August 23, 2021 at 2:57 pm #1096920PheebersParticipant
First of all, let me start by saying I know this is a non-problem to have, and I’d never discuss it with anyone in person because I’m not an idiot. I hope it isn’t offensive. But it’s something that has happened to me and if anyone else has experienced it I’d find advice helpful.
My husband and I are normal professionals with normal jobs. For the past 30 years, we’ve lived frugally – we bought a very modest home, we rarely vacationed or ate at restaurants, we bought used cars, we didn’t keep balances on credit cards, and we always invested our spare money. That (combined undeniably with luck; we were never unemployed) means that now we find that we’re…wealthy.
Our kids just graduated from college, and now we’ve got that tuition part of the budget again, and we’re realizing that we can spend more on ourselves and still meet our goals. So we’ve leased nice cars and are updating our house, and we want to loosen up a bit as we’re nearing retirement. Part of my problem is guilt. I’m donating money to some good causes, but I can’t pay for friends without it being weird. And I worry about losing my sensitivity – just today I was about to suggest a friend meetup at an expensive coffee place when someone else suggested a park, and I realized they didn’t want to pay anything. When friends are worrying about saving for retirement and paying for their kids’ colleges I’ve been able to help with good advice but when they say they have nothing saved for retirement at age 50 I just feel sad and guilty that I do.
So I guess my question is, now that we’ve achieved our financial goals, how do I relax and enjoy it? Please don’t roast me, if I came across badly it’s hopefully just because I am bad at explaining.August 24, 2021 at 6:01 am #1096933
Hmm, it sounds like you guys did “skinny” FI/RE, which is definitely catching on among younger people. But boomers and older Gen X were more likely to think everything would just work out for them and didn’t save as much. That’s a huge generalization, obviously, but my parents actually have *pensions* and a lot of social security, and those things alone give them as much per year as a good salary! Then there’s their savings / investments. Younger people know theres not going to be that kind of cushion for them, and some of them are saving a large percentage of their income and being super frugal with the goal of being financially independent in their 40s and 50s and being able to do what they want.
But it sounds like you feel surprised and kind of guilty to have actually achieved financial independence/built wealth. You shouldn’t. But I wonder, did you have a detailed financial plan? Do you have one for the future? You’ll need to do tax-smart income planning and that kind of shit for retirement. You also want to protect your assets against the next bear market.
But I would also say, pay attention to what you’re feeling, sit with it, unpack and examine it, and try to figure out what’s making you feel that way (hint: look at your past).August 24, 2021 at 6:04 am #1096934
Also, it’s super normal for people your age who have built wealth, to struggle to move from a saving mindset to a decumulation mindset in retirement! Financial planners help with that.August 24, 2021 at 8:07 am #1096945LisforLeslieGuest
Oh you are not alone. You did everything right so don’t let yourself feel that by being careful with your money you somehow did something wrong.
You didn’t win the money, you didn’t inherit the money, you earned it, you saved it. It’s ok to use that money to do things that make you happy. Spend it on a car. Spend it on a doughnut. It’s ok. Because you’ll still be charitable and you’re not going to run through your savings in a whirlwind of ill-advised spending. You’re still working against a budget, it just happens to be a bit larger and that’s OK.August 24, 2021 at 8:14 am #1096946Dear WendyKeymasterAugust 31, 2021 at 3:52 pm #1097173PheebersParticipant
Thank you, all. Kate, sorry I missed your response before.
Yes, we had/have a detailed plan. It’s EXTREMELY detailed. I download, check, and reconcile all of my accounts daily, which isn’t nearly as pathological as it sounds as my profession is accounting. I’ve been doing it since I was a teenager in the 80s and Quicken was DOS based. I actually enjoy that part quite a bit, as I like organizing! So when I say it all caught me by surprise, I don’t mean I wasn’t looking at my balances, I mean more that it all just registered with me.
We have the majority of our investments with a manager now and I use Excel to create “what-if” scenarios on a regular basis so I don’t expect we’ll suddenly squander it all or take excessive risk. It’s just…weird to think if we really want to do something, or if an emergency happens, it isn’t a problem. It’s a different mindset. I’m truly grateful for how lucky we’ve been.September 1, 2021 at 9:48 am #1097203
Oh ok, great! It was the “surprise” element and also that fewer than half of people in the surveys I do with Mass Affluent and above, actually say they have a financial plan!September 1, 2021 at 10:08 am #1097204LisforLeslieGuest
@Kate – I’m actually shocked that half have plans. My, albeit rather limited perspective, is that most people have “inherit from parents’ as their primary financial plan.
A friend recently retired and knows that she set things up so that between her investments and pension, if she manages to a budget, she has indefinite funds. Still, she’s freaking out a little because you never know right?September 1, 2021 at 10:17 am #1097205
Fewer than half! Oh, but you’re surprised it’s even that high. Yeah…
I work for an investment company after years of focusing more on consumer packaged goods, so I’m all about this shit now. And yeah, you never know what calamity might happen with the stock market. But the simulations in my plan are default-set to a worse-than-average market. If I set it to “average” or “better than average,” things look great. In a bad market, I might need to tighten my belt a bit (this is without factoring in inheritance). Having a plan definitely makes me feel more confident than when I was just doing 401(k) and saving with no plan.September 1, 2021 at 10:38 am #1097206ktfranParticipant
The husband and I will have zero inheritance, so def have to not account for any of that $.
I have to laugh, I remember my paternal grandparents… they would talk about inheritance, etc. like it was a lot of $. When they passed, I think their four children ended up with $40k each. Not insignificant, but definitely not a windfall.
September 1, 2021 at 11:00 am #1097208LisforLeslieGuest
- This reply was modified 3 weeks, 2 days ago by ktfran.
Yeah the inheritance fallacy is going to be a rude awakening for a lot of people. People are living a lot longer than they used to and the cost of staying alive is a lot more expensive.So for all the people my age whose parents are relatively healthy and in their 70’s, 80’s, 90’s – they are spending spending spending.September 1, 2021 at 12:03 pm #1097211ktfranParticipant
My Grandpa decided to sell his house and move into a senior independent living facility, which I’m glad he did. But that quickly depleted a lot of his resources.
The husband and I definitely talk about where we want to live and what kind of place makes sense as we age and will need more support and make sure we have the resources to accommodate that. For instance, if we want to stay in the City, our place in between now and some type of assisted living community will likely be an elevator building with a doorman. Although, I have a lot of friends who aren’t having kids. I tell them that my dream is to live in some kind of commune with all of them. If only!