Snapshot vs Stable State: Why Your Retirement Budget is Overinflated


Reading Time: 4 Min

I read a lot of FIRE boards. And something particularly eye-opening is comparing the budgets of aspiring FIRE-ers with those of the actually retired.

Most folks report that they actually spend less than they budgeted in retirement. Sometimes it’s less travel, sometimes it’s less eating out, and sometimes it’s less on an expensive hobby as they pick up other, cheaper pastimes.

What all those individual cases boil down to, though, is that many of the things you are imagining on your docket for retirement are probably only temporary projects, and you are probably over-inflating your retirement estimate because you assume you will be pursuing them indefinitely.

In other words, when you envision your retirement, you see a snapshot filled with all the novel, expensive things you want and assume they are ongoing expenses, but they are most likely short-terms costs that don’t actually figure into your stable state dream life. 


Examples of the Snapshot Error

Say you expect to travel. Unless you have a serious travel bug as exhibited by dozens and dozens of trips so far in your life, you will probably be like me; you go on a few big international vacations and then you’re good. Or you do six months around the world and retire to your couch.

At this point, I won’t even go on an all-expenses paid vacation by myself. I’d go with friends and family, but I’d only want to do one trip maximum a year. That shit gets tiring, man. So after two or three years of jetsetting, you are probably done. Believe me, while there are some true travel bugs out there, if you haven’t been fitting travel in at every opportunity already, your list of actual travel desires will get taken care of very quickly.

Say you expect to do expensive activities. That’s fair. But the truth is you tend to stick with things you end up getting good at, and if you’re good at things they often stop being so darn expensive. Taking music lessons? After 4 or 5 years, you’re probably at a point where you can practice on your own, cut down your lessons, go with online options, or even teach yourself. You’re not taking lessons for 20 years.

I call this problem Working Goggles. In your limited spare time while working, you have really enjoyed X. So you imagine you need to support X for the rest of your retired life. But the truth is that while X is enjoyable, you’re not going to want to do X every day all day. Its relative scarcity whets your appetite for many things that end up being a meaningful but more casual part of your life. You will discover this when you have a plethora of options.


Universally Enjoyable Activities Are Mostly Free

So what does the hobby list (and cost) look like for an actual retiree?

I live in one of the most amazing cities in the world, where you can pursue just about anything you’re interested in. But I’m only one person, and I only have a few major interests at a time.

So instead of running around to yoga and barre and gyrotonic lessons ($30/class), learning instruments ($50/lesson), participating in a mariachi band ($150 outfit), touring all the museums ($15/trip), going to underground art shows ($10 drinks), etc. etc. etc. I have a few major passions. Writing (free). Reading (free). Talking to my friends (free). Playing with my dog at the dog park (free). I didn’t plan for all those things to be low cost, but they are.

When you think about the things that bring universal delight to humans, they mostly tend to be free as well. They were evolutionarily selected behaviors before commercial pleasures were created. Hanging out with other people. Learning. Playing. Sleeping. Your life will most likely revert to these things as well, and your retirement will cost much less because of it.

From the other side of the retirement fence, I distinctly remember a laundry list of things I thought I’d want to do, and a lot of them required money. International travel! Classes of all kinds!

But eventually many of those things were satisfied – and relatively quickly. When you think about retirement, you fill it with all the things you don’t have now that you want, but you often neglect to categorize them as short-term vs ongoing expenses. You’ll try a few things. They’ll be nice, but then you’ll be ready to move on. It is much easier to budget in three big international vacations for you to get your travel fix (an extra $15k total), than to budget big international travel for the rest of your 40 year retirement (at $5k a year, $5k ÷ 3% withdrawal rate =$167k additional nest egg).

You are overestimating your retirement needs because you are putting too many things into your ongoing expenses based on your wants today that are actually only one-time costs.

Statistically, most of those wants are likely to be satisfied in more temporary fashion (one or two years, a few trips, etc.). If you re-bucket those by pulling them out of your ongoing expenses and just putting them in the one-time savings section of your retirement budget, you could shave hundreds of thousands off your nest egg target, saving you years of extra working life.

This is why a I advocate a one-time expenses category when building your retirement budget in my airtight budget post.



You are closer to a happy, activity-filled retirement than you think. Go back to your retirement budget and adjust it for short-term, one-time dreams you want to fulfill. You may find you need hundreds of thousands of dollars less than you budgeted.  



Get More of The Money Habit
Enjoyed this post? Get new ones every Tuesday and Thursday and start building your own Money Habit.
No spam. We respect your privacy.

You may also like...

5 Responses

  1. Michael Crosby says:

    i just really like your thoughts. very enjoyable, thank you so much.

  2. Heather says:

    Hi – I have a quick question. What does FIRE stand for?


  3. Thank you for this great post! “Working Goggles” is a phrase I might adopt myself – it describes perfectly the distinction between what you think you want and what you find you truly want, and how that relates to your need time spent on an unsavory activity. I’ve been searching for this phrase for a while now without knowing it 🙂

Leave a Reply

Your email address will not be published. Required fields are marked *

Want To Retire Earlier?
Get new posts every Tuesday and Thursday that could help you earn, save, or grow your money by thousands of dollars. Or, you know, it will at least have pretty pictures.
No spam. Nobody likes spam.