August Wrap-up: Winds of Change

DannyB Superuser ✭✭✭✭
edited October 7 in How do you Simplifi?
August Review

We were once again able to follow our Spending Plan successfully ending the month with a 19% surplus when all income and spending were accounted for.  For anyone who is wondering about our surpluses at the end of each month the surplus becomes part of our savings and investments in preparation for that day we move into full "retirement."

Winds of Change 

Speaking of which… it is official and we are now in countdown mode to my wife's transition into retirement in 5 months.  We have worked with a financial advisor for the past 10 years, pulling together all we have done and what was left needing to be done to prepare for this transition.  Over the past 2 or 3 years we have focused in and preparing a reasonable and realistic retirement budget as part of our overall financial planning, savings and investment profile.

Even with this years rocky investment environment (we moved to a more conservative investment profile a couple of years ago and that has served us well this past year!) and this year’s inflation numbers we are still in excellent shape to make this transition. Of course this is all in the context of "The Lord willing and we don't die" wisdom of my spiritual tradition.

Using the newly released ability to build a spending plan for the next 12 months I have started updating what our spending plan will look like beginning February 1, 2023 based on the retirement budget we have worked on for the past few years.  

And now I’m wondering.  Up until now I have set money aside and maintained an “emergency fund” equal to 3 - 4 months of our net income separate from savings for known expenses such as insurance premium, property and S.E. taxes, annual subscriptions, expected auto maintenance, etc.  That hasn’t always been the case.  There were quite a few years when my wife and I were first starting out during which we lived “paycheck-to-paycheck” as they say.  In reality, more then a few of those years the paychecks didn’t quite cover the cost of living and so we had some high cost accumulated debt.  (I shared about that “cash flow” problem in another post.). But since the early 90’s we made significant changes that led to our having all debt paid off and paying cash for everything especially in the past 20 years along with accumulating significant savings for our retirement years. That’s the long way around to what I’m wondering…

Do I need to maintain that “emergency fund” since we have and will be using our long term savings to supplement our other retirement income (Social Security, pension, other passive income).  The emergency fund was meant to cover our living expenses if we were unemployed for an extended time. But now, in essence we will be drawing on our long term savings anyway so is it necessary to maintain the current emergency fund separate from our retirement savings?  If we use our current emergency funds to supplement our other retirement income we could put off drawing down our various retirement accounts for another six-eight months.  Neither of us has reached the age in which we are required to take the minimum withdraw.
Simplifi user since 01/22
 Budget: a mathematical confirmation of your suspicions.” ~A.A. Latimer


  • Flopbot
    Flopbot Superuser ✭✭✭✭✭

    Thank you so much for doing these monthly summary posts.  They have been fascinating to follow and assure me that I made the right decision moving to Simplifi.  Reading about your process gives me hope that we won't be living paycheck-to-paycheck forever!

    Being in a different life-stage than you, I can't offer any real advice about your continue/cancel the Emergency Fund question.  My very uneducated hunch would be that there will never come a time in life when having extra money set aside specifically for emergencies isn't a good thing - especially with current events.  Even if you literally converted the entire amount to Gold Deblumes and burred them in the backyard, I can't imagine how that would be a bad thing...if you didn't end up needing them, they might make for a fun addition to your Will.   :)

    Sorry I don't have better advice.  Hopefully someone else in the community does.
    Quicken Desktop user since 2014.
    Brand new to Simplifi in 2021.
  • DannyB
    DannyB Superuser ✭✭✭✭
    Thanks Chris @Flopbot

    Gold Deblumes! I love it... and if we don't end up needing them I could created some kind of convoluted riddled way of finding them so that my kids or grandkids or some strange treasure hunter in the distant future can have a heck of a time finding them!  Think National Treasure, Indiana Jones, Uncharted, etc!
    Simplifi user since 01/22
     Budget: a mathematical confirmation of your suspicions.” ~A.A. Latimer
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