retirement spending

[LivingAlmostLarge]

http://money.cnn.com/2017/03/29/retirement/saver-spend-retirement/index.html

I sent this to my mom. I found it very funny because my mom is exactly this person. She is retired and yet she refuses to touch her savings. She complains about being on a fixed income but when I try to get her to understand she should spend what she saved she gets annoyed. Because my dad is still working (at 86) she still puts money every years into a Roth IRA, even though my dad has to take RMD out of his accounts.

Even with all of this she can't understand that she should spend in retirement what she saved. She's just not able to grasp the concept.

I wonder if all savers after saving their entire lives can?

[97guns]

The key word is fixed income, I think a lot of retirees on skimpy fixed incomes have the mindset that they shouldn't spend, they understand inflation have gone through bad economies and fixed incomes usually do not compensate

[kork13]

Perhaps you should approach it differently.... Ignore the money, and just encourage them to do things that they enjoy. Because that's what is really important -- quality of life, not volume of spending. Whether it's travel, education/learning new things, cooking, or gardening -- just encourage them to find and do things that will make their lives enjoyable. The money will take care of itself, and as they do enjoyable things and improve their quality of life, I'd bet that her concerns with being on a "fixed income" will alleviate as well.

Separately... I've never really understood the idea of being "on a fixed income". Sure, if your only income stream is SS and perhaps a pension (that may or may not adjust to inflation), I can see how that would be concerning. But if you have investments that you draw upon, you have all the flexibility in the world to adjust your income as required. Sure, you have to plan for keeping those investments intact for the future, but there is still flexibility there to drive the train on your income.... I dunno, I'm probably missing something...

[disneysteve]

My mom is like this, too. She lives off of her SS and the income generated by her portfolio but never wants to touch the principal. Well over the years, as interest rates have gone down and cost of living has gone up, that's gotten harder to do.

I finally ran some numbers last year and showed her that she could start drawing down principal and give herself an extra couple hundred dollars per month in income and her portfolio would still last her until she was something like 121 years old. I know she took some money out but I'm pretty sure she's not doing it regularly.

By the way, she is almost 87 years old.

[disneysteve]

I've never really understood the idea of being "on a fixed income".

I've always disliked that term, too. In reality, most of us are on a fixed income. We work 40 hours a week for $xx dollars per hour and that's our income. We need to base all of our spending and saving decisions on that amount. Sure, we could put in extra hours or pick up a side job and earn more, or change jobs entirely, but for the most part, our income is what it is.

[LivingAlmostLarge]

I don't get fixed income. I feel like retirees are much better off because they have guaranteed income from SS and pensions or savings. Workers are still saving and they can lose their income stream.

[disneysteve]

I don't get fixed income. I feel like retirees are much better off because they have guaranteed income from SS and pensions or savings. Workers are still saving and they can lose their income stream.

It's fixed in the sense that they can't really do much to change it. You or I could get a promotion or a new job or a second job. If you're living on SS and/or a pension, that amount is fixed other than COL adjustments.

[LivingAlmostLarge]

I guess so. I find it odd that in fixed income but many have guaranteed pensions or like SS versus the tenous nature of being fired from a job.

[Fishindude77]

I'm glad there are people that live this frugally, because there are a whole lot more of them that don't. I think a lot of folks my parents age were this way because they grew up at the end of the depression, went through rationing during WW2, etc. and remembered how hard it was to earn and keep a dollar.

Was discussing s similar situation with friends yesterday. Her mom is getting pretty elderly and only has a tub / shower presently. Could really use a shower with a seat she she can walk right in and be safe, rather than stepping over the tub edge. The old girl has plenty of money, but just won't spring for something like this

[bennkar]

Yeah this reminds me of my mother. 72 y.o. and still works as an in home hair dresser and continues to contribute to a Roth IRA which really doesn't make sense... but whatever. Though to be fair she has upgraded just about everything in her house, needs for nothing, is taking an overseas trip yearly now while she can, and even had plastic surgery last year. AFAIK she is living off her earnings and part of her SS payments, and continuing to sock away a good sized chunk yearly. As an only child, if she dies suddenly I am going to have a major pile of money fall into my lap tax free. But I'll be fine if she stretches it out for decades to come.

[97guns]

Have to travel and see whatever you can NOW, nobody knows what tomorrow brings. My dad was around 80 when he started thinking about that once in a lifetime fishing trip to Alaska that he had always dreamt about, turns out that's all it ever was for him, a dream

[LivingAlmostLarge]

So now we planned our asia trip and I scored an insanely good deal for us. For my parents to join us it'll cost well $1000-$1500 per person. My mom started complaining and saying it's too much money.

I wanted to whack her on the head. We are never going again with my dad he's 86. This is it and we had to wait until the kids were old enough to manage, well we could manage too. This is my dad's last year probably traveling so much.

They can comfortably afford it. My mom's pension alone without SS is $4k/month. I don't know how to get her to realize you can't take it with you. The fact they are in "retirement" and still saving into a Roth IRA and have an income of around $150k/year makes me crazy. Especially after last night and her whining about this trip. Once in a lifetime I guarantee it since we don't have much time left.

We already missed a lot due to circumstances. And it's not even the ideal time for us money or time wise. But we are grabbing it while we can. I'm saving less than normal and diverting it to a trip I know will probably be conservatively $12k. That's an ira payment for 2017. But this is worth it to us.

I don't want to end up like my parents and in-laws. Struggling to spend money in retirement after a lifetime of saving.

[snafu]

I've no idea of the backstory but why can't you take your dad and go as planned? [buy 5 tickets] Mom can join you, or not as she likes, buying her ticket separately on whatever airlines has a seat available.

[Petunia 100]

So now we planned our asia trip and I scored an insanely good deal for us. For my parents to join us it'll cost well $1000-$1500 per person. My mom started complaining and saying it's too much money.

I wanted to whack her on the head. We are never going again with my dad he's 86. This is it and we had to wait until the kids were old enough to manage, well we could manage too. This is my dad's last year probably traveling so much.

They can comfortably afford it. My mom's pension alone without SS is $4k/month. I don't know how to get her to realize you can't take it with you. The fact they are in "retirement" and still saving into a Roth IRA and have an income of around $150k/year makes me crazy. Especially after last night and her whining about this trip. Once in a lifetime I guarantee it since we don't have much time left.

We already missed a lot due to circumstances. And it's not even the ideal time for us money or time wise. But we are grabbing it while we can. I'm saving less than normal and diverting it to a trip I know will probably be conservatively $12k. That's an ira payment for 2017. But this is worth it to us.

I don't want to end up like my parents and in-laws. Struggling to spend money in retirement after a lifetime of saving.

It's a form of mental illness. Instead of hoarding cats or junk cars or figurines, she is hoarding dollars. To the extent that the dollars are more important than her loved ones.

My mom was a lot like this, until a few years ago. It finally sunk in that she isn't going to take it with her, so she may as well spend on some of her wants. She does not have all that much, but she was still adding to her savings, rather than spending down modestly. Mom is 84. Lifelong habits can be hard to break.

[scfr]

I think it depends. My grandparents were generally very frugal, lifelong savers and investors. Yet they did spend selectively on the things that were very important to them. I remember helping my grandmother shop for the dress for her 50th anniversary party. We went to a nice mid-range department store, she looked around, found a dress she liked, and paid full price. That made an impression on me because she was the sort of woman who would rinse out and reuse bread bags, darn socks, and gather beach glass on her daily walks to use as free material for projects. But when it really mattered, she would spend on something special, and could because she had saved. She was able to compartmentalize every day and special spending. I think people run in to trouble when they either want to do "special spending" all the time or will never loosen the purse strings even when the resources are available and wind up missing out.

I like sanfu's idea of your dad going on the trip and your mom deciding whether she wants to go or stay home and miss out.