I’m not retired, but I do have two kids in college where I’m paying the bills from 529 plans where I’m the account owner and where I made the vast majority of the contributions. What I find that helps is the following:
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The money was saved for a particular purpose – college education. It’s now being used for that purpose, which makes spending it more guilt-free.
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As the kids picked their colleges and I was able to get a handle on what the costs would look like, I converted their 529 plans into CD ladders, scheduled to mature just before the start of each semester. Maturing CDs inside my state’s 529 plan turn into cash, which I find to be a lot easier to spend than stocks where I’m always wondering whether they might be worth more tomorrow.
Translating that into retirement terms, I expect to have a bond ladder where the maturing bonds in that ladder provide enough cash to cover my core costs. Similar to those CDs, maturing bonds turn into cash, which I find easier to spend than money that’s still tied up in investments.
The thing about a bond ladder, though, is that as individual bonds mature, new rungs need to be added to keep it going. I plan to use dividends, interest, and proceeds from the sale of other investments to maintain that ladder. When things are going particularly well in the market for my investments, I should be able to tap more than I strictly “need” to maintain those core costs and help cover other priorities or goals.
That should serve as a “permission slip” to spend more than absolutely needed…
Regards,
-Chuck