The Retirement Spending Lies All Retirees Believe

When we make more money, we spend more money, and we're VERY good at coming up with non-essentials on which we waste our money.  Don't buy the house that the mortgage company says you can afford. Look for a house that is HALF that amount. "I've been approved for $350,000!" That's great! Now, look for a house in the $175,000 range. Smaller, more affordable housing needs to make a comeback. Builders only make houses that will sell, and those houses are driven by what the banks allow people to borrow. Not a lot of people are interested in a new house under 1500 sq/ft these days, so builders don't construct smaller houses. Don't go into debt spending money you don't have to buy stuff you don't need to impress people you don't like. I wouldn’t have known this if not for my advisor.

I feel retirees should be focusing on under-the-radar stocks, and considering the current rollercoaster nature of the stock market, Because 35% of my $270k portfolio comprises of plummeting stocks which were once revered and i don't know where to go here out of devastation.

The key is expenses. Low expenses, low amount needed for retirement. I have only averaged $50,000 a year over the last three years. Home paid off and no debts.This is less than 1% of my portfolio. Did all major work to my home back in 2020, new roof, siding, paint, along with renovating the bathrooms. Can get a fully subsidized ACA plan, keep my AGI in the 12% bracket and still live the life I currently do as a successful business owner. Just gotta keep that "Just one more year" voice out of my head. Retirement date, Aug 30th 2024.

Retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My parents both spent same number of years in the civil service, but my mom was investing through a wealth manager, and my dad through the 401k.

Although I have interests in global economics I don't watch the news anymore... I have enough FUD lol. Thanks for this news and offering your insight on how to navigate during unfortunate times/events like this. You're right about keeping level headed when investing so that's why I think it's important to limit the amount of FUD we consume. I don't watch the media but the news that you present has enough to know issues going on without riding the emotional rollercoaster if I were to watch the news everyday. Now I buy and just trade long term more than ever, I have made over 16 btc from day trading with Francine Duguay in few weeks, this is one of the best medium to backup your assets incase it goes bearish.

I’m 79 been retired twenty years. We update a spreadsheet showing all our financial assets on the first of every month and the graph over the last few years shows us if we can or should adjust our spending. Having said that we enjoy our lifestyle and don’t want to spend more. My wife and I spent the morning cycling in the hills amongst beautiful scenery and stopped along the way to eat a sandwich on a bench with an incredible view. I’d rather do that than anything. There is no point spending for the sake of it, as you get older the desire to impress vanishes. If you do a lot of exercise and eat right your spending may not follow the smile pattern. When we first retired we used to ski all day with just a quick snack for lunch, now we often just ski the morning and then go for a good lunch with a couple of glasses of wine so we are spending more.

Finally!!! A CFP that addresses the elephant in the room. CFPs don’t want you to spend down because they charge based on AUM. I would never hire the individual. Charge me a flat rate of $5 or $10K for advice but damn if I’m going to pay you 1-2% of my portfolio balance.

It’s about time somebody explains it the right way. I’ve seen so many people that retire from work and within 10 years they’re dead. Some of these people were not in the best physical state and I told them to enjoy your life while you’re still have it I understand people want to give their kids and family, a nest egg, but you worked your whole life and should enjoy it first.

Nice video - I completely agree that the financial services industry is purposely trying to make people afraid of spending their own money.

I retired at 50 because I didn’t want to die while still slaving away. I then transitioned into travel as a job and lifestyle and would always encourage people to stop dreaming and start doing. So many people work until it’s too late to travel and really enjoy the fruits of their labor. I’ve always known better and love your honest approach to what should come next.

You are certainly the "thinking mans" YouTuber. We all know that everybody's situation is different and one size does not fit all in retirement. Excellent content.

Thank you AGAIN for being a transparent ethical financial educator always. I have worked with you for a few years now and you have gotten me debt free outside of a 2.99% mortgage. I never thought I would be so financially ready to retire so thank you and your team!

The severity of failure is at least as important as probability of success.

Great video! I sort of already came to your way of thinking on using those "spending bands" when I was modeling this out in New Retirement. I keep my base living expenses all throughout retirement, but then I am adding 5 year "bands" of generic "discretionary spending" which are much higher in the first 5 years, then slowly taper down for the net couple 5 year bands. This video and the sources you list are why I am less afraid of running out of money, and more afraid of not spending enough money and missing out in earlier retirement on the fruits of all our labor and saving!

This is probably the best video on retirement spending I have seen so far. Bravo.

Invest in the financial markets before retiring by diversifying across assets, allocating a small portion of your portfolio, staying updated on market trends, and considering long-term holding to balance risk and growth.

Awesome 😊. I appreciate that you bring the data to back up your analysis. "In god we trust, all others bring data."

I know four or five people who took social security early and retired, not long thereafter. And I see them around because they come back to work. Looking for some part-time income. One thing to keep in mind is that the United States is absolutely a brutal place to be if you don't have money. If I leave some money behind for the wife and son after I croak that's fine by me as long as I'm not being hounded by bill collectors. Because one of the best things about a cushion of money is KNOWING THAT IT'S THERE. It's not like I intend to sit around in a rocking chair all day, although that might not be so bad. I have 40K in hobby related equipment and can keep myself amused for quite some time with the stock of stuff on hand.😊

$82,000 in first year of retirement? How real is that? That’s more than I ever made while working in one year!

Thanks Eric for another very helpful and informative video!