Author Topic: Lifestyle Inflation / Increased Spending in Early Retirement?  (Read 4787 times)

flashpacker

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Lifestyle Inflation / Increased Spending in Early Retirement?
« on: October 28, 2014, 03:27:46 PM »
I'm noticing some lifestyle inflation creeping in now that we are early retired. No big ticket items but definite creep. 

Part of the issue is that we've moved to a cheaper country (moved to the US) and therefore things like convenience meals (e.g. organic frozen burritos) are comparatively a lot cheaper. Another example of lifestyle inflation is going away for the weekend once a month or so.  A different type of example is buying plants for the garden, something we previously wouldn't have bothered with as we weren't home as much to enjoy it. 

Have others experienced lifestyle inflation or increased spending once early retired?  I'm not asking because I want others to tell me how to reduce my costs (We got to FIRE so we know how to do that), but I'm more conceptually curious if others have experienced the same, given that people typically talk about how costs reduce when you early retire (e.g., lower commute costs, less need for work wardrobe). 

Gone Fishing

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Re: Lifestyle Inflation / Increased Spending in Early Retirement?
« Reply #1 on: October 28, 2014, 07:21:51 PM »
I am anticipating some significant creep due to the "everyday is Saturday" effect.  Commuting gas and work clothes will save a bit but not much.  Health insurance will take up any savings.  No point retiring if I can't have a little fun!

BlueHouse

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Re: Lifestyle Inflation / Increased Spending in Early Retirement?
« Reply #2 on: October 28, 2014, 07:58:10 PM »
Is part of the inflation due to new location/new house?  I always find that my first 2-3 years in a new place are super expensive because I'm feathering my new nest.

needmyfi

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Re: Lifestyle Inflation / Increased Spending in Early Retirement?
« Reply #3 on: October 28, 2014, 08:24:53 PM »
I'm with So Close, our current spending is so low that it looks we will get along just fine on ss.  But I'm planning on spending more in retirement.  Vacations, art classes, long lazy mornings at the local coffee shop........

geekette

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Re: Lifestyle Inflation / Increased Spending in Early Retirement?
« Reply #4 on: October 28, 2014, 08:39:57 PM »
We've had anti-lifestyle inflation since an unplanned retirement...  DH got laid off a year ago May and our expenses have gone down.  Much is probably due to finding MMM and seeing that with the ACA and a few tweaks ::surprise!:: he actually could retire.  A smaller part of it was having to curtail vacations due to his father's failing health (and then dealing with the estate), and a lot more eating at home. 


arebelspy

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Re: Lifestyle Inflation / Increased Spending in Early Retirement?
« Reply #5 on: October 29, 2014, 10:38:24 AM »
I'm planning on purposeful creep (e.g. expenses I expect to have in ER via higher luxury spending, that I don't do now), but I'll be curious to see if unintended creep occurs as well.

I don't think it will, based on the personalities of my wife and I, but it could happen.

More often I see people on ER forums talking about what Spartana is - a decrease beyond what they thought.

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Catbert

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Re: Lifestyle Inflation / Increased Spending in Early Retirement?
« Reply #6 on: October 29, 2014, 11:22:09 AM »
Some things increased more than I thought and other deceased more.  For example, while I like to cook we go out to eat more than when I worked (but usually lunch rather than dinner) which surprised me.  OTHO when I was always a bit of a clothes horse.  I knew the cost of clothes would go down since even nice casual clothes are less expensive than business suits.  But I didn't expect all my casual clothes would be jeans, shorts and knit tops from the local discount store that gets Costco leftovers. I want to be clean and sorta neat but no longer have anyone to impress with how I dress.

Jon_Snow

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Re: Lifestyle Inflation / Increased Spending in Early Retirement?
« Reply #7 on: October 29, 2014, 11:25:08 AM »
Since leaving my job, we are actually spending quite a bit less. It turns out (and I suspected this) that I spent a fair bit on things that helped me cope with my career. While we were both working our monthly spending was between $2500 - $3000 monthly. Now we seem to have found a comfort zone spending between $2000 - $2500. And it doesn't feel like we are being particularly frugal. I would like to do better, but I sense my still working spouse would resist. She's working, I'm not... won't push it.

My wife has hinted strongly that once she joins me in ER, she wouldn't mind ramping up the lifestyle somewhat (I think I have a LBYM gene which she lacks). I find myself not all that opposed to the idea. I always considered her choosing to continue to work as her way of paying for future lifestyle inflation that she may desire. I have a hard time picturing how we could spend $4000 monthly, but if it ever comes to that, we should be able to cover that quite easily. By my calculations, in another 5 years around when my wife would like to retire, barring any ill timed market calamities, our dividend income should be approaching 6k monthly.

flashpacker

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Re: Lifestyle Inflation / Increased Spending in Early Retirement?
« Reply #8 on: October 30, 2014, 03:25:48 AM »
BlueHouse is right that a significant part of it is house and garden related stuff. At the moment, the increased spending is not an issue but I'm hoping that I don't get hedonic adaptation to all the fun stuff I'm currently enjoying!

I also think it's a comparison issue with my in-laws who are wealthy (hard earned and were very frugal), whose spending has probably more than doubled in retirement due to lots of international travel and taking a ton of cruises and tours! I'm slightly worried that I'm going to start wanting to spend that much money too. Hopefully it's true that it's better to spread out the fun rather than concentrate it in the 70s and 80s like they're doing.

deborah

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Re: Lifestyle Inflation / Increased Spending in Early Retirement?
« Reply #9 on: October 30, 2014, 03:59:43 AM »
We do spend significantly less in retirement even though we couldn't work out any expenses that would go down when we were working out our retirement budgets - it just happened.

Daisy

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Re: Lifestyle Inflation / Increased Spending in Early Retirement?
« Reply #10 on: October 31, 2014, 08:18:15 PM »
I'm not ER'd yet, but I suspect my ER expenses will be similar to my expenses now...well now that I've cut them down since getting serious about FIRE. Some costs will go down (commuting), some will go up (I'll have to start paying for cell phone service, a gym(?) which is currently available at work, on my own for health care), and some will stay the same (such as food as I think I've got this down pat).

My travel budget may expand a little since I will have more time to travel. My charitable donations will go down since I do it as a percentage based on my income.

But I don't mind an initial increase in expenses in EARLY retirement (such as for travel), as I believe in maximizing my time in my 50s and 60s. I plan to taper my costs down a lot in my 70s as the type of travel and activities I can do might be curtailed by a smaller stash (from spending it in my 50s and 60s) and possibly deteriorated health. We have long lives (into the late 80s and 90s) in my family, but I don't mind spending those last 10-20 years enjoying my local surroundings, moving in with friends/family ala Golden Girls style, etc., in order to reduce costs. If I do happen to have the money and health to travel in my 70s that would just be an added bonus.

This coincides nicely with Social Security. Maybe I can just live on that in my 70s and 80s if the stash unexpectedly does not last that long. From what I see in my family, those two decades are best spent slowing down and enjoying life.

I'm also not a big fan of going to extreme measures to extend my life. Some may call it morbid, but I will accept whatever comes my way once I hit 75 or so. So I won't need a huge amount of money for end of life care or anything like that. Although like I said my family history seems to indicate I will be healthy into my late 80s.

deborah

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Re: Lifestyle Inflation / Increased Spending in Early Retirement?
« Reply #11 on: October 31, 2014, 08:39:42 PM »
With several people in my family having reached their 100's I often wonder how long the stash will need to last!