Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
our expenses has remained the same but what we spend on vacations has gone up. our saving has gone up but that is only because of the RMD that we reinvest. otherwise we live on pension and social security.
the two biggest groups are those that stayed the same and those that saw drastic drops. you have to wonder if those that voted they saw drastic drops did so because of mandatory budget cuts and not choice.that would include having to move to lower cost areas not by choice.
our best friends relocated to florida and saw a big retirement savings .
but they had to move, they didn't have enough saved to make it here in nyc. they are still depressed about having to move but they had no choice.
of course they become part of that statistic now that says expenses fall in retirement and they will be part of the bls survey that says we spend less because we age.
of course they wouldn't be in that group if they saved more . it was their financial condition that dicted they spend less in retirement not their age.
I had a big drop and it was due to choice and 5 years of planning/researching/projecting.
Whether we spend more or less in retirement is probably less related to age and more related to whether or net worth is increasing or decreasing. Some reach a point where their investments are growing well and they are putting good chunks of new money to work that is growing. At what point do you seek another balance. There is a structured way to reach this point if you have pensions and SS. The simplest way is to retire on your pensions and stagger SS in so you get a decent income increase at 62, 66, 70 and 70.5. By basing our retirement initially on your pension the income bumps will either increase savings or enable you to crank up the lifestyle. Seventy One could be a great year.
Whether we spend more or less in retirement is probably less related to age and more related to whether or net worth is increasing or decreasing. Some reach a point where their investments are growing well and they are putting good chunks of new money to work that is growing. At what point do you seek another balance. There is a structured way to reach this point if you have pensions and SS. The simplest way is to retire on your pensions and stagger SS in so you get a decent income increase at 62, 66, 70 and 70.5. By basing our retirement initially on your pension the income bumps will either increase savings or enable you to crank up the lifestyle. Seventy One could be a great year.
That's exactly what I did. The older I get the more money I'm going to get
Besides SS I have a 401K I have not touched.
I'm fine right now on pension and the extra substitute teacher work I do.
The sub work is my play money for animals, barns, fences, etc…slow improvements to my ranch.
The pension takes care of bills and discretionary spending. I am living beneath my pension so I have extra money left over some months which I put into my fidelity trading account.
More than likely as I age I'll eventually have to move to the city and that alone will bump up expenses so I figure it evens itself out.
our expenses has remained the same but what we spend on vacations has gone up. our saving has gone up but that is only because of the RMD that we reinvest. otherwise we live on pension and social security.
Great topic, both the simple poll and the detailed posts about why their spending changed (or the same). I am planning to retire in 2 years, so I didn't answer the poll but appreciated the details in the posts.
This is my plan, I live well below my current income and save for retirement:
Pension 36% less then my salary
Federal income tax 36% less (30% less taxable income)
State income tax 26% less (until I move to a less taxing state in a few years)
Save the 7% of salary that was being paid in payroll withholding tax (federal CSRS, no Social Secuity)
Save the 1.45% of salary for medicare payroll withholding tax
Health Insurance premiums unchanged (federal employee pays 25% of premiums, employer 75%)
Stop retirement savings, was $17,500 plus $5,500 catch up (IRS limits), plus $6,500 IRA.
Expect the same additional savings at 30% of working salary (spending less than take home income).
Property tax, car insurance, home insurance will be the same (until I move and downsize).
Utilities will increase a small amount as I will be home move (AC, heat, lights).
After all that math above, in my case, I estimate my take home income will be the same as my preretirement take home. Although my pension is 36% less than my salary, all those percent of salary costs are gone, including the $17,500, $5,500, and $6,500 retirement savings.
I don't include my TSP(401k) and IRA income as I don't plan to touch it until 70-1/2 yrs old.
So if my spending stays the same, I will still be saving 30% a year like I am now plus the growth in my TSP(401k), IRA, and my taxable brokerage account. When I move in a few years to a less expensive area (state) and downsize my home (paid off a few years ago), I plan to buy a couple big ticket items (new car, riding lawn mower, hobby workshop, etc.)
Last edited by CSRSJim; 12-25-2013 at 11:49 AM..
Reason: Savings and IRS limits
CSRSJim: Just a heads up (from a now 7 year CSRS retiree, former accountant) - take a close look at your projected taxable income in the years leading up to the RMD period at age 70.5.
Depending on your taxable pension amount (and obviously any other taxable income), it may be advisable to make withdrawals from TSP/IRA accounts in advance of the RMD period if your total taxable income is below the Fed 15%/25% tax threshold.
You get nailed for the 10% differential Fed tax when you cross the boundary. Enjoy your planned CSRS retirement, you (as did I), skipped the option to switch to FERS, it was a very good decision.
we saved a crapload when he retired, no 64 mile commute each day. Now his rig gets less than 3K miles on it a year. No new tires every two years, less in insurance, gas and maintenance.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.