What I’ve learned in retirement about inflation, travel, peer pressure and rewiring my brain to spend, not save
Inflation bigfooted my retirement spending plan.
Spreadsheet in hand, I tracked expenses preretirement and then forecasted how they’d change for my wife and I when I left full-time work. Spending estimates are critical because they dictate how much retirement income is required.
As with many retirees, we planned to spend big on travel. Unfortunately, travel costs are one of the less talked about but most egregious examples of inflation. The cost of flights to non-U.S. international locations and hotels is higher than anything we’ve seen in the past or expected going forward. Canadian prices are a bit better, but not dramatically in some cases.
The financial corrosiveness of inflation on retirees is one of several things I’ve learned since leaving full-time work at The Globe and Mail and moving into a role as an independent personal finance guy. Another is that travel is such a big deal in retirement-land.
Our retired friends and relatives talk about travel constantly. Many retirees are apparently visiting New Zealand, and Portugal gets mentioned a lot, too. Going away for a month or more is also a thing.
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There’s a subtle, not overt, pressure to live up to such standards. It’s a bit like FOMO, or the fear of missing out, but also something more. In some conversations, there’s a sense that retirement should reflect your best self and be a summation of everything you’ve worked for and achieved.
A related lesson is that retirees should get used to being judged by their peers and people in the work force. You feel like you need to explain yourself a lot – how you’re “finding purpose” and even minutia like what time you get up in the morning, how much you’re working out and, of course, how much you’re travelling.
We recently reconsidered near-term plans with friends to head to visit a few European cities after checking the cost of the refundable tickets we all need because our aged parents have health challenges that occasionally require all hands on deck. Now, we’re going to Mexico City.
Our food budget has similarly been deflated by inflation. We have more time to go out for meals now, but we might just be doing it less than when I was working full-time. Meantime, our grocery spending has exceeded expectations by a lot. Food inflation gets a lot of the blame, but there’s also more time to make better meals.
Maybe the biggest realization about retirement is how hard it is to go from saving money to being a retiree spending your savings. My wife and I are in a transitional retirement phase right now, where she works full-time and I generate intermittent earnings. We have not yet withdrawn any money from our retirement savings, but that’s coming and I know I’ll need to mentally prepare.
For now, the challenge is fighting a sense that we need to keep saving despite assurances from our financial planner that we’re well positioned. We have savings for emergencies and contingencies, but what if it’s not enough for a big health-, home- or family-related cost?
In retirement, you feel more financially vulnerable to these uncertainties. If you deplete your savings, how do you replenish them?
Something else I’ve realized is that retirement is good for your health. My most destructive habit was sitting for long periods at a computer. Sitting, as you may have heard, is the new smoking. My desk time now is about half what it was before, and much more broken up. My neck and lower back thank me for that.
I’m not working out much more than I did while I was employed full-time, but I am more consistent because I can head to my gym or go for a run any time and not feel rushed.
In conversations with others who have left the full-time work force, I have asked for their top tips. The answer that most sticks with me is to find activities, hobbies, work or whatever that gives you a more or less daily sense of accomplishment. You just read my latest attempt to do that.
Rob Carrick is a personal finance expert and former Globe and Mail staff columnist.
