Die With Zero vs Living Frugal

[Finntastic]

Hey All,

I'm about to fire in 4 months and got two minds how I will go about it. So up until now I've been saving up money for the retirement and by 1st Jan 2022 when my work contract ends me and my wife (who already retired) should have about 3m$ net worth. She is 44 and I'm 43 and we have no kids so...

As we don't have any reason to live wealth behind us I'm thinking why not go with the Die With Zero principal: https://www.diewithzerobook.com/
Obviously we do not need when the day comes so need to leave some safety margin in there, but I think my dilemma is that it's very different to what I was thinking earlier when my plan was that living frugal will allow us to retire earlier.

Anyone else wrestling with these conflicting ideas? Any word of advice.

ps. this could also be just retirement panic as the date is getting closer...

[Rdy2Fire]

Similar situation here, I figure why not spend it all, leave anything left to friends and charity

[Fishindude]

I'd do the same, but don't know how long we're going to live.

[reeshau]

You could die with zero if you just put it all into an annuity.  It's not a new idea; it's what retirement with a pension was like.  You probably want to withhold a lump sum for emergencies / long-term care, but could do that easily.

Of course, that isn't the way I am living retirement.  And with interest rates so low, annuity pricing sucks at the moment.  But if you are really convinced to go that way, you could put your base spending / lean FIRE into something like that, and know that what's left is pretty much play money.

[Metalcat]

They're not conflicting ideas.

Living frugally is a lifestyle, die with zero actually just comes down to a withdrawal strategy. The reasoning for doing so it to be able to spend more. If you want to spend more, then use a withdrawal strategy that gradually draws down your principal. It's that simple. Most traditional retirement advice is to gradually draw down the principal, it's just the ultra conservative FI world that focuses on preserving principal because the retirement timelines are so much longer.

Don't go looking for conflicts where there are none.

You DO need to figure out your withdrawal strategy, and 4 months to retirement is a pretty late start on hammering that out. You need to assess your SORR tolerance/strategy and your WR strategy. Most of us do this well before retiring, since some SORR strategies, like bond tents, require taking action before you retire.

Don't let people trying to sell books distract you from how simple this question really is. Are you willing to take more risk to be able to spend more, or are you more conservative? If so, how conservative do you want to be?

That is ALL you need to figure out.

[Moustachienne]

We are 4 years retired and have found our net worth growing due to a 3.75% WR, strong stock performance, and an unexpected inheritance.  Not having children, we always intended to Die with Zero; what we didn't anticipate is having so much more $$ to allocate in our lifetime.  We have increased our WR and are crafting how to spend it all down.  It's a great "problem" to have but it does take a mind shift from the conservative, saving mentality that got us to retirement.

There a lots of choices:
1. just keep accumulating because that's our autopilot - but kind of crazy not to do more with our money
2. increase consumer spending - but not attractive past a certain point as the simple living that got us here is satisfying (how much more food can we eat? how much warmer can we be at night? how much more comfortable can our beds be? not much)
3. increase philanthropy - this is where we're heading and it's really exciting to see the small and large differences we can make through thoughtful giving
4. start a business or two like MMM - can see the attraction for some but not our thing
5. other?

Die with Zero or Die with Pots of Money - you still have to (get to?) craft a life that's satisfying to you.  Use your time and money intentionally.

[Finntastic]

They're not conflicting ideas.

Living frugally is a lifestyle, die with zero actually just comes down to a withdrawal strategy. The reasoning for doing so it to be able to spend more. If you want to spend more, then use a withdrawal strategy that gradually draws down your principal. It's that simple. Most traditional retirement advice is to gradually draw down the principal, it's just the ultra conservative FI world that focuses on preserving principal because the retirement timelines are so much longer.

Don't go looking for conflicts where there are none.

You DO need to figure out your withdrawal strategy, and 4 months to retirement is a pretty late start on hammering that out. You need to assess your SORR tolerance/strategy and your WR strategy. Most of us do this well before retiring, since some SORR strategies, like bond tents, require taking action before you retire.

Don't let people trying to sell books distract you from how simple this question really is. Are you willing to take more risk to be able to spend more, or are you more conservative? If so, how conservative do you want to be?

That is ALL you need to figure out.

Thanks for this reply, is there any good links to learn more about SORR and WR as this is the first time I ever heard of those terms. I assume I can kind forget that 4% rule as that is to preserve the principle.

I would say I probably want to go very conservative and have already invested into real estate as well as gold, but still a lot of cash to invest, I do want to keep small (less than 10%) to play with crypto's as I've done pretty decent 400-500% gains.

One thing that makes this even harder is I have absolutely no idea about how much we going to spend for living. I have lived most of my adult life in Thailand and we are now selling everything here and wrapping up and move to Finland in January, so 2 weeks into our post FIRE life we will be in a new country and continent.

[Finntastic]

We are 4 years retired and have found our net worth growing due to a 3.75% WR, strong stock performance, and an unexpected inheritance.  Not having children, we always intended to Die with Zero; what we didn't anticipate is having so much more $$ to allocate in our lifetime.  We have increased our WR and are crafting how to spend it all down.  It's a great "problem" to have but it does take a mind shift from the conservative, saving mentality that got us to retirement.

There a lots of choices:
1. just keep accumulating because that's our autopilot - but kind of crazy not to do more with our money
2. increase consumer spending - but not attractive past a certain point as the simple living that got us here is satisfying (how much more food can we eat? how much warmer can we be at night? how much more comfortable can our beds be? not much)
3. increase philanthropy - this is where we're heading and it's really exciting to see the small and large differences we can make through thoughtful giving
4. start a business or two like MMM - can see the attraction for some but not our thing
5. other?

Die with Zero or Die with Pots of Money - you still have to (get to?) craft a life that's satisfying to you.  Use your time and money intentionally.

I think when it comes to spending more there is few things that I can think of, I do not want a big house, 2 br is enough however I could have some land around it and great views by the lake so that could be something. Also when it comes to car I'm looking to buy electric volvo which is going to be the most expensive car I have ever bought, but still looks like affordable in the long run. That point 3 is something we've been thinking also. My wife already spends reasonable amount of time volunteering and this is something I will probably also take on, but we could also consider donating some money when we feel comfortable that what we have is going to be enough.

[ixtap]

I assume I can kind forget that 4% rule as that is to preserve the principle.

No, it doesn't. The 4% rule is designed to not go below zero before the end of 30 years, while keeping up with inflation. As such, it neither promises to preserve nor deplete principle in the average scenario. There may be much better options for you, such as a variable percent withdrawal.

If you are just now learning about SORR and WR, you might also want to look into how SS fits into your plans (assuming US, but many other countries have similar retirement schemes).

[Metalcat]

They're not conflicting ideas.

Living frugally is a lifestyle, die with zero actually just comes down to a withdrawal strategy. The reasoning for doing so it to be able to spend more. If you want to spend more, then use a withdrawal strategy that gradually draws down your principal. It's that simple. Most traditional retirement advice is to gradually draw down the principal, it's just the ultra conservative FI world that focuses on preserving principal because the retirement timelines are so much longer.

Don't go looking for conflicts where there are none.

You DO need to figure out your withdrawal strategy, and 4 months to retirement is a pretty late start on hammering that out. You need to assess your SORR tolerance/strategy and your WR strategy. Most of us do this well before retiring, since some SORR strategies, like bond tents, require taking action before you retire.

Don't let people trying to sell books distract you from how simple this question really is. Are you willing to take more risk to be able to spend more, or are you more conservative? If so, how conservative do you want to be?

That is ALL you need to figure out.

Thanks for this reply, is there any good links to learn more about SORR and WR as this is the first time I ever heard of those terms. I assume I can kind forget that 4% rule as that is to preserve the principle.

I would say I probably want to go very conservative and have already invested into real estate as well as gold, but still a lot of cash to invest, I do want to keep small (less than 10%) to play with crypto's as I've done pretty decent 400-500% gains.

One thing that makes this even harder is I have absolutely no idea about how much we going to spend for living. I have lived most of my adult life in Thailand and we are now selling everything here and wrapping up and move to Finland in January, so 2 weeks into our post FIRE life we will be in a new country and continent.

Okay, what do you mean by conservative? I'm kind of confused by what you are calling conservative.

How did you determine how much to save without first figuring out your intended withdrawal rate?

What *is* your plan? How did you determine you are ready to retire in 4 months? What are you basing this on?

[seattlecyclone]

Put some numbers into cFIREsim. Look at the graphs. You'll see that there's a wide variety of outcomes given the same starting wealth and withdrawal strategy. It just depends how the market does in the particular sequence of years you choose to be retired. This is what is meant by "sequence of returns risk" (SORR).

Doing something like the 4% rule may turn out to be a very lean strategy, or you may more than double your money. The problem is you have no real way of guessing which way it will turn out until a decade or two after you retire. If it turns out you seem to be hitting a favorable sequence of returns, then sure you can probably bump up your spending to well above 4% of your original portfolio without much risk of running out of money. If it turns out otherwise, I hope you're content with the lifestyle you started with.

[Finntastic]

I assume I can kind forget that 4% rule as that is to preserve the principle.

No, it doesn't. The 4% rule is designed to not go below zero before the end of 30 years, while keeping up with inflation. As such, it neither promises to preserve nor deplete principle in the average scenario. There may be much better options for you, such as a variable percent withdrawal.

If you are just now learning about SORR and WR, you might also want to look into how SS fits into your plans (assuming US, but many other countries have similar retirement schemes).

Regarding SS assuming you refer to social security, I think it's safe to assume 0 for us. As of now we don't really know where in the world we will be in 5 years time, but as most of our work is done in Thailand which doesn't really have any SS and I'm citizen of Finland as will be my wife in few years time we are eligable for SS in Finland BUT and this is a big but when it comes to public health care it doesn't really work, yes it's free but for example my father needed knee surgery he would have needed to wait 10 years in the cue for getting one done in the public hospital in Finland (for free) or pay for private hospital which he couldn't afford (most people don't have insurance) so he flew to Thailand and got it done here.

When it comes to pension I'm eligable for that as a Finn, but I believe that system will collapse way before my retirement age (68-69) it's kind of ponzi/pyramid scheme where people working now are paying for the retitrement benefits of the people who are currently on pension, however Finland is heavile ageing society only 2nd to Japan so that is not going to work so I assume 0 government pension and I had private one but they invested it badly and it's now down 0 also.

[Finntastic]

They're not conflicting ideas.

Living frugally is a lifestyle, die with zero actually just comes down to a withdrawal strategy. The reasoning for doing so it to be able to spend more. If you want to spend more, then use a withdrawal strategy that gradually draws down your principal. It's that simple. Most traditional retirement advice is to gradually draw down the principal, it's just the ultra conservative FI world that focuses on preserving principal because the retirement timelines are so much longer.

Don't go looking for conflicts where there are none.

You DO need to figure out your withdrawal strategy, and 4 months to retirement is a pretty late start on hammering that out. You need to assess your SORR tolerance/strategy and your WR strategy. Most of us do this well before retiring, since some SORR strategies, like bond tents, require taking action before you retire.

Don't let people trying to sell books distract you from how simple this question really is. Are you willing to take more risk to be able to spend more, or are you more conservative? If so, how conservative do you want to be?

That is ALL you need to figure out.

Thanks for this reply, is there any good links to learn more about SORR and WR as this is the first time I ever heard of those terms. I assume I can kind forget that 4% rule as that is to preserve the principle.

I would say I probably want to go very conservative and have already invested into real estate as well as gold, but still a lot of cash to invest, I do want to keep small (less than 10%) to play with crypto's as I've done pretty decent 400-500% gains.

One thing that makes this even harder is I have absolutely no idea about how much we going to spend for living. I have lived most of my adult life in Thailand and we are now selling everything here and wrapping up and move to Finland in January, so 2 weeks into our post FIRE life we will be in a new country and continent.

Okay, what do you mean by conservative? I'm kind of confused by what you are calling conservative.

How did you determine how much to save without first figuring out your intended withdrawal rate?

What *is* your plan? How did you determine you are ready to retire in 4 months? What are you basing this on?

very valid questions, so with conservative I mean that I would happy to get 5% ROI for my investments annually.

I haven't figured out how much to save nor have I figured out the withdrawal rate yet. I'm trying to do it right now, however it's hard as I have no idea where in the world we will retire, but I guess this is something that I can adjust a lot. We can live with 1,000$/month if we have to (move to our off-grid farm house in Thailand).

The 4 months comes from my current contract that ends then, yes I could find more work and yes I do have one contract that allows me to do as much or as little consulting work as I can for 120$/hr, and I guess I can always pick up some stuff if I get bored or I need to, but not for long at the age of 43 I'm already one of the dinosaurs in the IT industry =D

[Finntastic]

Put some numbers into cFIREsim. Look at the graphs. You'll see that there's a wide variety of outcomes given the same starting wealth and withdrawal strategy. It just depends how the market does in the particular sequence of years you choose to be retired. This is what is meant by "sequence of returns risk" (SORR).

Doing something like the 4% rule may turn out to be a very lean strategy, or you may more than double your money. The problem is you have no real way of guessing which way it will turn out until a decade or two after you retire. If it turns out you seem to be hitting a favorable sequence of returns, then sure you can probably bump up your spending to well above 4% of your original portfolio without much risk of running out of money. If it turns out otherwise, I hope you're content with the lifestyle you started with.

Thanks that calculator looks great will play with it a bit and see what comes out, great tip!

[Finntastic]

Put some numbers into cFIREsim. Look at the graphs. You'll see that there's a wide variety of outcomes given the same starting wealth and withdrawal strategy. It just depends how the market does in the particular sequence of years you choose to be retired. This is what is meant by "sequence of returns risk" (SORR).

Doing something like the 4% rule may turn out to be a very lean strategy, or you may more than double your money. The problem is you have no real way of guessing which way it will turn out until a decade or two after you retire. If it turns out you seem to be hitting a favorable sequence of returns, then sure you can probably bump up your spending to well above 4% of your original portfolio without much risk of running out of money. If it turns out otherwise, I hope you're content with the lifestyle you started with.

Thanks that calculator looks great will play with it a bit and see what comes out, great tip!

With 40k$ yearly withdrawals and current portfolio ratios I'm getting: 95.56% - Failed 4 of 90 total cycles.
oh and I assumed we are going to live over 100 years... that's pretty good ods eh?

[Metalcat]

very valid questions, so with conservative I mean that I would happy to get 5% ROI for my investments annually.

I haven't figured out how much to save nor have I figured out the withdrawal rate yet. I'm trying to do it right now, however it's hard as I have no idea where in the world we will retire, but I guess this is something that I can adjust a lot. We can live with 1,000$/month if we have to (move to our off-grid farm house in Thailand).

The 4 months comes from my current contract that ends then, yes I could find more work and yes I do have one contract that allows me to do as much or as little consulting work as I can for 120$/hr, and I guess I can always pick up some stuff if I get bored or I need to, but not for long at the age of 43 I'm already one of the dinosaurs in the IT industry =D

Okay, you're using "conservative" in terms of returns, which is what k thought. But I was using conservative in terms of your withdrawal strategy.

So someone could have an aggressive asset allocation and get major returns, but choose a conservative 1% withdrawal rate. You need to risk asses your withdrawal strategy, decide how conservative you want to be or if you are more tolerant of risk.

Actively drawing down your principal, especially early on is much higher risk than a 4% withdrawal rate. That doesn't make it a bad strategy, it just depends on your risk tolerance.

Your risk tolerance will be determined by how flexible you are willing to be. So for example, if you are very willing to cut your costs or pick up work again as needed, then a higher risk withdrawal strategy could make perfect sense for you.

However, if you were inflexible in your spending, then a more.conawrvative strategy would make more sense.

Likewise, for some people an early conservative approach and then later draw down of principal makes most sense. This is common among people who move somewhere very inexpensive during their younger retirement years, and then move somewhere more expensive for the sake of amenities, services, and healthcare for their later senior years, and dip into their principal to pay for it, because they don't need the money to last decades longer.

It sounds like you need to do A LOT of thinking about the risks you are willing to take on in retirement and what you want your retirement to look like. Once you figure out what risks you are and are not comfortable with, then you will see that there's no conflicting approaches, just different approaches that are appropriate for different people.

Basically, the more you understand your own needs and the strategies to accomplish them, the more the approach you should take becomes obvious.

As for reading Early Retirement Now is the go to resource for understanding withdrawal strategies and relative risk. But also, it helps to play around with FIRE simulators for a few hours trying out different withdrawal scenarios to see how big an impact each decision can make.

[Retire-Canada]

One of the key messages from the MMM blog is to appreciate that, despite what marketing departments tell us constantly, spending money and happiness are not the same thing. Out of that comes the idea that once you have a lot of money and you no longer have to work you should pursue making your life great...which doesn't mean spending more money. Of course the opposite is true as well...you aren't going to be happiest because you spent the least money possible.

So first off I'd determine what's important you in life. Map out some retirement plans and don't worry about money just worry about what would really make you deeply happy. Once you have a few ideas figure out what they would cost and how that compares to your finances. If you have the money to do the things that make you really happy awesome then go for it make those ideas/dreams a reality.

My GF and I are never going to have kids and will likely have an ever growing mountain of investments in our accounts. I've got zero interest in spending all that money for the sake of dying with nothing. We will spend money when it means something to us like paying for nicer seats on a long flight when we are older and our bodies are more achy. That said we would be happier right now doing a big road trip and tent camping/hiking/biking along the way even though we could afford to stay in 5 star hotels, eat at fancy restaurants and take private guided tours of the sights.

So what will we do with all the excess money we'll eventually have? Give it away. I'm working on some ideas that I'll incorporate into my will. I'll feel great knowing I supported organizations/causes that mean something to me with the extra money I did not need to live an amazing life.

[bacchi]

VPW

https://www.bogleheads.org/wiki/Variable_percentage_withdrawal

The google sheets version, under the Retirement tab, goes out to 120 years.

It's important to note the "Required Flexibility" section, which is the historical "worst case" withdrawal you could expect in a market drop (if you're invested in index funds). If you get a bad start, it could also be your new starting position.

[Finntastic]

very valid questions, so with conservative I mean that I would happy to get 5% ROI for my investments annually.

I haven't figured out how much to save nor have I figured out the withdrawal rate yet. I'm trying to do it right now, however it's hard as I have no idea where in the world we will retire, but I guess this is something that I can adjust a lot. We can live with 1,000$/month if we have to (move to our off-grid farm house in Thailand).

The 4 months comes from my current contract that ends then, yes I could find more work and yes I do have one contract that allows me to do as much or as little consulting work as I can for 120$/hr, and I guess I can always pick up some stuff if I get bored or I need to, but not for long at the age of 43 I'm already one of the dinosaurs in the IT industry =D

Okay, you're using "conservative" in terms of returns, which is what k thought. But I was using conservative in terms of your withdrawal strategy.

So someone could have an aggressive asset allocation and get major returns, but choose a conservative 1% withdrawal rate. You need to risk asses your withdrawal strategy, decide how conservative you want to be or if you are more tolerant of risk.

Actively drawing down your principal, especially early on is much higher risk than a 4% withdrawal rate. That doesn't make it a bad strategy, it just depends on your risk tolerance.

Your risk tolerance will be determined by how flexible you are willing to be. So for example, if you are very willing to cut your costs or pick up work again as needed, then a higher risk withdrawal strategy could make perfect sense for you.

However, if you were inflexible in your spending, then a more.conawrvative strategy would make more sense.

Likewise, for some people an early conservative approach and then later draw down of principal makes most sense. This is common among people who move somewhere very inexpensive during their younger retirement years, and then move somewhere more expensive for the sake of amenities, services, and healthcare for their later senior years, and dip into their principal to pay for it, because they don't need the money to last decades longer.

It sounds like you need to do A LOT of thinking about the risks you are willing to take on in retirement and what you want your retirement to look like. Once you figure out what risks you are and are not comfortable with, then you will see that there's no conflicting approaches, just different approaches that are appropriate for different people.

Basically, the more you understand your own needs and the strategies to accomplish them, the more the approach you should take becomes obvious.

As for reading Early Retirement Now is the go to resource for understanding withdrawal strategies and relative risk. But also, it helps to play around with FIRE simulators for a few hours trying out different withdrawal scenarios to see how big an impact each decision can make.

aah yeah so I can go down to 10,000k$/year if I have to and still have a decent life I could also pick up some work at least in the early years of retirement later it could be tricky.

[Metalcat]

aah yeah so I can go down to 10,000k$/year if I have to and still have a decent life I could also pick up some work at least in the early years of retirement later it could be tricky.

Okay, but you need to actually quantify what that means in terms of an actual withdrawal plan.

It's one thing to say "I can cut expenses and maybe pick up work", it's another to quantify what that means in terms of impact on your numbers.

If you have the capacity to adjust your withdrawal, then you will want to research variable withdrawal rates. You also might want to run some simulations of starting off with a variable withdrawal rate while you are younger and more able to lower your withdrawal amount through work or cutting expenses. But then raise your withdrawal rate and make it stable in later life when you may not have as much flexibility.

The simulators can help you visualize the relative impact of all of these factors and options.

[chevy1956]

Interesting topic. I have 3 kids and I want to leave them money but not at the expense of my happiness.

I think there are a couple of interesting points about this topic though:-

1. Does spending more money really lead to increased happiness ? My gut feel is the answer is sometimes but not very often and hardly ever for people who are wealthy enough to retire early.
2. I don't think it's possible to put this into a withdrawal strategy. The difference in spending would probably be negligible.

[Finntastic]

Interesting topic. I have 3 kids and I want to leave them money but not at the expense of my happiness.

I think there are a couple of interesting points about this topic though:-

1. Does spending more money really lead to increased happiness ? My gut feel is the answer is sometimes but not very often and hardly ever for people who are wealthy enough to retire early.
2. I don't think it's possible to put this into a withdrawal strategy. The difference in spending would probably be negligible.

Actually just realised one thing reading this,... I got 3 brothers and I remember from very young age that my father used to say that the gift he is leaving behind is to make sure that there will be 0 heritage for us to fight over, so they will donate all into some charity (all that they can't spend) and I totally agree with this, nothing breaks families as much as fight over heritage also there a people who's getting wealthy plans is to wait for heritage... so perhaps this die with zero plans actually is something I have learned from my parents.

[dblaace]

Interesting topic. I have 3 kids and I want to leave them money but not at the expense of my happiness.

I think there are a couple of interesting points about this topic though:-

1. Does spending more money really lead to increased happiness ? My gut feel is the answer is sometimes but not very often and hardly ever for people who are wealthy enough to retire early.
2. I don't think it's possible to put this into a withdrawal strategy. The difference in spending would probably be negligible.

I think there is a sweet spot and it will be different for everyone. The mustachian/FIRE journey is finding it.

[Metalcat]

Interesting topic. I have 3 kids and I want to leave them money but not at the expense of my happiness.

I think there are a couple of interesting points about this topic though:-

1. Does spending more money really lead to increased happiness ? My gut feel is the answer is sometimes but not very often and hardly ever for people who are wealthy enough to retire early.
2. I don't think it's possible to put this into a withdrawal strategy. The difference in spending would probably be negligible.

Actually just realised one thing reading this,... I got 3 brothers and I remember from very young age that my father used to say that the gift he is leaving behind is to make sure that there will be 0 heritage for us to fight over, so they will donate all into some charity (all that they can't spend) and I totally agree with this, nothing breaks families as much as fight over heritage also there a people who's getting wealthy plans is to wait for heritage... so perhaps this die with zero plans actually is something I have learned from my parents.

Not leaving money to your kids is not necessarily the same as spending down your principal though. You could die with 7M and still choose to not leave it to your kids. Spending down your capital is a risk tolerance question.

Focus on that and then make the appropriate decisions for *you* and *your circumstances*.

[chevy1956]

Just a note that I'm reading this book now. I think it may also be relevant that I've borrowed a copy rather than pay for it.

[lutorm]

As we don't have any reason to live wealth behind us I'm thinking why not go with the Die With Zero principal: https://www.diewithzerobook.com/
Obviously we do not need when the day comes so need to leave some safety margin in there, but I think my dilemma is that it's very different to what I was thinking earlier when my plan was that living frugal will allow us to retire earlier.

I haven't read the book but I'd argue this is impossible. Any day, you could die tomorrow. Or you could live until you're over 100. How can you possibly have a strategy that guarantees you die with zero?

Furthermore, given the slight downside of Dying With Nonzero versus the arguably tremendous downside of Living With Zero, it seems like a strange thing to try to prioritize.

[sixwings]

I'm hoping to leave a large estate to my neices and nephews (there are 4 of them). Our estate is going to be divided equally between them. I was the recipient of an inheritance from my grandparents of about 50K when I was 22 and it was lifechanging for me. I want to be able to provide that to them as well and hopefully build generational wealth that provides options to them and eventually their children too.

That said, I'm not going to sacrifice my own happiness so there's a balance to achieve. My plan is to live off interest and leave the principal to accumulate over my lifetime and then give it to them when I die.

[Padonak]

It's a great book but there are very few specific financial tips in it because it's about the mindset.

Highly recommended to those who are too frugal and/or stuck in OMY situation.

[SYNACK]

I still have about a year or so to go before retiring. And I thought of this before. So far I'm thinking about money in retirement lumped in phases. Phase1, for say the first 10 years (ie my 50s until around 62) spend from taxable. Phase2 from 401k starting in early 60s (ie when I can without a penalty). Then SS at 70 to maximize that payment.

Thinking of it in phases from different accounts sort makes it easier for me to understand. It is not the only source of income, but the primary source. I think of income as a base level (ie you have to have) and a more optional level (where it is nice to have like T&E). I want the primary income source to cover that base level. If yes, and if you so desire, perhaps it makes it more straight forward to deplete the previous source that the current phase.

Also I think spending is somewhat variable and perhaps correlates to such phases... who knows. Like for example we may prioritize certain things in our 50s that maybe different than 60s or 70s etc.

The downside of all that is that frugality is built into my genes :-( I'm one of those people that don't mind a middle seat on a cross country flight just to save a few dollars...

[joe189man]

ptf

[WalkaboutStache]

I am more or less in the same situation as you, except that I am thinking of going from a VHCOL to VLCOL or LCOL, albeit with a first year in my current Very High Cost of Living Location.  I'll need to be watchful and flexible in that first year and am setting the next few months of earnings aside for a cushion.

My original plan was to pull the plug and then work on projects a few months every year just for the living expenses of that year, but I am finding that I have less and less bandwidth for that, so I adjusted for a permanent retirement.  If I do any work, it will be related to my life passion, which pays peanuts where I am and nothing where I intend to be.

I was lucky to find Big ERN's series on SWR and SORR a couple of years ago (https://earlyretirementnow.com/safe-withdrawal-rate-series/), had a read, and then read it a bit more deeply recently.  It helped me readjust my rates to deal with the inherent risk of a 4% SWR, and run some simple simulations of various scenarios far into the future. Nothing is certain, but I feel better about my plans.

[peabody58]

FIRE'd back in 2015.  Was a little worried the first couple of years and we were very frugal.  As each year passed, we became more and more open to spending.  Our Retirement Income is like a 5 legged stool: good solid cash flow above our budget with extra savings to boot.  We won't even need to touch our IRA's until 72 and that's only for the MRDs. 

So we have now approached spending as "if it enhances our life", then lets do it while we're still healthy to enjoy it.  Added a Sun Room and expanded Pergola Patio space to our Forever Home.  Started international travel.  Wife got all her "Trophy Wife" cosmetic surgeries she wanted after losing 70 lbs on her own.  Going to concerts, shows, etc.  Covid slowed down our plans, but we're getting back into the swing of spending guilt and stress free again.  Upgraded wife's old car to a 2014 VW Eos Convertible (Red of course).  Just added on another Disney DVC Timeshare, and got more Annual Passes.  Treating our kids to some nice Family GTG vacations.

However, it is only because we lived the Mustachioning Lifestyle early in our career, that we are now able to stop being so 'frugal' and be more spending on stuff that makes us happy.  Wife just looks at me sometimes and say "Who are you and what have you doe with my husband?"  Don't worry kids, there will still be something left when we depart.

[soccerluvof4]

A little different in that we have 4 kids and struggled in part with what we want to do and when. We came to the conclusion that we will help them now with things like college etc.. and during being fire'd like now have a healthy budget and between our Real Estate and if something is left than so be it. The Real Estate alone should give them a lift later.