Who said anything about replacing something that does not need replacing? Things age yes? Some things need to be replaced every so often (car, appliance, windows).
It does not make sense to wait for it outright die to then extract maximal value. Capitalize on a sale, or a quiet time in the year relative to the service needed. If you’ve been putting off repairs and maintenance to “spend less” well at some point you are going to have to pay the piper. The idea is to pay the piper while you still have a steady income, no?
This makes no sense. If you are replacing them only when they need replacing, then there is no way to direct that timing into right before you retire. So either you wait until they truly need replacing, or you replace them right before FIRE. I don't see how it can be both. When it needs replacing is when it needs replacing. Your blender doesn't peer out of the cabinet to see if you are home during the day and decide to off itself because you are still working and it knows you want to replace it before you retire. It dies when it dies. Same with your car and your windows and your carpets, flooring, and furniture. Why would you replace carpet before you quit, when it could last another couple years? In the long run, that costs you more because you lost 2 years worth of the initial carpet life. And if you are replacing it because it truly needs replacing, then you are in no way tinkering with anything in a way to "pay the piper" less money, or even pay him sooner or later than would happen naturally.
And yes, at some point you have to pay for these things. Whether that happens 6 months before you retire or 6 months after is irrelevant, and in fact on a macro level, the latter buys you an extra 12 months of letting that money grow a little bit, so after it is spent, you still have a few dollars extra left behind.
Not sure I buy that…
If you are a true MMM fan, you purchased a 15 year old 1990 Honda Accord the day you started working. 15 years later, that car is now nearing its EOL being 30 years old, just as you are approaching FIRE. Guess what. Time for a new car!
I don’t believe that FIRE is just single day that comes and goes. You can often chose and optimize your exit point. Which I think is what this thread is getting at. Optimizing expenses around a flexible fire date.
The easiest solution to buying down your expenses prior to FIRE may be to just move into a newer home. You could get another 20-30 years before anything BIG is needed.. Any by then, your stash has settled and grown and you’ve survived any initial market corrections and can now support some healthy maintenance related withdrawals. But I would never dare suggest such a maneuver knowing how folks here would react....!
Not sure if I want to withdraw 40-60k for a new roof and HVAC on day 1 of FIRE. If it’s close to coming due I would simply fix now and add a modest delay to FIRE. Or being a few years out, start planning ahead of time and charting my path.
I wouldn't love that, either. But how is it better to withdraw it 6 months before FIRE? And increase the chances that you will need to buy an additional roof in your lifetime (though admittedly not by much)?
As for your car example, if you intend to replace the car at 15 years, then that's a specific time, and has nothing to do with whether you FIRE at the 16 year mark (so new-to-you car one year before retirement) or at the 14 year mark (new car one year after retirement). And that's the point. Things wear out when they wear out. If you buy a new car at 14 years instead of 15 so that you have that expense before retirement instead of after, you are more likely to need one extra car purchase in your life because you threw away one viable car-year. And you didn't save any money buying early (unless your employer offers some sort of car discount), and you took money out of the market 12 months sooner.
The math is pretty simple and clear. Buying stuff sooner because it feels better to buy it while you have paycheck doesn't make sense. Unless, I suppose, you keep the FIRE number the same, so you retire with $700,000 and a new a/c vs. $700,000 and a 30 year old a/c, and you don't account for that in your overall budget (which would be short-sighted). But of course in that case, you will just work longer, so it's apples to oranges because with the same retirement date, writing that a/c check the day before or the day after, or the 6 months before or after, makes no difference.
And maybe that can help you see the math more clearly. If you decide your last day of work will be June 30, does it matter if you buy a replacement car June 29 or July 1? Surely you don't think it makes any difference. So why would June 1/July 30 make a difference? Or Jan 1 and Dec 31? It's all the same. Except that in the latter grouping, your money actually has more time to sit and grow, so you come out slightly ahead, on average.
This makes no sense. If you are replacing them only when they need replacing, then there is no way to direct that timing into right before you retire. So either you wait until they truly need replacing, or you replace them right before FIRE. I don't see how it can be both. When it needs replacing is when it needs replacing.
Two examples come to mind:
- HVAC. If you replace it when it fails, it will be likely be peak of summer or peak of winter (for heat pumps), when everybody else replaces them. You have no negotiating power, and weather puts additional pressure on you.
- Water heater (although the cost is rather trivial, especially for electric+DIY). You really don't want to wait until it fails.
But in the grand scheme of things, that's not what makes or break your FIRE plans, and for many, I suspect, not worth the brain cycles.
Would you make the choice to replace the a/c or the water heater preemptively if you weren't close to FIRE? If so, then the decision has nothing to do with FIRE so it's not an example of making post-retirement life cheaper, or a decision where the timing is based on a retirement date. Or an example of how doing something before you quit is cheaper than doing it after you quit.
And if you wouldn't make that decision if you weren't retiring, then the logic is deeply flawed. Either you replace that 25 year old water heater now because you believe it needs replacing before it goes and you feel that's the best approach. Or you don't do it now because you don't feel it is needed. And that answer should be the same whether you retire in 6 months, 6 years, or did it a year ago.
You can't conflate preventative maintenance and updates with maintenance and updates done based on the fact someone is retiring soon-ish when they otherwise would have waited. Totally different questions. Totally different logic.