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Old 01-18-2015, 12:33 PM
Location: Central IL
15,211 posts, read 8,518,332 times
Reputation: 35606


Originally Posted by LivingDeadGirl View Post
Much less: clothes, eating out, makeup, vehicle expenses, etc. All these costs drastically decreased.
hahah - LESS makeup? I assume I'll be spending more on makeup and probably botox to boot!...
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Old 01-18-2015, 01:12 PM
Location: Los Angeles area
14,018 posts, read 17,732,288 times
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Originally Posted by reneeh63 View Post
...........What will go down is the amount of taxes you pay because you're in a lower tax bracket, any contributions you made when saving for retirement, and hopefully housing costs (unless you'd already paid off your mortgage).
Perhaps in most cases but certainly not in all cases. Not all of us made the big bucks while we were working. I didn't, and my retirement income is about the same as, or slightly greater than, what I used to make.
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Old 01-18-2015, 01:51 PM
672 posts, read 837,976 times
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Utilities can greatly increase. We only use our heat for about an hour in the AM and it comes back on late in the day for a few hours. A/C turned on late in day as well when we return from work. But, if you are home all day in retirement those utilities will have to be adjusted. And the cost of running your heat and A/C can shoot up. Just a thought...
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Old 01-18-2015, 03:07 PM
Location: Las Vegas
13,886 posts, read 25,316,043 times
Reputation: 26372
I went from living relatively well to pretty poor. Housing downsized from 3800SF to 1500SF. One used car, very urban setting. I don't use my heat till we are really cold or the AC till we are really hot. I shop for food and try to squeeze every nickel. My retirement budget is about 25% of my old household income so I have to live cheap. No travel at all either and that's one of the things I really miss.

Here's how I do it:
1) Commuting expenses. I used to commute 100 miles per working day. Not doing that saves a lot of money in fuel, maintenance, and transportation expenses.

2) Climate control. I used to be responsible for elder care. Had to keep the house comfortable for them. I'm still young enough to freeze and sweat!

3) Relocated from a high tax, high COL state, MN, to a low tax low COL state, NV. I used to pay a ton in taxes just to live in a place that had Winter for more than half the year. No more taxes, blizzards, or tornadoes.

4) Used to live in a big expensive waterfront home with an acre to maintain and a triple driveway and 2 garages. Big taxes and big maintenance. Now I live in an urban area middle class neighborhood in a small home with low maintenance and taxes. But my home is pretty crappy. H died before the remodeling was complete. The house isn't finished and comfortable. I work on it but my hands are tied on the big ticket items I need help to complete.

5) I shop for everything! Time used to be more important than money. Now I shop for everything and always look for the best possible deal. My clothes come from thrift stores now because I have the time to look for great quality on the cheap. I plan my menus around what's on sale and go to several stores each month. No impulse purchases.

Sounds pretty grim on virtual paper but I actually have a great life. Since I live in Vegas, food is cheap and I still get to go and do. I eat out at least once a week and even got free tickets to a Savoy Brown concert last week. The only thing I really miss is travel and being able to visit friends or go on a vacation. The only thing I need but don't have is health insurance.
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Old 01-18-2015, 04:09 PM
Location: Grove City, Ohio
10,131 posts, read 12,381,010 times
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Originally Posted by rdflk View Post
I suppose I'm curious: Is your retirement a "budgeted one" -- or one where you can afford -- say 90% of your desires...and money really isn't a factor.

For example my IDEAL retirement would be a 20K a year travel budget. My more realistic retirement may be more like 10K.

This was prompted by another thread.

To me, the only reason you'd need less money in retirement is if your housing or other NON work expenses go down. But many articles about needing less money in retirement make it seem as if that some how just magically by not working alone you'll need so much less money.

I'm sure this has always been a generalization. And maybe it was more true for previous generations.
But I've never thought I'd be saving all that much money -- or need less to live on in retirement.

Sure working now I:
-- use a tank of gas a week for my commute
-- pay $230 a month for parking

Those are about the only work related expenses that I can think of off the top of my head that would go down. And that's not major money. So all the articles I see about being able to live off 70% of your salary -- I never did buy into.
I have budgeted and calculated until I am blue in the face. I have lots of spread sheets.

I decided to work 3 more years to age 70 before filing for benefits.

Very shortly my wife, who does not work, will receive a benefit equal to 50% of my FRA benefit. and will collect it for 2 1/2 years before I file.

Our social security benefits are free of any federal or state income taxes. What our benefit is our take home pay so to speak.

Funny thing in working it up is when I do file at 70 my weekly "take home pay" will actually jump by $31 per week. Retirement will be exactly like receiving an extra $135/month more than I am being paid in terms of take home pay now.

How cool is that, to retire and get a raise all on the same day?

Using this estimator How much of my social security benefit may be taxed? a married couple receiving a rather high combined benefit of $60,000/year will not pay any federal taxes on their social security unless they have other substantial income. A coupling receiving $60,000/year in ss benefits plus withdrawing $1,000/month from an IRA still won't pay any federal income taxes.

$72,000 per year and not pay any federal or state taxes, how cool is that?

But if you work it with an income it's not so pretty.

When my wife draws she will receive 50% of my FRA benefit or $1,125/mo for $13,500 annually.

Because I am working and my income 85% of her benefit will be federally taxed which will cost $3,213 in additional taxes. I thought about taking my benefit at 66 and banking all of it until age 70 but taxes on 85% of our combined social security benefit gives a real knock in the gut of $9,639 in federal taxes just on our social security benefits. Tell you what, I won't take it, my benefit will grow 33% if I don't take it and when I do all of it is tax exempt unless I continue to work.

But I am really liking the idea of retiring and getting a raise all on the same day.
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Old 01-18-2015, 06:20 PM
Location: Wisconsin
21,536 posts, read 43,992,643 times
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Basic/fixed expenses for me have not changed in retirement. Home and all the attendant costs haven't changed a bit, nor have food, utilities, insurance - although had an unexpected $6k roof repair right after retirement. Owned my car free and clear when I retired, still driving the same car, budgeted items for vehicle maintenance and repair on the money. What I don't spend on gas/parking now goes to medical insurance and dental.

Medical/dental costs - necessary and insured are higher. Insurance is now over 4x what I paid when I worked - which was $40/mo. Now, it's $179/mo with Part B and and hd-F. Not liking that at all. Don't doctor much, never did, medical insurance always a net negative for me - but not smart not to have it, so I pay. Dental costs are more b/c employer provided great dental coverage. Now I pay it all - fortunately not more than a few hundred a year for checkups, cleanings, etc., although I was hit w/an unexpected $2k expense right after retirement.

Clothes/cosmetics - all that comes out of discretionary - because they are. Got so many clothes, I'll never wear them all. Makeup is less and less necessary the older I get. Never wore much when I worked, either. Skin care, on the other hand, is a must-have item for me - and I will spend $$ on that.

Charitable contributions today are about half what they were when I worked. But, my income today is half what my gross income was then. Difference is I saved half of it when I worked.

My take-home when I worked is almost to the $ exactly what my SS/pension are today. Other income - rental pays home repair. RMD's pay property taxes and are kept to a minimum, and I'm doing Roth conversions to keep it that way and keep my tax liability and erosion of nest egg to a minimum.

No, in my case, my retirement financial needs are pretty much what they were when I worked - which I always knew before I retired. I couldn't see where I could cut back then and still don't. There some things I won't do without - like cable, internet, landline, high quality food - or my house. Can't live in a more convenient neighborhood and couldn't rent for less.

Right now not spending on travel, but that probably will change somewhat this year - that money will come from discretionary.
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Old 01-18-2015, 09:06 PM
Location: Florida
4,359 posts, read 3,696,311 times
Reputation: 4085
Too many variables for a good answer. But from those I know well enough they are spending more. Of course they have to have saved so they can spend more. The more comes from finding activities to fill up the days, health issues and/or helping those that need help.
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Old 01-19-2015, 07:25 AM
Location: Backwoods of Maine
7,110 posts, read 8,150,955 times
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Originally Posted by augiedogie View Post
We're taking on a total change of lifestyle, in part to economize on living expenses. Smaller home means lower taxes and utility bills. We don't need all the space we have now. We can cut down to 1/2 the square footage and still have plenty of room.
Exactly what we did. We moved from 2000+ sf to 1120 sf, from 4 beds and 2 baths to 2 beds and 1 bath. We switched from paying a small mortgage, to no mortgage at all. And we moved to a place with much lower taxes. This one move saved us $thousands per year.

The result of this is tremendous savings that we had not thought about when we first planned retirement. Now we'll be taking that $$$ and purchasing an inexpensive place in TN where we have some family. It will be a nice getaway when we need a vacation. And who knows? We may someday buy yet another place!

People who are bogged down with big houses and big mortgages do not realize the liberating effects of being freed from all that. Why try to keep up with the Joneses in retirement? Why would you care?
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Old 01-19-2015, 07:30 AM
Location: Forests of Maine
30,679 posts, read 49,437,227 times
Reputation: 19129
My pension is a lot less than how much I was making when I was working, though our expenses are a lot less.
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Old 01-19-2015, 11:53 AM
Location: Tennessee at last!
1,886 posts, read 2,037,294 times
Reputation: 3796
I am not retired yet, but these are some of the expenses that I expect to reduce when retiring, based on my plan I developed 2 years ago:

1. Replacement of a car every 4 years or so--I drive a LOT with work and put about 40-50,000 miles on the car each year. (I am already reducing this expense a little as I can telework from home some days.) With reduced use and also not needing to drive long miles in rural desert areas an older car will last longer too--no 120 degree heat drying out all the seals, hoses and belts, about $200 a month savings.

2. Less gas use due to less driving, about $50 a month savings now with the drop in gas prices)

3. The constant 'donation' for a retirement, new baby, someone is sick, someone's relative dies, etc. gift at work, about $30 a month savings.

4. Going out to lunch currently about $120, would likely drop to 1/2 as will still go out and then with kids who will be teens then, about $50 savings.

5. Currently put $400 into a retirement account called TSP at work as a part of our retirement program, that will be eliminated, savings $400

6. Currently pay state taxes, will be moving to TN, saving state taxes. I just did my CA taxes for this year and paid about $6k last year, so that is about $500 a month savings.

7. I will be moving from CA to TN, annual property taxes will go from $2800 to $640. These are this years update figures. I already bought the house in TN. However, the property has a POA, so that annual cost is $240. Saving $160.

8. Insurance, homeowners insurance where I live is high risk for fire, so I will save about $50 a month for car and home owners insurance.

Some costs will go up such as vacations as we will have a whole new area to explore, and airfare to our timeshare in Hawaii will be higher.

And overall cost of food seems higher in TN than in CA, especially the meats/poultry and fresh fruit and vegetables, but how much I have not figured out yet as I have not explored to locally grown, farmer's markets options in TN yet.

But overall savings look like they would be about $1440 without considering the additional costs for food and travel. Most of that savings is related to moving to a lower cost of living area.
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