laterbloomer
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Post by laterbloomer on Jan 29, 2021 11:33:29 GMT -5
What do your really spend per month? I'm trying to decide how much I need for retirement and I'm coming up with a really low monthly amount and I'm curious how realistic it is.
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jerseygirl
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Post by jerseygirl on Jan 29, 2021 11:45:55 GMT -5
About the same or more than pre retirement ( but not this year) Travel, monetary gifts to kids, grandkids, taxes and health insurance are more Wish I had put more into Roth instead of traditional IRA/401k as now we must take high RMDs that are taxed and also cause higher Medicare (IRMA) and drug insurance payments.
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Rukh O'Rorke
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Post by Rukh O'Rorke on Jan 29, 2021 11:50:15 GMT -5
My bare minimum would start at about 5k/month. Is that low or high - compared to what you are looking at?
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plugginaway22
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Post by plugginaway22 on Jan 29, 2021 11:54:38 GMT -5
We are looking at retiring real soon and believe we can do it on $50k/year.
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lynnerself
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Post by lynnerself on Jan 29, 2021 12:19:34 GMT -5
About the same as before retirement (not including travel). What we saved from job related costs is spent eating out, wine tasting , home improvements etc. Travel (before Covid) was a big increase, but was accounted for in our savings plan. ETA: I forgot about medical insurance, that was the big extra cost that had to be accounted for. It was ridiculous until we turned 65 and is still high.
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MN-Investor
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Post by MN-Investor on Jan 29, 2021 12:25:49 GMT -5
The best way to project what you'll spend in retirement is to track and analyze your current spending. Several years before my sweetie joined me in retirement I started summarizing all the data from Quicken where I kept track of all of our spending. By the way, spending includes all those automatic deductions from your paychecks so don't forget them. Identify all the recurring expenses that will continue unchanged - real estate taxes, insurance, etc. I have a huge Other category which is basically everything spent at Target, grocery stores, restaurants, etc. The point of this exercise is NOT to identify all the little expenses, but to get an overall picture of what YOU spend, on average, during the year. Then think about what will change for you in retirement. Reduce expenses for work clothes and gasoline for example, but increase expenses for trips to visit the grand kids. I'm continuing to figure out what I spend each year because my sweetie retired in 2016, he passed away in 2018, and the pandemic hit in 2020.
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saveinla
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Post by saveinla on Jan 29, 2021 12:26:30 GMT -5
What do your really spend per month? I'm trying to decide how much I need for retirement and I'm coming up with a really low monthly amount and I'm curious how realistic it is. Maybe if you list your categories, people can comment on what may be missing.
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laterbloomer
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Post by laterbloomer on Jan 29, 2021 13:56:37 GMT -5
What do your really spend per month? I'm trying to decide how much I need for retirement and I'm coming up with a really low monthly amount and I'm curious how realistic it is. Maybe if you list your categories, people can comment on what may be missing. I'll do that when I get home.
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skubikky
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Post by skubikky on Jan 29, 2021 14:16:08 GMT -5
I used to do all the projections on my investments and an estimated budget.
But as it turns out it really didn't matter.
Monthly burn rate is markedly lower than income from investments.
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Deleted
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Post by Deleted on Jan 29, 2021 14:21:39 GMT -5
I'm probably spending more than when I was working but that's because I can and most of the increase is in travel and charitable donations. Oh, yeah- and I'm not saving for retirement anymore! I sort of did it backwards- looked at the assets and calculated 3.5% (4% is considered a safe withdrawal rate but I'm pretty conservative) and asked if we could live on that plus DH's SS and the $900/month pension I was getting. The answer was yes. Don't forget the occasional "shock" expense- a root canal car transmission dies, house needs a new roof or new A/C, etc.
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Deleted
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Post by Deleted on Jan 29, 2021 14:59:52 GMT -5
I'm a terrible person to ask because I simply live on what I get from my pension + SS. A lot of expenses went down after retirement. @athena53 mentioned she's not saving for retirement anymore, but that is more than what you were putting in your 401k. In my case, I no longer save for retirement (pension contribution, 459 contribution, and Roth contribution). I also don't pay SS/Medicare taxes on my "income" or state income tax.
What did go up for me was insurance, but that shouldn't be a problem for you since you live in Canada, right? Everything else has stayed the same or gone down.
I do save $1500 a month from the $4500 that I receive after taxes. The remaining $3000 is more than I had to spend prior to retirement, but DH was alive then and drawing a nice SS check.
ETA: The $4500 is also after health care, including dental insurance.
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mollyanna58
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Post by mollyanna58 on Jan 29, 2021 15:18:53 GMT -5
I am not retired but I handle my mother's finances. Her spending costs have gone up with increasing age. She is no longer able to live alone, and has a live-in aide. That's expensive.
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laterbloomer
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Post by laterbloomer on Jan 29, 2021 15:49:56 GMT -5
Expenses Mortgage Property Taxes $350 Insurance $400 Electric/Water $250 Gas for house $150 Reliance Food $400 Gas for car $150 Cell phone $70 TV/Internet $167 Spending $500
Total $2,437 I'm in Canada, I don't have to worry about health care, and if I need long term care I sell the house. I also have savings for shock expenses but I plan for the roof to be done before retiring and I do have insurance. I've padded everything to compensate a bit for inflation. What do you think?
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NastyWoman
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Post by NastyWoman on Jan 29, 2021 15:51:56 GMT -5
I'm probably spending more than when I was working but that's because I can and most of the increase is in travel and charitable donations. Oh, yeah- and I'm not saving for retirement anymore! I sort of did it backwards- looked at the assets and calculated 3.5% (4% is considered a safe withdrawal rate but I'm pretty conservative) and asked if we could live on that plus DH's SS and the $900/month pension I was getting. The answer was yes. Don't forget the occasional "shock" expense- a root canal car transmission dies, house needs a new roof or new A/C, etc. Not yet retired (but soon -covid permitting this fall). And I have calculated out what I 'll have coming in that same way as athena. Since I have hardly any cost left with my paid off mortgage I have plenty and then some. And that leaves my Roth and other savings for any shock expenses or when the market under performs
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vetswife
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Post by vetswife on Jan 29, 2021 15:54:05 GMT -5
I live on about 3200 monthly, including charitable donations and gifts. That leaves a bit leftover for miscellaneous expenses and I try to put some in savings. I haven't touched retirement savings except to buy a new car last summer. My monthly expenses include putting money aside for house, car and flood insurance and HOA fees so I am prepared when they come due.
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Post by minnesotapaintlady on Jan 29, 2021 15:58:18 GMT -5
Expenses Mortgage Property Taxes $350 Insurance $400 Electric/Water $250 Gas for house $150 Reliance Food $400 Gas for car $150 Cell phone $70 TV/Internet $167 Spending $500
Total $2,437 I'm in Canada, I don't have to worry about health care, and if I need long term care I sell the house. What do you think?
Well, I think that is perfectly doable for typical month to month. What it's leaving out is big ticket maintenance, car replacement and travel. What are your plans for those?
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laterbloomer
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Post by laterbloomer on Jan 29, 2021 16:01:45 GMT -5
Expenses Mortgage Property Taxes $350 Insurance $400 Electric/Water $250 Gas for house $150 Reliance Food $400 Gas for car $150 Cell phone $70 TV/Internet $167 Spending $500
Total $2,437 I'm in Canada, I don't have to worry about health care, and if I need long term care I sell the house. What do you think?
Well, I think that is perfectly doable for typical month to month. What it's leaving out is big ticket maintenance, car replacement and travel. What are your plans for those? I edited my original post as you were posting. I plan to do the roof before I retire and I do have savings for things insurance won't cover. I need to figure out how much of a travel budget I want.
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Post by minnesotapaintlady on Jan 29, 2021 16:06:31 GMT -5
Personally I think without a mortgage or kids, I could do fine on 3K/month with dipping into savings for large irregular expenses which would be close to your $2400 because I'd need to pay for insurance.
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Blonde Granny
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Post by Blonde Granny on Jan 29, 2021 16:20:15 GMT -5
Like Susana, I live on VA disability and Social Security......there is usually some left over so my total monthly cost: food, utilities, gas, and all other misc. costs me about $2300 to 2400 month. I spend little if anything on entertainment, travel or other items I deem to be unnecessary (for me, not you)
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laterbloomer
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Post by laterbloomer on Jan 29, 2021 16:37:05 GMT -5
Personally I think without a mortgage or kids, I could do fine on 3K/month with dipping into savings for large irregular expenses which would be close to your $2400 because I'd need to pay for insurance. If I wanted to sell the house and rent an apartment with a room mate my expenses go down even more. I'm trying to decide how much the house means to me in retirement.
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Deleted
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Post by Deleted on Jan 29, 2021 16:55:40 GMT -5
Personally I think without a mortgage or kids, I could do fine on 3K/month with dipping into savings for large irregular expenses which would be close to your $2400 because I'd need to pay for insurance. If I wanted to sell the house and rent an apartment with a room mate my expenses go down even more. I'm trying to decide how much the house means to me in retirement. I also think I've been really generous with my food and spending budgets I don't know about the being really generous part. What I have found about "spending" is that there are a lot of things that you "forget" to include like tags & registration & oil changes & new tires & new brakes, etc. for your car. Or gifts. Or yearly subscriptions like the $30 a year I spend for Ring, or my Costco membership fee, or my Amazon Prime membership (that's all my tv except for a Hulu account with ads for $60 for the year), or my AAA membership, and so on. Do you do your own lawn service? Clean your own gutters? Never use a dry cleaners? Never have your carpet cleaned? Cut your own hair? Buy ink for your printer? Do your own taxes? Since it isn't broken out, all that would have to come from "spending," and it mounts up. As far as house vs. apartment, I know Blonde Granny is almost ready to hang up home ownership in favor of senior living apartments, but I couldn't take the lack of privacy. If by "roommate" you mean your BF or BFF, then that might work. But unless you really know the person, I think living with a stranger as an older adult has the potential to be a real problem. We aren't college kids just starting out. They . . . you know that mysterious "they" . . . say you will be ok if you have 80% of your pre-retirement income. That might be a place to start.
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Rukh O'Rorke
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Post by Rukh O'Rorke on Jan 29, 2021 17:44:00 GMT -5
Expenses Mortgage Property Taxes $350 Insurance $400 Electric/Water $250 Gas for house $150 Reliance Food $400 Gas for car $150 Cell phone $70 TV/Internet $167 Spending $500
Total $2,437 I'm in Canada, I don't have to worry about health care, and if I need long term care I sell the house. I also have savings for shock expenses but I plan for the roof to be done before retiring and I do have insurance. I've padded everything to compensate a bit for inflation. What do you think?
no number on the mortgage?
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tskeeter
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Post by tskeeter on Jan 29, 2021 18:24:38 GMT -5
My bare minimum would start at about 5k/month. Is that low or high - compared to what you are looking at? For the two of us, we spend about $11K a month. That includes about $750 in mortgage payment, a $400 a month car payment, about $10K a year for travel, and no state income tax. A single person would probably live for 15% - 20% less because you’d only have one car, medical care for one person, food and clothes for one person, probably lower housing expenses, and the like. Another longer term consideration might be whether or not you raised a family. Kids may be able to provide some assistance as you age, delaying the cost of assisted living, etc. As childless retirees, our budget includes about $2K a year for LTC insurance.
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TheOtherMe
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Post by TheOtherMe on Jan 29, 2021 18:28:21 GMT -5
I certainly don't spend $5K per month because my pension is no where close to $60K per year.
I do not spend more than I earn and I do live in a LCOLA.
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Post by The Walk of the Penguin Mich on Jan 29, 2021 18:39:21 GMT -5
TD has been tracking our expenses for the last several years. Certain categories will go away, others increase. It is an ever shifting landscape for us where paying for COBRA until Medicare kicks in, pulling from Canadian accounts until SS for TD kicks in. Once his SS kicks in, all expenses other than travel should be covered by our combined SS.
It’s not straightforward.
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buystoys
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Post by buystoys on Jan 29, 2021 18:52:34 GMT -5
We spend about what we did before we retired. I tracked our expenses (mine for years, ours for three years) before we retired so we had a pretty good idea about what it would cost us. The big thing we underestimated was medical coverage. The overestimations elsewhere made up for that in the final budget. Now that we're on Medicare, medical costs are really low compared to our first four years. Here are my categories: Home Mortgage Home Property Taxes Home Insurance Home Electric Home Water Home Garbage Home Housekeeping Home Pool and lawn Home Major Projects Home Maintenance Personal Groceries Personal Cigarettes Personal Pets Personal Spending Money Automobile Car payment Automobile Gas Automobile Insurance Automobile Registration Automobile Maintenance Medical Ins. Premiums Medical Doctor/Dentist Medical Lab/X-ray Medical Misc. Medical Prescription Telecommunication Cable Telecommunication Phone/Internet Telecommunication Cell phones Rental Expenses Taxes Federal Taxes Tax prep
The maintenance buckets are just a single number in for the year. We haven't spent it on the house (1% of the house value) yet, so we have some slush there.
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tskeeter
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Post by tskeeter on Jan 29, 2021 19:02:58 GMT -5
Expenses Mortgage Property Taxes $350 Insurance $400 Electric/Water $250 Gas for house $150 Reliance Food $400 Gas for car $150 Cell phone $70 TV/Internet $167 Spending $500
Total $2,437 I'm in Canada, I don't have to worry about health care, and if I need long term care I sell the house. I also have savings for shock expenses but I plan for the roof to be done before retiring and I do have insurance. I've padded everything to compensate a bit for inflation. What do you think?
For a macro level view of spending, I don’t try to build a budget from zero by category. I simply take the amount that flowed through our checking accounts for the year. Then I deduct any disbursements that are not payment of expenses. Things such as transfers from checking to investment accounts, etc. In 10 or 15 minutes of looking at on-line bank statements, I know how much we spent in a year. I believe that for most people, their retirement spending in total will be pretty close to what they spent while working. Some things, such as mortgage payments and retirement savings, will probably go down. But those decreases will most likely be offset by increases in spending on travel, hobbies, income taxes, etc. Even if you’ve been doing something such as cash flowing college expenses, that probably means that you have been putting off replacing cars, replacing household appliances that are nearing the end of their lives, delaying doing major home maintenance such as a new roof, and similar items that will consume part of your retirement budget.
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sesfw
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Post by sesfw on Jan 29, 2021 19:39:05 GMT -5
After we retired we moved to another state so our expenses changed a lot.
Mortgage went down about 25% Property taxes down close to 60%. Cost of just plain living down about 10% Vehicle insurance down Licensing of cars down
Our home is paid off now so it's just maintenance and taxes now.
Both over 65 at retirement so medical isn't a real problem.
Our month-month living expenses are about 3/4 of monthly income.
With this pandemic our travel doesn't exist, and hobbies can be done at home.
Taxes on RMDs can sting a bit but it's all in the planning.
Track your spending for a couple of years before retiring so see where the funds go now. As you get older, you ability to do the things you did in your young adult years will change. Have an emergency 'kid' fund for helping out.
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laterbloomer
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Post by laterbloomer on Jan 29, 2021 19:39:57 GMT -5
Expenses Mortgage Property Taxes $350 Insurance $400 Electric/Water $250 Gas for house $150 Reliance Food $400 Gas for car $150 Cell phone $70 TV/Internet $167 Spending $500
Total $2,437 I'm in Canada, I don't have to worry about health care, and if I need long term care I sell the house. I also have savings for shock expenses but I plan for the roof to be done before retiring and I do have insurance. I've padded everything to compensate a bit for inflation. What do you think?
no number on the mortgage? My mortgage would be paid off.
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tskeeter
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Post by tskeeter on Jan 29, 2021 19:47:28 GMT -5
Expenses Mortgage Property Taxes $350 Insurance $400 Electric/Water $250 Gas for house $150 Reliance Food $400 Gas for car $150 Cell phone $70 TV/Internet $167 Spending $500
Total $2,437 I'm in Canada, I don't have to worry about health care, and if I need long term care I sell the house. I also have savings for shock expenses but I plan for the roof to be done before retiring and I do have insurance. I've padded everything to compensate a bit for inflation. What do you think?
I don’t see anything for income taxes. Are they included somewhere else? I suggest that you actually figure inflation in your spending plan. At 3%, your living expenses will about double in 20 years. I don’t know about Canada, but I believe that US retirees actually experience real inflation in the 3 1/2% to 4% range due to the mix of goods and services they consume.
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