Why We Give Ourselves a Monthly Retirement Paycheck

We are both fully retired now and haven’t gotten a “real” paycheck since December. At first, we didn’t think that was a big deal, but it’s really quite weird to not get a regular paycheck.  I mean, everybody keeps track of paydays, right???  And, Carter has pretty much always had a detailed spreadsheet with paycheck information (e.g., benefit deductions, extra paychecks when we got paid semi-monthly).  Yes, he can be a little on the analytical side!

We have 4 main reasons for paying ourselves on a monthly basis vs just withdrawing what we need from our investments:

1Provides monthly investment disbursements (aka, paychecks).

Initially, we didn’t think of the monthly disbursements from our investment accounts as paychecks, but that’s what they are.  We’re paying ourselves! 

Depending on how the market is performing, we draw down from our investments or cash accounts.  If the market is really stinking, we don’t want to sell any of our investments, so we have a separate cash account we use to pay ourselves.  That way we’re not forced to take losses on investment sales.

2Helps us be more aware of spending.

Contrary to popular belief (by our son), we don’t have a bottomless pocketbook.  We’ve found that when we pay ourselves we’re much more conscience of our spending and budget. Our monthly paycheck is basically our annualized expenses divided by 12.  Anything outside of the annual budget needs to come from our side hustles (e.g., online resale, Lyft). 

Carter, assuming the budgeting position

We don’t want to be completely stressed out by market volatility, so we don’t watch our investments all the time.  We touch base with our financial advisor and review our account information available online once every 6 months.  He gives us a detailed review, we talk about budget, and tag dollars for specific “job descriptions” (e.g., long-term care insurance).

3Allows us to NOT watch our investments on a daily basis.

We use Quicken to track every penny.  Having a paycheck helps us be more aware of our budget and spending on a monthly basis vs waiting till the end of the year.  And, Quicken lets us see both sides of the equation: income and expenses, on a real-time basis.

4Reinforces how blessed we feel.

Last, but certainly not least, we feel blessed every day! We giggle to ourselves when Carter says, “we got paid today” on the first day of each month.  It’s still hard to believe we’re actually retired and living this life.  We certainly don’t take it for granted, and we’re thankful for the steps we took early in life and along the way to help guide us toward this very simple way of living!

We’ll be giving ourselves a raise!

We need to make our investment money work for us for the next 40-50 years. But, the good news is that the paycheck we’re living on right now is the smallest it will ever be.  Thank goodness! Once Carter turns 59 ½ (7 ½ years from now, but who is counting?) we’ll be able to start drawing down from his 401(k).  We also have Holly’s 401(k), pensions, and (hopefully) Social Security as we get older. As we add each of those layers, our paycheck will get a little bigger.

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