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Old 01-18-2015, 12:06 AM
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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.
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Old 01-18-2015, 12:47 AM
Location: Los Angeles area
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People's work situations vary enormously, so the plain fact is that some people have work-related expenses which will disappear in retirement and some people don't.

1. One thing that comes up a lot is dry cleaning. In an age with wash-and-wear dress shirts and dress slacks (for men at least), where the hell does dry cleaning come in? Sure, ties and sports jackets, but how often does one need to have them dry cleaned? Yes, I am speaking from a male perspective.

2. Work clothes. With some exceptions (lawyers who appear in court, lobbyists like Curmudgeon who hob-nob in the state legislatures, and some others) most people in this day and age do not need any work clothes different from just regular clothes. I continue to wear the same clothes I've always worn - clothing expense has not changed at all.

3. Parking costs. If you have to pay to park at work, then of course you will save that if you no longer work. I never had to pay to park at work, so no savings there.

4. Commuting costs. Everyone goes on and on about how we retirees save our commuting costs. Not me. I didn't have a very long commute anyway and I probably put more miles on my car now because I have more free time to go places and do things.

5. Lunches. Some people bring sack lunches to work (not always socially acceptable depending on the job, I know) or utilize inexpensive cafeterias, so there is no lunch saving for me.

6. Union or professional association dues. There is my saving as a retiree, right there, but it doesn't amount to all that much.

The work-related savings of retirement is just one of those urban myths built on an upper middle class stereotype. For most people it's just pure bs. But for others its reality.
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Old 01-18-2015, 01:22 AM
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I forgot about union dues, But like you said that's not enough to make up for all the traveling I want to do.

I'm not traveling now because I work....(and any money spent would just delay my much desired retirement....and I won't travel as much as I like in retirement because I likely will have less disposable income than I have now..whenI'm NOT traveling.

That's one reason I'm curious about whether people feel as if they're on:
-- TIGHT retirement budgets
-- not tight, but not "money is no object"
-- or.....more than enough for anything I'd desire...money not a factor at all.

A money is no object retirement for me would be 20K in travel alone.
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Old 01-18-2015, 02:35 AM
8,180 posts, read 11,900,573 times
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Originally Posted by rdflk View Post
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.
There are a couple of other major items you're forgetting. For one, you won't be paying Social Security and Medicare taxes any longer, so that's 7.65% of your gross salary right there (if you're not over the cap) that you don't need to live on in retirement. Plus, you would have been paying income taxes on that 7.65% of salary so that's another 1.5% or so you don't need.

But the biggest "expenditure" that you won't have any longer is putting money away for retirement! If you've been putting 15% - 20% of your income into retirement savings of one sort or another, then with the SS & Medicare you've been paying, you've already actually been living on 70% -75% of your income.
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Old 01-18-2015, 02:51 AM
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while you get a decrease in one side of the equation ,for us we find time cost money.

one thing we will have plenty of is time in retirement and that can cost plenty of money easily coming to more than the savings .

but money is like water and will always seek its own level. so if you don't have the money to spend you won't spend it.

it all depends how much discretionary spending you can do.

we figured a lot of discretionary spending for our early years which will easily eclips our incomes we had while working. I am not even sure it will decrease as we age as we have other plans as far as what to do with the money we are not spending .

perhaps one big yearly trip taking all the kids and grandkids may become the norm. while studies show international travel falls off big time in the late 70's , domestic travel seems to stay strong right through the mid 80's for those healthy enough and who have the money.

instead of spending so much on ourselves as we age it may just shift to others in our family so our plans do not really call for less income in retirement. we can judge better after our first year.

since we both are working only part time now and only until july we already stopped drawing paychecks and are just maxing out our retirement plans with 2x the amount so we have little taxable income this year.

so we are already living on our retirement budget right now without those checks so once we have a year under our belts we can see what our budget looks like.,

Last edited by mathjak107; 01-18-2015 at 03:01 AM..
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Old 01-18-2015, 04:36 AM
Location: Whereever we have our RV parked
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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.
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Old 01-18-2015, 04:43 AM
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we may buy a co-op where we live but that is to cut down housing costs from renting . the plan is to cut housing costs so we have more to spend in other areas and improve our lifestyle and increase discretionary spending .
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Old 01-18-2015, 07:04 AM
Location: NC
6,543 posts, read 7,956,796 times
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As far as commute costs decreasing, as a retired peson I now have more free time and drive all over the countryside. I spend lots more on gas and work my vehicle hard. So that has certainly not decreased. Soon I might decide to buy a more expensive car just to have all the new gadgets like back-up assist, and greater dependability.

Paying other people to do work for you increases. I don't paint like I used to, nor do I climb on ladders to fix things or dig lots of holes in the garden. I even need to hire people to help me shift furniture around or put up outdoor christmans decorations. That is an added cost.

Eating out -- I do this more frequently to meet with firends, and the cost is more than the old cafeteria lunches at work. But it is not every day so this is sort of a wash.

But bottom line is that you cannot count on expenses (other than feeding into retirement savings) going down. If you were saving 20% of a salary before you retired, though, your retirement expenses drop 20% if you change nothing else.
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Old 01-18-2015, 07:11 AM
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I think it depends in part on how much you were earning in salary, but also how much of that salary you were living on. Our expenses pre-retirement were constructed around one salary with the rest going to savings.

We are fortunate to both have pensions, but I still constructed our expenses around roughly one pension even though the surviving spouse will have 1.5 pensions worth with survivor benefits. If you take out retirement savings, and consider reduced taxes, our net pension income is roughly the same as our net salary was.

We didn't save that much due to not working. The only thing would be lunch and that's not that much because we still eat lunch out a few times a week either with friends or tacked onto some other outing. Clothes would be big except we stopped buying new work clothes and also new winter stuff which is more expensive a few years before retirement. When you no longer care if anyone notices you wore the same thing on Thursday that you wore on Monday clothing budget declines rapidly.

Where we saved a ton of money was relocating from a high COL to a low COL area. Approximately, 10-15000. We could have saved more if we paid off the house, but we chose not to due to low interest rates. This of course requires an outlay for moving,

We also saved not buying a new second car we had planned to when we realized it was unnecessary. Instead, we plan to drive it until it dies or costs more in repairs than its worth.

We traveled all our lives and have little desire to do so now other than to visit family. On the other hand, we spend a lot on entertaining because our location is appealing to out of town guests.

All that said, we could significantly downsize if we needed to and live on 70% of our pre-retirement income, maybe even 50%.

Last edited by Blondy; 01-18-2015 at 07:21 AM..
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Old 01-18-2015, 08:20 AM
Location: North Monterey County
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We are still going to invest - but clearly not the 30% of paycheck like we are now.

It's the one thing that has me convinced we will be OK. We already know how to live on nothing.
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