximizing my perceived quality of life. But right now the desire for ever improving quality of life is at war with having hit the trifecta of substantially elevated inflation, bear markets, and being on the edge of economic recession right out of the gate. So even pre-planned, accounted for, relatively moderate discretionary spending like the kayak etc., which at least in the short run have already demonstrated some positive impact on enjoyment of life, comes at a cost in worry. Maybe I've turned into the sorry, miserly soul a subset of the bogleheads crowd warned me I'd become.

I do think it would be cathartic to be more willing to loosen up on the reins as long as whatever eating into the stash that occurs comes with a reasonable argument that it's an attempt to enhance contentedness/happiness and not done as a lazy proxy for amusement/buying "fun". But due to my nature and what I've habituated myself to it'll probably have to wait until I see fairer skies and calmer water ahead. Hopefully in the next 2-2.5 years things will change for the better. But I like your idea in general.

*Actually I was probably already somewhat below typical of my demographic as I was making a noticeable dent in debt and saving the conventional wisdom driven 15% or so towards retirement.

I always read and enjoy your journal, Dave. We are of similar age (58) and both like to fish. I do the latter with waders or from a drift boat. I'm apt to retire by the end of 2023, perhaps involuntarily.

I've forgotten your basic financials (e.g., multiple of X, etc.). We won't have a pension nor any kind of post-employment HC-related support to get to 65. Thus, when the ripcord is pulled we will have to depend upon the nuts we have squirreled away in the background over the decades plus, eventually, SS. I'm not complaining. We have been exceedingly fortunate.

I deem ourselves hyper-frugal, LBYM, LCOL, DIY folks so thus have great respect for you and others here. We live in a remote area that I suspect many folks wouldn't even consider. I do some blacksmithing. And so on and so forth. That said, "I'm not worthy" of ERE. After all, I'm still just a schmuck with my shoulder to the grindstone at age 58. Looking back on my life, I now see that I've made a lot of mistakes. It all seems like a huge waste.

Anyway, we are at 44X and anticipate using a perpetual withdrawal rate (~2.5%) as a "ceiling," if possible, at least for the initial years of retirement. I fret about SORR and related matters. I'm dreading the withdrawal phase, to be honest. I don't want to get the shovel out and start exhuming the nuts from our backyard. So I get where you are coming from.

I also understand Scott's position, too.

So you both are right. I just know that DW and I are going to spend retirement racing to see how little we can spend. So maybe we will end up doing ERE in reverse. We will achieve right before we drop over into the grave what we should have done at the beginning of this weird journey called "life."

Please keep posting. Your journal is an inspiration to me.

IlliniDave wrote: ↑

Sat Jul 23, 2022 5:29 am

But due to my nature and what I've habituated myself to it'll probably have to wait until I see fairer skies and calmer water ahead.

I feel that sentiment, deep in my bones. I can't help but think back to January 1st market valuations, when I look at our net worth.

The impact of a marginal dollar spent is what commits me to the spending floor. Let's assume 40% of our budget is discretionary. Cutting that in half, only reduces spending by 20%. But realistically, doing so would cut most of the novel ideas. Spending a little more gives dramatically more capital to work with. I know ERE says depend on other capital, but doubling the money is a powerful lever.

I went through a similar path of finding my frugality limit, then ratcheting consumption back up. What I find different now, is the lack of time or schedule constraints. The opportunity cost of frugality is lower. Taking a full day to explore some idea, is easy.

Scott 2 wrote: ↑

Sun Jul 24, 2022 8:03 am

I know ERE says depend on other capital, but doubling the money is a powerful lever.

ERE (WL7) has a different perspective on money than FIRE. In ERE, money is the lubrication of the engine rather than the gas that fuels it. If the engine is well constructed with little friction, doubling the amount of motor oil is not going to make it run better. It might even gunk up the works.

The difference in perspective is between optimizing one lever, money (WL5), having more levers (WL6), and optimizing how those levers work together (WL7). Thus, at WL7 money is not a powerful lever; more like a tweak.

The goal [in ERE] is not to dial fuel usage up and down according to how limiting it is but to keep the engine going. An engine designed for a $7k/year spend will not run well on a $15k/year input. It would require a redesign to run efficiently at $15k/year, basically building a different engine.

Scott 2 wrote: ↑

Sun Jul 24, 2022 8:03 am

I went through a similar path of finding my frugality limit, then ratcheting consumption back up. What I find different now, is the lack of time or schedule constraints. The opportunity cost of frugality is lower. Taking a full day to explore some idea, is easy.

The next set of constraints tend to be skill-constraints. Not knowing how to do something or not knowing what one doesn't know, e.g. that something could easily be done. One of the reasons I really can't go higher in my spending even if my SWR is ~ 0.66% is that I don't know how to build a bigger machine than a super-efficiently running middle-class household. That is, I can build a $60,000 lifestyle for $15,000 ... and presumably similar [systems theory] methods could build a $200k project for what we could actually afford. I just have no idea of what that would be. I don't think(*) it's an upper-upper-middle class lifestyle because the difference between that and the median is primarily waste, i.e., more expensive versions of more or less the same thing, which is contradictory to my methods.

(*) I've only seen/visited such but never lived it, so this statement is based on observations only. In any case, I don't see "home making" as my primary goal; just a base to support other goals that are more important to me.

RockyMtnLiving wrote: ↑

Sat Jul 23, 2022 8:26 am

... I've forgotten your basic financials (e.g., multiple of X, etc.). We won't have a pension nor any kind of post-employment HC-related support to get to 65. Thus, when the ripcord is pulled we will have to depend upon the nuts we have squirreled away in the background over the decades plus, eventually, SS. I'm not complaining. We have been exceedingly fortunate. ...

Hey RML, good to hear from you and thanks for the kind words. Woke up early and zero-dark-thirty is the most reliable time to borrow a little wifi from the neighbors. The rickety DSL service out here at the end of the road doesn't hold up well once the world wakes up. Thought I'd share some further thoughts as, as you mentioned, our situations have a lot of similarity starting with age.

I'd sort of forgotten some of my financial metrics too, and had to look them up out of a mothballed spreadsheet. Just comparing anticipated spending to the stash I was at around 42x when I pulled the plug. When I started factoring in the annuity and SS it was somewhere in the 400X-700X range in the heart of my parameterized space (parameters being spend rate, inflation, timing of SS, etc.). With assumptions of diligent moderate frugality and relatively low inflation infinity-X was achievable although not something I set as a major goal. Present inflation will probably eliminate that possibility anyway.

When that day comes, digging into the stash will be a challenge. I suppose it's because I retired a little late for a do-over, so realistically there won't be much opportunity to channel significant new money into it. Once it's gone it's gone. Right now my taxable account is spinning off roughly $550-$650/mo in dividends/interest. So I can tap those while telling myself it's not the same as selling shares and consuming them. Weak sauce, I know. When I start selling shares out of something other than the Money Market sweep account is probably the day I start repositioning myself for higher efficiency (i.e., probably sell the cabin, look at downsizing my main home if applicable, relocating to LCOL depending on what's up with my dad, etc.). I'll likely also dig out all my DIY books too.

While I was back home the guys at the shop where I bought my kayak asked me if I'd consider coming to work there part-time in the fall. That I didn't immediately say, "No, thanks," shines a light on the existence of an amount of trepidation at the prospect of exhuming the nuts. $600-$800 bucks a month for 8 months to offset inflation or stash in my Roth IRA sounds tempting.

I suppose it's good for me though to grapple with SORR and other economic headwinds right out of the gate--should toughen me up.

Sounds like you're in pretty good shape, and if you've got some wiggle room to tighten up spending even more, that adds a lot of resilience. I deliberately baked in some fluff in my planning budgets so I'd have that option, and until inflation ratcheted up at a higher growth rate than I covered in my planning, I was expecting to coast along well below planning assumptions on average. As it stands, it appears that what were intended as substantially conservative assumptions might prove to simply be accurate.

jacob wrote: ↑

Sun Jul 24, 2022 8:41 am

One of the reasons I really can't go higher in my spending even if my SWR is ~ 0.66% is that I don't know how to build a bigger machine than a super-efficiently running middle-class household.

From what I've observed, after meeting individual desires, capital is used to broaden one's reach. Family. Community. Legacy. Committing it to the public markets only delays the decision. The degree of one's obligation to act as a better steward is debatable. Playing video games isn't an efficient use of my human capital. I do it anyways. Does that make me irresponsible or selfish? Maybe. Is it irrational? Dunno. I haven't stopped.

Allocation of capital, financial or otherwise, is worthy of regular reconsideration. Introducing small, but frequent, disruptions is a way to facilitate this. It's part of why I like the spending floor. Otherwise, It'd be very easy to settle into a locally optimized minimum. Robust, but potentially limited.

Not to say ERE or a 0.66% SWR isn't your best path. It's an effective model, no doubt. Maybe after a decade of financial independence, I'll find my way there. Already, I am finding it harder to consume everything I can afford.


@IlliniDave - Have you come across the book Die with Zero? A contrary strategy could offer an interesting read:

https://www.amazon.com/Die-Zero-Getting ... 0358099765

The numbers you're talking about leave a substantial legacy. What if expressing it now is worth the additional financial risk?

Pulling an example from my own life - there's a good chance my parents leave a significant inheritance. They're also likely to live into my 70's. There is nothing life changing about that money. At the same time, they spent $200 helping to furnish my first apartment. I was thrilled. We're talking simple things like a folding table and crock pot. But offered at the perfect time.

I wrote most of this offline, and noticed as I pasted it in that a few additional entries have come in. I'll try to respond to them over the coming days.

One year summary

TL;DR. To boil down to a single phrase, it seems like the underlying theme is: life goes on.

Thinking back on the event itself:

There was no profound and dramatic lifting of cares or worries. Nor were there any regrets or doubts. I just stopped going to work one day and it was just as natural as going to work had been the day before. I suppose years of planning had subconsciously conditioned me for the transition. There were a few transient moments of, "Is this real?" linked to things like selling the house I'd been in for 23 years and getting a new driver's license in a different state. And maybe on some level I was a little let down that there wasn't a bunch of emotional fanfare--it's a pretty big step in life for those that take it voluntarily. But I didn't retire to drum up a reason to celebrate, and the lack of crisp elation didn't mean much.

I'd always viewed bowing out of a corporate career as a step in moving on to new opportunities rather than a flight from something dreadful, and maybe that's why it turned out to be somewhat of a non-event. Corporate politics had changed a lot over the last two years, generally for the worse. Not something I want to get into here, but if I'd played a couple more OMY cards it's likely retirement would have been more accurately described as fleeing rather than embarking. I was aware of that in the final run-up, and it led me to feel I'd chosen the right time and bolstered my eleventh-hour resolve. It was a reasoned action, underpinned by gut-level instinct, but not driven by visceral forces.

Looking at the first year:

This retrostpective is a little harder to get a handle on. I haven't approached Phase III with the same goal-oriented outlook I'd adopted during the run up to retirement. I don't have a list of pass/fail criteria to measure things against. That in itself is arguably a small victory.

I derive a lot of peace of mind from being geographically closer to my dad. Being three states away during the four years of my mom's illness sort of haunted me. And being able to check in and visit with my dad in person a couple times a week over most of the calendar year feels right. One little victory.

During the planning years I'd put together lists of leisure pursuits--things I'd occasionally had wistful thoughts that I'd like to do over the years. I haven't moved too far down that list yet. The low fruit at the top of the list--things I'd already moved out on like the hideout or always had on the back burner like fooling around with music--have kept me sufficiently engaged. Boredom certainly has not been a problem. One little victory.

People have frequently asked me what I'm going to do post-retirement, and I get the sense they are expecting me to say I'm embarking on a second career or starting a business or some such. Other than the guys at the "water/nordic sports" shop where I bought my kayak feeling me out regarding whether I'd like to work there part-time during the off season I never gave a moment's thought to working for a paycheck except when contemplating possible counters to the most dire of black swan eventualities (and as bad as things are we're not in the ballpark of that yet, at least as pertains to viability of my lifestyle). I'm about 75% of the way to being a kayak fishing enthusiast so I might actually take the job out of nerdiness and for the opportunity to network with people in that neck of the woods who are promoting the sport. My initial reaction was to pooh-pooh the idea, but I agreed to at least think about it over the balance of the summer.

The whole "kayak thing" wasn't on my original lists of leisure pursuits (though expanding my fishing definitely was up near the top) and is just an example of things that can just pop up along the way when a guy isn't too married to a set of preconceived ideas. And much like when dipping into the stash in 2014 to buy the cabin, it was somewhat liberating. Throwing a little money into something like the kayak I think helps me avoid descent into becoming completely miserly. The phrase I came up with when I bought the cabin was roughly: it's a reminder that the stash is there to serve me rather than me being here to serve the stash. The kayak experience has been in that vein. All-in-all: one little victory.

A thing I never considered was that not having a job to claim a large fraction of one's week makes dealing with all the little aggravating things life throws at everyone much, much easier to navigate because making time becomes much less complicated. Things that used to make me grumpy now just stir up the routine a little bit, and often provide the impetus to get out of the house and run by a nearby park or forest preserve for a bit of a hike or something rather than requiring me to stay late at work to make up time, or expend limited vacation time. One little victory.

So although it's mostly very mundane, much is working well. The list is longer: I'm getting outside a lot more and building up my vitamin D stores, my guitar pursuit is much more consistent and organized, except for Youtube fishing and kayak porn my online time is decreased, etc.

But there are some imperfections. I'm not as focused on mindfulness as I thought I'd be. I still have my moments. I'm typing this in installments and this morning (7/27) I had an uplifting moment when I listened to the pair of loons that base themselves on this stretch of the lake rallying the troops from the four corners before dawn broke. Yesterday I spent a few hours up in my compartment of the garage building affixing all the required registration numbering and expiration decals and permit exemption stickers to the kayak. It's a more involved process than it would seem and required some cleaning and sanding and overall carefulness. Having a large fraction of the day accompanied by rain and thunderstorms (i.e., I wasn't missing out on anything due to the chore) allowed me to get fully absorbed in each of the piecewise simple tasks and left me feeling 100% refreshed when it was all complete. Later this morning when it warms up a little I'll apply a midseason UV protection/treatment which is another wax-on, wax-off sort of activity, albeit a quicker one. However, I could and should be doing better in that regard overall. I'm still allowing my thoughts to scatter when I'm out fishing in the kayak and playing the guitar--two activities tailor-made to promote mindfulness. Mostly the problem is I'm just too lazy to rein myself into the moment.

And a lot of the day-to-day opportunities to ground myself in mindful contentedness are disrupted by my not having my own "home" yet. I only do a small fraction of the cooking and housework which were always good conduits to "just be". My aunt is one of those people who can't stand by if I busy myself with "her" household chores (unless it involves lifting heavy things, haha). So if I spontaneously mop the kitchen floor or something she'll respond by cleaning all the rest of the floors in the entire house. I don't want to work her to death!

That kind of stuff should work itself out in time though.

Despite being outside more I should probably be getting more outright exercise. I do some paddling in the kayak but while actually fishing I'm generally content to let the motor do most of the work. And I'm not eating optimally. My home base is situated in the land of superb pizza, and my aunt loves to bake. The nutrition part will sort itself out when I'm back to living on my own I think, but it's important that I do better in the meantime.

Some Final thoughts:

So to reiterate, I've not stepped into an idyllic fantasy world. I wasn't expecting that but I think I expected to have a more intense feeling of freedom. I guess I mean that in a spiritual sense. I have more financial freedom than many, and more agency when it comes to my time than most people my age. But I still have tethers to the mundane. Ditching employment severed the shortest, most restrictive of them. But family, friends (to a lesser extent), "stuff", government-imposed overhead, and even simply having a little money put away to steward tend to keep me entangled in many of the things that characterized my old life.

One thing I can safely say is I do not miss work or having status as a corporate minion. From day one I spent zero time thinking about my former "career". That's not to say I don't think about some of the friends I made through the years, and several I keep in touch with through various means. But when those that are still working share anecdotes about the office I politely try to appear to be paying attention while inwardly my eyes glaze over.

It's a little difficult adjusting to my income having plummeted, mostly in the sense that spent money is not so easy to replace now. It hasn't mattered, but being sort of an arch-conservative fiscally-speaking, having lost a layer of redundancy will take some getting used to. Makes me feel like I'm living dangerously.

I touched on the generic financial aspects of Year 1 in prior entries so I won't go there in this review except to say that all is fine, with the bonus that apparently we have avoided a recession by virtue of the powers that be redefining recession. I'm sleeping much better thanks to that .

Looking ahead:

Year 2 starts tomorrow, or maybe Saturday, depending on how I count it. The last day I actually worked was two days before I technically retired from the company iirc. It'll start with a short trip to the annual Blueberry Festival in Ely MN. Obviously I pull all the stops when celebrating milestones. Actually, being 1-2 generations removed from "the farm" in my family (all my grandparents grew up on farms) I tend to enjoy these somewhat rural-flavored events.

I'm hoping to improve on Year 1 as I move through Year 2. I don't have a lot of specific ideas on that yet. I've never suffered from wanderlust and covid has provided an excuse not to push me out of my comfort zone in that regard, but maybe I'll take a few day trips or 2-3 night road trips to see some of the regional sites in the upper Midwest/visit friends in various locations. But there won't be anything exotic in the mix.

The main thing I want to do is be more deliberate about trying to make each day the best day I can make it, one day at a time. I'm not a high maintenance guy and I have no trouble passing days in ways that are generally pleasant, but I'd like to see if I can't get a little more out of the time I have left. I know operating in full up thrill-seeker mode is something that tends to just add stress and make me cumulatively weary, but maybe there's an optimum between good enough and too much I can gravitate towards. These are emerging thoughts so I can't much other than they are emerging and if they take root maybe they'll show up in future entries.

Scott 2 wrote: ↑

Wed Jul 27, 2022 3:42 pm

@IlliniDave - Have you come across the book Die with Zero? A contrary strategy could offer an interesting read:

https://www.amazon.com/Die-Zero-Getting ... 0358099765

The numbers you're talking about leave a substantial legacy. What if expressing it now is worth the additional financial risk?

Pulling an example from my own life - there's a good chance my parents leave a significant inheritance. They're also likely to live into my 70's. There is nothing life changing about that money. At the same time, they spent $200 helping to furnish my first apartment. I was thrilled. We're talking simple things like a folding table and crock pot. But offered at the perfect time.

Some years back i spent a good amount of time in discussions on what I call the "can't take it with you" topic, primarily over on bogleheads.org. I get the sentiment but I've failed to identify a strong correlation between spending money and increasing contentedness, contentedness to me being akin to subjective quality of life. If anything I noted an inverse correlation at the levels I was operating at before ER became an explicit pursuit.

I've got some contradicting sides to my nature. In certain realms I'm willing to shell out $ to get what I want. Guitar toys are a good example. I've got a pair of high end guitars that I could have bought the functional equivalent of for 25% of the price. Similar for my amp and my modeler/effects processor. But now having a check in all boxes I wanted to put a check in, I have little motivation to acquire more instruments and gear even though it's likely I would enjoy them at times. The kayak/fishing realm is another where I've spent more then th basic admission price. But I eventually hit the enough threshold and can feel the diminishing returns looking over my shoulder.

I suppose my limited strategic luxuries are a way testing the boundaries on a semi-regular basis.

It looks like my Prime membership gets me a free listen to the audio version of that book. If I can get it to work over my rickety internet connection here I'll give it a listen--have a couple of rainy days starting Sunday in the forecast. Never hurts to give consideration to what the other side has to say.

Also with the bogleheads I'm a veteran of many legacy conversations. It's fairly common in that crowd for people to attempt to pre-pay their heirs' inheritance while their heirs are still young and can "enjoy it". My concern is that I don't want my kids to ratchet their lifestyle upwards dependent on a fat check from the Bank of Dad every year. If things went to $hit and I had to stop I wouldn't want to add having to pull the rug out from under them to the angst of my own house-o-cards falling down around me. If they were A+ in their financial stewardship scores it might be different. Both are improving but are still probably in the C+ range. Of course I'm referring to some sort of a methodical prepayment in those remarks. I'm a softy and lend a hand on a fairly frequent basis for specific pickles they find themselves in--not dissimilar to what your folks did when you first got your own place.

Thanks for putting a spark in my synapses. Good topics to revisit periodically--sometimes convictions formed in the past don't hold as a person evolves.

IlliniDave wrote: ↑

Sat Jul 23, 2022 5:29 am

But due to my nature and what I've habituated myself to it'll probably have to wait until I see fairer skies and calmer water ahead. Hopefully in the next 2-2.5 years things will change for the better. But I like your idea in general.

You've discussed One More Year (OMY) syndrome in the past, and its also a frequent topic over on the other board. I think that the spending in retirement might also have its own OMY syndrome for you. There's also some reason why retiring later is "better", but you know that you have to push through that.

Same thing here - if you're going to wait until things are "better" to spend from your portfolio and execute your plan (which was designed to withstand both good and bad times), then you'll be waiting forever. The idea that there is some point in the future where the economic, political, financial, etc skies are clear is a myth. Don't set yourself up to regret all the things you didn't do or experience when you had the opportunity to do so.

MBBboy wrote: ↑

Mon Aug 08, 2022 9:45 am

You've discussed One More Year (OMY) syndrome in the past, and its also a frequent topic over on the other board. I think that the spending in retirement might also have its own OMY syndrome for you. There's also some reason why retiring later is "better", but you know that you have to push through that.

Same thing here - if you're going to wait until things are "better" to spend from your portfolio and execute your plan (which was designed to withstand both good and bad times), then you'll be waiting forever. The idea that there is some point in the future where the economic, political, financial, etc skies are clear is a myth. Don't set yourself up to regret all the things you didn't do or experience when you had the opportunity to do so.

You make a good point, although at this juncture I am still operating per plan, i.e., I'm not waiting around for better conditions to implement my plan. What we were discussing above was spending more than the plan as sort of an exercise to test whether what I came up with as an optimal spending levels (in terms of contentedness/quality of life) back in the 2015-2018 time frame still hold up. I am indeed citing poor present conditions as a reason to delay any sort of experimentation along those lines.

Some background from the dusty pages of yore:

I'm in what you could call a bridge period in that I've cut off the flow from the employment spigot and have replaced it with a much smaller annuity income which (per plan) is supposed to largely carry me until I take SS (4-12 years down the road). There's also the minor wrinkle that I've still got a year or two before I can get at my 401k funds without having to jump through any hoops to avoid penalty taxes. In terms of a planned spending profile I've always intended for retirement to start with relative minimum spending with the expectation that it will increase as required as I age; and if I'm lucky as other "income" sources (SS and eventually RMDs) phase in I'll keep up with the need. But today I don't have a dollar figure of how much I'll increase spending say between 2030 and 2031 or whatever. The goal/hope is that I'll always be able to spend what I want to spend, and that what I want to spend won't derail the plan's viability.

Got it! I just saw the 0.7% withdrawal rate and thought you were underspending your plan.

The good news is that you aren't alone in not knowing how to spend more money - and it's definitely the better problem to have than the reverse!

I have a bit of an August summary.

Spending finally got reined in to where I like it, I finished about $1,400 below my annuity income, putting me up over $9,000 in cumulative underrun since stable retirement life commenced (bit over $800/month average). So I'm still at 0% withdrawal rate. The stash took another pummeling, down about $40K, so not taxing the stash yet is a good thing. So far the stash is down a bit less than 11% since I pulled the plug.

I might have mentioned this before in one of my long wordy posts, but I hit a point during August where I determined I was quite happy with life up in the woods. Sometimes we anticipate things so long and fervently we wind up being a little let down when reality smacks us in the face and the actual falls short of the dream. This summer, for me, has exceeded expectations. I made some good choices during the run-up years, and did a good job understanding myself and what added to contentedness and what did not.

That said, this month owning the hideout is going to be expensive. I'm expecting the bill for some planned upgrades and deferred maintenance to come in around $10K-$15K. I set aside a chunk of the proceeds from selling my Bama house for this and other purposes and never entered it into my accounting (other than it being reflected in my new worth calculation) so it won't be reflected in the numbers I talk about here for progress tracking. I guess you could call it Limbo money. Once these things are complete and I eat some up front costs establishing a new household in Illinois once that happens, I'll sweep the rest into the stash and do more honest accounting from that point forward.

Had a nice display of northern lights the night before last. I didn't see it, but a couple neighbors shared photos. I'll need to figure out what they use to track the forecast of those so I can check them out myself. Typically I'm already asleep before they are visible. Local folklore says they are a sign that winter is coming. Morning lows are already dipping into the 30sF although daytime temps are still in the ballpark of 70F. The season is winding down. I figure I'll stay up here for about 4 more weeks before heading back to the real world.

I'm happy to hear your Northern Woods dream is meeting expectations. I'm strongly considering making my move up north sooner than I originally long range planned due to a number of unforeseen circumstances both good and bad. I am quite possibly mistaken, but this desire is centered on belief that if I can just watch the sun rise over Lake Huron while sipping on a mug of coffee any given morning, I will be happy enough with my life.

7Wannabe5 wrote: ↑

Mon Sep 05, 2022 8:32 am

... this desire is centered on belief that if I can just watch the sun rise over Lake Huron while sipping on a mug of coffee any given morning, I will be happy enough with my life.

Sometimes I think it really can be that simple. Those words prompted me to consider what the key ingredients are here. Haven't worked it out completely yet. Maybe it's just that there are several aspects of the lifestyle I adopt here that are sources of serenity. Each is imperfect but they combine to be enough. The easy peace I'd always found in this type of environment certainly contributed to the motivation to expand the amount of time I dwelt in it.

You are in an extremely enviable position. It's easy to take that for granted. Congrats on remaining self aware enough to appreciate it.

Scott 2 wrote: ↑

Tue Sep 06, 2022 3:28 pm

You are in an extremely enviable position. It's easy to take that for granted. Congrats on remaining self aware enough to appreciate it.

Thanks, Scott

It's a interesting mix of how-am-I-getting-away-with-this and this-feels-completely-natural. As much as I can for as long as I can I'm going to focus on what I have and avoid dwelling on what I don't.

This weekend I'll be closing down things at the hideout and heading back to the Real World. One day next week once I'm settled I'll update financials when the final numbers are in. Sneak peak would be the portfolio got brutalized again but spending was okay, I think I'll come in 20-25% below annuity income even with a flurry of month-end expenses related to close out and travel. September marks the end of another year as pertains to retirement in that by the 30th I'll have a full year under my belt after some financial artifacts of the transition settled out, which gives me 12 months of stable financial data to examine.

Got some sticker shock when I ordered a 100lb propane cylinder to replace the one I emptied out over the summer (I have 2). I'll have to look up what I paid for a replacement last September, but roughly the cost was 40% higher this year. Dunno if utility-provided natural gas is similar, but just yesterday I heard a meteorologist on the radio talking about Ian and how similar storms (strength, timing, and path) have correlated with relatively cold winters in North America in the past. If that's the case this year heating one's home might get a bit spendy. Maybe if that comes to pass it will result in a milder winter in Europe. I can't imagine what happened to the Nord Stream pipelines might mean on top of all else.

So far my retirement still seems financially viable but there's enough going on that once I get home I'm going to start drawing up contingency plans.

The foundation makeover on the hideout finished up this week. During that work a number of additional problems, some significant, were identified and corrected. I'm very pleased with the result, and will be even more pleased if come next spring once things thaw there is no major shifting. The main culprit of the degradation over the prior years has been addressed so I'm optimistic. It's nice to have all the doors and windows open/close without sticking or jamming. The new roof will go on in a couple weeks after I'm back in Illinois, and the two major structural tasks will be complete once that's finished. Then I can start in on some more minor repairs and after that some upgrades. Once I get through that I'd theoretically be in a decent position to liquidate.

Although I recognize that it's time, I'm not thrilled about leaving for the year. My experience this summer argues in favor of moving my full time residence up to the Northwoods once the things I need to do in Illinois are OBE. Minnesota is one of those states a lot of people flee when it comes time to retire, for both climate and economic considerations. Don't know if there's an opportunity to exploit in that on the financial side. So far I don't see one.

Woke up in the middle of the night and couldn't get back to sleep so a few random add-ons.

For the first time in my adult life I witnessed the aurora borealis a few nights ago. In hindsight I feel foolish--I hadn't realized how much of the spectacular images we see are aided by digital camera trickery. To the naked eye the images are normally more/less black-and-white. This occurrence caused the northern horizon over the lake to look like it was wearing a crown--the display was very symmetrical. To my eye it looked slightly orangish, similar in color to the glow of a distant city's halogen street lamps. My neighbor with his cell phone was able to get some long exposure images as we stood there and when intensified the light was the usual pale green.

I probably mentioned this in the distant past, but the hideout is outside measurable light pollution. During the heart of the summer the night sky is somewhat underwhelming (unless maybe you are out right around midnight, a time when I'm always asleep), mostly because the sun doesn't go so far under the horizon. But with the lowering of the sun approaching autumn one can get pretty spectacular views at reasonable hours by looking up. It's easy for me to appreciate why ancients were so moved by the stars. Makes one realize how small a life is if one takes the time to ponder what they are seeing rather than just noting how pretty the sight is. The night before last the lake was calmer than I'd ever seen it--so calm it reflected a perfectly still mirror image of the stars. It was a strange sensation, the illusion of having stars both above and below with only a strip of trees on the far shore separating them.

I saw a "ufo" a couple weeks ago during the predawn dark, unidentifiable to me at least. It looked somewhat like a large version of those prop planes that tow banners behind them, except that instead of lettering the back part was a row of lights that obviously wasn't fluttering, led by a smaller light a good distance ahead. Occasionally jet planes will fly overhead and more often than not at night I can hear them, and none of these lights blinked. If it was all lights from a single plane the plane would have been flying extraordinarily low and quietly, or it was extremely large. It proceeded across the sky on a slow and steady course which makes me fairly certain it was some sort of man-made mechanical thing. Wish I knew what it was.

I looked in the mirror the other day with more than just a glance. I've gotten pretty scruffy over the last couple of months--make Albert Einstein look rather foppish. No wonder I get funny looks in the grocery sometimes and the girls aren't clawing at each other to get the first place in line at the door to the hideout. If I had crazy eyes I'd be downright scary looking.

I got bored with the endeavor and quit keeping count, but I'd estimate I caught enough fish over the summer to produce something on the order of 200 lbs of fillets had I opted to harvest them. Not quite enough to supply what I'd desire for daily protein consumption for a year. I probably averaged 10-15 hours/wk fishing between 6/9-9/29. My home lake is a tough nut to crack and I'm still learning to apply my craft to it. It'll be interesting to see if I can improve on that next year.

Started breaking down the kayak yesterday to get it ready for transport. A ritual that clearly signaled that this hideout season is effectively over. Also helped my neighbor pull his boat out of the water. As the season wore on he and I fished together more-and-more. I guess at this point I'd more accurately refer to him as a friend rather than simply "neighbor". The little enclave here is an interesting collection of folks. I am probably among the least accomplished in life, surrounded by academics, business owners, etc. Most are retired or semi-retired. Most have their permanent homes out-of-state. But we're all kindred spirits that are drawn to the quiet places and this one area in particular.

Sort of a random and generally off-topic collection of thoughts, but if you ever wonder what old guys think about in the middle of the night when they can't sleep ...