If you wait too long to start spending your money, you will have wasted many years of unnecessary work, stress, and worry. You'll have traded your best decades for a number on a screen that eventually gets passed to someone else.
After another summer living with my parents, I'm even more convinced about 45, my recommended start of decumulation. Not because the math changed, but because I watched the alternative up close for two summers in a row.
Here's the realization: you won't be able to spend all your money when you're old. Not “you shouldn't.” You won't be able to. The ability and the desire itself disappears.
And when I say old, I'll peg that age at 65+, the traditional retirement age when corporations no longer deem you productive enough to keep around.
The Inability To Spend Money When You're Old
If you want to get a glimpse of how you'll be when you're old, simply spend more time with your parents when they're old. After all, children are highly influenced to follow in their parent's footsteps in many stages of life.
My parents used to love going on cruises to various parts of the world. It was one of the ways they enjoyed their wealth in retirement.
Then COVID hit and their cruising enthusiasm never came back. When I asked them why they don't go anymore, they said they can't be bothered. They also don't want to risk getting sick.
So I offered to pay. A nice cruise, balcony suite, any duration, any location. My treat.
They declined. This makes me sad as I fondly reminder seeing the joy on both my parent's faces every time they went to the buffet.
The single largest barrier to spending money, the money itself, was removed entirely. And they still said no.
No Excursions With The Family Either
One of my favorite childhood memories was going to Hanauma Bay with my father. We walked down and up the hill no problem. We even ran into Robin Williams. But when I decided to take my own kids for the first time this trip, I already knew he wouldn't want to come, so I didn't even ask.
Instead, he enjoys hours of free TV programming at home. My mom does too.
So I feel great knowing I bought them the largest new TV that would fit on their stand. For over a year, they had been watching a blurry TV, and just chalked the image up to poor eyesight.
But even the finest 60″ TV from a retailer now costs under $1,000. So cheap for years of entertainment.
Inexpensive Board Games
Not one to give up easily on finding fun things my father can do with us, I first got him to play Monopoly Junior with my son and daughter. That worked until my boy lost interest after the first game and my daughter chucked a game piece on the ground after losing a second time. Monopoly Junior is almost entirely luck, so it stops being fun pretty fast.
The second evening, I switched to chess, a game my father used to play constantly. He was enthusiastic, and so were the kids. One of my fondest memories is playing him about 10 years ago after snow bowls for dessert. This time it was my dad versus both kids. They had a lot more fun, even though they still got crushed.
Each game cost about $20 at Target. They will be played dozens of times.
That's the entertainment budget of two people in their 70s and 80s with no debt and pensions. Board games and a TV antenna, not even cable. The rest of their spending is food, taxes from required minimum distributions, house maintenance, and property taxes.
The travel and the big-ticket experiences are simply gone.
Frugality Compounds, And Not Always In A Good Way
Here's the part that makes it worse. My parents have been frugal their entire lives.
They didn't become careful with money after they retired. They were careful at 30, at 40, at 50, and by the time they hit their 70s, thrift wasn't a strategy anymore. It was part of their DNA.
We spend so much time talking about how compounding works on the asset side. Nobody warns you that it also works on the behavior side. Forty years of telling yourself “no” builds a muscle that gets very hard to relax.
You can hand a lifelong saver a spreadsheet showing they can safely spend $200,000 a year and they will still hesitate over a $12 shave ice. The number doesn't matter. The wiring does.
This is the cruel joke of the FIRE movement that nobody puts on a chart. The exact discipline that gets you to financial independence is the thing that prevents you from enjoying it.
I have friends worth eight figures who still won't upgrade their 11-year-old car with electrical gremlins. They aren't being smart. They're being trapped by a version of themselves from 1998 who genuinely couldn't afford it.
Could This Be My Destiny?
When you're younger, it's easy to say your life will look different from your parents' when you get to their age. Then you catch yourself doing the exact same things.
I remember when my dad was 49, because I was 17, finishing up my junior year of high school and getting into a fair amount of trouble. He worked a regular job and came home with my mom around 5:30 or 6pm.
So we're different in that respect. I stopped working a day job five years before we had our son.
But I forgot that my dad and I used to play golf together whenever I came home to Honolulu. That hasn't happened in about 10 years. He lost interest, and there was never enough time or motivation to get out there.
Here's the thing. I don't find golf that fun anymore either after being infatuated with the sport in my 30s. I only go when someone invites me to a corporate outing or their club, which is only two or three times a year. I'd rather play pickleball and tennis, but my body is wearing down too with increasing injuries.
Since graduating from college in 1999, I've never gotten into the habit of watching more than two hours of TV a day. Most days I watch none, just short video clips online. After all, I cut cable, remember? A long time ago I decided producing content was more fun than consuming it. It was also more profitable.
But if I don't end up watching a lot of TV as my cheap entertainment, I'll probably just play pickleball, go to the beach, or go hiking instead. Surprise surprise, all of those are free.
So when I was facing a liquidity crunch and my wife wanted us to vacation in Las Vegas, I decided to YOLO. I wasn't going to let my silent stress keep us from a memorable experience.
How About Spending On Cars And Houses?
My parents drive a 28-year-old car. That means my dad has been driving the same vehicle since he was 54. At 49, I'm not that far behind. I've had my 2015 car, bought a year old, for 10 years now.
I could easily see myself keeping my next car until it disintegrates. The thrill of owning a fancy new car died for me around age 32. Now I want reliable, safe, and roomy enough for a family of four. Once both kids are out of the house, I'm not sure I'll need to buy anything nicer. I only drive 6,300 miles a year as it is.
Finally, my parents live in a paid-off home my grandparents built in the 1980s, after tearing down the previous house that was infested with termites. The house is too big for them, but it's great when we visit, especially now that I've finished remodeling the two-bedroom in-law unit.
Unless they want to move into a two or three-bedroom condo with amenities, they aren't spending money on property either.
We found our forever home in San Francisco after climbing the property ladder for 20 years. We won't be upgrading if we stay in the city. If we move to Honolulu, we might buy a cheaper house since prices are more affordable there.
Hmm. Almost every single line is me becoming my father, just on a 33-year delay.
Spending Money Aggressively Past 65 Provides Declining Joy
Ages 65 to 70 is still young, assuming your health is intact. But I've clearly watched my parents slow down after 70.
Besides yummy food and fitness, there is genuinely nothing money can buy them that brings more joy. The only thing I came up with is hiring a reliable house cleaner once a month for $500. And even that would come out of their cash flow, not savings or investments.
Which means the only way my parents will ever decumulate their wealth is through a bear market. A decline that provides them nothing in return. That's it. That's the exit.
Their money will not be spent. It will simply be transferred, either to the market on a bad year or to me and my sister.
But, I don't want it. I have my own money. I built my own thing specifically so I would never have to think about theirs. Every dollar they don't spend is not a dollar I'm quietly rooting for. It's a massage they didn't get, a cruise they didn't take, a business class seat they suffered through coach to avoid.
I'd trade the entire remainder for two more good years of them enjoying themselves.
15-20-Year Window To Spend With Joy When Old
So when I look at my life at 49, and at their lives after retiring in their 60s, it becomes obvious that there's only about a 15-20-year window to spend money intentionally.
You don't want to spend heavily before 45, because there's too much life left and probably dependents to care for. But after 45, it's go time. That window closes faster than anyone expects, and it closes from the inside.
If you FIREd well before 65, ironically, you may need to spend even more aggressively. You accumulated enough capital to retire early in the first place, which means you benefited more from the bull market than the average worker who can't live off investments alone.
A 4% or even 5% safe withdrawal rate has simply been too conservative since 2012. Your net worth is far higher than when you first retired.
What I'm Actually Going To Do About It
After observing my parents in detail for two straight summers, I'm going to work harder at consumption spending.
I tried my best with the $40,000 earmarked for the Summer YOLO Fund and failed spectacularly, spending only 20% of it. But I still spent more than I would have without setting an intentional target, so the exercise wasn't a total waste. I also used the remaining funds to invest in Mezzi, the AI investment advisor I think is incredibly helpful.
America generally thinks spending money on private school is a waste. I don't, so that expense is covered. My home is set for now, though I'm considering something nicer in Honolulu.
What's left is upgrading my car, eating absurdly expensive food I don't need, and donating more to charity.
I've also got to stop treating investing like a luxury expense. Investing has been one of my biggest hobbies for the past 30 years, and it's almost impossible to stop. It brings me so much joy!
Finally, I'd love to live long enough to see and help take care of my grandchildren. Hence, more money to physical and mental health.
The Funny Part Of Not Spending
Ironically, my parents seem happy. Or maybe the better word is content.
If you asked them whether they're missing out on anything, they'd look at you like you asked whether they're missing out on scuba diving. Not at all.
So who exactly is the unhappy one here?
Maybe I'm projecting. Maybe I'm looking at their life through the eyes of a 49-year-old with a functioning body and a to-do list, and mistaking a calmer life for a lesser one.
Or maybe contentment is just what a lifetime of frugality feels like from the inside, and there's no way to tell the difference between peace and adaptation from the outside.
I don't know.
For myself, the lesson is simpler. Front-load the spending after age 45. Do the trip while your knees work. Buy the thing while you still want things.
Because the money will absolutely still be there at 75. You're the part that won't be.
Reader Questions
Have you watched a parent become unable to spend their money, even when they clearly could afford to? At what age did the shift happen?
If you're a lifelong saver, what's the largest purely discretionary purchase you've made in the past year, and how long did you agonize over it?
Do you believe you'll spend more freely in retirement than your parents did, or is that the same thing every generation tells itself at 49?
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Everything I write comes from firsthand experience, because money is too important to be left up to pontification. I've been sharing it since 2009.
