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Old 04-12-2015, 05:22 AM
 
71,463 posts, read 71,629,249 times
Reputation: 49027

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overall what you show is pretty much in line with both ty bernick's study and the biggest study of its kind the sun life study.

lots of increased spending in early retirement , then a big fall off by 20-30% in many cases during the late 70's early 80's , then a rise again as healthcare costs and gifting pick up.

of course this only apply's to those with discretionary spending since if everything is a need there is little to cut back on in your 80's.

most of your list i find apply's to us too. i wear the same thing regardless of work or not , if we are home i am either driving somewhere or paying tolls seeing the kids and grand kids more . we spend more eating out on the go and in general eat more now that we are home more days.


last year working part time our bridge tolls ran 700 bucks seeing the kids or going to the zoo or botanical gardens to photoshoot stuff. . this year being off they will run a lot more.

with no 401k deductions , ira deductions, or medical coming out pretax eventually our taxes will be higher not working once rmd's kck in
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Old 04-12-2015, 06:11 AM
 
Location: Grove City, Ohio
10,128 posts, read 12,373,396 times
Reputation: 13936
Quote:
Originally Posted by texdav View Post
Another day another retire article; ho hum.
And in a retirement forum no less!
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Old 04-12-2015, 06:18 AM
 
Location: Kalamalka Lake, B.C.
3,044 posts, read 4,011,329 times
Reputation: 3898
I like this article. My expenses not working includes not needing a second or even third vehicle, and planning my time and buying into one trip, not three, and having time to do things myself instead of arranging to pay someone as I'm busy working. I eat out less, drink less, and all the women my own age have their own homes and cars. So I fuel them up and they drive. I'm out in an area where one coffee shop has been trying to open for a year; look at all the dollars you save from not being in town and bored!
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Old 04-12-2015, 06:45 AM
 
Location: UpstateNY
8,612 posts, read 8,294,298 times
Reputation: 7522
You folks with dental expenses please check this out. This plan saves me a ton on dental and chiropractor. 12.99/mo. for a family.

https://www.vitalsavings.com/
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Old 04-12-2015, 07:12 AM
 
761 posts, read 637,263 times
Reputation: 2229
I think all but the rich (possibly) have the fear that funds will run out.

No guarantees in life.
Can get hit by a bus tomorrow or live to 100.
Who knows?

I am hopefully in the last few years before retirement and the goal is to reduce debt in general and credit debt in particular. Get my finances in order and restructure/rebalance the 401K with some advisor assistance.

I've done pretty good up till now on my own, but I know I could do much better with adequate guidance.
It's all so subjective.
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Old 04-12-2015, 07:26 AM
 
Location: Surf City, NC
364 posts, read 552,591 times
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A big difference from my spending before retirement is that I no longer have to put money into my 401K fund. I was putting a big chunk of each paycheck (maxing my "catch up" payments to make up for earlier years when I didn't) into my 401K. That is income right off the top that I don't have to replace. When you include all the other expenses I no longer have, 80% of my final salary would be very much over-kill. My medical expenses may increase as I get older, but between medicare and federal heath insurance I have good coverage, and I expect my travel and entertainment budget will decrease.
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Old 04-12-2015, 07:27 AM
 
Location: UpstateNY
8,612 posts, read 8,294,298 times
Reputation: 7522
Quote:
Originally Posted by CCc girl View Post
You folks with dental expenses please check this out. This plan saves me a ton on dental and chiropractor. 12.99/mo. for a family.

https://www.vitalsavings.com/
The chiropractic portion is covered under their wellness benefits portion which also covers massage. The site is limited, you have to call to find a participating provider in your area. The compensation for the chiro is handled by A.S.H.

'More discounts come with your card
Just think of them as little extras that fit your life and save you money every day.
  • Eye exams, frames and LASIK surgery
  • Gym memberships
  • Weight-loss programs
  • Massage therapy and more'
https://www.vitalsavings.com/howitworks.aspx

When I first got on with my Chir I told him Aetna Vital and got a blank stare, then when I said we're ash he immediately lit up and knew what form to get signed.
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Old 04-12-2015, 07:34 AM
 
Location: Portugal
5,917 posts, read 2,883,413 times
Reputation: 11303
Everyone is different, our income needs are far less in retirement.


- We still have two cars but really only drive one now, so will probably sell the extra one. Either way we drive far less than when had two people working

- We spend less eating lunch out because we aren't at work where sometimes that is all you have time for or the temptation of all your coworkers going is great.

- We were saving a very large percentage of our salaries for retirement, obviously no longer doing that.

- We used to pay a ****-ton of income taxes since home paid off, no kids, two solid incomes but now we could pay almost nothing since in 15% bracket where dividends and cap gains are tax free (this will vary due to Roth conversion ladder ramping up soon)

- So far have not found entertainment spending to have gone up, most hobbies I have reading library books on kindle, fishing, hiking, video games don't really cost more to spend more time at them, wife goes to a lot more classes at the YMCA yoga, tai qi, etc. but same monthly price

- So far travel costs for short trips are down because we book flights based on cheapest instead of which ones leaves Friday night and returns Sunday, can go mid-week = savings

- We're on Obamacare and actually get subsidies because if your income needs are modest and income is mainly the cap gains it isn't hard to fall under threshold
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Old 04-12-2015, 08:13 AM
 
Location: Loudon, TN
5,768 posts, read 4,822,990 times
Reputation: 19387
I never liked this method of calculating retirement expenses as a percentage of your prior-to-retirement expenses. I feel it is much more accurate to start from zero and figure out where all your money is currently going and what will change after retirement. One way to do this is just itemizing every expense in your checking account for 6 months or so. This will show where your money is going and give you an idea of where cuts could be made, and which things you will no longer need after retirement. Then form a chart to show how your various income streams will stack up over time. Some income may end (a temporary annuity for instance), or go down or up (rent from a property perhaps), some will start at various points (SS). Some expenses may also start or stop (pre-medicare medical insurance as an example) over time as well. If there are gaps, you can then see where you need to come up with a plan to fill them.

After performing this exercise we felt confident that we would have what we needed and were happy to walk away from work as early as possible. We could have worked longer if we were worried about it, but this really allowed me to stop worrying. After retiring we find that we are not only doing fine with our plan, we are actually doing much better than expected. I have to admit that there is always the possibility of unforeseen events that will alter our plans, but we pay insurance to cover all but the most far-fetched of those possibilities.
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Old 04-12-2015, 08:55 AM
 
6,212 posts, read 4,715,040 times
Reputation: 12710
Quote:
Originally Posted by Escort Rider View Post
Ouch! I presume you are not yet on Medicare, because once you turn 65 and go on Medicare, your medical expenses are taken care of. Sure, there are still things like co-pays, or monthly premiums for Medigap policies, but all that doesn't amount to a hill of beans. So you have major savings to look forward to starting on your 65th birthdays!

Of course dental expenses are not covered by Medicare, so that's a whole different issue. Since turning 65 six years ago, I've had two implants at close to $4,000 a pop that I paid for out of pocket.
Not so fast. My wife and I pay about $300/mo for Part B and Part D social security deductions. In addition she pays $200/yr for a separate prescription plan. She paid $3500/yr out of pocket for drug copays. I paid $2600/yr for LTD insurance. That would have been double if my wife qualified. We also have AARP/United Healthcare Plan F which is $6000/yr for both of us. Dental insurance is $1500 and I also had $1200 that was not covered. With some mileage and minor additional expenses our total for the year was over $19000. It was about $2000 less the year before but we changed residence to NY and our insurance costs increased.

There is no end in sight to these expenses and no way I can find to reduce them. Due to chronic health issues our situation may be a bit worse than average but supplemental insurance and other expenses can easily hit $12000/year for retired couples with relatively good health.
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