{"id":265372,"date":"2021-06-03T04:30:00","date_gmt":"2021-06-03T01:30:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/opinion-how-much-can-i-spend-in-retirement\/"},"modified":"2021-06-03T04:30:00","modified_gmt":"2021-06-03T01:30:00","slug":"opinion-how-much-can-i-spend-in-retirement","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/opinion-how-much-can-i-spend-in-retirement\/","title":{"rendered":"#\n  Opinion: How much can I spend in retirement?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a27e2507aea6\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a27e2507aea6\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/opinion-how-much-can-i-spend-in-retirement\/#Theres_no_point_deciding_on_a_budget_until_you_know_how_much_money_youll_have_available_to_spend\" >There\u2019s no point deciding on a budget until you know how much money you\u2019ll have available to spend<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/opinion-how-much-can-i-spend-in-retirement\/#Richard_Quinn\" >Richard Quinn<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#<br \/>\n  Opinion: How much can I spend in retirement?<br \/>\n<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"Theres_no_point_deciding_on_a_budget_until_you_know_how_much_money_youll_have_available_to_spend\"><\/span>\n  There\u2019s no point deciding on a budget until you know how much money you\u2019ll have available to spend<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\">\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000292159\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       On the journey to retirement, should you focus on setting a retirement spending budget or on making sure you have adequate retirement income?<\/p>\n<p> I think the answer is obvious: There\u2019s no point deciding on a budget until you know how much money you\u2019ll have available to spend. And yet I hear about people who devote endless hours to detailing precisely how much they\u2019ll spend in retirement on everything from housing to <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/trip-and-travel\/\" data-internallinksmanager029f6b8e52c=\"10\" title=\"Trip &amp; Travel\" target=\"_blank\" rel=\"noopener\">travel<\/a> to healthcare to dining out. This strikes me as a colossal waste of time\u2014until they know how much income they\u2019ll have at their disposal.<\/p>\n<div class=\"paywall\">\n       In the 10 years before I retired, my compensation came in three parts: my base salary, annual incentive compensation and long-term incentive compensation. Base salary and annual incentives were paid in cash, while long-term incentives consisted of stock options and restricted shares.<\/p>\n<p>Read: 9 birthdays that matter most to your retirement<\/p>\n<p>My wife and I based our ongoing expenses\u2014our lifestyle\u2014on what was left of my base salary after taxes were taken out, and after deductions for 401(k) contributions and premiums for health, dental, group life and long-term-care insurance. Meanwhile, we sometimes used my annual incentive pay for onetime major purchases, but mostly we saved the money.<\/p>\n<p>What about long-term incentive pay? That was more variable and depended on the organization\u2019s performance. For example, stock options could be worthless upon vesting. Restricted shares go up or down. I once exercised stock options and im<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>tely sold the resulting shares, so I could put an addition on our\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/humbledollar.com\/2021\/04\/while-were-at-it\/\" class=\"icon none\">vacation<\/a>\u00a0home. The rest of the time, I kept the stock upon exercising options\u2014a strategy I\u2019m told is rarely used. I did the same with the restricted shares. Over several years, I used all this stock to create a healthy stream of dividend income, which is reinvested in additional shares and which I view as a financial backstop, in case inflation starts to crimp our retirement lifestyle.<\/p>\n<p>Read: Just because you can\u2019t drive doesn\u2019t mean you\u2019re stuck at home. Seniors should check out these transportation options<\/p>\n<p>Notice that I haven\u2019t mentioned a budget. My take-home pay set our budget. We would never spend more each month than could be paid for in full that month.<\/p>\n<p>During the years leading up to retirement, my focus was on having at least enough income to maintain our preretirement lifestyle. There was no immediate plan to relocate and downsize to lower our expenses, though eight years into retirement we did opt to move into a nearby 55-plus\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/humbledollar.com\/2020\/11\/last-stop\/\" class=\"icon none\">community<\/a>.<\/p>\n<p>As I was getting closer to retirement, I monitored my accrued pension and Social Security benefit. When I finally retired after nearly 50 years on the job, that combined retirement income was slightly more than my gross base pay. That had always been my goal.<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>I never tried to budget for retirement. Instead, my focus was on funding what I wanted to spend\u2014and that funding goal had no better target than what I was living on just before I retired.<\/p>\n<p>Do I spend more or less in retirement? On average, I spend about the same each month, though \u201cspend\u201d includes discretionary amounts, 529 plan contributions for the grandchildren, travel and saving. Yup, I said it, I still put money aside in retirement for contingencies, just as I did while working.<\/p>\n<p>There are trade-offs in retirement spending. I no longer pay payroll taxes, but my health insurance premiums are five times higher. I don\u2019t put money into a 401(k), but I spend thousands on\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/humbledollar.com\/2020\/04\/home-at-last\/\" class=\"icon none\">travel<\/a>\u00a0and leisure activities. I don\u2019t buy new suits, instead living in jeans and shorts (as long as my wife\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/humbledollar.com\/2019\/11\/fashion-statement\/\" class=\"icon none\">approves<\/a>), but I spend $60 per week on golf.<\/p>\n<p>Many people are convinced their expenses will be vastly different in retirement. Different perhaps. Lower? Not so much. \u201cI\u2019m moving to a lower-cost part of the country, so I\u2019ll save money,\u201d I\u2019ve heard. Good for you. But you might want to use those savings to build up a financial reserve, because your expenses are sure to grow, by choice or by chance.<\/p>\n<p>Having a pension, as I do, isn\u2019t typical. What if you don\u2019t have a pension? The notion that retirement income\u2014and not a budget\u2014should determine spending still <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>lies. If you have $1 million in retirement funds, your spending possibilities will be around $40,000 a year, assuming a 4%\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/humbledollar.com\/money-guide\/four-percent-withdrawal-rate\/\" class=\"icon none\">withdrawal<\/a>\u00a0rate, plus whatever you get from Social Security.<\/p>\n<p>That\u2019s the reality. It doesn\u2019t matter what your retirement budget says. The chicken is your retirement income\u2014and that produces the egg of spending possibilities.<\/p>\n<p><em>This column first appeared on <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/humbledollar.com\/\" class=\"icon none\">Humble Dollar<\/a>. It was republished with permission<\/em>.<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Richard Quinn\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Richard_Quinn\"><\/span>Richard Quinn<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. 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I think the answer&#8230;<\/p>\n","protected":false},"author":1,"featured_media":265373,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-265372","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/265372","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=265372"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/265372\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/265373"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=265372"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=265372"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=265372"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}