What do you do or plan to do with extra monthly income in retirement? (55, pensions)

[TuborgP]

This is a financial retirement thread that many can hopefully if interested participate in. If in retirement it is for many a basic question that hopefully is answered.
If in the years prior to retirement what is your plan for hoped for extra monthly/yearly income.

Most if not all of us have once we retire a fixed income coming in beyond our control. For most that income is some combination of Social Security, Pensions, and eventually RMD's.

This is important for you to remember when reading or participating in this thread. The amount of that income is not important and the input of someone with 30K net income living on 20 is just as important as a person with 200K living on a amount less than that.

All to often retirement income discussions is a back and forth on needs vs wants.
Guess what once you reach a certain age what you have coming in is what you have whether you want or need it.

So if you are fortunate to reach that point what is your strategy of handling that money?

Savings account
Pass book savings or CD's
After tax investment account
Do you invest in a growth style, balanced or conservative manner
Money under your bed

Sure you have a emergency fund target amount and when you reach that do you change your options.

I read post where a person says they expect to have 30, 50, 100 or more thousand income in retirement and they only plan to live on a amount less that that.

What triggered my thought that this could/might be a helpful topic was a post in another thread where the person said that by delaying SS they would have a combined 90K SS benefit and would be living on about 60k. Cool so what happens with the difference?

I have been active here for 13 years and lurked for a good time before that. This is a topic I wish had been more discussed back then.

Now in my 70's and retired 13 plus years the chickens are in the yard.

[funisart]

Now that we are staying safe at home, we are saving quite a bit of money. So far it is just staying in our bank account. We did purchase a new Bosch refrigerator. We will send our kids money for Christmas as well as presents.

We have put more of my recent inheritance money in after tax investments. We will probably add more when we start taking RMDs. We have a good buffer amount in a savings account earning laughable interest- but giving us special perks on a credit card.

We haven’t taken any RMDs because we don’t need to until we are 72.

We will probably buy a new vehicle in a few years, but are waiting to see advances in hybrids.
We might buy a condo near our son when we are 80, (keeping our Asheville home), but we don’t know for sure where he will be living in ten years.


We don’t really need much more materially, and we aren’t going anywhere to buy anything. We know we will need more money to live comfortably when we get up into our 80’s. So saving extra money, that we don’t need now, seems sensible.

I also enjoy hearing about those who have done well in their retirement and how they accomplished it.

[Serious Conversation]

Given that interest rates are going to remain low for the foreseeable future, I think real estate investment in the suburbs surrounding stable metros with jobs will perform well. With low interest rates, there's little reason to think that property prices and rents won't continue to rise.

I think urban cores of major cities may struggle for awhile, and truly isolated small metros and rural areas have no reason to turn around.

[aslowdodge]

I listed out my wants and achieved all of them except for travel, that being affected by covid.
I still hope to do so when covid is not an issue. In the meantime I might look at buying another rental or two or investing in a re syndication.
One of my goals was to get a Mercedes sl550 for fun but got lucky and was able to get a Ferrari instead.
One of the dumber things floating in my head is to not invest or travel and get a more expensive Ferrari or a Lamborghini. Hopefully it is just fantasizing and common sense prevails.

[johngolf]

Any extra I have gets deposited in two mutual funds (one Fidelity, one Vanguard). These are funds I do a monthly withdrawal on. Other that RMD's, I take nothing from my IRA's which are in Fidelity Mutual Funds. I keep about $10K in a savings account for quick access to cash or transfer to my checking account for a unplanned purchase such as a new $5K AC some months back.

[TuborgP]

Originally Posted by aslowdodge

I listed out my wants and achieved all of them except for travel, that being affected by covid.
I still hope to do so when covid is not an issue. In the meantime I might look at buying another rental or two or investing in a re syndication.
One of my goals was to get a Mercedes sl550 for fun but got lucky and was able to get a Ferrari instead.
One of the dumber things floating in my head is to not invest or travel and get a more expensive Ferrari or a Lamborghini. Hopefully it is just fantasizing and common sense prevails.

Fantasy can become more common sense with time. We all make ROI estimates on our money. I am referring now to after tax money. Ten years or so in retirement you have a decade of returns and new money put in. If your returns far exceed your estimated returns along with the compounding part can make your fantasies closer to common sense.

[SunGrins]

I have a financial advisor who keeps me on track with a few stocks and mutual funds that are solid and pay dividends. He thinks I keep probably too much other money in cash accounts that I can get to if something comes up. I have little faith in the current stock market so I am not enthusiastic about more investing beyond what I have already. I am working through a wish list of home improvements that I think are needed and helpful. I have a few trips I would like to take when and if things settle down.

[TuborgP]

Originally Posted by SunGrins

I have a financial advisor who keeps me on track with a few stocks and mutual funds that are solid and pay dividends. He thinks I keep probably too much other money in cash accounts that I can get to if something comes up. I have little faith in the current stock market so I am not enthusiastic about more investing beyond what I have already. I am working through a wish list of home improvements that I think are needed and helpful. I have a few trips I would like to take when and if things settle down.

Great post. That is one of the thoughts I suspect many wrestle with.

[BellaDL]

We became more relaxed with our spending after our daughter finished vet school.

Ever since she was diagnosed with breast cancer, our focus has been on what we can do to enjoy our lives together.

I had not kept tracked of our income or spending until recently while participating in several threads about income/spending in retirement.

While working, we had automatic payroll deductions for stock purchases/401K and automatic monthly extra mortgage payment or investment purchases . We also have automatic reinvestments and payments while working and in retirement. Bottom line is that we don't really know what is our 'extra' monthly income. Every so often, when our saving account balance exceeds a certain amount, we transfer the excess fund to our Vanguard or Fidelity cash account. Occasionally, we withdraw money from these accounts for big expenses like a new car, a new roof or a vacation.

We have been following pretty much the same saving/spending pattern in retirement. The main difference is that we have to pay quarterly estimated income taxes and to withdraw my husband's RMD. Since the RMD goes into paying our income taxes, it's difficult to categorize it as a a retirement saving spent down amount.

Yes, we have had several big expenses in the last several years (medical expenses, moving expenses, updating our NY home before selling, new furnishings, new high quality garden/power tools, boats, utility trailer, upgraded driveway, winery equipment, and now adding a wood burning stove & a dock). We did sell some mutual fund shares to pay for the work on the previous home but pretty much got the money back after selling it. We probably spent about 1/4 of the sale proceed on some of the expenses listed above. We were thinking of purchasing some mutual funds but ended up purchasing two hangars (one for us and one to rent).

We have accomplished almost all planned home improvement big ticket projects (the last ones will be pergolas/grape trellises over the new 13'x90' lawn area and maybe a more official kitchen in the lower living level if we ever desire to have an airbnb). Once we complete these projects, tt's likely that we will find our saving account grow fat again. However, there are always more fun things to do, trips to take, causes to donate.

[Sand&Salt]

Any extra we have goes to travel. Carefully in these Covid times, but still doing it.

No interest in investing more than we have done....we want to see/experience all we can while we are able.