I saved $3 million but was afraid to spend it when I retired. Here’s how I changed my mindset after being frugal for decades.

• During his 40-year career, Scott Scovel saved $3 million for retirement.

• But when he retired, he was so focused on saving that he struggled to start spending.

• Spending tactics such as a $50,000 “war chest” helped him adopt a carpe diem approach.

I’ve spent a lifetime scrimping and worrying about my retirement portfolio and savings, and by the time I’m 58 in 2020, it’s worth $3 million—more than enough to retire and cover healthcare for the rest of my life.

However, I worried about worst-case scenarios like hyperinflation leaving me poor. So I worked another year. And another.

For decades, I’ve heard retirement advice encouraging me to “save more!” But no one explained that at some point I would have to radically change my lifestyle and “spend more!”

I set about saving until an old college classmate died at age 59 in 2022. I was the same age, and his death deeply disturbed me. Realizing that I have more money than time, I decided it was time to stop working.

A few weeks later, the day before my 60th birthday, I quit my full-time job as head of pricing at a software company. I had transitioned to the next phase of my life, but my savings-oriented mindset struggled to change.

I was proud of my disciplined approach to saving

I had been saving for retirement since early in my career, when I was working as a junior portfolio analyst at a financial planning firm. I chose to have my company deduct 10% of each paycheck and put it into a pension fund. They partially matched my contributions and taught me the importance of saving for retirement.

I continued this habit throughout my 20s and 30s. As I’ve gotten older, I’ve strived to make the maximum 401(k) contribution allowed by the IRS each year, including the additional catch-up amount they allow once we turn 50. Fortunately, my product and CEO career in various industries, including banking, media, and technology, has given me the means to consistently contribute to my retirement plans.

For nearly 40 years, I’ve poured money into retirement accounts from nearly every paycheck, postponing today’s joys to secure tomorrow’s happiness.

To maximize long-term returns, I invested in equity mutual funds in each of my employer’s retirement plans, primarily aggressive US funds plus some international as well. Every time I moved companies, I rolled over my funds with my former employer into low-cost Vanguard IRAs. I didn’t worry if the market went up or down, as I knew over the long term stocks significantly outperformed cash or bonds.

By my late 50s, thanks to the power of compound interest, my savings had grown to over $3 million. Besides, I owned my house. My gut felt that I probably had enough money to retire, and then I confirmed this by reading many investment articles, talking to experts and friends, and building a multi-page spreadsheet to break down my finances.

I was financially, but not mentally, ready to retire

At first, I was uncomfortable with seeing my savings dwindle, and I had such a work-until-I-quit mentality that I couldn’t even believe I was “retiring.” I told myself that I was just taking a three-month vacation before I decided on the next stage of my career.

I realized that I needed to rewire my brain and tackle my personal finances to ease my transition into retirement and enjoy spending as much as I would like to save. This helped me to stop working more willingly.

When my three month “vacation” was over, I extended it by a few months and then some more. I just started my 38th^th holiday month. And now, when my mind is distracted, I actually tell people I’m retired.

I give myself a “paycheck” and have a “war chest” for fun experiences

I budgeted that I would need $7,500 per month to cover expenses during retirement, which I initially manually transferred from my savings to my checking account. But then my frugal instincts kicked in and I wondered if I could get by with $6,500 instead, cutting back on things like eating out or buying clothes.

An automatic monthly transfer was a much better solution. I discovered this approach in an article about retirement, but took it a step further by calling it “my paycheck.” This language has eased my anxiety, and consequently I never have to worry about how much I am withdrawing, nor am I tempted to scrimp on anything.

Another effective anti-saving tool is my “war chest,” which is a pot of money I set aside each year for fun experiences, some of which are taken out of my monthly “paycheck.”

I aim to pay myself around $50,000 a year for this war chest so I can travel a lot while still in my early 60s, fit and in the go-go retirement stage. I will reassess the annual war chest amount as I age, reaching the “slow-go” and “no-go” stages of retirement. My financial planning suggests that I will be able to maintain my $7,500 per month “paycheck” and my war withdrawals, both of which increase annually at the rate of inflation, until I am 95.

In the spirit carpe diemI’ve enjoyed recent war experiences like witnessing the Great Wildebeest Migration in Kenya, paying extra to get near-invisible hearing aids that make me less self-conscious, and watching my friend’s delight when I replaced her broken dishwasher. At the end of the year, I see any money left in my war chest as lost pleasure, not savings.

For decades, I acted like Aesop’s proverbial ant, who worked all summer to store food for the winter, while the grasshopper played and later starved.

Thanks to my vacation mentality, paychecks, and war chest, I have become wiser. I like retirement because I both toiled as the ant in the past and now rejoices safely as the grasshopper in the present.

Have a story to share about saving for retirement? Contact the editor, Charissa Cheong, at ccheong@businessinsider.com

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