Dealing With the Mind Shift

[weston]

(Note to Admins: Cross posted basically the same question on The Bogleheads forum. If I am breaching any etiquette please just delete)

My wife is about to retire in a few weeks. While I believe that we are on pretty solid ground financially (She will have a  pension, I  will continue to work for at least a few more years, we will have approx 1.5 million in liquid investments (both taxable and non taxable), it's the psychology of all this is that seems to be preying on our minds.

I do not for a minute think that this is a new or unique issue. How do you handle the whole mind shift of going through  decades of saving for retirement and not touching those assets, to being okay mentally with the act of finally withdrawing from those accounts?

I am less concerned with us running out of money and more concerned that we will stay in this "sacrifice and save" mode to the point where we won't be able to enjoy ourselves as much as we should.

Any advice (again more along the lines of the psychology as opposed to financial/numbers), or suggested resources would be greatly appreciated.

[AlwaysBeenASaver]

I'm in exactly the same situation and having the same issues. One thing I've done is tell myself over and over that if I was saving up to buy a large item, such as a house or a car, once I had saved up my goal, I would purchase the item and stop saving for it. So, in this case, I've spent my working career saving up to buy my freedom (in a sense), so now I've reached my goal I can stop saving for that and "buy" it, per say. I still have doubts if I think too much, so I'm trying not to think about "the rest of my life", but rather just thinking about "having the summer off work."

[Fastfwd]

I have the same problem on a limited scale. Will be taking a few months off work and should be able to spend just as much as I normally do but I still feel like I should spend less and postpone things because money is not coming in anymore except for capital gains. Will follow this tread to help me with this and my eventual forever vacation.

[HenryDavid]

Because it's a mind shift, you won't think the same way after it as you did before! So no worries  : ).

The meaning of the word "enjoy" may have changed, in the phrase "we won't be able to enjoy ourselves as much as we should."
Enjoyment won't be directly related to spending anymore.

My reading of this blog is that it's NOT about finding clever financial ways to start enjoying consumerism etc. EARLIER IN LIFE:
instead, it's about removing the consumerism center from your brain FOR GOOD. That's the real mind shift.

It's a mindless-consumption-ectomy. Once that part of your brain is gone, you won't miss it.

[HenryDavid]

Oh, and also: I wasn't addressing the fear that you may have trained your brain to sacrifice and work forever.
If your values have changed and you don't focus on "money" so much as "how I intend to live according to what I value most," then it will be easier.
If you've valued time with friends etc. above "things" all along, you won't have a problem doing more of that once you don't need to work . . . right?
Anyway that's one person's take.

[AlwaysBeenASaver]

I've never really enjoyed spending, so that's not an issue for me. The mind shift I'm having trouble with is *taking money out of my investments to live on*, since up until now I've only put money into the investments, not taken it out.

[EscapeVelocity2020]

Because you say you will continue to work for 'a few years', this will smooth the transition considerably.  My wife decided to SAH with young children, so we were dealing with the prospect of new expenses in addition to 1/3 less income.  We had been saving and investing aggressively, but having both of us working was miserable.  We found that our day to day life improved considerably with so much less daily stress, which allowed me to do better at work and enjoy life more.  Very easy to look back, now that the outcome was a success, and know it was the right choice - but it was a difficult decision at the time...

Nowadays I'm trying to convince her that we'd be fine if I SAH also - we also have numbers that work - but, that's when things get REALLY interesting.  The only words of wisdom I have for dealing with that is that you in a much better position than most folks already in retirement (Bogleheads non-withstanding, they are not 'the norm'), and most seem to be surviving just fine.

Good luck! 

[Thegoblinchief]

At a certain point, you have to tell yourself I saved all the $ for a reason - and retirement is that reason.

If it's technical stuff, as in HOW to draw assets down, that has you concerned, see:

http://livingafi.com/2014/05/09/drawdown-part-1-the-basics/ (read whole series)

The rest of Dr Doom's blog is also a very good place to understand dealing with the psychology of what you're having  trouble with.

[Greystache]

I am going through this right now. I retired on Jan. 1st of this year and my wife will retire in June.  We are both 55. We always lived well below our means and never worried about money. If we needed something, we just bought it. There was always more money coming in.  If the stock market crashed, no worries, there was more money coming in and stocks just went on on sale.  Now our attitude towards money has changed. I find myself much more conscious of money and budgets. I think about purchases more carefully.  I find myself much more concerned about asset allocation and protecting and growing my portfolio now that no additional money is coming in.  Mind you, I have a small pension and a 7-figure investment portfolio, but I still have issues with the transition from accumulation to draw-down.  The pension helps. I took a lump sum pay out and it will cover our expenses for the first ten years.  We won't have to tap our other investments until our mid 60's.  This reduces our sequence risk and provides a  bridge to when we can start collecting SS. Even though I think I have done my homework and prepared well, I have trouble getting comfortable with spending when there is no more regular income. I don't have any solution or advice for you. Just know that you are not alone and I suppose it is not that uncommon to feel that way.  I guess it is something that we just have to get used to.