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Old 01-19-2015, 12:36 PM
 
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Quote:
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
Your airplane tickets to HI will pretty much eat up most of that savings. Also, I've found moving from NorCal to TN that my car insurance doubled and my heat and a/c is so much higher. And yes, food. What is cheaper - cost of housing, cost of gasoline and no state income tax. But everything else has been a wash.
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Old 01-19-2015, 02:44 PM
 
Location: Maui, Hawaii
679 posts, read 617,575 times
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Ours is about the same, we spend it a bit differently, like we don't need the biz insurance we used to have but our health insurance costs go up as we age also because we moved to a higher cost of living place just the higher cost of basics burns up any day to day savings we would have had.

I see other retirees quickly learn to adjust to their new (in either direction) income levels.
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Old 01-19-2015, 03:25 PM
 
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Hello! My retirement expenses did not decrease, because we are early retirees [pre-Medicare]. I did retire with a fully-vested pension, but state government salaries are low here. Our largest increase in expenses is the cost of the health insurance for my husband and myself. I arranged to take a smaller pension, so that my husband could continue to receive income if I die first. And I have health issues, so that it likely to happen. As a result, most of my pension is "eaten-up" by the cost of the health insurance premiums, and the remainder goes for monthly medical co-pays. So, we take out some earnings from our investments each month [we do not touch the principal and we do sell any loosing investments so everything is about even at year's end]. In addition, we have a couple of untouchable 401K and 457K that cannot be used because of our ages. So, we eck out a living by having a thrifty lifestyle. I drive less now and do more home-cooking, and do most clothing shopping at thrift stores. We have money reserved for some planned home-improvements and a new AC unit. We may have a wedding coming up and Mom & Dad will have to cough up some money for that!!! Not having to go to work when sick, and using all sick and vacation days being sick, makes retirement a true blessing!!

Last edited by HollyhockGarden; 01-19-2015 at 03:27 PM.. Reason: typo
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Old 01-19-2015, 07:37 PM
 
Location: Tennessee at last!
1,886 posts, read 2,039,389 times
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Quote:
Originally Posted by N.Cal View Post
Your airplane tickets to HI will pretty much eat up most of that savings. Also, I've found moving from NorCal to TN that my car insurance doubled and my heat and a/c is so much higher. And yes, food. What is cheaper - cost of housing, cost of gasoline and no state income tax. But everything else has been a wash.
That is actually pretty close for the airfare. I fly to Kauai so it generally costs us about $500 a ticket and it will end up being about $950 a ticket....So the annual cost increase for the 3 plane tickets will be about my monthly savings. Still have some other months to save without the offset And once we get to TN the kids may find a beach they like in Alabama or Florida and then we can change the time share week in Hawaii for one nearer to TN.

So far the heat and air costs do not seem much different in TN than in CA. I am in the mountains of southern CA and we get snow pretty much like in the area I am moving to in TN. And I already run 2 central air conditioners all Summer. Plus the electricity and gas cost per unit is MUCH lower in TN. Car insurance for me with the one car that was moved to TN was slightly lower.
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Old 01-19-2015, 08:54 PM
 
Location: CT
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I'm in my final few years before retirement and obsessed with preparing for it. For the most part, it's not so much about saving on living expenses as being realistic with what you'll have to live on. A lot of expenses are completely out of your control, like health insurance, utilities, taxes, so you'll have to work with that. We can save a little through frugal living, to some extent and finding a place we want to live with a lower COL, if that's possible. So if travel is your passion and that's what you see in your retirement, how do you do it? It may take sacrifice in some areas to get more funds into your travel budget. For us, I started with a pretty detailed spreadsheet of our current budget, then I just keep working it with numbers I expect in the future. Think about milestones, budgets before you hit FRA, once you reach 65 and go on medicare, when your wife hits FRA, when you hit 70. Most important piece of advice, don't kid yourself, it will cost more than you think and any savings now will be eaten up by inflation. But it's all possible, I foresee a retirement where we plan to sell our house up north, build a new house in a more tropical setting, and live comfortably off SS and 4% of our investments and we are not millionaires.
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Old 01-19-2015, 09:50 PM
 
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Our expenses are lower in retirement, even though we spend $12-15K a year on travel.
Biggest saving was that we quit saving for retirement, just that alone more than covers our travel costs.
Our commuting and clothes costs were fairly high while we were working so that was a substantial drop.
Between us, we probably save $2K a year by not having to buy gifts (baby, wedding, graduation, Xmas) for co-workers.

Other than travel, I can't think of anything we're spending more for in retirement. Neither of us have any health problems so far. If/when we do, we'll likely be spending less on travel so there'll be some offset.
edit to add: Just remembered one cost increase: we have to pay for our own cell service now, our employers paid it before. I think we also picked up some add'l expense when I went on Medicare B and dh's company health plan become secondary.

Last edited by biscuitmom; 01-19-2015 at 10:07 PM..
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Old 01-20-2015, 06:47 AM
mlb
 
Location: North Monterey County
3,179 posts, read 2,856,112 times
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Yup. The 15K we put away annually for retirement will be a boost to our income post-retirement.

It still will be tight but we know how to live tightly.
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Old 01-22-2015, 09:36 AM
 
Location: East of Seattle since 1992, originally from SF Bay Area
29,789 posts, read 54,455,776 times
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Our travel desires are fairly simple and won't change when we retire. We make 3-4 trips a year, usually 2-3 hour flight for a week or less, maybe Hawaii every 2-3 years. Based on current projections, when we retire in 5-6 years, with both of the cars paid off before then, and selling the house/pay cash for smaller one, the 2 pensions, SS and 401K should put us at about the same net income as now. If the supplemental health insurance costs are less than what the car payments and mortgage are now, we may actually have more than while working since there will be no commutes, less clothing to buy,
and lower property tax.
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Old 01-22-2015, 10:48 AM
 
2,038 posts, read 1,947,995 times
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Quote:
Originally Posted by Nor'Eastah View Post
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?
Amen to this, most people can retire if they toss the big house and eliminate the mortgage which frees up typically $2,000 to $3,000/month for the "average" retiree. We did this in our pre-retirement planning stage with a short time to go and it's amazing how much savings we accumulate every month when the money stays in our accounts without going to a bank for a mortgage.
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Old 01-23-2015, 11:04 AM
 
Location: Chapel Hill, NC, formerly DC and Phila
8,574 posts, read 12,673,240 times
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One thing I haven't seen mentioned is for those with children, you will no longer be raising a family when you retire, so costs that normally go towards raising them would go down - often dramatically. I didn't have children until my 30s (with my youngest one, I was 39). Although, it's still over 10 years away, we tentatively plan on retiring right around the time he goes off to college or when he graduates college. When he graduates, we won't be supporting him (we hope!) or any of our children any longer. Right now our expenses include feeding 5 mouths, travel for 5 people, entertainment for 5, etc. In retirement, all of those costs should decrease a good bit, in addition to needing a smaller abode. (Although, the deductions decrease, too. )

On the other hand, I can see if you had your kids young and they are out of the house long before retirement, you have already adjusted your expenses to just two of you, so retiring wouldn't change that.

Just thought I'd throw that in there even though it's not quite a working expense, usually raising children occurs for about 20+ years during ones working years.
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