This article originally appeared in HumbleDollar.
This has been a year of living large in the Kerr household.
I just finished adding up the numbers for 2024, and between my son’s wedding in Colorado in June, my own wedding last month, our honeymoon afterward, a vacation to Key West, a new car for my new wife, and various long-overdue repairs to Rachael’s townhouse, I spent upwards of $60,000 on items I hadn’t budgeted for in 2024.
The tally doesn’t count the $9,000 I spent on a hot tub for the mountain house. That purchase was financed by the last of my restricted stock grants that I took with me when I retired from my former employer three years ago.
Those are hefty expenses for a 65-year-old who no longer has a full-time job. All I can say is, thank goodness for my part-time gig as a corporate executive writer. If I didn’t have that money coming in, I would have burned through most of my liquid cash and had to tap my retirement savings earlier than planned. As it stands, I was able to cover my financial splurges while ending the year with roughly the same amount of cash as I started.
More to the point, if I didn’t have the work income, I wouldn’t have done all the things I did this past year. Rachael and I would have had a much simpler and less expensive wedding. We would have put down less and financed more of the cost of her new car. We would have skipped the Key West trip and put off the house repairs a little longer.
But that’s why I continue to work part-time—to fund experiences and other discretionary items during the early part of my golden years, while holding off on drawing down my retirement savings. Those savings are sufficient (knock on wood) to provide a comfortable, albeit not cushy, income over the course of a 20- to 25-year retirement, but I figure the longer I can hold off on drawing on them down, the longer they will last me in my older years.
The same is true for Social Security benefits. While I could begin drawing benefits now, I will take a hefty haircut over what I could get if I wait to my full retirement age of 66 years and 10 months. On top of that, I’d have to pay higher taxes on my Social Security benefits because of my earned income, and I might lose much or all of my benefit to the Social Security earnings test. So, why not wait another year and a half and thereby avoid the haircut?
In the meantime, I’m acutely aware of time’s winged chariot at my back and I have no interest in holding off on trips and experiences I’ve long wanted to do. As Jonathan Clements’ recent cancer diagnosis has brought home to his readers, life is short and fragile, and we best live it now.
That’s what I’m doing with my current income. I could try to sock some of it away, but frankly, I’m done with the accumulation phase of my life. As long as I can maintain a healthy emergency fund in my money market account, I intend to spend every after-tax penny I make on trips, gifts, and, yes, occasional luxuries. I’ve worked hard in my life. Why not enjoy it while I can?
Take our wedding celebration in mid-October. Yes, we could have made a trip to the courthouse and saved more than $15,000. But what an event it was! We had 90 relatives and friends from as far away as Hawaii and England. How often does that happen—other than at wakes and funerals?
Likewise on getting a hot tub. I’ve always wanted one, and soaking in that tub for 20 minutes does wonders for my aging neck and joints.
Interestingly, retirement has taught me a few things about myself that I didn’t fully appreciate before. All my working life, I’ve avoided spending money on extravagances that others in my income bracket might have had no trouble with, such as going on expensive trips or shelling out tens of thousands of dollars for a country club membership.
I told myself I was being responsible, thrifty, frugal. How could I spend on extravagances when I had three kids to put through college and a retirement fund to build?
But you know what? I like the finer things of life as much as anyone. I just needed the psychological comfort of having a solid financial cushion under me to enjoy those luxuries.
Now, I’m there and I’m opening the valve of my spending. Hopefully, I’m doing it responsibly. Only time will tell.
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