Vacations aren't for they children at that age, they are for the parent (additional bonding time).
As for $3k-$5k annually, you are probably fretting too much. You noted that the monthly increase was $1,100. Assuming that you save the rest of the increase in a tax deferred retirement account you will be saving in excess of 60% of the increase. It is true that after 20 years that $5,000 would be worth $240K when invested at 7.5%; however, it appears that you are in for 20 years to get the pension benefit, so deferred spending doesn't really accelerate your RE date.
A mustachian view-point would ask how much is enough? Are you just trying to save like mad because you haven't done any forward projections? It might be worth it to go through some projections to make you feel more at ease about spending money on a vacation. An extra $6K per year towards savings every year over the next 20 years will be worth $288K (@ 7.5%). For every $10,000 you currently have in retirement accounts, you will have an additional $44,600 (again at 7.5%). Therefore, if you have currently saved just $100,000 in retirement accounts and save just $6,000 per year you will have $734,00 at RE. This is on top of any pension payments. You can play around with any of these assumptions to see where you end up, but it appears as if you will have more than enough.
Today is a gift, and tomorrow is never promised. Come up with a plan that you can both live with and move forward (Also, the $3-5k sounds like a big SWAG on your spouses part. You should come up with some goals and plans much like your retirement goals and plans (with cost estimates) - commit it to paper and execute the plan).