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Is early retirement money and life as expected?

Dorina had a question for me which she posted in the comments against my August 2021 early retirement costs & targets post:

I was wondering if you would share a comparison between your spending now and what you estimated before retiring? You have some years of data and I'm really curious if it was above expectations?

I love this question, it's exactly what I was asking myself back in 2016 when considering my own early retirement decision. What would early retirement cost, would it be more or less than I was currently spending? This was a huge question that I was desperately trying to answer before deciding whether or not I could press the button and hand my resignation notice to my employer.

Then, in addition to the money question, there was the matter of trying to envisage what life might look like if I retired.

So these are today's topics:

  1. How does our early retirement spending compare to pre-early retirement expectations, and perhaps to our actual pre-early retirement spending?

  2. How does early retirement life compare to my pre-early retirement life?

Spending - comparing actual to pre-early retirement expectations

Even with the benefit of hindsight and some half decent records, trying to answer this question is proving difficult. That probably explains why it's such a challenging question at the time of the early retirement decision.

The first difficulty is that, although I did keep records all those years ago, I didn't keep them to the same detail as I do now. Looking back, we used much more cash, but whether that was spent on groceries, coffee shops, nights out, or something else entirely, is something that my records don't tell me.

The second difficulty is that our lives were different back then, for example, we still had our son living at home. We also had good jobs with regular and healthy pay cheques which, at least to some extent, meant we spent a little differently. Perhaps a bigger difference was that we were expatriate workers living and working in Dubai, meaning at some point shortly after retiring we would have to leave and live somewhere else with a different cost of living. As it transpires, we seem to have gone from one relatively high cost of living area to another.

The third difficulty is that the change of countries means we have costs in different currencies, and ever moving exchange rates make things difficult to compare.

As a result, any financial comparisons are imperfect, perhaps by quite a margin. But I won't let that stop me having a go. By the way, when Dorina posted her comment/question, part of my response was that I thought I might have already posted something on the subject. I've looked back, and found that I had - I'll use some of the same information here and add some more comments too.

Anyway, what I found is that in 2015, the last full year before my early retirement, we spent a little over £80,000 (US$110,000 or €94,000 at today's exchange rates). At that time, we were a family of three living in Dubai.

I had access to that same information when making my early retirement decision, but I honestly can't remember looking at it. Instead, I think I did two things. Firstly, I'd always had a number in mind - if we could have a before tax income of £50,000 (US$69,000 or €58,000), then I reckoned we could live on that. I don't think this number had a huge amount of science behind it, but I have a vague recollection of subsequently putting together a rough budget as part of my early retirement decision making, and concluding that living on that amount seemed to work. So that was what I based the "what would it cost" part of my early retirement decision on. We would have to pay tax of course, which would reduce that amount to an after tax spending budget of £45,000 (US$62,000 or €52,000).

Now to what actually happened, what we really spent since full time early retirement started.

Our annual early retirement costs (they're in GBP, multiply by1.38 for USD equivalent or by 1.17 for € equivalent)

But things aren't that simple, during those four years we lived in different countries and also travelled a fair amount.

2017: Lived in Dubai for the year (our son was still at home for most of this year)

2018: Lived in Dubai for 6 months, travelled for 4 months, lived in France for 2 months

2019: Lived in France for 9 months, travelled for 3 months

2020: Lived in France for 9 months, UK for 3 months, and there's that Covid thing too

However normal or abnormal those first four years of early retirement were, we can say that:

  1. Our average annual spend of £54,000 was substantially less than the amount of £80,000 that we spent in Dubai during my last full year before early retirement.

  2. But, at the same time, our average annual spend of £54,000 is quite a bit higher than the after tax budget of £45,000 that I had in mind when I made my early retirement decision.

However, maybe even that's not the end of the story, because we of course have choices. A quick look shows that some of our big items of expenditure are mostly discretionary. Based on the 2020 spend, we could get our annual spend down to £25,000 (US$35,000 or €29,000) if we took out travel (we've done some mega trips), furnishing a second house (not a normal thing), gifts/charity, sports equipment and medical costs (if we stayed in the UK we would have free medical). Obviously we wouldn't want these things to all be zero, we'd like a holiday, to buy our loved ones birthday and Christmas gifts, there's always a little maintenance to be done around the house etc, but I think we could be in the low to mid £30,000's (US$41,000's or €35,000's) with our spend if we wanted, even lower if we pushed it.

So what does all this mean? We've spent on average less in early retirement than in the year before when we were working full time but, conversely, we've also spent more than the figure I had in mind when making my early retirement decision. But that's living a life that's certainly not thin FIRE - if we had to cut our costs by around 40%, our life would be a bit different, but I think it would still be a good and enjoyable life. What's more, our investment income covers our costs and I'm sure that causes the purse strings to be a little more relaxed.

Does that answer Dorina's question? I suspect not precisely, partly because my records pre-early retirement aren't as comprehensive as they are now, but also partly because the amount we spend is to an extent influenced by the amount of income we have. If we needed to spend less, we could and we would.

Early retirement life compared to pre-early retirement life

This wasn't what Dorina asked, but her question got me thinking about it. How does my life now compare to my life before, when I worked typically fifty to fifty-five hours a week? Below are some things that come to mind, not the complete story, but a quick brain-dump:

Has my early retirement life met my expectations. Given that I have no desire to turn the clock back, it has to be a resounding yes. But to be honest, the thing I did realise at the time of my early retirement decision was that I couldn't picture exactly what early retirement would be like. It was akin to trying to describe a place you've never been to. It was something I would have to discover once I arrived. It's not been a disappointment.

Some things are probably as I thought they'd be, but many are different. I never expected to be living in France. I love the time that I have to think about things and also the mindfulness that seems to have come with my early retirement. I enjoy that I'm trying to be adventurous, at least by my definition, and I like knowing there's a whole world of opportunity out there to be discovered and that I have the time and the youth to go and do it.

It was a good question from Dorina, and I've enjoyed spending some time thinking about it, trying, and probably failing, to answer it. It was a lot more fun than being at work!


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Just came across this set of (US) stats and thought they may be of interest you, see:

Some Fascinating Retirement Statistics... - The Retirement Manifesto

The statistic "Only 26% of retirees report spending is higher than expected" reminded me of your post.

Replying to

I'm like to say that it's nice to not always be amongst the masses, but maybe not in this case!



Very interesting post.

What most caught my eye was that your gross "figure in mind" (£50k) had little or no rational, explicitly "I don't think this number had a huge amount of science behind it, but I have a vague recollection of subsequently putting together a rough budget as part of my early retirement decision making, and concluding that living on that amount seemed to work." This recent post from ERN explicitly highlights in the conclusion that "getting your baseline budget right might be something you want to spend some time on", see: When to Worry, When to Wing It: Withdrawal Rate Case Studies – SWR Series Part 47 – Early Retirement Now

Replying to

I think, for those who have reliable and reasonably representative records, I'd err towards your process. Mine experience based on early retirement would be new, family circumstances would be new, and location would be new should probably be viewed as the outlier version.


Dorina Gabor
Dorina Gabor
Sep 18, 2021

Thank you for the complex response, it helped getting a more realistic image. I tend to consider a certain yearly budget, by cutting current expenses and it seems that the reality might be different. It seems that whatever I estimate, I should plan also a 5-10% buffer for just in case stuff.

In your case, you came from an expansive area and I guess the original planned budget was helpful to make plans. Good thing you have the additional buffers, to not have to cut down your lifestyle or worry about it.

Replying to

Hi Dorina,

I think a buffer of some sort is a good idea, as you say, stuff happens.

It's also worth reiterating that we've had quite a lot of discretionary expenditure, particularly travel and furnishing a second home. These have been our choice, and could be massively reduced and I'm convinced we would still have a great early retirement, and then I'd be saying that our spend is less than the initial budget figure that I thought of.

If we had less money, I'd rather cut our spend and still have taken early retirement rather than still be working a stressful job that I'd had enough of. We spend much more than we need to enjoy our life, partly because…


Do those figures include Sally's clothes and shoes too? I completely agree about not being able to imagine your retirement till you're there. I'm working on a post about the same thing- I really did start it before I read yours. That's what I get for procrastinating, now you'll think I'm plagiarizing...

Replying to

Yes, Sally's clothes and shoes are included - I guess I can't complain that she spends too much on them. Having said that, she has quite a lot of clothes and shoes stored under the bed, so she doesn't wear that much of what she has anyway.

On your post, I think it's great that you're preparing something similar. We're all different, so it will be interesting to get your view on the same subject.


Hi David,

Great post, lots of food for thought :).

I have a question for you. If you could start your investment journey again back before you retired and back before you invested in buy-to-let, would you structure things differently?

I can't recall how far back (before you retired) you bought your buy-to-let portfolio and invested in Vanguard, but would be good to know if you'd do things the same or differently. You can answer this question both with and without Sally's viewpoint if you'd prefer 🤣.

Best, Ian

Replying to

Hi Ian

To the timeline first, we bought our initial rental property in 2011, and then built up our portfolio of properties, buying the last one in 2017. In terms of low cost ETFs (Vanguard products in our case), I think it was probably 2016 when we started on that route.

In hindsight, would I have done things differently? My answer is yes, I would have bought low cost ETFs on a monthly or quaterly basis and that would have been that. They would have given a huge amount of diversification in terms of industry sectors and geography, to the extent that I'm not sure I would have needed to do anything else. No doubt, some of the peaks and…

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