One of the hardest retirement transitions that I encountered wasn’t a loss of work identity or social isolation. Yes, I did work through some of that but those were rather quick and manageable. Here’s the thing that threw me harder- good savers are lousy retirement spenders. It has been the bigger and longer lasting FIRE transition. I still occasionally struggle with it, even after 11 years into my early retirement.

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Good Savers To Lousy Retirement Spenders

Having been a successful saver and now lousy retirement spenders is certainly a fortunate problem to overcome. Especially when a Fidelity Retirement Savings Assessment found 46% of American households are at risk of not being able to cover essential expenses in retirement. The whole reason we saved as well as we did was for a better future. Sure, when it comes to spending there are all the numbers that must be respected. But then there’s the nagging mental side of things when making this retirement spending transition regardless of how good the numbers look. 

Frugal Living Got Us Here 

There’s nothing extreme about our early retirement story. Everyone has to define their own livable frugality to meet their financial goals. For our family’s frugality, we never feel like we live a deprived life. But we also don’t enjoy spending money thoughtlessly. There will always be needs, wants, and nice to haves in life. 

During the FIRE journey we were really good at sticking to what we defined as our frugal budget. It focused on our needs and only what brought true happiness to our family. A game that was hard won in the face of all the consumerist temptations and social pressures to fit in. 

As hard as it was to create what became good frugal living habits, once the game is won and numbers look great it’s just as hard to draw against savings and decide to spend a little more. Maybe enjoy some wants and “nice to have or do” things that were long set aside. We found early in our retirement tendencies to even scale down spending on things long considered part of our budget. 

The Balance Between The Retirement Budget and Covering For Longevity

A new mental spending boogaloo started to rise up several years into our early retirement. Aging adds new dimensions that I really didn’t fully appreciate in my youthful retirement planning and early retirement living. The realized reality is that our retirement portfolio and spending is a lifelong dance with changing music and tempos. I’ve already found that out as I get older. Life’s tempo does start to slow down. Aging adds new dimensions long before what we consider old age. 

Like most people, my retirement planning was more focused on the portfolio financial swings that came with market volatility, future projections, and possible inflation.

There was motivation to get out of the rat race early but I should’ve also had a higher focus on the diminishing years to play on the planet. There’s a high value associated with youth and health that is often missed in our calculations. I was doing everything right to stay fit and healthy. That might have influenced my thinking. I didn’t fully allow myself to focus on the likely future negative age related health issues that could surprisingly appear and disrupt my perfect retirement plan. 

Good retirement calculator scores help settle a retiree’s spending-troubled mind. But we just don’t really know how long we’ll be on this world and under what health conditions. I think that’s the monkey wrench in the mental works for triggering most of the lousy retirement spenders syndrome. Even without fully thinking about it, it’s always there: The fear of outliving our money, which of course is a worthy concern. It just has to be reasonable and balanced with living a purposeful retirement life, not a financially fearful one. 

My wife and I have already experienced a couple of unexpected health scares, which adds to this reluctant retiree spender mix.

These came before we reached the traditional early retirement age of 62. There’s the highly probable cost of covering future unknown but inevitable medical issues. I will admit, it took our medical scares to wake us up. All of a sudden our focus was forced to change. Now we truly realize there needs to be a balance between having enough to pay for what comes but also put a value on how we really want to spend the healthy time we do have left. 

How We Overcome Lousy Retirement Spending Syndrome

Old spending habits die hard. 

It takes time to transition from saver to spender. For us it had been a far more gradual transition over time. Regardless of how good calculated financial results looked, we knew there was little headroom with our less than million dollar portfolio and we needed to slowly and cautiously test them first. It took us seeing reality based results bounce against the simulations. Now eleven years into early retirement it appears any past financial anorexia on our part was for not. The numbers held up better than expected, even with surprises like rising healthcare costs.

My takeaway: Give yourself the time to make the retirement spender transition.

Track and test as necessary. But there’s wasted time in worrying or cutting back beyond the budget that got you to retirement or cutting the retirement budget numbers used in your retirement financial calculations. Trust in your ability to recognize any problems. Be flexible enough to counter them.

Updated our spending quotient.

To get to early retirement our spending was always done with purpose. We spent on needs and only what added real happiness to our family’s life without fluff and waste. Now we’ve also added to our spending quotient the permission to allow for spending to reduce stress or simplify life. 

Previously in my younger form if it was something I could do myself I wasn’t going to pay someone else to do it. I still struggle with this issue. But there are things I’ve always hated doing even though I’m fully capable of doing it. Life is much better letting go and paying for qualified professional tasks that need to be done. 

My takeaway: Doing full due diligence with cost comparisons and client reviews when applicable will satisfy frugal financial tendencies.

That’s what helps with mentally accepting this form of spending. 

Spending on unique experiences, each time might be the last time.

We have kids and grandkids. I remember my grandparents but it’s limited to visits with a lot of quiet chatter and sitting around waiting for mom and dad to say it’s time to go. That’s also the subject of every old photo I look through. There are no special experiences to remember them by. We’ve tried our best to be part of our adult kids and our grandkids lives. We’ve found that spending a little more on experiences with them is a whole new level of joy in our retirement.

Building memories of shared vacations and spending on experiences now with them instead of worrying about leaving more behind when we ditch this world makes for a more satisfying retirement. All of those opportunities evaporated during the pandemic and now with vaccinations and reopening of life, we look forward to returning to this big part of our retirement happiness.

My takeaway: We remember how hard it was for us when our kids were young and we didn’t have the resources or money to do a lot of things.

From vacations to simply babysitting. Doing things now that makes their lives easier while the grandkids are still kids makes for our happy retirement and will hopefully be remembered. Budgeting for and mentally opening up some of our spending so we can offer to do things with them that they might not normally be able to do spreads that joy across our family. 

YOLO with a twist.

Falling into the “You Only Live Once” thought process is usually a sign of overspending and poor financial decisions. Certainly a financial curse to many and something that must be tamed when tapped. But if there’s ever a time to recognize some of the wisdom within YOLO it’s when you have had a close call or are otherwise finally made fully aware that there’s an eventual end date.

As the years tick off, any unchecked bucket list items need to be seriously addressed or just scratched off. It’s not even about how long we will live. It’s about how long we will be fit and healthy enough to accomplish them. All of course with respect to budget and portfolio constraints. My misstep was allowing spending reluctance to overtake any other thoughts.

My takeaway: There are things I missed an opportunity to do because I didn’t get off my keister earlier to make them happen.

Missed opportunities that I either can’t do now or even really want to do now. But I still wonder if I have missed out by not doing them because of my lousy retirement spenders syndrome when my life’s time was right to do them. I will never know. But I’ve pledged that I owe it to myself to do a better job of it going forward. 

Once we retire after a successful run of years saving and investing to pull it off, changing from saver to spender will mess with our minds. For my wife and I, it has been a long gradual mental adjustment over many years that still challenges us. 

Being aware and having new reasons to combat mental tendencies to unnecessarily hold retirement spending back even when the numbers support relaxing spending reluctance is the first step. Then it’s giving ourselves the time it takes to work through this transition and the permission for the occasional purposeful splurge for a better retirement life.