# WWYD: Work 5 years longer?



## Plugging Along (Jan 3, 2011)

This is a quasi hypothetical question as tend to revise my plans every few years. I know what will actually happen may not resemble my plan at all. I am playing around right now, as I do like looking at these scenarios, I don't know why, but I guess I get some reassurance of my best cases or worst cases. I did some ROUGH numbers assuming my spouse and I split equally the income

I have a DB pension, which in 10 years (age 55), I will be able to have an early retirement at a reduce rate. I didn't start with the company until I was in my mid thirties.
Based on the pension calculator, I expect the pension to be around $27K a year
At that time, I also anticipate that would be able to withdraw about $75K a year from our investments (primarily RRSP).
Total income about $100K after tax about $70k (split between spouse and I)

If I retire at 60, there is no early retirement reduction on the DB. The investments would also grow by contribution and returns. The numbers would look closer to: 
DB Pension $50K
Investment withdrawal: $95k
Total Income: $145K
After tax $100K 

Other considerations are my hopefully, launch (out of the house children) in 10 years, the youngest will still be on her first degree, and oldest heading to med school. It 15 years, both should be done school. 

We could live on $70K after tax. I will allow us to do a lot of the things we want, and it won't be much of a change to what we do now. Or I can work an extra 5 years, and we could have a very lush retirement which would also be helping our future generations (which is something important to me). I seems like such a good 'investment' of working 5 morn yeast to be guaranteed an extra $23K income. That's like investing over $100k a year. The math tells me that's a good investment. 

Just curious what others would do.


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## diharv (Apr 19, 2011)

I read on this site once life is short and getting shorter . I guess at 55 you will be faced with the question what is more valuable to you . Five more years of income and growth in your portfolios and pensions, or free time? For everyone the answer will be individual but it is a great question . There will be a lot of advice and most will likely be in favour of getting out while you can and are healthy, and life is not about seeing who has the most money in the care home, another quote I read here once . For me , June 2021 when I am 56 but I can go anytime now. Look forward to reading the responses.


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## OnlyMyOpinion (Sep 1, 2013)

Great work PA. I agree with diharv, carry on and re-examine your situation at 55.
You are way ahead having scoped out possible scenarios - that is far more than most folks do. 
I can relate to putting in a few more high-earning years at the end though, to add an income buffer and to have the ability to help the kids getting established (or otherwise spend it). We were were in that position when I retired at 58.


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## Jimmy (May 19, 2017)

So you will be contributing to the pension for 5 more years? That is a big increase in pension to delay for 5 yrs and looks worthwhile. I know w OAS, the breakeven was ~ 17 yrs to make the delay worthwhile. So you will likely live past 72, the delay is likely worthwhile.

I could grind the math if you could tell me how much you contribute/yr or ~ what the pv of 5 yrs on contributions is


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## Plugging Along (Jan 3, 2011)

diharv said:


> I read on this site once life is short and getting shorter . I guess at 55 you will be faced with the question what is more valuable to you . Five more years of income and growth in your portfolios and pensions, or free time? For everyone the answer will be individual but it is a great question . There will be a lot of advice and most will likely be in favour of getting out while you can and are healthy, and life is not about seeing who has the most money in the care home, another quote I read here once . For me , June 2021 when I am 56 but I can go anytime now. Look forward to reading the responses.


Definitely agree. At 54, I will have a much better idea of what things are looking like. Who knows, my kids could be drop outs and nothing is as planned, or they could be on a full scholarship. Much of retirement really is dependent on where my kids are in life. I hope that by raising them well now, will have a further benefit that are self sufficient earlier, but who in the world knows. 




OnlyMyOpinion said:


> Great work PA. I agree with diharv, carry on and re-examine your situation at 55.
> You are way ahead having scoped out possible scenarios - that is far more than most folks do.
> I can relate to putting in a few more high-earning years at the end though, to add an income buffer and to have the ability to help the kids getting established (or otherwise spend it). We were were in that position when I retired at 58.


I know my parents sold their business when they knew I wouldn't flunk out of University (there was a little concern after my first year). I will definitely re-examine. I also don't plan to help my kids if the seem like they are entitled, spoiled kids. I want to be able to help them because I want to, not because I have too. I hope they learn that. Also, I sometimes dream of these year long round the world vacations. There are so many places I still want to see, and to be honest, I don't like doing it on a budget. 



Jimmy said:


> So you will be contributing to the pension for 5 more years? That is a big increase in pension to delay for 5 yrs and looks worthwhile. I know w OAS, the breakeven was ~ 17 yrs to make the delay worthwhile. So you will likely live past 72, the delay is likely worthwhile.
> 
> I could grind the math if you could tell me how much you contribute/yr or ~ what the pv of 5 yrs on contributions is


I wanted the numbers to be rough, I will put in based on todays amounts about $14k a year. Hence why I think those last 5 years are a great deal.


Really, the reason I started this thread is the rationalization between my head (the numbers seem to tell me to stay) vs. my heart or lifestyle. These are decision have the most difficulty with is just not looking at the numbers, but looking at the whole picture.


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## Longtimeago (Aug 8, 2018)

This is a topic I have discussed many times with people looking at 'when to pull the plug'. As someone who retired in his 40s, I've had a lot of people ask me about whether I regretted not putting in a few more years to increase my income based on similar factors as you are looking at Plugging Along. My answer when they ask me that is to laugh.

You write, "The math tells me that's a good investment.", and I agree with you 100% on that, from a FINANCIAL perspective. However, I would suggest you consider the following statement by me.

When to retire is not a question about money, it is a question about TIME. It's as simple as that.

Time is something you cannot bank. Once it is gone it is gone and what you could have done with that time is lost. Nor do you have any guarantee of how much time you will still have to enjoy if you delay your retirement. So for ME, there is no way to financially justify delaying retirement unless you can come up with a way to put a dollar figure on time!

My wife considered delaying her retirement for similar reasons to your own. I convinced her we did not need more money, we needed more time and so she retired at age 52, not long after we married (I was already retired). By age 62, she was (and still does) reflecting on what we had done over those 10 years (which was a lot) and how if she were to just be starting to do those things at age 62, chances are we would not be able to do them all again.

The fact is as you get older, even when in good health as we both are, the reality is that you slow down, become less tolerant, etc. For example, we went on may long 'road trips' (a month or more in duration) after she first retired. A couple of years back, we went on a road trip and realized that we were no longer happy to do so. Being in the car for 8+ hours a day is simply no longer enjoyable or tolerable. So our time to do long road trips has ended. What if we had not started till she was 62? Then those trips would never happen.

I believe that while you cannot put a dollar figure on the value of time, you can put a value on time in relation to time. What I mean is that I believe that every year you have of retirement before age 60 is worth 5 years of retirement after age 60 in terms of what you can do with that year.

So, if you accept my valuation, then delaying retirement from 55 to 60, then you would need to LIVE 5 x 5 = 25 years longer after age 60 to break even. How's that for a way of considering whether, "The math tells me that's a good investment."?


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## Jimmy (May 19, 2017)

Plugging Along said:


> I wanted the numbers to be rough, I will put in based on todays amounts about $14k a year. Hence why I think those last 5 years are a great deal.
> 
> 
> .


ok. I assume the company is matching so you put in ~ 7k/yr. In that case the breakeven is 12 yrs (assuming a 4% return) . If not, it is 15 yrs.


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## Plugging Along (Jan 3, 2011)

LTA - very interesting thought about being able to do 5 times more. Something I knew, but really thought about. My parents could have retired before 50 but waiting until their little black sheep was showing that she would be fine in the world. 

The other part I have to reconcile with is it seems when you have the time, you do not necessarily have enough money. The things I seem to want to do, seem to costs more, hence why I thought working more would be prudent. Perhaps my tastes will also change when I am older and I will not have the desire to travel the way I do now. 

All very good points to consider. I like pondering different scenarios.


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## Plugging Along (Jan 3, 2011)

Jimmy said:


> ok. I assume the company is matching so you put in ~ 7k/yr. In that case the breakeven is 12 yrs. If not, it is 15 yrs.


No, the $14k is what I put in yearly. 

I don't understand how you get the break even though. I am putting in $14k a year for 5 years longer. However, I would get $23K more per year after 5 years. I calculating a much faster break even (just financial terms). Then again, I always had an oversimple way of calculating.


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## OnlyMyOpinion (Sep 1, 2013)

I don't accept your valuation LTA. Like my comments, it is only your opinion, biased by your experience. 
Trying to quantify some 5x multiplier is bogus.
Oh, and we still don't find 8hr drives to be onerous at all.


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## Retiredguy (Jul 24, 2013)

Is the DB pension indexed?

As a scenario how about stopping work at 55 living on other assets and start your pension at 60. This would eliminate the pension penalty, allow it to grow by returns, but you would not be contributing more to it . It would also allow you to likely pay less tax on your RRSP withdrawals between 55-60.

I'd also want to consider the pension provisions for your wife, should you die.


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## peterk (May 16, 2010)

Perhaps in a few years you could start taking a regular leave of absence from your work, for 1-3 months per year? Still get 3/4 of the benefit of working longer but have a much more tolerable time doing it, have time to do some of those key activities you want to do while young still, and also give retirement a trial run to make sure it's all it's cracked up to be.


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## Jimmy (May 19, 2017)

Plugging Along said:


> No, the $14k is what I put in yearly.
> 
> I don't understand how you get the break even though. I am putting in $14k a year for 5 years longer. However, I would get $23K more per year after 5 years. I calculating a much faster break even (just financial terms). Then again, I always had an oversimple way of calculating.


It is complicated. I did this in Excel and varied the time. Bring everything back to current 2019 $ There is inflation too. I found 14 yrs ~ the break even ( You have 5 more years of $14,000 contributing or $60,000)

*Option 1 Pension $27,000 start in 2019 Draw for 14 yrs. *
FV = 14* 27,000 = $378,000
PV( 2%, 14, 0, -378,000) = $286,476
*
Option 2 Pension $50,000, starts in 5 yrs, Draw for 9 yrs.*
FV = $450,000
PV(2%,14,0,-450,000) = $341,043 

Minus

5 more years $14,000/yr, FV $60,000
PV ( .02, 5, -60,000) = 53343

= 341,043 - $54,343 = $286,699

So break even around 14 yrs.


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## Prairie Guy (Oct 30, 2018)

Plugging Along said:


> We could live on $70K after tax. I will allow us to do a lot of the things we want, and it won't be much of a change to what we do now. Or I can work an extra 5 years, and we could have a very lush retirement which would also be helping our future generations (which is something important to me). I seems like such a good 'investment' of working 5 morn yeast to be guaranteed an extra $23K income. That's like investing over $100k a year. The math tells me that's a good investment.
> 
> Just curious what others would do.


I'd retire...if I understand you correctly, you will have enough at a certain point so in effect, you're working 5 years longer for money that you don't really need. No matter how long you live, the reality is that by age 75 most people start to severely slow down. Of course there are outliers but the vast majority of people slow down by 75 and don't have a lot of energy.

So, if you retire at 55 you may have 20 good years left. If you retire at 60 you may have 15 good years left...you've given up 25% of your good years, but more importantly, you will have given up the 5 healthiest remaining years in your life for money that you don't really need.


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## Plugging Along (Jan 3, 2011)

OnlyMyOpinion said:


> I don't accept your valuation LTA. Like my comments, it is only your opinion, biased by your experience.
> Trying to quantify some 5x multiplier is bogus.
> Oh, and we still don't find 8hr drives to be onerous at all.


I do think that LTA has some merit. You can definitely do more at 55 than 60. Though, I am not sure if it's 5 times more. My parents, in laws, and relatives all seemed to be really active until about 70, then they seemed to slow down a little more. They still do lots, but just different things.

Ironically, the long road trips seem to increase for my parents at 70. However, the difference is they signed up with their friends in senior travel groups, and had someone else do the driving. It seems after 65/70 that driving becomes a little hard. They seemed to love these bus tours. My dad just took on last year for 2 weeks, while he was 85, he wasn't the oldest, and not the youngest. They spent a lot of time on the bus, and he was happy with it. He said, 'Its not like I am rushed any where, as long as there is a washroom every two hours' He was pretty happy. 
I also noticed when they seemed to hit about 70, my parents and many I know became much less adventurous. 



Retiredguy said:


> Is the DB pension indexed?
> 
> As a scenario how about stopping work at 55 living on other assets and start your pension at 60. This would eliminate the pension penalty, allow it to grow by returns, but you would not be contributing more to it . It would also allow you to likely pay less tax on your RRSP withdrawals between 55-60.
> 
> I'd also want to consider the pension provisions for your wife, should you die.


Yes, it's indexed. This is one scenario, I have just begun exploring. Our pension calculator doesn't spit out the numbers as easily. I think I would need a little more invested for me to be comfortable. I need to run numbers a different way, but this may be the next scenario. I know I would like more to retire off of if I retire at 55, because I would want to do more. My spouse has the larger RRSP, and I haven't started playing around with the different pension provisions. Thanks for the suggestions, I create those scenarios the next time I have chance. 



peterk said:


> Perhaps in a few years you could start taking a regular leave of absence from your work, for 1-3 months per year? Still get 3/4 of the benefit of working longer but have a much more tolerable time doing it, have time to do some of those key activities you want to do while young still, and also give retirement a trial run to make sure it's all it's cracked up to be.


It's not that my work is not tolerable, so I am not sure shorter term absences help me that much. In my case, a lot of my time is sucked up with my kids and the responsibility of my parents, so I can't really just leave for a couple of months at a time. Though I am thinking of taking some longer leaves so I can travel with the kids for the whole summer. I don't know if a few months will be really reflective of giving retirement as a trial run. I quite honestly have no shortage of imagination and initiative to keep me busy. Just this current time in my life with dependents (both young and old), I look forward to a time where I think solely of my self and spouse. I don't see that happening until retirement. 

I am considering taking a couple of one year sabbaticals. I just haven't found out the information in terms of how it my impact my retirement. I think I can pay back my pension, but am not sure. Again, I could be wrong, but i am not thinking of it as retirement but rather as a shift in focus to my kids and things I want to do with them while I still have the chance. My work is quite tolerable, I have always felt very liberated knowing that I am here by my choice (even on crappy days or weeks). 

I feel that once I officially retire, I will be completely on my own terms, where even taking a sabbatical, I know i have to return. I will look into it more. Maybe I am thinking of retirement more, only because I have never had a break from work since I have been out in the workforce. Sometimes I dream of getting laid off.


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## cainvest (May 1, 2013)

Plugging Along said:


> The other part I have to reconcile with is it seems when you have the time, you do not necessarily have enough money. The things I seem to want to do, seem to costs more, hence why I thought working more would be prudent. Perhaps my tastes will also change when I am older and I will not have the desire to travel the way I do now.


That's the trade off I often look at, money vs time.
Having the extra time is no good to me if I can't pursue my wants (hobbies) and needs (food,shelter) due to a lack of funds.


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## Plugging Along (Jan 3, 2011)

cainvest said:


> That's the trade off I often look at, money vs time.
> Having the extra time is no good to me if I can't pursue my wants (hobbies) and needs (food,shelter) due to a lack of funds.


This is where I struggle is knowing that I have enough for all the wants, not just the needs. I know I will have all my needs met at 55, but there are ALOT of things I want. I admit it, my tastes are not simple, I love doing things, and the things I enjoy most seem to cost a lot more. I am fine to work for those things, as I have enjoyed them along the way. Maybe, my wants will change as a I mature and get older, but as someone here says I cannot see there from here, so I can only go for what I know. 

Right now, I really enjoy being able to afford pretty much what I want to do whether it's a stupidly expensive meal, or tech gadget, or show, trip, what ever that may be. I enjoy being able to say 'yes' for when an opportunity or adventure comes along for me or my family. I love being able to help someone in need without worrying. The amount of money I could spend, is only limited by my time. I worry that if I have no time limits, that I will find that I don't have 'enough' in terms of the my wants. 

Maybe that's another reason I started this thread, just to get the different perspectives of people on how they balance their time and money. I know everyone is different.


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## Eclectic12 (Oct 20, 2010)

Plugging Along said:


> ... Our pension calculator doesn't spit out the numbers as easily ... My spouse has the larger RRSP, and I haven't started playing around with the different pension provisions. Thanks for the suggestions, I create those scenarios the next time I have chance.


There are lots of assumptions for variables that likely make the calculator more of a rough guess.

If it is like the pension calculator my company provides, setting it to age sixty is going to drop the early retirement reduction (what you want) but also add in an extra five years of pension credits (which you don't want). I doubt the two will cancel each other so whichever is bigger is going to inflate or reduce from the real number.

Setting it to age 55 assumes one starts the pension then so the reduction factor means what would be received at age 60 is larger.


Basically if you don't know what the assumptions are and what is automatically included ... the numbers are going to be off but may be close. If you have access to a pension booklet that provides all the needed formulas and factors, it may be easier to build a spreadsheet then plug in the numbers you are trying to evaluate.




Plugging Along said:


> ... I just haven't found out the information in terms of how it my impact my retirement. I think I can pay back my pension, but am not sure. Again, I could be wrong ...


I have friend/relatives where in some cases, the sabbatical has to be funded on one's own where there may or may not be an opportunity to buy benefits and pension service.
In other cases, signing up meant the employer put aside across four years the funds to pay salary which then covered benefits and pension service for the sabbatical year.

There seems to be a lot of variety so getting the details is likely important.


Cheers


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## Longtimeago (Aug 8, 2018)

There are various comments that have been made since my comment re when to retire being about time rather than money due to the decreasing ability (physically, mentally and emotionally) to do things.

Rather than trying to comment on them individually, I will try to make some overall comments in each regard.

I suggested that 1 year before 60 was equal to 5 years after 60 in terms of what you may be able to do with your time. I can understand someone questioning that ratio. But bear in mind that when I say that, it is a 73 year old man who last summer was hiking at altitude (some will know what that means) in the Swiss Alps and still able to consider doing so again this year. So it is not some overweight, out of shape, couch potato suggesting that ratio to you. My family physician refers to my health and fitness, and I quote, as 'remarkable'. If I see what I can do as being that different from pre-60 to after 60, then perhaps it is worth considering even if you dispute the ratio. Even if you only accept is as being a ratio of 1:2, is that not significant enough to merit consideration?

I will also add that it is not just a case of 'physical' limits. Mental and emotional limits become equally as important and also change with time. I can physically drive for 8 hours, but I don't WANT to anymore. That's not physical but it is a change that has occurred with time. In my case, it is those limits far more than my physical limits that matter. Don't get tunnel vision re what kind of limits change.

Regarding having time but no money. Yes, I can understand that as well as anyone. However, the corollary that follows having enough money is you also have to have enough time and continue to be able to do what you want. In other words, waiting till you have more money because you want to do more expensive things with your time does you no good if you are no longer capable of doing those things. It's a true catch-22. 

I can't give anyone an answer as to how to have enough money soon enough to be able to do what you want. But I can say that working longer to have the money is not enough alone. I have been fortunate enough to be able to retire early and have enough to do what I want to do while still able to do so. I guess the question I would ask myself if I had to choose between having the money but no longer being capable to do what I want vs. not having enough money to do what I want but still being capable of doing what I want, is that I would look for 'the third answer'. That means for example that if I wanted to hike in the Swiss Alps but did not have $10k to spend on a trip of a couple of weeks, I would not want to give up going or being capable of doing the activity, I would look for a way to do it for less money. The third answer. Or perhaps a less expensive location could provide the same enjoyment as the Swiss Alps. Another 'third answer'.

Prairie Guy has put it simply and got it right. "*No matter how long you live, the reality is that by age 75 most people start to severely slow down. Of course there are outliers but the vast majority of people slow down by 75 and don't have a lot of energy.

So, if you retire at 55 you may have 20 good years left. If you retire at 60 you may have 15 good years left...you've given up 25% of your good years,...."
*
What makes it difficult for some is not deciding 'when to retire' in terms of age. I don't think there are many people who can't understand that sooner is better. It is an entirely different question that hangs them up and that question is, 'how much is enough.' The answer to that question will obviously vary by individual depending on their needs and wants. I do find however that many OVER estimate how much they will need to enjoy their retirement and be able to do what they want to do. It is also a pretty well established fact that as you continue to age, the amount of money you will spend decreases. There is nothing to stop someone from deciding that they will spend $100k a year for 10 years and then reduce that to $70k a year thereafter. 

What would that do to some people's calculations? Usually people plan for the same income 'forevermore.' Why? As Prairie Guy rightly notes, everyone starts to slow down eventually and the corallary we can take from that is everyone starts to spend less eventually as well.

In terms of over-estimating how much is needed, most people 'can't see there from here'. If you look at how much you spend today while still a working person, that has little to do with how much you will spend once retired. You won't spend as much on clothes, you probably won't eat out as much since you have more than enough time to cook rather than coming home tired and saying, 'let's just order a pizza delivery', etc. Many, many things change in terms of how you spend money after you retire. My cellphone costs me $100 per YEAR. How much does your cellphone cost you? 

I must make choices about what I spend money on. If I want to hike in the Alps, I choose to buy a less than maximum cellphone package, TV package, internet package, etc. etc. I choose to drive an older car rather than buying new every couple of years. Saying I want to have enough for my needs AND all my wants would have resulted in my still being a working person, today. There is never a time when anyone can say, 'now I have enough money.' I"d like to fly First Class to Switzerland twice a year to hike but I can't afford to do that. Should I have waited till I could afford to do that? 

Don't get hung up on 'how much is enough' to the point that you delay, delay, delay until you find that it no longer matters since you are no longer able to do what you want anyway.

The title of this thread is 'work 5 years longer?' If I had started this thread before my retirement, the title would have more likely been, 'how can I work 5 years less?'


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## lonewolf :) (Sep 13, 2016)

I would probably work to 60 use the money to go to Asia get stem cells injected into blood between age 70 & 80 to increase lifespan & health. Do not put any money into kids education instead let them live @ home for 3 years (set some rules for cheap rent pulling their weight & proper money management of their finances) If they want your help rules need to be followed) work @ Mcdonalds then go to school as adult student work part time job min wage & get 27,000 a year grant to pay for schooling. Would also consider buying a gold Swiss annuity for income & safety against currency crisis.


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## cainvest (May 1, 2013)

Plugging Along said:


> I feel that once I officially retire, I will be completely on my own terms, where even taking a sabbatical, I know i have to return. I will look into it more. Maybe I am thinking of retirement more, only because I have never had a break from work since I have been out in the workforce. Sometimes I dream of getting laid off.


Guess another couple of factors is whether or not one likes their job or can they return to it later if more cash is needed. IMO it would be much harder to leave work if you enjoy it but if you're just trying to exit the "rat race" maybe go as soon as you can.


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## Longtimeago (Aug 8, 2018)

cainvest said:


> Guess another couple of factors is whether or not one likes their job or can they return to it later if more cash is needed. IMO it would be much harder to leave work if you enjoy it but if you're just trying to exit the "rat race" maybe go as soon as you can.


I've heard the old 'I love my job and never want to retire' line more times than I can count cainvest. My response is so what? 

I enjoyed much about the work I did cainvest just as I enjoy much about my retirement. Why would enjoying your job be a reason to not retire? It would only be a reason to not retire if you were to find you didn't enjoy being retired equally as well. 

The idea that to change, you must change to something that will be 'better' is a common one. It is used to justify not changing but the implied thought is that the change will not be as good or better than where you started from. That to me is a big jump or/and false logic.

You might as well say, 'I love apple pie' and therefore will never bother trying any other food item just in case I don't like it as much. What makes leaving work harder cainvest is fear of the unknown. Another factor has to do with 4 simple words. Here they are: What do you do?

When asked that question, what goes through your mind? The answer to that simple question for many people is what defines them as a person. 'I'm a bank CEO', 'I'm a stockbroker', ........'I'm a used car salesman'. Oops, that last one doesn't impress much does it.

So when it comes to thinking about retiring, many people have a problem with what they will say in answer to that simple question once retired. 'I'm a used to be bank CEO'(or whatever) is in fact how many will refer to themselves after they retire. They don't necessarily consciously think of that question and retirement in such specific terms but they do think of it as a 'demotion' in standing. That's why so many will indeed say, 'I'm a retired X' rather than just 'I'm retired.'

Having retired early, I had no such problem since there is no 'demotion' implied when you say you retired at 43. It is perceived as proving you have done better than the average bear and is something to be proud of, which it is. Yet another reason to retire as soon as possible I'd say.


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## OnlyMyOpinion (Sep 1, 2013)

I think the PRIMARY issue (and the basis for this thread) around retiring before a 'normal' retirement age of 60-65 is the often posed question "Will I have enough?"

The decision is much easier if you only have to be concerned about your own wellbeing. It is easier if your living expenses are manageable or easily adjusted (e.g. no mortgage, car loan, embedded home and vacation property costs...). 

There is a whole segment of the financial industry built up around keeping you working, saving and investing for retirement.

I agree with your comment on change LTA, as with many things in life, a lot (most?) people find it easier to carry on routinely than examine and make changes. Change usually happens when forced upon us. I'm not critical of that if a person lives and reaches the end of life with no regrets, contented with what they've done. Sad if otherwise though. It's sometimes a good exercise to ask "if I only had a year left what would I do/value", or a similar type of question.


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## Longtimeago (Aug 8, 2018)

OnlyMyOpinion said:


> I think the PRIMARY issue (and the basis for this thread) around retiring before a 'normal' retirement age of 60-65 is the often posed question "Will I have enough?"
> 
> The decision is much easier if you only have to be concerned about your own wellbeing. It is easier if your living expenses are manageable or easily adjusted (e.g. no mortgage, car loan, embedded home and vacation property costs...).
> 
> ...


I have thought of that question, 'what if I only had a year left' that you mention OnlyMyOpinion and my answer is that I do not have and never have had a 'bucket list'. Not in the last 30 years anyway. I do what I want to do, when I want to do it. A 'bucket list' to me indicates someone who is not doing that. So if told I had only a year left, I don't know that I would do anything in particular as a result of that information. I do think though that if someone does have a 'bucket list' that would apply to that question, then they should start on it as soon as possible. 

I might do a round of visiting places I enjoy as a kind of 'nostalgia trip' but as I am writing that thought, I am thinking that would be a bit maudlin wouldn't it. I think what that tells me is actually I am indeed quite content with what I have done. I'd like to do more, but that because I'm not stupid, I'd like to live longer, anyone who says, 'I'm ready to go' is lying or crazy. LOL


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## Prairie Guy (Oct 30, 2018)

Longtimeago said:


> When asked that question, what goes through your mind? The answer to that simple question for many people is what defines them as a person. 'I'm a bank CEO', 'I'm a stockbroker', ........'I'm a used car salesman'. Oops, that last one doesn't impress much does it.
> 
> So when it comes to thinking about retiring, many people have a problem with what they will say in answer to that simple question once retired. 'I'm a used to be bank CEO'(or whatever) is in fact how many will refer to themselves after they retire. They don't necessarily consciously think of that question and retirement in such specific terms but they do think of it as a 'demotion' in standing. That's why so many will indeed say, 'I'm a retired X' rather than just 'I'm retired.'


Some people identify with their job and their job provides status. Doctors, CEO's, pilots, etc. are all careers that many people respect or envy, so it's easy to see some people with those careers may not want to retire and lose that status. Dr. Bob is now just retired Bob and Pilot Bob is now just retired Bob. Another factor is that the high profile jobs that people identify with often come with high salaries and it's a lot easier to justify staying another year or 5 at a job that pays $200k a year than a job that pays $60k

On the other hand, someone who was a govt clerk, mechanic, or a shoe salesman usually has no problem retiring immediately once they become eligible or financially able, and the financial gain with staying longer usually isn't there.


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## Longtimeago (Aug 8, 2018)

I should answer my own question of 'what do you do' in my response #22 to cainvest. 

When asked that question these days, my most common response since I see the person asking as someone who thinks that what you do defines who you are, is to say, 'I'm a member of the Leisure Class. I don't DO anything, I no longer have to.'

The implication of course is that they still have to 'do' something to be somebody. LOL


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## cainvest (May 1, 2013)

Longtimeago said:


> I've heard the old 'I love my job and never want to retire' line more times than I can count cainvest.


I've heard it a fair bit as well. All good points you make related to jobs and retirement, seen most of it from CEO "losing status" to "I don't have anything other than work that interests me".

A job is just another activity when you've reached financial independence, albeit one you make money from. Some use this independence to do another job they really enjoy, like an accountant that is now a fishing guide for example, it's all good.


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## Plugging Along (Jan 3, 2011)

OnlyMyOpinion said:


> I think the PRIMARY issue (and the basis for this thread) around retiring before a 'normal' retirement age of 60-65 is the often posed question "Will I have enough?"
> 
> *The decision is much easier if you only have to be concerned about your own wellbeing*. It is easier if your living expenses are manageable or easily adjusted (e.g. no mortgage, car loan, embedded home and vacation property costs...).
> 
> ...


The main reason I started this thread because when I was crunching the financial numbers, it seemed like it was a no brainer to work an extra 5 years to get an extra $23K/year for life. That was simply a ROI question that Jimmy did a great job doing the calculation for me. However, as many people here pointed out, its not just about the money, that just one factor. Losing out on 25% (5 years out of 20) of my good retirement years and the fact that the early retirement years you can do more really resonated with me.


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## Plugging Along (Jan 3, 2011)

Longtimeago said:


> I have thought of that question, 'what if I only had a year left' that you mention OnlyMyOpinion and my answer is that I do not have and never have had a 'bucket list'.


I have recently thought about this a lot, as I found out my mother is terminal. She was only given 3-5 days to live when we found out, now we are passing a month, and each day she is still alive is a miracle. They still say she has no chance of recovery, and it could still be weeks. I have done a lot of thinking from the first hours when I found out to now on a daily basis. In the first hours, I had to think was there anything I wanted or needed to tell her. What came to mind in what I thought were the last hours were 'Thank you for everything for being my mom and grandmother. Thank for the sacrifices you made, and we know in your heart you did the best you could. You are dearly loved and made an impact to the people we are.' All the things that she did or didn't do, didn't matter. 

For the extra days that she has been given, we make sure she is comfortable, she gets her favorite foods, we share favorites memories, and watch some of her childhood favorite shows. She seems truly at peace.

I have asked the same question what would I do if I had a year to live. The answer focuses primarily around my kids. I would be trying to teach them even more as possible, making sure they knew how much they are loved, making some more memories through another big trip, and trying to help them in the future. So really, it would be not much different that what I am doing now except condensed. This may be why, I don't see the rush for retirement, because I ready get to do what is more important to me.


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## peterk (May 16, 2010)

Plugging Along said:


> I have recently thought about this a lot, as I found out my mother is terminal. She was only given 3-5 days to live when we found out, now we are passing a month, and each day she is still alive is a miracle. They still say she has no chance of recovery, and it could still be weeks. I have done a lot of thinking from the first hours when I found out to now on a daily basis. In the first hours, I had to think was there anything I wanted or needed to tell her. What came to mind in what I thought were the last hours were 'Thank you for everything for being my mom and grandmother. Thank for the sacrifices you made, and we know in your heart *you did the best you could*. You are dearly loved and made an impact to the people we are.' All the things that she did or didn't do, didn't matter.
> 
> For the extra days that she has been given, we make sure she is comfortable, she gets her favorite foods, we share favorites memories, and watch some of her childhood favorite shows. She seems truly at peace.
> 
> I have asked the same question what would I do if I had a year to live. The answer focuses primarily around my kids. *I would be trying to teach them even more as possible, making sure they knew how much they are loved, making some more memories through another big trip, and trying to help them in the future.* So really, it would be not much different that what I am doing now except condensed. This may be why, I don't see the rush for retirement, because I ready get to do what is more important to me.


Very touching PA.

So if your life goal is roughly to do the best you can, and give your kids fond memories and help them in the future, I think you just need to ask yourself: "Is my staying at work enabling me or preventing me from doing the best I can for my family?" Once the answer, on the whole, switches from enabling to preventing, you'll know it's time.


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## fireseeker (Jul 24, 2017)

peterk said:


> So if your life goal is roughly to do the best you can, and give your kids fond memories and help them in the future, I think you just need to ask yourself: "Is my staying at work enabling me or preventing me from doing the best I can for my family?" Once the answer, on the whole, switches from enabling to preventing, you'll know it's time.


That is very well summed up. Good advice for anyone.


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## Joebaba (Jan 31, 2017)

Hey PA,

You've received lots of good advice in this thread.
I'll take a bit of a contrarian stance....
You mentioned in the original post, that you'd like to have a little more upscale retirement. I fully understand that. And you need to consider that.
Would you like to winter in a warmer climate?
Would you like to go on international travel trips yearly? Maybe fly business class?
Would you like to golf 100 times or more a year?
All those things cost money, and while spending time with family is important, it's also important to consider yourself and trying to find a balance.
So you need to at least consider those things when evaluating.

Just one technical thing – in your original post it looks like you're using a tax rate of 30%. I know you're just doing rough calcs, and you probably want to be conservative, but my wife and I are in a similar income territory and we're paying much closer to 20% tax overall.

Good luck with your planning.


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## Longtimeago (Aug 8, 2018)

Plugging Along said:


> The main reason I started this thread because when I was crunching the financial numbers, it seemed like it was a no brainer to work an extra 5 years to get an extra $23K/year for life. That was simply a ROI question that Jimmy did a great job doing the calculation for me. However, as many people here pointed out, its not just about the money, that just one factor. Losing out on 25% (5 years out of 20) of my good retirement years and the fact that the early retirement years you can do more really resonated with me.


I'm glad to read that PluggingAlong. How any individual chooses to determine when to retire is up to that individual. What I think is important is that they are aware of any include all the major factors in their decision making. It seems this thread has helped you to give more thought to the factors other than just the *seemingly* 'no brainer' financial picture. 

Just to add another 'what if' to the mix, what would you say if I told you that our net worth and income has continued to increase over time even after an early retirement? When you retire 'early', you obviously must have enough income coming from somewhere to fund that retirement. It certainly isn't all or in my case, at all, coming from pensions. So at some point, pensions will kick in which will increase your income even if those are only CPP and OAS. Also, depending on how you manage the income you do have when you retire, you may still be investing some of that. I've mentioned here on various threads before that I believe in the Rule of 3s. That tells me to live on 1/3 of income, have 1/3 for disposable income (travel, new roof on the house, etc.) and SAVE/invest 1/3rd. Obviously if you are still saving/investing 1/3 of your income, your net worth and income will continue to rise. Also as I have said, people tend to spend less as they get older. I can honestly say that after 30 years of retirement, I have more income than I need. 

There is no reason to *assume* that just because you retire 'early', that you will have to earn $23k less per year, *every year and forevermore*. That is in fact just an assumption based on another assumption which is that you will not be doing anything to grow your income after you retire. Who said you have to do it that way? Not me.


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## nobleea (Oct 11, 2013)

peterk said:


> So if your life goal is roughly to do the best you can, and give your kids fond memories and help them in the future, I think you just need to ask yourself: "Is my staying at work enabling me or preventing me from doing the best I can for my family?" Once the answer, on the whole, switches from enabling to preventing, you'll know it's time.


Honestly one of the best answers/comments I've seen on this site.
Very thoughtful, and bang on.


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## OnlyMyOpinion (Sep 1, 2013)

^+1 yes. 

Although ISTM that when most of us retire, the kids are already grown and busy with their own lives. So our retirement is not as big an event in their lives. It does affect the spouse hugely though. It also has impact if you are going to take up caring for grandkids, or if you retire and then the kids get into a rough stretch where you really can't afford to help financially.

As far as memories and the kids, I'd say that having meaningful times with them as they are growing up is the key. Memorable family vacations at least once a year would usually top that list. I find its not the 'length' of the memorable events, but the quality or intensity of the events that we remember.


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## CPA Candidate (Dec 15, 2013)

After watching my father get sick at 72 years old and rapidly decline in 10 months to finally passing at 73; I think one should emphasis time over money. Things can change so fast.

Living so long that you run out of money is a nice problem to have. Working so long that you die without enjoying the fruits of all that effort is a catastrophe.


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## Plugging Along (Jan 3, 2011)

peterk said:


> So if your life goal is roughly to do the best you can, and give your kids fond memories and help them in the future, I think you just need to ask yourself: "Is my staying at work enabling me or preventing me from doing the best I can for my family?" Once the answer, on the whole, switches from enabling to preventing, you'll know it's time.


Nice summary! I have used this line of thinking in previous choices regarding my career and stepping back when it took too much time away from my family. I think the difference is when I am at age 55 to 60, the kids won't need my time as much as they will be busy studying, and starting to launching their own lives. How I will best help them is financially. The difference is that at that time, I gave up more of my time of my retirement for myself. So it's an interesting conundrum of working for my kids, vs retiring for myself. Right now, I work for my kids, but don't mind. Always another tough balance question. 



Joebaba said:


> Hey PA,
> 
> I'll take a bit of a contrarian stance....
> You mentioned in the original post, that you'd like to have a little more upscale retirement. I fully understand that. And you need to consider that.
> ...


1. Definitely don't see us snowbirding. We aren't the type. We prefer trips for a month or so. Also, hopefully, we will still be able to ski then, if the winters don't get colder. Also, I don't see us ever owning a property elsewhere, we already have a recreation property we learned from. 
2. International travel is definitely in the plans. That's one of the areas I could see having the extra funds available. I have noticed on the trips I have taken internationally, we have preferred a more expensive options. Mostly due to the language, we hire private guides. 
3. Any extra golfing or any extra activity I have accounted for in our budget. It's just the extra travel that I find I can go overboard.
4. We used 30% based on most of our investments are RRSP, non registered, pension or income producing, so not taxed a favorably. Plus, I do prefer to use a higher rate since the government has no problems raising taxes. 



Longtimeago said:


> Just to add another 'what if' to the mix, what would you say if I told you that our net worth and income has continued to increase over time even after an early retirement? When you retire 'early', you obviously must have enough income coming from somewhere to fund that retirement. It certainly isn't all or in my case, at all, coming from pensions. So at some point, pensions will kick in which will increase your income even if those are only CPP and OAS. Also, depending on how you manage the income you do have when you retire, you may still be investing some of that. I've mentioned here on various threads before that I believe in the Rule of 3s. That tells me to live on 1/3 of income, have 1/3 for disposable income (travel, new roof on the house, etc.) and SAVE/invest 1/3rd. Obviously if you are still saving/investing 1/3 of your income, your net worth and income will continue to rise. Also as I have said, people tend to spend less as they get older. I can honestly say that after 30 years of retirement, I have more income than I need.
> 
> There is no reason to *assume* that just because you retire 'early', that you will have to earn $23k less per year, *every year and forevermore*. That is in fact just an assumption based on another assumption which is that you will not be doing anything to grow your income after you retire. Who said you have to do it that way? Not me.


Great insight. Hence why I started this thread. Sounds like you are young retiree even though you have retired for so long. I am anticipating that we will spend lots in the first 10-15 years of retirement when we are doing lots things and travelling, then we will just slow down a little as you indicated. However, I am then anticipating that we will end up spending a lot more again for assisted living or a home. I have been dealing with this for my parents over the last couple of years. It was quite a shock how much seniors homes are, and that's if a lot of it is government funding. My mother's home and care was more than double what my parents spent in a month, so they are suddenly paying for 3X what their previous spending was. Trying to get them into the same place, required private home care, and was as much as $8K for the two of them to be together. The costs for care when you cannot care for yourself as well can be quite staggering. We want to be able to cover those costs too. It could also work out that we live out our lives in our home, and then our kids will get a nice inheritance.

The other point you made about the 3 rule is good, but to get the extra third for savings, then I would most definitely be working until the 60 age. That extra time gives me the cushion that I know I won't run out. In theory I like the idea, in practically it goes against retiring earlier. 
My question would you retire later in order to be able to save or invest 1/3 of your income while in retirement?


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## Longtimeago (Aug 8, 2018)

Plugging Along said:


> Nice summary! I have used this line of thinking in previous choices regarding my career and stepping back when it took too much time away from my family. I think the difference is when I am at age 55 to 60, the kids won't need my time as much as they will be busy studying, and starting to launching their own lives. How I will best help them is financially. The difference is that at that time, I gave up more of my time of my retirement for myself. So it's an interesting conundrum of working for my kids, vs retiring for myself. Right now, I work for my kids, but don't mind. Always another tough balance question.
> 
> 
> 1. Definitely don't see us snowbirding. We aren't the type. We prefer trips for a month or so. Also, hopefully, we will still be able to ski then, if the winters don't get colder. Also, I don't see us ever owning a property elsewhere, we already have a recreation property we learned from.
> ...


People always make assumptions based on where they are now Plugging Along and obviously to some extent, that can't be avoided. But it can also lead to 'paralysis by analysis' when we 'what if' something to death. No one can predict the future. If my wife and I both end up needing 'assisted living' we might have a financial problem. Are you suggesting we should live our lives NOW based on that 'what if'? 

While I consider it prudent to plan for a negative future (I wish to die in my sleep one night, not have to go into assisted living), I do not consider it wise to plan for that negative future to the extent that I do not enjoy my NOW. Obviously, there has to be some kind of balance and some kind of RISK taken. If you attempt to remove all risk then you will never retire. 

Another aspect I see a lot of emphasis on here is 'the kids'. I don't have any kids, I have two grown up offspring who do not need me to help them, they're adults and they do not need me to 'leave them a nice inheritance', they are quite capable of taking care of themselves. I stopped taking care of them when they became adults. If anything, I may expect them to take care of me if needed as I took care of them when they were children. I can understand taking care of aging parents, I cannot understand thinking of being able to 'help' adult offspring and I do not include doing that in any financial planning I do.

Regarding whether I would, "retire later in order to be able to save or invest 1/3 of your income while in retirement?", the answer is NO. Again an assumption is being made. Everything is not a yes or no decision. Look for the 'third answer'. For me the third answer is easy. Live more on less on 1/3 and save 1/3 of the income you HAVE. Do not put the 'cart before the horse'. Your assumption is that you will not be able to live life the way you want on less income. It's just an assumption, not a known fact. You might be surprised how you can reduce your living costs for example without suffering when the motivation is to be able to take that ski trip to Chamonix, France each winter while you are still ABLE.

I hear you saying, you want to travel in a more expensive way. So do we and we do. We just don't need to buy a new car every couple of years etc. and by not doing so, we can afford to travel as we wish. There is a difference between saying, 'well on an income of $20k per year, we can't afford to do what we want' and saying, 'well on an income of $80k per year we just can't do what we would do if we had $100k per year.' The first makes sense, the second is debatable.

Don't forget, the Rule of 3s I refer to is not carved in stone. It allows a 66% cushion for heaven's sake. You can move the percentages around quite a bit and still maintain the 'basic idea'. All it is really telling you is don't have living cost anywhere near 100% of your income. 

For example let's take two incomes of $80k and $100k. Let's also take a travel budget of $30k. With an income of $80k, the travel budget represents 37.5%. So that still leaves 62.5% to be divided between living costs, saving/investing and any other discretionary spending. Not thirds, but not a problem either. But let's say one year, you need to replace the roof on your house and it will cost $20k. If living costs are 1/3 of income equals $26.6k then 80-(30+20+26.6k) leaves only $3.4k for saving/investing THAT year. Gee, what a disaster.

If living costs are say $35k, the new roof $20k and travel is still $30k, then you come up $5k short that year. Gee what a disaster, you had to dip into savings for $5k. But what about next year when things work out as the average probably will? Then $35k will be living costs, only the $30k travel will happen in discretionary and you will have $25k left for savings/investment. Huh, that sounds OK to me. 

Now look at the $100k with the same other numbers. In the first case with the $20k roof, $26k living costs, $30k travel, you end up with $24k left for saving/investing. Not 1/3rd but hardly a problem. Second case, $35k living, $20k roof, $30k travel, you are left with $15k for saving/investing. Final case with no roof cost, $35k living costs, $30k travel and $35k left for saving/investing. 

Yes, with $100k income the numbers are better but what did it cost you to get those numbers and why were the $80k numbers not good enough? Especially given the cost in TIME you incurred to get from $80k to $100k. All you actually gained in the end is greater savings. That will be a real comfort to you when you die huh. You won't have lived any better or travelled any more but hey, you'll leave a nice nest egg for the kids. Hopefully, they will need it right? Personally, I'm hoping and betting my kids won't need it. In any of those scenarios did you have to give up the $30k for travel?

The numbers are not supposed to be 'static'. The word 'cushion' implies 'flexible'. What you want is a number that allows you to move up and down in ANY of the categories from year to year while overall still remaining positive in terms of cash flow. 

Back to 'risk'. At $80k there may be a risk of negative cash flow in a given year. But how big a risk? And what will be the cost in TIME. spent working rather than enjoying retirement while you are able, be to try and remove that risk? 

The numbers I have used of course are arbitrary and only an example but the principle remains the same. Have a 'cushion' and know how to use that cushion when necessary. We do not do without our travel, but we may sometimes tighten up on our living expenses to free up more money for travel and we may also save/invest less in a given year in order to allow us to still travel. It is our choice how we apportion the income and we decide the priorities in how it will be spent, each year. 

Planning when to retire is not about anyone other than YOU. It is about how YOU will enjoy your retirement and for how long. Figuring out when enough is enough for me is easy. It's enough when it is more than you need to live on from year to year. What risks are involved in what may happen in the future are risks I am entirely prepared to accept as I have done for the last 30 years and gee, look at me, nothing bad has happened yet. Who would have thought.


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## cainvest (May 1, 2013)

Longtimeago said:


> Figuring out when enough is enough for me is easy. It's enough when it is more than you need to live on from year to year.


I think for most this isn't as easy, I know for me it's not black or white.
For example, I have enough money to retire tomorrow and meet all my financial needs until I die. However, when I add in my wants over the next 'X' years that amount changes significantly. I would think this is a common issue for most, time vs money vs lifestyle, a different rule of 3 I guess.


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## Prairie Guy (Oct 30, 2018)

cainvest said:


> I think for most this isn't as easy, I know for me it's not black or white.
> For example, I have enough money to retire tomorrow and meet all my financial needs until I die. However, when I add in my wants over the next 'X' years that amount changes significantly. I would think this is a common issue for most, time vs money vs lifestyle, a different rule of 3 I guess.


It's a balance, but of the 3 (time, money, or lifestyle), lifestyle is the easiest one to make adjustments to without negative effect. No one can make more time, and few can make more money without giving up time, but by looking for deals and other means, you can maintain as good a good lifestyle with less money, and sometimes far less money.

- travel can be inexpensive if you look for sales and deals and are flexible with dates
- buying gently used cars can save 40% over the cost of new
- buying name brand clothes at outlet malls for 25% - 35% of retail
- cooking a high end steak at home on charcoal rather than going to a restaurant and paying $50

All of the above provide the same comfort and luxury but at far less cost.


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## Plugging Along (Jan 3, 2011)

Longtimeago said:


> Regarding whether I would, "retire later in order to be able to save or invest 1/3 of your income while in retirement?", the answer is NO. Again an assumption is being made. Everything is not a yes or no decision. Look for the 'third answer'. For me the third answer is easy. Live more on less on 1/3 and save 1/3 of the income you HAVE. Do not put the 'cart before the horse'. Your assumption is that you will not be able to live life the way you want on less income. It's just an assumption, not a known fact. You might be surprised how you can reduce your living costs for example without suffering when the motivation is to be able to take that ski trip to Chamonix, France each winter while you are still ABLE.
> 
> The numbers are not supposed to be 'static'. The word 'cushion' implies 'flexible'. What you want is a number that allows you to move up and down in ANY of the categories from year to year while overall still remaining positive in terms of cash flow.
> 
> Planning when to retire is not about anyone other than YOU. It is about how YOU will enjoy your retirement and for how long. Figuring out when enough is enough for me is easy. It's enough when it is more than you need to live on from year to year. What risks are involved in what may happen in the future are risks I am entirely prepared to accept as I have done for the last 30 years and gee, look at me, nothing bad has happened yet. Who would have thought.


I feel I am pretty good at being flexible with my numbers, and I have a very good sense of what is of value to me personally that is worth spending my money on. I sensed you would come up with a third option, which is your option. I just wanted to know if when push came to shove if one would delay retirement if they didn't have the one third for savings. I like having my buffers, but I took out the savings portion for the retirement stage of my life. It's similar to what you said though. I imagine it will be about 40% living expenses, and I do factor things like roofs, repairs, vehicles in there, and then 60% discretionary. Though I don't think I will always spend the discretionary, I will have some for savings, but will not delay retirement for it. If things go bad, I spend less. I do that now. 



cainvest said:


> I think for most this isn't as easy, I know for me it's not black or white.
> For example, I have enough money to retire tomorrow and meet all my financial needs until I die. However, when I add in my wants over the next 'X' years that amount changes significantly. I would think this is a *common issue for most, time vs money vs lifestyle,* a different rule of 3 I guess.


The priority triangle, a project manager's way of guiding them through life. I always say pick two. 



Prairie Guy said:


> It's a balance, but of the 3 (time, money, or lifestyle), lifestyle is the easiest one to make adjustments to without negative effect. No one can make more time, and few can make more money without giving up time, but by looking for deals and other means, you can maintain as good a good lifestyle with less money, and sometimes far less money.
> 
> - travel can be inexpensive if you look for sales and deals and are flexible with dates
> - buying gently used cars can save 40% over the cost of new
> ...


However, most of those things take more time. When my spouse was laid off, and I was on mat leave with a threat of lay off, we had a lot more time, but were watching the pennies. We made everything at home, and scoured the deals. However, to get the best deals, we spent about 20 hours a week planning and researching to make sure we got the best deal. I imagine when we are retired I may do that again, it was kind of a fun sport, but time consuming.


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## cainvest (May 1, 2013)

Prairie Guy said:


> It's a balance, but of the 3 (time, money, or lifestyle), lifestyle is the easiest one to make adjustments to without negative effect. No one can make more time, and few can make more money without giving up time, but by looking for deals and other means, you can maintain as good a good lifestyle with less money, and sometimes far less money.


True enough, likely many can adjust to a more frugal lifestyle, it's the easiest of the three to modify. More money without eating into time is a challenge (frugality aside) but I guess time can be "somewhat extended" if you take care of yourself.

For my retirement I really can't be (or wish to be) more frugal than I am now so the trade off will be between money and time. Also when I leave work my expenses will go up but there is no getting around that.


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## Prairie Guy (Oct 30, 2018)

Plugging Along said:


> However, most of those things take more time. When my spouse was laid off, and I was on mat leave with a threat of lay off, we had a lot more time, but were watching the pennies. We made everything at home, and scoured the deals. However, to get the best deals, we spent about 20 hours a week planning and researching to make sure we got the best deal. I imagine when we are retired I may do that again, it was kind of a fun sport, but time consuming.


It does take time but I'd never spend an hour to save $2 or spend 20 hours a week searching for deals...although last year I did spend a few hours a week for a couple months looking for my "gently used car". But that was a once in a decade major purchase and I considered it worth the effort because I got the colour, trim, and low mileage that I wanted.

For day to day grocery shopping I will only spend a few minutes checking out flyers for sales, and when I see a non-perishable on sale I stock up.

I was just in Florida with my GF and we spent half a day at a large outlet mall...I bought 15-16 name brand Dri-Fit T-shirts for $6 - $10 each, 8 name brand golf shirts for $10 - $15, 2 pairs of Asics runners for $40, and several pairs of shorts. When it was all said and done, I spent $500 Canadian to upgrade a seriously outdated wardrobe with high quality clothes that would have been $2000 retail.


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## Plugging Along (Jan 3, 2011)

Prairie Guy said:


> It does take time but I'd never spend an hour to save $2 or spend 20 hours a week searching for deals...although last year I did spend a few hours a week for a couple months looking for my "gently used car". But that was a once in a decade major purchase and I considered it worth the effort because I got the colour, trim, and low mileage that I wanted.
> 
> For day to day grocery shopping I will only spend a few minutes checking out flyers for sales, and when I see a non-perishable on sale I stock up.
> 
> I was just in Florida with my GF and we spent half a day at a large outlet mall...I bought 15-16 name brand Dri-Fit T-shirts for $6 - $10 each, 8 name brand golf shirts for $10 - $15, 2 pairs of Asics runners for $40, and several pairs of shorts. When it was all said and done, I spent $500 Canadian to upgrade a seriously outdated wardrobe with high quality clothes that would have been $2000 retail.


My 20 hours a week was pretty extreme, but we called it 'austerity measures' at our house because we down to 19% of our normal income with a new baby. It was a pretty good exercise for us as we learned what was the bare minimum we could live off of. It was a lot of effort, but I was able to get our groceries from over $1000 a month to $400, so it was well worth it. Groceries and eating out were our biggest discretionary spending item out of our needs at the time. We cut out all wants automatically.

Normally, we do a major cross border shop every year or two to get the kids all of their back to school clothing, but it takes a specific 3-4 day trip for us to do it. We do all of things you mentioned, nicer steaks at home, checking flyers, buying used, cross boarder shopping, among things already, but I am just saying those things do take more time. When we are retired, that's actually one of things I look forward to, really trying to find the good bargains.


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## Longtimeago (Aug 8, 2018)

Prairie Guy said:


> It's a balance, but of the 3 (time, money, or lifestyle), lifestyle is the easiest one to make adjustments to without negative effect. No one can make more time, and few can make more money without giving up time, but by looking for deals and other means, you can maintain as good a good lifestyle with less money, and sometimes far less money.
> 
> - travel can be inexpensive if you look for sales and deals and are flexible with dates
> - buying gently used cars can save 40% over the cost of new
> ...


Got it in one Prairie Guy. As I tried to show in my example above, what you can do on $80k vs. $100k as an example really doesn't differ enough to justify the cost in TIME. Quite often when looking at the 'equation' people tend to see the income need as fixed and then look at how to increase the capital to provide that 'fixed' income. It's surprising how many can totally ignore the 'reduce the income needed' factor.

When I first retired in 1993, I went from an income of $100k plus to $36k. I lived on $12k per year for several years in fact. Most people would immediately say, that's not possible, not without giving up a lot anyway. But in fact, what I did was go and live in a one bedroom apartment on a Mediterranean island in the sunshine. Steps to the beach and a swim every day; long lunches in a small beachfront restaurant and afternoon siestas; evenings socializing in a local taverna and meeting single tourist women out to have a good time. Pretty much a bachelor's dream really. 

Was I jetting from place to place on the company's dime, staying in upmarket hotels and eating in Michelin starred restaurants? Of course not but then I had done all that before and frankly, it wasn't nearly as good as living simply, eating well and enjoying each day and evening. Enjoying life really doesn't need nearly as much money as people think. They use the word 'lifestyle' but in fact are thinking in terms of money. The belief is that you must have more money in order to enjoy life more. That's simply not true. Money does not buy hapiness, it is what you do with your time that brings happiness and you can do that with or without more money.


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## Longtimeago (Aug 8, 2018)

cainvest said:


> True enough, likely many can adjust to a more frugal lifestyle, it's the easiest of the three to modify. More money without eating into time is a challenge (frugality aside) but I guess time can be "somewhat extended" if you take care of yourself.
> 
> For my retirement I really can't be (or wish to be) more frugal than I am now so the trade off will be between money and time. Also when I leave work my expenses will go up but there is no getting around that.


Can you reveal why your expenses will go up when you retire cainvest. That is 100% contrary to what happens when anyone I have ever heard of retired. I think you may be counting things as 'expenses' that really don't qualify. I've never heard of anyone whose income went UP when they retired. If you are saying your 'expenses' will go up, then you would need your income to go UP. Just how can anyone do that? Something is not adding up in that statement you made.

Re adjusting to a more frugal lifestyle, thank you for making my point as to how people perceive the word 'lifestyle'. You equate it to money. Lifestyle to me is not about money it is about how you live your life in terms of enjoyment and happiness. I had lunch some years ago after having been retired for a few years, with an acquaintance who was doing very well in terms of making money. After asking me about how I was liking living by the beach, taking a siesta every day, etc. he made a comment I always remember. He said, 'I'm so busy living a lifestyle, I have no time to live my life.' He was acknowledging the exact point about how most people define 'lifestyle'.

When I went from $100k plus to $36k and living on $12k per year, I gave up NOTHING in terms of my lifestyle. In point of fact, my lifestyle IMPROVED immensely. If you don't think lying in a hammock, listening to the waves on the beach and having a maiden peel grapes to feed you one at a time (OK, I'm exaggerating a bit maybe) is not a better lifestyle, you need to re-think your definition of lifestyle. LOL


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## peterk (May 16, 2010)

Plugging Along said:


> When we are retired, that's actually one of things I look forward to, really trying to find the good bargains.


Uhg. When I talk to my parents on the phone, one of the most popular topics is telling me over and over again about their system of timing the various local gas stations to get the cheapest gas...

When we talk to her parents on the phone, it's about the local Nofrills sales over and over...

I've told DFW that whatever comes in the future, I don't want to be those elderly people who spend 50%+ of their day either shopping for, in research of, or thinking deeply about, the best deals.

For me, frugality is physical and mental work, a job to get you to a goal, something I one day want to retire from.. I hope to be able to lessen my thinking about prices the older I get.


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## Prairie Guy (Oct 30, 2018)

peterk said:


> Uhg. When I talk to my parents on the phone, one of the most popular topics is telling me over and over again about their system of timing the various local gas stations to get the cheapest gas...
> 
> When we talk to her parents on the phone, it's about the local Nofrills sales over and over...
> 
> ...


You don't have to be like your parents...there can be a happy middle ground. I won't waste hours to save $2, but 5 minutes of basic research to save $20 on a $100 item is well worth it.

One of my friends is worth several million and we share golf coupons. He doesn't need to use them, of course, but what he hates even more is wasting money or overpaying.


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## peterk (May 16, 2010)

Ya, I can definitely foresee having a hard time not being frugal about major purchases, anything that will save me 100+ bucks, even if I'm wealthy... I just don't want it to become part of my identity, and a major conversation piece of my life, like my middle/lower-middle income relatives.


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## cainvest (May 1, 2013)

Longtimeago said:


> Can you reveal why your expenses will go up when you retire cainvest. That is 100% contrary to what happens when anyone I have ever heard of retired. I think you may be counting things as 'expenses' that really don't qualify. I've never heard of anyone whose income went UP when they retired. If you are saying your 'expenses' will go up, then you would need your income to go UP. Just how can anyone do that? Something is not adding up in that statement you made.


Off the top of my head,
- medical expenses
- dental expenses
- loss of tax write off for my home office
- likely forgetting a few other perks right now ...

Aside from those I'll also require more money to engage in my wants (hobbies) which I'll have more time to do. This could increase my cash requirements (for wants) a lot but of course I'll need to budget those.



Longtimeago said:


> If you don't think lying in a hammock, listening to the waves on the beach and having a maiden peel grapes to feed you one at a time (OK, I'm exaggerating a bit maybe) is not a better lifestyle, you need to re-think your definition of lifestyle. LOL


While that lifestyle appeals to you it would drive me crazy, I'd die of boredom lol.


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## Prairie Guy (Oct 30, 2018)

peterk said:


> Ya, I can definitely foresee having a hard time not being frugal about major purchases, anything that will save me 100+ bucks, even if I'm wealthy... I just don't want it to become part of my identity, and a major conversation piece of my life, like my middle/lower-middle income relatives.


It sounds like they might be bored and saving a couple $$ might be the highlight of their day?


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## Spudd (Oct 11, 2011)

Longtimeago said:


> Can you reveal why your expenses will go up when you retire cainvest. That is 100% contrary to what happens when anyone I have ever heard of retired. I think you may be counting things as 'expenses' that really don't qualify. I've never heard of anyone whose income went UP when they retired. If you are saying your 'expenses' will go up, then you would need your income to go UP.


Not true - if he is currently saving 50% of his income, say, and plans to have the same income in retirement, he may be then spending 80% of his income vs the 50% he's spending now. Same income, higher expenses.


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## cainvest (May 1, 2013)

Spudd said:


> Not true - if he is currently saving 50% of his income, say, and plans to have the same income in retirement, he may be then spending 80% of his income vs the 50% he's spending now. Same income, higher expenses.


There you go! 

BTW, my average savings rate (in recent years) is closer to 60% of my yearly income. Last year was under 10% though due to a large purchase.


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## Prairie Guy (Oct 30, 2018)

cainvest said:


> Off the top of my head,
> - medical expenses
> - dental expenses
> - loss of tax write off for my home office
> - likely forgetting a few other perks right now ...


Much of that offset by:

- no more CPP, EI and other work related payroll deductions
- no more parking/commute expenses
- no longer saving for retirement
- lower tax rate assuming lower retirement income



> Aside from those I'll also require more money to engage in my wants (hobbies) which I'll have more time to do. This could increase my cash requirements (for wants) a lot but of course I'll need to budget those.


If you have hobbies that cost money, then you may spend more.


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## Plugging Along (Jan 3, 2011)

peterk said:


> Ya, I can definitely foresee having a hard time not being frugal about major purchases, anything that will save me 100+ bucks, even if I'm wealthy... I just don't want it to become part of my identity, and a major conversation piece of my life, like my middle/lower-middle income relatives.


I think once it’s ingrained, it’s ingrained. My whole family is frugal, even though none need to be. It’s more about not paying more than you need to, but I always compare against , my time. I still get excited when I come across a great and will take the time to tell my family about it, and they do the same. I still spend though. 



cainvest said:


> There you go!
> 
> BTW, my average savings rate (in recent years) is closer to 60% of my yearly income. Last year was under 10% though due to a large purchase.


Wow. 60%. That’s amazing. I can’t remember how far are you from retirement or are you in retirement.


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## cainvest (May 1, 2013)

Prairie Guy said:


> Much of that offset by:
> 
> - no more CPP, EI and other work related payroll deductions
> - no more parking/commute expenses
> ...


- CPP/EI is before net income so no difference there, good that I won't have to pay from my savings though!
- my commute is walking downstairs, free parking in my garage! 
- no more savings ... yes, goes towards new expenses due to free time!
- lower tax rate ... yes, it'll drop me a few brackets



Prairie Guy said:


> If you have hobbies that cost money, then you may spend more.


Pretty much a given that'll spend more with more free time.


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## cainvest (May 1, 2013)

Plugging Along said:


> Wow. 60%. That’s amazing. I can’t remember how far are you from retirement or are you in retirement.


I think I'll pull the trigger within the next few years, that'll keep me well padded into my retirement and still young enough to enjoy it. I've been lucky enough to have a debt free life and my expenses are pretty low so that's allowed me to save fairly well over the years. On the other hand, I'm not rich by any means but that's all relative anyways ... I have enough to keep me going with what I want to do.

Added: I may also try to drop to part-time for a year or two ... not sure if my work will allow me to do that or for how long.


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## Longtimeago (Aug 8, 2018)

Spudd said:


> Not true - if he is currently saving 50% of his income, say, and plans to have the same income in retirement, he may be then spending 80% of his income vs the 50% he's spending now. Same income, higher expenses.


LOL, not true.

We need to get on the same page here Spudd. The income might remain the same after retirement which is not likely for most people. The living costs could also remain the same after retirement but again is not likely for most people. But before you can make the statement you made, you would have to know that the income has remained the same AND the expenses have INCREASED from 50% to 80% of that SAME income. 

Perhaps what you were trying to say was that the post-retirement income would decrease while the expenses remained the same. That would indeed mean a higher percentage of income was going to expenses. But even in that case, the expenses would only increase as a percentage, not as an actual dollar figure, unless the person started spending more money than they did when working. Not many are likely to do that but we can let cainvest respond for himself and tell us just what will or will not increase/decrease as he sees it.

In any case, don't confuse percentage with actual dollar figures. That a percentage increases/decreases does not mean the dollar figure also increases/decreases in the same direction.


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## Longtimeago (Aug 8, 2018)

cainvest said:


> - CPP/EI is before net income so no difference there, good that I won't have to pay from my savings though!
> - my commute is walking downstairs, free parking in my garage!
> - no more savings ... yes, goes towards new expenses due to free time!
> - lower tax rate ... yes, it'll drop me a few brackets
> ...


It may be a 'given' you will spend more cainvest but that does not mean your 'expenses' will cost more. Perhaps it would help clarify your situation if you gave some indication of where you see your 'expenses' will be and in what amounts vs. what you spend now. 

Your living costs should decrease after retirement even if only by the cost of a drive-through medium Timmy's coffee per work day. Your discretionary spending may exceed what you currently spend on hobbies but that is discretionary, not a living cost expense and that is where as I say I think you are referring to expenses when in fact I think you are talking about spending. 

That's why I wrote that I did not understand how you could see 'expenses' as going up. Expenses and Spending are two different words. One you are stuck with while the other you can adjust as you wish. Like I've just said here to Spudd, everyone has to be on the same page in order to discuss the topic and that means agreeing on the difference between 'expenses' and 'spending'. 

Living expenses: monthly bills, projected taxes, planned replacements ie. car, house maintenance, etc.

Discretionary spending: Hobbies, vacations, unexpected expenses.

Some people go a long way to try and project expenses and keep them out of the discretionary spending category. For example, while some might project funds for a new car in their living expenses budget, they might not project funds for a new roof. When the time comes for a new roof, they take that out of their discretionary spending budget. It's all in how you choose to do your budgeting.

But again, all that matters is if you have enough to cover all expenses and some left over for discretionary expenses and maybe even enough to still continue to add to savings/investments.


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## cainvest (May 1, 2013)

Longtimeago said:


> Your living costs should decrease after retirement even if only by the cost of a drive-through medium Timmy's coffee per work day. Your discretionary spending may exceed what you currently spend on hobbies but that is discretionary, not a living cost expense and that is where as I say I think you are referring to expenses when in fact I think you are talking about spending.


A little confused, so you're saying a medium Timmy's coffee per work day is a living expense and not discretionary?

Since I work from home I don't have the "normal" daily work expenses most have.



Longtimeago said:


> That's why I wrote that I did not understand how you could see 'expenses' as going up. Expenses and Spending are two different words. One you are stuck with while the other you can adjust as you wish. Like I've just said here to Spudd, everyone has to be on the same page in order to discuss the topic and that means agreeing on the difference between 'expenses' and 'spending'.
> 
> Living expenses: monthly bills, projected taxes, planned replacements ie. car, house maintenance, etc.
> 
> ...


Already listed some expenses that'll go up on a previous post, medical, dental, loss of tax write-offs. Also I should add that other expenses, like auto or home repairs, will likely go up as well mainly due to my willingness to do them myself when retired.

In the end it gets taken out of the same money pool, whether to pay the rent or buy a new boat, it all comes down to the lifestyle you choose to live. Just like working life, one has to plan ahead to budget correctly for their retirement plans.


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## cainvest (May 1, 2013)

Longtimeago said:


> But even in that case, the expenses would only increase as a percentage, not as an actual dollar figure, unless the person started spending more money than they did when working. Not many are likely to do that but we can let cainvest respond for himself and tell us just what will or will not increase/decrease as he sees it.


Yes, I will be spending more money in retirement than I do now while working.


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## Plugging Along (Jan 3, 2011)

I do believe there are cases where your living expenses can go up after retirement, though very rare. I looked at a potential example in our case of areas where our expenses will go up upon retirement

If you work from home and have a lot of your expenses either covered by the company or written, there would be a higher living cost. 

Cells phones and data plans - ours are covered by the company, we would probably go with a cheaper plan later, but currently our cost is zero.
Utilities, internet, house maintence, etc - We write off a portion of this due to our home office/home business. The expense will be the same but no write off later
Car - we used to write off a portion of our vehicle against the company or many moons ago, were provided with a company vehicle
Technology - currently we write off a lot of our technology as business expense or it gets covered by work. We will have start paying for this again later. Thou
Meals - Used to write off business expenses and in my case get certain reimbursement
Medical - this I see being the largest. My spouse is on really expensive meds. They are cover 100%, when retired, they will not be. My parents if they didn't have low income coverages (which we wont) would spend on average $3-4K on med each a year. Last year, my mom's medical supplies were over $10K if not covered. That doesn't even include dentist, eyes, etc. 

In our case, our actual living expenses are pretty low to begin with primarily due to write offs and what is already covered, and if we just factor in the additional expenses above, you could have higher expense requirement in retirement than working. 

That being said, we have lots of discretionary to work with in both working life and retirement life. We spend a big chunk on discretionary spending (kids), travel, and stuff, I see some lots going down, but lots going up too.


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## Spudd (Oct 11, 2011)

Longtimeago said:


> LOL, not true.
> 
> We need to get on the same page here Spudd. The income might remain the same after retirement which is not likely for most people. The living costs could also remain the same after retirement but again is not likely for most people. But before you can make the statement you made, you would have to know that the income has remained the same AND the expenses have INCREASED from 50% to 80% of that SAME income.
> 
> ...


Cainvest never mentioned percentages, he simply said that he expected his expenses to increase after retirement. This to me implied a $ value - ie. he currently spends $50k a year and expects to spend $60k a year in retirement, for example. Note also that he did agree with me so I suspect my assumption was accurate. So indeed, we were not on the same page.


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## Longtimeago (Aug 8, 2018)

If we cannot agree on what 'expenses'are differs from what 'spending' is, then anyone can say anything and who could argue.

Even in a case where someone has some costs covered when working from home, those expenses do NOT increase after retirement, all that changes is how you are paying for them. The individual's 'spending' may go up but the 'expense' remains the same. What is so difficult to understand about that? 

Consider it this way, regardless of whether you are an employee who receives certain benefits/perks as an employee, like a company car or company cellphone, etc. or are self-employed, those are all part of your GROSS Income. The cost of providing them is simply deducted by the employer before paying you your NET Income. Some of the money out of your left pocket simply doesn't go into your right pocket, it gets paid out to a third party prior to the transfer of your income from your left to right pocket.

Yes, Cainvest has clearly written 'spending more money in retirement'. That still tells us absolutely nothing about what he means by that in terms of living expenses vs. discretionary spending on hobbies, etc.

It would be very rare for living 'expenses' to increase after retirement. To do that, you would have to spend more on gasoline, more on tv/internet/phone packages, more on water bills, property taxes, income taxes, groceries, car maintenance, eating out at restaurants, etc. All the normal day to day living expenses that we all have. To have higher 'expenses' immediately on retirement, you would be saying those are going to increase immediately. Moving payment from Gross Income via an employer, lost tax deduction, etc. to payment directly by yourself, does NOT increase expenses.

When I went from being an employee to a self-employed consultant and then 'hired' myself out to my previous 'employer'. In rough terms, I went from $100k salary plus benefits to $160k in billings. They were not paying me more money, they were paying me the SAME amount of money. Because the $60k difference was what it was costing them in benefits. When I went self-employed and had to pay out those benefits to myself directly, they didn't suddenly become added 'expenses' to me, they had been there all along, I just hadn't been paying them directly. 

You guys seem to want to say that if you had an income of $100 before retirement as well as a health insurance payment being made by an employer, of $10, before retirement, that your income was not $110 and if you continue to pay $10 into health insurance you will then have a NEW 'living expense' of $10 to cover that health insurance. NOPE, absolutely not. The $10 living cost expense of health insurance was always there, it always came out of your GROSS income and still does come out of your income. NO change except in who writes the cheque.

So, I still don't know how cainvest can think his 'expenses' will go up after retirement if indeed that is what he means when he writes his 'spending' will go up. My question remains the same, how will expenses go up?


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## cainvest (May 1, 2013)

Longtimeago said:


> Yes, Cainvest has clearly written 'spending more money in retirement'. That still tells us absolutely nothing about what he means by that in terms of living expenses vs. discretionary spending on hobbies, etc.


Sure I have, you just ignored it. 



Longtimeago said:


> It would be very rare for living 'expenses' to increase after retirement. To do that, you would have to spend more on gasoline, more on tv/internet/phone packages, more on water bills, property taxes, income taxes, groceries, car maintenance, eating out at restaurants, etc.


I will spend more on most of those items you've listed when I stop working, already mentioned that ....


Add: BTW, you haven't answered my question, is a medium Timmy's coffee per work day a living expense or discretionary? I just ask because you seem to imply it was a living expense which is confusing.


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## Eclectic12 (Oct 20, 2010)

Longtimeago said:


> ... Consider it this way, regardless of whether you are an employee who receives certain benefits/perks as an employee, like a company car or company cellphone, etc. or are self-employed, those are all part of your GROSS Income. The cost of providing them is simply deducted by the employer before paying you your NET Income ...


Maybe for you ... in my case, the deductions by the employer not providing internet access and the one providing it were the same. When the one providing it decided to cut the internet access, net income stayed the same and the deductions stayed the same.

The employer didn't change my income and was likely writing it off as a business expense.


Cheers


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## james4beach (Nov 15, 2012)

I agree with cainvest and for those of us who like to travel, those expenses will also increase with age. 20 year olds can travel around on the cheapest flights, with the worst connections and worst schedules, take buses and stay in cheap accommodations (or sleep in airports).

As a person gets older, they will seek better (and more expensive) flights and better accommodations. Someone who has medical problems will probably want to book premium economy or business class seating, for example.


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## ian (Jun 18, 2016)

Wait five years and re-examine your financial position and your predisposition to go early. Things change over time.


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## Longtimeago (Aug 8, 2018)

cainvest said:


> Sure I have, you just ignored it.
> 
> 
> I will spend more on most of those items you've listed when I stop working, already mentioned that ....
> ...


I didn't see you ask about whether a coffee was a living expense or discretionary spending cainvest. 

You could include it in either but my point was that someone who picks one up on the way to work each day, would be far more likely to make their own cup of coffee at home after they were retired. So that cost would no longer exist in either category. Instead of say $1.50 at Timmy's per day, they would make a coffee at home for say $0.25 per day. I think that is pretty obvious as an example of a cost that would disappear or decrease and that was all it was, an example.

Generally speaking, the difference between living costs and discretionary spending has to do with whether they are an ongoing regular expense. So a monthly phone bill is a simple example. Discretionary spending is not generally an ongoing regular cost. So buying a new shirt is discretionary spending. But if someone wants to include a $ number per year in their budget for 'clothing', they could CHOOSE to include it in their annual budget of living costs. Someone buying a coffee each morning 'religiously', really has a living cost that can easily be budgeted for under that category. Someone who stops intermitttently to pick up a coffee would be more likely to just see that as discretionary spending as it is not a 'regular' thing and so far more difficult to budget for accurately.

Living costs are regular payments for anything you can easily and accurately budget for and most are something you do not want to or cannot do without. Discretionary spending is just what the word discretionary means. You can choose to spend or not at will. 

You say most of your costs for the items I listed will increase. OK, but can you explain to me why that is? Why would your costs for, "gasoline, more on tv/internet/phone packages, more on water bills, property taxes, income taxes, groceries, car maintenance, eating out at restaurants, etc." actually increase? Are you trying to tell me you will change to paying for more expensive tv/internet/phone packages for example or are you telling me you will have to pay for them whereas before you did not? How will your property taxes increase? Are you planning to buy a bigger house or move to an area with higher property taxes? Do you intend to buy more groceries? 

I'm not saying you will not choose to spend more money after you retire cainvest but I am questioning whether your actual living costs will increase. Again, as I have said, that is contrary to the norm when someone retires.

Normally when someone retires, their income remains the same (but from different sources ie. pension replaces employment income) or decreases. Their living expenses remain the same or decrease (ie. they no longer need to buy 3 new suits a year for business wear). Their discretionary spending may often increase with thinks like more vacations, hobbies, etc. Usually that increase in discretionary spending is funded by a decrease in the amount of their income that previously was applied to saving/investing.

You seem to want to keep it a secret as to how you see your own finances as changing. That's fine, it's up to you to share or not but if you don't want to share how you see your income and how you spend it as changing, it really makes no sense to say, 'my expenses will increase' and expect anyone with half a brain to just take your word for it when it is totally contrary to what normally happens when someone retires.

I'm beginning to wonder if you even know the difference between living expenses and discretionary spending, since you had to ask which a daily cup of coffee cost would fall into. Some people think an annual vacation is part of their annual living costs, they don't differentiate at all. But the only way their 'spending' could increase in that case is if their income after retirement were to increase over their income before retirement. Are you trying to say that is the case? Your income after retirement will be greater than your income while still working? If so, a lot of people would probably like to hear how you are going to make that happen.


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## Longtimeago (Aug 8, 2018)

Eclectic12 said:


> Maybe for you ... in my case, the deductions by the employer not providing internet access and the one providing it were the same. When the one providing it decided to cut the internet access, net income stayed the same and the deductions stayed the same.
> 
> The employer didn't change my income and was likely writing it off as a business expense.
> 
> ...


Umm, what you are saying is that your employer removed a benefit (If am reading what you wrote correctly). For your income to remain the same you would then have had to get an equivalent increase in salary. It's an equation Eclectic12 and either it 'equals' or you have in fact changed the equation.

Salary + benefit $ value = income.

So if for example the salary is $100 + $60 benefit value = $160 income.

If your employer took away a benefit of internet access worth say $10 then the equation obviously changes.

Salary $100 + benefit value ($60-10) $50 = $150 income. So your income in fact went down Eclectic12, it did NOT remain the same. The only way for it remain the same would be if the salary were increased or an equivalent other benefit added.

Salary $110 ($10 added to salary) + benefit value $50 = $160 income. Or salary $100 + benefit value of ($50 + a new benefit value of $10 added) $60 = $160 income.

If you lost internet access Eclectic12 without receiving an equivalent increase in some other way, then you lost income Eclectic12.


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## Longtimeago (Aug 8, 2018)

james4beach said:


> I agree with cainvest and for those of us who like to travel, those expenses will also increase with age. 20 year olds can travel around on the cheapest flights, with the worst connections and worst schedules, take buses and stay in cheap accommodations (or sleep in airports).
> 
> As a person gets older, they will seek better (and more expensive) flights and better accommodations. Someone who has medical problems will probably want to book premium economy or business class seating, for example.


What does that have to do with anything james4beach. I agree that many people will choose to spend more if they can afford to, on flying in a higher class of airplane seat or staying in a nice hotel vs. a hostel, etc. But that has nothing whatsoever to do with living expenses. It simply indicates how they will choose to spend from their 'discretionary income' category.

Vacation travel is not a 'living expense' james4beach or do you think that it is? If so, all I can say is that it would appear you do not understand the difference between a 'living expense' and 'discretionary spending.' A vacation and any associated cost is discretionary spending. Choosing to spend more on a vacation does not increase your living expenses, it just means you spend more of your discretionary income on a better seat on the bus.

I'm beginning to wonder if some responding here need to do some research on what the difference is between living expenses and discretionary spending. 
https://www.seniorfinanceadvisor.com/resources/discretionary-non-discretionary-spend


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## cainvest (May 1, 2013)

Longtimeago said:


> You say most of your costs for the items I listed will increase. OK, but can you explain to me why that is? Why would your costs for, "gasoline, more on tv/internet/phone packages, more on water bills, property taxes, income taxes, groceries, car maintenance, eating out at restaurants, etc." actually increase?


Already listed some expenses that'll go up on a previous post, medical, dental, loss of tax write-offs. Also I should add that other expenses, like auto or home repairs, will likely go up as well mainly due to my willingness to do them myself when retired.


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## Prairie Guy (Oct 30, 2018)

cainvest said:


> Also I should add that other expenses, like auto or home repairs, will likely go up as well mainly due to my willingness to do them myself when retired.


Usually DIY makes those things LESS expensive. Will those costs be going up because you are choosing to ignore them now and eventually will have to play catch up?


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## cainvest (May 1, 2013)

Prairie Guy said:


> Usually DIY makes those things LESS expensive. Will those costs be going up because you are choosing to ignore them now and eventually will have to play catch up?


DIY is almost always cheaper, unless you mess it up. 
Guess there are multiple factors ... 
1> Would rather be doing something else
2> Age gets in the way a bit
3> I've saved enough over the years of DIY to easily afford them now.

Added: As as example ... I'll be needing a new roof in a few years and I'm on the fence about doing it myself again, I might though. Years ago, with much younger friends, we easily replaced the roof for about 1/3 of the cost but now with some friends in their 60's I'm not inclined to ask some of them for help.


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## Prairie Guy (Oct 30, 2018)

I'm 56 and will be doing my own roof this year. But, I'll be installing steel instead of shingles...it's not much more but it's faster and easier. 3 foot wide panels cut to size that span the entire roof from top to bottom go up in minutes and you don't have to spend the entire day bent over or carry 60 bundles of shingle up the ladder.


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## cainvest (May 1, 2013)

Prairie Guy said:


> I'm 56 and will be doing my own roof this year. But, I'll be installing steel instead of shingles...it's not much more but it's faster and easier. 3 foot wide panels cut to size that span the entire roof from top to bottom go up in minutes and you don't have to spend the entire day bent over or carry 60 bundles of shingle up the ladder.


I thought about steel but a few friends have had theirs leak over the years, done by "professionals" no less. I also don't know the first thing about them but have done a number of shingle (and roof repair) work over the years to be comfortable doing it. But yes, those bundles will no doubt "feel" heavier this time.


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## Longtimeago (Aug 8, 2018)

cainvest said:


> Already listed some expenses that'll go up on a previous post, medical, dental, loss of tax write-offs. Also I should add that other expenses, like auto or home repairs, will likely go up as well mainly due to my willingness to do them myself when retired.


OK, I can understand no longer being willing to DIY some projects as you get older, I have become that way myself. It would seem however the degree of DIY you are considering far exceeds my own changes. I have never re-roofed a house myself and would never have considered it. Nor have I ever done my own car maintenance even to the extent of changing the oil. My view has always been that my time is worth more than the time I have to pay someone else for. That will obviously vary by individual. In my last few years of having to work for a living, I billed my time at $X per day as a consultant (I don't want to appear to be bragging by giving an actual number). That was 30 years ago and I can assure you that even today, a roofer isn't getting anywhere near that. So my living expenses have always included things like paying a roofer since it was cheaper than my own time. But I can accept that someone else could say they will be paying out thousands they would not have paid out before for such things. 

It also leads to another point in terms of retirement and that is when someone chooses to supplement their income with some kind of temporary or part-time work after they retire. Again, my view has always been that if my time was worth $X before retirement, there is no reason why it is not worth as much after retirement. So supplementing income which is something I have actually done a few times since retiring, does not mean taking a job as a Walmart greeter for minimum wage, it means doing something that pays what I'm worth.

I recently employed 3 local retired guys to put up a shed in our backyard. I could have done it myself but the $600 I paid for the 3 of them to do it was good value as far as I was concerned. They worked for 2 full days for $100 a day each. I would not do any kind of work for $100 per day. From my perspective, they were under-valuing their own time. I should add that all 3 of them had well paying ($100k+) jobs before retiring. Their problem was boredom, nothing better to do with their time.

But getting back to expenses going up, I still think you are underestimating the extent to which other expenses will go down. If that were not the norm, then everyone who retired would have to earn more in retirement than they did while working! Either that or have less discretionary income available for anything beyond 'making ends meet.'

You seem to be concentrating on what you see as going up but have you looked at what will go down? For example, you mention loss of tax write-offs. What about the tax write-offs you may get instead though. Seniors can easily get several thousand dollars a year in write-offs simply because of age. https://www.canada.ca/en/revenue-ag...-golden-years-these-tax-credits-benefits.html

You expect medical and dental costs to increase. Why? I don't see any increases in my own medical or dental costs since retiring. Are you actually just expecting them to increase without any actual basis for that expectation other than 'I'm getting older so they will cost more.' They are entirely dependent on the individual and the luck of the draw in terms of the genes you were born with. I am fortunate to never have had to be treated for anything more serious than the flu. That could change tomorrow but there is no way I would be saying, 'I expect my health costs to increase when I retire'. Certainly not in the immediate days after retiring. You write as if they are a known fact. It is quite reasonable to expect medical costs to increase LATER in retirement but not immediately after retirement. You may want to consider what is known as the 'Retirement Smile' affect. Which says retiree spending tends to decrease in the beginning of retirement, continue to decrease and then begin to increase as you continue to age.
https://www.onefpa.org/journal/Pages/MAY14-Exploring-the-Retirement-Consumption-Puzzle-.aspx


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## Prairie Guy (Oct 30, 2018)

I'll do my own roofs (house and garage) because it will save me $3000 or more for one day of work...that's worth it for me. I also have to enter my attic to take care of a leaky bathroom exhaust fan and some suspect wiring, and because of a poorly located hatch and a low slope that makes access extremely difficult, I plan to enter the attic from the roof by removing some sheathing directly above the areas in question. So, that's another reason why I'm doing my own roof as I doubt a roofing company will stop for a couple hours while I fuss around with that.

But, I wouldn't bother to build a shed for someone if it was a 2 day job and only paid $600, and especially if I had to share that with 1 or 2 others.


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## cainvest (May 1, 2013)

Longtimeago said:


> OK, I can understand no longer being willing to DIY some projects as you get older, I have become that way myself. It would seem however the degree of DIY you are considering far exceeds my own changes.


Yes, the degree of DIY I do has saved me significant money over the years. For the most part, I've never hired anyone to do home and/or auto repair for me over the years.



Longtimeago said:


> You seem to be concentrating on what you see as going up but have you looked at what will go down? For example, you mention loss of tax write-offs. What about the tax write-offs you may get instead though. Seniors can easily get several thousand dollars a year in write-offs simply because of age.


I still have about 7-8 years before becoming a senior and those tax savings will help later on. I'll also get CPP/OAS at that time so that'll be a little boost to my income.



Longtimeago said:


> You expect medical and dental costs to increase. Why? I don't see any increases in my own medical or dental costs since retiring.


Guess a couple of points on this on why I see these costs rising.
1> A number of slightly older friends are getting more expensive dental work done (crowns, implants, etc) these days. My dentist has pointed out a few of these are in my future as well.
2> My cost with my work plan gives me excellent coverage, 100% in most cases, and I don't think (haven't look extensively yet) I can find a similar plan (or pay cash) after retirement for less money.

There is also the general increase in cost of living so naturally expenses go up on their own. Don't get me wrong, these increases are hardly the end of the world for me, I've planned (the best I can estimate) for them.


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## ian (Jun 18, 2016)

Our lives, our attitudes, and our financial situation changed drastically in our early 50's. We became empty nesters, my income and our net worth increased substantially over a period of a few years- as did the value of my db. Suddenly our house was far too big for us, no longer important in any way, and required more mtce and attention than we were willing to provide. We wanted to travel.

My basic message is that it is fine to plan now and to contemplate what the future may bring but time may change your perspective, your preferences, your health, and your financial situation. Have a plan but remain flexible. Realize that a plan is just a living document at this stage and very much subject to change. And embrace change.

We went to Thailand during our first year of retirement. Went on a whim, a spontaneous decision. We just returned from our fifth winter visiting the area. We never imagined that this would become a preferred winter location for us. It was not in the plan. After selling our home we rented for four years. This was not even envisioned in the plan however the real estate market where we lived made buying an imprudent financial decision for several years. 

Who really knows where interest rates, inflation rates, and investment returns will be in five or ten years. Or currency. Sounds strange but we know folks who have pushed away from retirement winters in the US because of the exchange rates.


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## Longtimeago (Aug 8, 2018)

I keep trying to tell wannabe retirees that you 'can't see there from here' but many still seem to think they can ian. Some will learn without much of a problem, others will perhaps learn an expensive lesson the hard way.

I find your comment re some who have 'pushed away' from winter in the USA because of exchange rates interesting. I will no longer spend any time in the USA because of its cultural decline and choose to boycott it entirely as long as the idiot is President.

But from just a $ perspective, my choices of where to spend time do not take cost as the primary factor and never have. If I want to continue hiking in the Swiss Alps in summer, there is little point in someone saying to me, 'the exchange has gone against you this year'. I guess what you are saying is that really, those who winter in the USA and let's be frank, particularly Florida, do not do so because they are attracted to Florida for anything other than warmer weather and 'Early Bird Specials' at restaurants.

A winter in Florida is my personal idea of something pretty close to hell. One of my recurring nightmares is winning a contest where the first prize is a week in Florida and the second prize is 2 weeks in Florida. In the nightmare, I win second prize. :hororr:


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## ian (Jun 18, 2016)

Our primary reason for pushing away from Florida was not the exchange rate. It was simply an added benefit derived from selecting different locations for travel. We have spent lots of time in the past in Florida. It no longer holds any attraction to us for various reasons. We prefer other locations. We ended up in Thailand, SE Asia, (and Australia for two) purely by accident. We booked a last minute flight to Thailand because we did not want to go to Florida, etc. We were hooked. We kept going back. I suspect we will be there again next winter. It will be either that or Costa Rica/Panama. We have stopped twice in Honolulu on our way back from Thailand and Australia. We did so last week-three days in Honolulu. It serves to reinforce our selection of a winter trip.

If someone would have told us in our late 40's, early 50's that this is where we would be spending some winters in retirement we would have laughed. But there you have it. Exactly the same for several other lifestyle decisions the we have made just prior to, and post retirement. I have no doubt that in five years from now our lifestyle and our choices may encompass other things that we had previously not considered.


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## Prairie Guy (Oct 30, 2018)

Longtimeago said:


> But from just a $ perspective, my choices of where to spend time do not take cost as the primary factor and never have. If I want to continue hiking in the Swiss Alps in summer, there is little point in someone saying to me, 'the exchange has gone against you this year'. I guess what you are saying is that really, those who winter in the USA and let's be frank, particularly Florida, do not do so because they are attracted to Florida for anything other than warmer weather and 'Early Bird Specials' at restaurants.
> 
> A winter in Florida is my personal idea of something pretty close to hell. One of my recurring nightmares is winning a contest where the first prize is a week in Florida and the second prize is 2 weeks in Florida. In the nightmare, I win second prize. :hororr:


Each to their own. My idea of hell is a couple weeks on a cruise ship...a floating prison. I also don't want to climb mountains, so the Swiss Alps don't appeal to me either. But, we just spent a month in Florida (your version of hell) because we like warm weather. Unfortunately, I can't tell you about the breakfast specials because the place we rented had a kitchen and we prepared 98% of our meals.

We also won't visit any places run by dictatorships because we believe in democracy and freedom, but I do get a good laugh out of those that do visit places like Cuba or China and then say that they won't visit the US because of the president (I'm not referring to you...unless it applies, of course ).That kind of thinking is beyond the pale.


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## Longtimeago (Aug 8, 2018)

Prairie Guy said:


> Each to their own. My idea of hell is a couple weeks on a cruise ship...a floating prison. I also don't want to climb mountains, so the Swiss Alps don't appeal to me either. But, we just spent a month in Florida (your version of hell) because we like warm weather. Unfortunately, I can't tell you about the breakfast specials because the place we rented had a kitchen and we prepared 98% of our meals.
> 
> We also won't visit any places run by dictatorships because we believe in democracy and freedom, but I do get a good laugh out of those that do visit places like Cuba or China and then say that they won't visit the US because of the president (I'm not referring to you...unless it applies, of course ).That kind of thinking is beyond the pale.


If people were honest Prairie Guy, they would admit that the reason they winter in Florida has nothing to do with any attractions in Florida and most likely, everything to do with cost. There are plenty of places to get warmer weather in the winter if someone wants that, but most will cost people more to get to at least. A decision to winter in Florida is not about 'warm weather', it is about 'cheap, warm weather' n'est-ce pas? After all, are you really going to try and tell us that a month in Florida would be your choice over say a month in the Seychelles or the French Polynesians etc. if someone else was paying for it? Florida is cheap end of story.

It is as you say to 'each his own'. However, that phrase really doesn't make it clear that not everyone who is doing 'their own thing' is not doing something for specific reasons that they do not want to admit to or try to justify. 'I go for the weather' sounds better than 'I go because it's cheap' doesn't it. Another common factor 'to each his own' covers is that many people are not very adventurous or have little interest in anything cultural, new, etc. They want the same language, the same food, etc. As much like home as possible but just with warmer weather. They have relatively small comfort zones and are not interested in expanding their comfort zones.

I agree re cruise ships and dictatorships. I would also add anywhere that you stay inside a fenced-in compound as well as any other all-inclusive places. They're a self imposed 'non-floating prison'. But again, people are more interested in cheap than in anything else.


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## Prairie Guy (Oct 30, 2018)

Longtimeago said:


> If people were honest Prairie Guy, they would admit that the reason they winter in Florida has nothing to do with any attractions in Florida and most likely, everything to do with cost. There are plenty of places to get warmer weather in the winter if someone wants that, but most will cost people more to get to at least. A decision to winter in Florida is not about 'warm weather', it is about 'cheap, warm weather' n'est-ce pas? After all, are you really going to try and tell us that a month in Florida would be your choice over say a month in the Seychelles or the French Polynesians etc. if someone else was paying for it? Florida is cheap end of story.
> 
> It is as you say to 'each his own'. However, that phrase really doesn't make it clear that not everyone who is doing 'their own thing' is not doing something for specific reasons that they do not want to admit to or try to justify. 'I go for the weather' sounds better than 'I go because it's cheap' doesn't it. Another common factor 'to each his own' covers is that many people are not very adventurous or have little interest in anything cultural, new, etc. They want the same language, the same food, etc. As much like home as possible but just with warmer weather. They have relatively small comfort zones and are not interested in expanding their comfort zones.
> 
> I agree re cruise ships and dictatorships. I would also add anywhere that you stay inside a fenced-in compound as well as any other all-inclusive places. They're a self imposed 'non-floating prison'. But again, people are more interested in cheap than in anything else.


We want to get away from the cold, but we have no interest in travel. Many people find that hard to believe. I actually have many varied interests and skills, but none of them include visiting foreign countries. So what do we do? We pick an inexpensive warm place that's convenient. It's that simple...our basic parameters are met, so why pay more if there is no additional gain? I don't know why I feel obligated to defend our choice, but some people tend to look down on those who don't want to visit other countries to experience their "culture". We walk on the beach, relax on the deck, and cook like we do at home...there's no reason to fly overseas to do that. Remember...we're not "travelling", we're just getting away from the worst of the cold for a month or so. Those are two entirely different things.

Travel is nothing more than just another hobby. For those who like it...have at 'er. But, please understand that not everyone cares about travel.


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## Longtimeago (Aug 8, 2018)

Prairie Guy said:


> We want to get away from the cold, but we have no interest in travel. Many people find that hard to believe. I actually have many varied interests and skills, but none of them include visiting foreign countries. So what do we do? We pick an inexpensive warm place that's convenient. It's that simple...our basic parameters are met, so why pay more if there is no additional gain? I don't know why I feel obligated to defend our choice, but some people tend to look down on those who don't want to visit other countries to experience their "culture". We walk on the beach, relax on the deck, and cook like we do at home...there's no reason to fly overseas to do that. Remember...we're not "travelling", we're just getting away from the worst of the cold for a month or so. Those are two entirely different things.
> 
> Travel is nothing more than just another hobby. For those who like it...have at 'er. But, please understand that not everyone cares about travel.


I consider that a reasoned explanation Prairie Guy and find no fault with it. Not everyone is interested in travel and exploring new cultures, etc. as you say. I can accept that quite easily. I might not be able to understand it but I accept it.


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