Pre-Retirement Fridays - Boring financial geekery

[hrj]

I am once again reveling in how much I can accomplish with my "pre-retirement long weekends." I posted about Friday's accomplishments already. Saturday was all about getting the vegetable beds set up and the tomatoes planted. Plus harvesting another bushel of Seville oranges, because I want to make a batch of "Heather's Retirement Marmalade" as give-aways at my work retirement party. (Previous instances of giving away Produce of My Estates have been very well received.)

I also spent some more intensive time with financial spreadsheets and have set up a month-by-month spending tracker (separate from my finance database) as a feedback mechanism for keeping within my target budget, as well as for planning/saving for non-routine expenses. The categories where I've decided to work on reducing expenses (e.g., non-grocery food) will take a while to get reined in, although I've already made progress on "restaurant dining will be for genuinely special occasions, not just because I feel like it".

In addition to the spreadsheet page for "routine expenses" I have a separate section for "budgeting for special events/needs". Exactly how much do I need to have earmarked for a convention? What is the frequency with which I can expect to need to upgrade my laptop? How do I want to plan for home maintenance needs (tree trimming, the eventual point when I may need/want to replace my kitchen range).

The next stage will be coming up with a system for setting aside money in advance for the non-routine expenses rather than simply assuming I can absorb anything that comes up. This was one of the reasons for setting up a second savings account for my "true emergency money". My general plan is to set a floor threshold in the "non-routine savings" account that will trigger "you may not plan any significant non-routine expenses until you get back above this." According to my current planning, I could have as much as $500/month "extra" in my budget to sock away in this account (once I keep to within my routine-spending targets), so my plan is to include a monthly check-in where I transfer unspent monthly budget into savings. (This is: any amount above and beyond the floor threshold I set on my checking account that defines what "extra" is.)

My hope is that I'm being significantly over-conservative in my planning and will find that I don't have to keep quite as tight a rein on myself as I think. But I'd rather start cautious and loosen up, rather than continuing my current spending habits and hitting a wall.

Comments

[jreynoldsward]

Being over-conservative in planning for retirement is better than underestimating your needs. We've been living in retirement for ten years and our strategy is very similar to yours. Part of it is just figuring out what you'll actually be wanting to do and spend once you aren't in the working world.

One hint--hang onto work clothing and recycle it into your everyday wearing. I'm still using my old work clothes for everyday wear. But I was also teaching in a place where I had essentially no significant HVAC, with definite four seasons, so....

You have an excellent plan! Enjoy your future retirement.

[madbaker]

Good plans.

[threadwalker]

Yay! Spreadsheets!!

[evil_macaroni]

My hat is off to you as you are navigating these shoals. I just had my first conversation with a financial planner today. My situation is not dire (thanks, past-Me for saving), but there are a lot of unanswered questions and next steps. And this cheerfully assumes that the current administration doesn't wreck our country's retirement infrastructure before I retire!