How much money do you expect to spend in retirement per month? (2013, retired)
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I am thinking about retirement and wonder what it will cost my wife and I to be retired and live a comfortable lifestyle. Now exactly what is comfortable is up to the person and the city they live in.
I will go first and say we (wife and I) figured we could live comfortably for about $3500 a month in a regular town down south.
What is your retirement spending budget or how much do you expect to spend per month in 2013 dollars once you retire?
We've been retired almost 5-years and live very comfortably in a small Florida 'tourist' town. We easily spend more than the $3500 per month you referenced. But, that is probably as irrelevant as knowing how much anyone (else) expects to spend per month over the next 10-20-years.' Everyone has a different 'monthly nut to crack' (housing costs, etc).
IMO, when most people finally decide to retire, they simply adjust their lifestyle to their assets and expected income (which, unless they are the government, they have already been doing while working) ... and move-on. If they have less than they need, they adjust (going back to work at an advanced age is hardly a dependable option). If they spend less than their income, they either spend more on other stuff or make their assets last longer ... or give money to the kids/grandkids.
The thing many retirees struggle with is the often unpredictable variation between 'Retirement Planning Assumptions' .... and reality. For example, many pre-2005/8 retirees determined that they would be able to indefinitely withdraw 4-5-percent from their savings, but, .... are now spending principle, years before they expected to. Then, there is the equally unpredictable matter of inflation, rising health costs and increasing taxes.
Take a look at your projected budget; build-in a safety cushion and match that against your income, plus the amount you expect to withdraw from your assets. It's not really 'rocket science' ... except when it comes to guessing how long you will live and how healthy you will be. But, even there, one can consult a wide variety of online calculators ('life expectancy'). There is no magic formula. -- Good Luck!
I think 3,500 is reasonable but I have no idea what it includes. You need to make up a budget. Be sure to cover health care, replacement of cars, home repairs etc.
Did you include income taxes in the 3,500?
The 45 minute drive maybe a problem and a big expense as you get older. Be sure to budget for it.
As much as I can get, from a wife 8 years younger, who is still working, maybe untill she tips over ! It does make a difference if you are self employed as I was for over 40 years, now it's my turn !
If you own your home, $3500 sounds very doable. Travel entertainment and cost of health care will probably be your biggest unknowns. You might have to forego some travel depending on your circumstances and how healthy you are. Figure out what you NEED and then go from there.
It is not so much a factor of owning your own home as it is improving cash flow by reducing housing expenses.
A renter who goes from a 3 bedroom apartment when the kids lived home to a one bedroom retirement pad gets the same improved cash flow as someone who finishes paying a mortgage.
In fact it can go the other way. We have a two bedroom apartment in nyc. We bought a 3 bedroom 3000 sq ft home in the poconos that we thought we would retire to.
Well that 3 bedroom home was needed now because all the kids would be staying over when they come . Now no one needs to stay over in nyc.
That house cost more a month then our apartment.
The point is home ownership may or may not matter one bit. It is all going to be about cash flow and not what you own or rent.
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