We are in the same boat. About two thirds of our income is reinvested.I answered based on the CRAs reconing, but most of that is DRIPs or is otherwise reinvested. I actually spend half of that.
We are about two years away from retirement and it will certainly be an adjustment going from saving to spending. We plan to ease into it as well as our retirement income will be higher than our current spend. We will be cautious, but at the same time, we want to make sure we enjoy the benefits of all those years of saving by spending more on travel, making our day to day life easier, gifting, donating, etc.
We ran a tape on after tax total spend for the few years leading up to early retirement. We did not care about the categories, only the total number. Then we made assumptions about our income and expenses in retirement. Several of those assumptions turned out to be wrong. Inflation and investment returns among others. Plus a percentage for margins of error.
What was odd is that we changed our lifestyle completely. Sold our home downsized. Did not have a home for almost a year. Then rented for four years prior to buying,
Oddly enough, that after tax bottom line estimate of what we would spend held true for the eight retirement years prior to covid. Dumb luck.
I still run a tape on total after tax annual spend. Tax payable and installment tax payments come from a drawdown on the portfolio as do any monies required over and above our after tax monthly income items.
Ditto for us. At 70 last thing we need is more shiny things. We spent a number of years downsizing. Now complete we are trying to ensure that this accumulation business does not get the better of us. We still have china/crystal glasses in unopened boxes from our move 12 years ago. It can be a challenge when you have some basement storage space. Too easy to avoid making a decision.I am 76 and my spouse is 72. As we age we are discovering that we don't need the income we are getting and as a result we are doing more giving and continue ti invest excess income. We could buy more things but the reality is we are trying to get rid of things . We are content with what we are doing.
We have travelled to our Texas winter home in both 2020 and 2021 and must say the covid retape is becoming a disincentive for travel. Agreed travel is our preferred option over buying stuff.Ditto for us. At 70 last thing we need is more shiny things. We spent a number of years downsizing. Now complete we are trying to ensure that this accumulation business does not get the better of us. We still have china/crystal glasses in unopened boxes from our move 12 years ago. It can be a challenge when you have some basement storage space. Too easy to avoid making a decision.
The more years we get into retirement the more our thoughts and our desires turn to experiences rather than things. Given a choice between something like a new car or an extended trip to Africa, Australia ,or SE Asia, etc. we will take the travel in a heartbeat.
My spouse still laughs about this. When we first met she had hardly been west of Toronto or east of Ottawa.
We did not travel during covid. We have been watching the numbers. The numbers and the practices are scary to us in some countries.We have travelled to our Texas winter home in both 2020 and 2021 and must say the covid retake is becoming a disincentive for travel. Agreed travel is our preferred option over buying stuff.
Good discussion for us young guys to read.
I am always wondering what to do in the "spend now vs. spend later" decisions, as a 30-something.
It does sound like many are advocating, in hindsight, a live well during your 30s-60s and live adequately during your later years approach, instead of the reverse.
If I don't lose my job and I get an inheritance that's worth "a whole house" by age 60, i.e., the status-quo and most likely scenario, then we're going to be exceptionally well off by my early retirement at age 55.
Even if I lose my job and the inheritance is very small for some reason, we'll be perfectly fine as long as me and/or my wife have some OK job, enough to pay the bills for the next 25 years, we just won't be rich.
The only way to get in real trouble is perpetual under employment forever, for both spouses, and no inheritances at all.
Anyways my kids are under 3, so it really doesn't matter yet right now. But I constantly wonder what type of experiences and lifestyle I want for them from age 5-18... I really don't want to end up in this CMF $15k/month retirement club and regret it.