Waffle
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Post by Waffle on Mar 23, 2011 9:49:59 GMT -5
It seems all the retirement calculators and articles, suggest that you plan for anywhere from 70 to 90 percent of your pre-retirement income after retirement. I think I'm going to need significantly less than that. Debt repayment (including mortage) and 401k contributions alone = 46% of my gross and those things will all be gone in retirement.
Am I looking at it wrong? (I'm 50 by the way).
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resolution
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Post by resolution on Mar 23, 2011 9:51:46 GMT -5
You have to factor in the rising cost of health care and an assisted living facility/nursing care or long term care insurance.
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Gardening Grandma
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Post by Gardening Grandma on Mar 23, 2011 10:00:36 GMT -5
It seems all the retirement calculators and articles, suggest that you plan for anywhere from 70 to 90 percent of your pre-retirement income after retirement. I think I'm going to need significantly less than that. Debt repayment (including mortage) and 401k contributions alone = 46% of my gross and those things will all be gone in retirement. Am I looking at it wrong? (I'm 50 by the way). DH has been retired two years. I've been semi retired for over 10. Everyone's situation varies, but we are spending pretty much about the same in retirement as we spent before retirement. Before retiring, DH took a lunch to work every day so no real change there. We are no longer contributing to a 401K plan or paying union dues. No payroll taxes. We spend less (obviously) on clothes, but more on gas (due to rising prices and a remote location). We spend quite a bit more on healthcare (his employer covered the premiums, now we pay for part) even though we both are healthy. We took out LTC ins at a cost of about $3000/yr. Our utilities are up - we are home more and using more, and the price has gone up. We are spending more on food because food costs more. And we aren't eating less, LOL. Rather than using a % of pre-retirement income, I'd look at spending. But it would be unrealistic to think that inflation won't be an issue. If you have no mortgage, that is great, but at some point you'll need to replace a vehicle, repair things that break, and for sure, it will cost more than it does now. ETA to add, once you turn 60, your dr starts talking about various tests and procedures for early detection of problems. Colosectomy, bone density etc.... Those cost $$ - ins may help, but there are still OOP expenses.
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Deleted
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Post by Deleted on Mar 23, 2011 10:05:25 GMT -5
In my case, I think I will be spending about the same if not more - more time on my hands to do what I want and some of it will require $$$ - more time on my wife hands to do what she wants... and I bet you spoiling her kids/grandkids will be a major part of it and that will costs $$$ - Traveling and eating out more often
those three alone will eat up what I would have paid into 401K and mortgage payment.
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Waffle
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Post by Waffle on Mar 23, 2011 10:14:19 GMT -5
I know I have to factor in health care and that will go up significantly from what I'm paying now. Currently I'm not very interested in traveling - but that could change.
GG - I think you've got the right idea, it's spending. But all the calculators use percentage of income. So I tried to estimate spending and then change that to a percentage. I went to a mini-retirement seminar put on by our company's 401k provider and then tried to use their calculator - just got me thinking.
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Gardening Grandma
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Post by Gardening Grandma on Mar 23, 2011 10:21:29 GMT -5
But all the calculators use percentage of income.
Yeah, I had that frustration as well. My suggestion for someone age 50, is to figure out the $$ amount that you need to live on now (better yet, a range - bare bones to some luxuries). Figure you'll need approximately the same since some expenses will be less, but others will be more.
Then factor in some % for inflation and go from there.
If we had to, we could live on our pension/SS income. But we are currently drawing some from the retirement accounts. I'm working on two budgets - the current one and the "if we needed to cut back" one.
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skubikky
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Post by skubikky on Mar 23, 2011 10:37:24 GMT -5
"once you turn 60, your dr starts talking about various tests and procedures for early detection of problems. Colosectomy,"
Wow....a colosectomy.....I hope you meant a colonoscopy.
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Gardening Grandma
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Post by Gardening Grandma on Mar 23, 2011 10:42:40 GMT -5
"once you turn 60, your dr starts talking about various tests and procedures for early detection of problems. Colosectomy," Wow....a colosectomy.....I hope you meant a colonoscopy. Oh Gawd!!! Thanks - I did mean a colonoscopy (going to get more coffee)
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tskeeter
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Post by tskeeter on Mar 23, 2011 10:51:14 GMT -5
Our projected retirement budget adds up to about 75% of our current gross earnings, assuming we have no mortgage. While some spending will probably go down, I think financial assistance to family members (elderly in-laws with limited resources and a mentally challenged BIL), travel, spending on hobbies, and medical care will go up. Given the extent to which medical care costs have increased since I first drafted this budget five years ago, I'm starting to think I should bump up our budget a little bit.
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april47
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Post by april47 on Mar 24, 2011 18:50:31 GMT -5
I think that the retirees that decide to downsize and/or relocate are the ones that show a significant drop in that percentage. If you plan on keeping up and add a little travel to the equation then I would imagine you could spend even more than before. It is extremely variable. I sold my house and paid off some bills and now live on approximately 30% of what I did pre-retirement. I live a simple lifestyle and don't drink smoke or have a pet. I do stay active and have hobbies. I love retirement and do not feel deprived at all.
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