The Benefits of Gamifying Retirement Spending

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Today’s guest post is from David, a long time blog reader. He retired early at age 52. In the five years since, he has lived exclusively off of his investments while leading an adventurous lifestyle.

Game controller

David has experimented with gamifying the process of spending to help him overcome mental hurdles to drawing from his portfolio while simultaneously keeping spending in check.

Today he will share his process and the benefits he derives from it. Take it away David….

Early Retirement Growing Pains

I retired at 52 with no portfolio withdrawal strategy. I had a no-frills checking account, into which my paycheck had been direct-deposited bi-weekly while I was working, and from which recurring monthly payments like my mortgage, credit cards, and insurance were billed. Everything was automatic. I never had to think about it.

Related: Financial Autopilot

When the paychecks stopped, I simply transferred cash from my brokerage account to checking on an ad hoc basis, replenishing my checking account as necessary. This worked pretty well for a while. 

But as I started to travel a lot, monitoring my checking account balance–and doing manual cash transfers as needed–became an annoying distraction. As a result, I set up automatic, monthly transfers from my brokerage account to my checking account.

The Unintended Benefits of Automating Withdrawals

Automating my withdrawals had some unanticipated–and, as I argue in this post, incredibly beneficial–side effects.

First, it forced me to take careful stock of my monthly living expenses. I had to pick a transfer amount that was:

  • Enough to cover my monthly expenses in the worst-case scenario (e.g., in the dead of winter, when my natural gas bills are astronomically high), and 
  • Not so much as to overdraw interest-earning cash from my brokerage account. 

The goal was to keep the balance in my checking account as low as possible, because it pays no interest. Cash in my brokerage account is held in a fairly high-yielding money market mutual fund (VMFXX which, as I type this, yields north of 5%).

After several months of fine-tuning, I finally arrived at a number that balanced these requirements. I have only had to adjust it once or twice in the last couple years to account for the odd one-off expense.

Why was this exercise beneficial? Because it gave me a more precise answer to the question, how much does it cost me to live in retirement? 

And with a good answer to that question, I can answer the most important question of all, which is, is the value of my portfolio sufficient to fund that retirement? 

Without an answer to the first question, the second is kind of meaningless. Is $1 million enough to retire? $10 million? Unknown! Unless you know how much you will spend in retirement.

A second, more subtle side-effect of automating withdrawals is that doing so has encouraged me to be more frugal. In effect, it has gamified my spending habits.

Dopamine Hits

The game works like this: I get a little dopamine hit when I look at my monthly checking account statement and see that my balance is above water. This tells me I spent within my means that month. I get an even bigger dopamine hit when I see this month’s ending balance is greater than last month’s. This means I spent less than my automated monthly transfer amount. 

And I get an even bigger dopamine hit when, over a period of several months, my checking balance has grown steadily to some not-insignificant number. When that happens, I treat myself to a little reward (the expensive hitch-mounted bicycle rack I just bought for my Jeep, for example).

On the flip side, if my balance goes down from one month to the next, the dread of having to resort to a supplemental manual transfer creeps in, and this has the effect of steering me back to the straight and narrow.

Second-Order Effects

Because I like seeing my monthly checking account balance creep upwards (or at least not go down), I seek out all sorts of ways to make that happen; things I never would have dreamed of while I was still working. This includes:

  • Clipping grocery store coupons, 
  • Claiming gasoline discounts, 
  • Comparison shopping, 
  • Seeking out or waiting for deals on stuff that I need, and 
  • Paying for everything with credit cards that pay me cash back. 

Even the insignificant act of scanning a grocery store coupon, and watching the total go down on the checkout screen, gives me a little dopamine hit.

It’s all of a piece with the gamification of my retirement spending, and it all started with the simple act of automating my monthly withdrawals. This may all seem trite, or even silly. But trust me, if you are a metrics-oriented person like me–and I suspect many reading this blog fall into that category–the money-saving game becomes a fun and engaging challenge!

Related: The One Thing That Determines Financial Success or Failure

Gamifying Inflation Adjustments

One final note is worth mentioning. Since setting up automatic withdrawals about two years ago, I have not given myself a cost-of-living increase (notwithstanding the high inflation we’ve experienced over the last 18 months). 

This inflation adjustment is the standard advice if you are following a portfolio withdrawal strategy like Bill Bengen’s 4% rule. But I have eschewed this advice.

Instead, I am trying to see how long I can go without a raise. This encourages me to find even more novel ways to save. It’s just another part of the game.

An Argument Against Optimization

Some may read this and argue there are better withdrawal strategies. 

  • Why don’t I set up a variable transfer system, whereby the amount of my transfers goes up when costs are high (e.g., in winter when my gas bills are high) and down when costs are low?
  • What about switching to an interest-bearing checking account and putting my cash there? 
  • Or why not set up direct-billing directly from my brokerage account?

These are good ideas in principle, but sometimes important financial considerations should include a dose of psychology, rather than reduce to a cold optimization problem. I worry that implementing any of these optimizations would dampen my incentive to save. 

Keeping the transfer amount constant, for example, incentivizes me to build up that cushion in my checking account, which in turn encourages me to save. Adjusting the transfer amount to meet demand, on the other hand, relieves me of that burden. I don’t think I want that.

Related: Financial Simplicity — How Much Is Your Time Worth?

What steps have you taken to gamify your retirement spending (or as an income-earner, for that matter)? Share your experiences below so that I and others might learn from them.

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[Chris Mamula used principles of traditional retirement planning, combined with creative lifestyle design, to retire from a career as a physical therapist at age 41. After poor experiences with the financial industry early in his professional life, he educated himself on investing and tax planning. After achieving financial independence, Chris began writing about wealth building, DIY investing, financial planning, early retirement, and lifestyle design at Can I Retire Yet? He is also the primary author of the book Choose FI: Your Blueprint to Financial Independence. Chris also does financial planning with individuals and couples at Abundo Wealth, a low-cost, advice-only financial planning firm with the mission of making quality financial advice available to populations for whom it was previously inaccessible. Chris has been featured on MarketWatch, Morningstar, U.S. News & World Report, and Business Insider. He has spoken at events including the Bogleheads and the American Institute of Certified Public Accountants annual conferences. Blog inquiries can be sent to Financial planning inquiries can be sent to]

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  1. Good article, Chris. This is very similar to how I do our finances. I call it a kind of reverse budgeting. I will need to adjust it in the next few months as we are retiring at the end of the year.

  2. We operate with much the same money outlay system. The talking points below the article suggest linking your brokerage account to your bills. Maybe think twice about linking your brokerage account to any of your bills. If hacked, you lose more than just your checking account balance.

  3. An interesting game. I currently take withdrawals roughly quarterly. Partly because I don’t want to have to be on top of it every month. I also don’t like taking withdrawals. So I do it less frequently.

  4. Congrats and kudos on finding and implementing a system that works for you. I prefer, however, to be a touch more precise. We only use 2 credit cards (both great for cash back) and when their statements come due, I download and categorize across about 20 categories (food, travel, dining, mortgage, taxes, etc.). I track our spending throughout the year to give us a very accurate accounting of what we’re spending and where. I do this all in excel (which is kinda my gamification, as I enjoy tweaking formulas and the like). This process gives us a running average of costs by category which helps us see if we’re tracking higher or lower. We’ve been doing this for the 6 years of our retirement and it helps us have great realistic conversations about our finances.

    1. Hi Dwayne,

      I too am a spreadsheet geek, and use them to track my expenses (among many other financial aspects of my life) meticulously. Unfortunately, I think spreadsheets make most folks cringe, and you and I are the outliers.

      That said, I firmly believe you can’t manage what you don’t measure. And measuring where your money is going (and how much of it) is not only useful for planning, but takes a lot of uncertainty (read: stress) out of retirement.


  5. Now I have a new term to encapsulate the spending game I also play! Had to laugh as I too began clipping coupons over the last year or so (usually digital.) Who knew it could be so satisfying, haha! An additional tactic I’ve adopted is to regularly swap out streaming services so I only have 1-2 active at any given time. I binge the shows I want and then move on.

    Spending management has become so much more important over the last +/-18 months now that portfolios are remaining relatively flat.

    1. Yeah, Ken, the one-two punch of lackluster market performance and high inflation has really put the squeeze on us retirees. Thus we resort to factors we can control—e.g., discretionary spending—to relieve the pressure. A wake-up call, for sure, after so many years of low inflation and interest rates, and high market returns. And I think a valuable learning experience to have to play defense for a change.

  6. Got a laugh out this! Thanks!
    Retired 4 years ago at 58 and started doing everything mentioned for the first time back then.
    My auto transfers occur weekly from multiple accounts into interest earning checking from which my cash back CC where all expenses are charged is auto-paid monthly.
    I do weekly xfers instead of monthly to avoid having to intervene or pay interest if a single big monthly transfer fails.
    Directly linking financial/brokerage accounts to payee’s isnt a good idea. Use a CC, enable every transaction alert available and use 2FA everywhere but not the SMS text kind.
    Banks in the U.S. downplay/ignore the deleterious effects of a SIM swap attack so for login authentications give them a VoIP#. If they cant accept VoIP then use an email address that isn’t tied to your phone carrier.

    1. JT (and David above), great remarks about the importance of securing online accounts. As a former software engineer, this is a subject near/dear to my heart, and is worthy of an entire blog post (or two) by itself. Even a few simple steps can drastically minimize our exposure to cybersecurity risk.

      1. Sounds like the next guest essay! I would love to hear what the experts have to say about how to keep our online accounts secure.

        1. Excel spreadsheets, dopamine hits..what’s not to like!

          My spouse and I are doing something similar as we enter our first year of retirement. We’ve closely tracked our budget for two years, and have come up with what we think will be our annual spend. We’re planning on quarterly transfers from our brokerage account into a HY savings account, and then weekly transfers from savings to checking. One tweak, I imagine if our checking account starts to balloon, we’ll funnel some back into the savings account. Also we’ll likely wait to the end of the year to examine how we’ve ‘done’–particularly if any extra in there to spend. It will be tough to get excited about monthly extra money just as I don’t want to get too upset about a large monthly spend. I want to see how it plays out over the year–unless we see a complete outlier happening. It is exciting though to get a personal process that you can hang your hat on. Best of luck.

  7. Congrats on finding a method that works for you. The key takeaway is that each person must land on the process that works for them; there is no absolute best way. Reading about what others are doing is one source to develop options to consider.

  8. I have had automatic transfers from my high yield savings account to my checking account set up for some time. This is mainly to cover monthly expenses. Other expenses, such as insurance and estimated tax payments, are auto payments set up to go directly from high yield savings, but also tracked in my budget. Transfers from brokerage accounts are usually done a couple times a year — in the most tax beneficial way — to re-up my high yield savings.

  9. Can absolutely relate to this being a fun excercise, lol. NerdsUnite!

    I also try to plug in no spend days and I plop things onto the calendar to research how to DIY (make own laundry soap, cooking/canning/gardening, mending clothes, yada yada). If I do something bigger (say, full car detail), I may reward myself with a meal out. Still saved 🙂

    I have also found that I sometimes want to shop out of boredom (this is very rare) – I can instead create a pile of donations from home at no cost to me, I usually find something that I’d forgotten about, and I feel better when I’ve decluttered a closet.

    Last, we have kids at home. The teen wants money….I’m going to let her try creating listings to sell larger ticket items that we no longer need, and give her a piece of the sale. Maybe 25%. Should result in some “bonus” folding money for all.


    1. Penny,

      LOVE the idea of paying the kiddo while making money myself and decluttering (which I need but hate to do). Win-Win-Win!

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