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Old 08-26-2019, 11:45 AM
 
Location: Southwest Washington State
22,430 posts, read 14,742,993 times
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Quote:
Originally Posted by RobertFisher View Post
I am nearing an age needing to do this. I wonder how detailed i need to do this.

I can be very meticulous and itemize the food and gas i will buy in one month, but I wonder if that's overkill.


Is it enough to Just make a general estimate?
Do what makes you feel most secure about your retirement.
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Old 08-26-2019, 11:53 AM
 
2,197 posts, read 931,501 times
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Tracked expenses on a spreadsheet for a few years which gave me the confidence to retire. The annual budget is the main thing because expenses can vary greatly from month to month. Didn't need to track every expenditure, just all the recurring payments (utilities, car lease, insurance, RE taxes, etc), most of which differ from month to month, but are fairly stable annually, and $1950 a month for everything else (food, clothes, entertainment, gifts, repairs, doctors copays, etc.). Didn't track what went into the $1950, but on an annual basis, that was also very stable. The total annual requirement was $55K . When our retirement income covered that annual requirement, I retired with a pension. My wife worked another couple of years and I went back to work after a year for another two years out of boredom. Before we retired for good we had no mortgage or other debt and tore up all the credit cards. I've been retired 11 years, my wife for 12. About three years ago I stopped using the spreadsheet. I just use the bank balances as a barometer. In the 11 years since I retired, expenses have risen, but our income has as well with COLAs and the RMD from our IRA. We've followed Charles Dickens' advice to just spend less than you make ...

Mr Micawber's famous, and oft-quoted, recipe for happiness:

"Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought [shillings] and six [pence], result misery."

Charles Dickens, David Copperfield

Last edited by bobspez; 08-26-2019 at 12:12 PM..
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Old 08-26-2019, 11:55 AM
 
2,804 posts, read 6,474,473 times
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Quote:
Originally Posted by mathjak107 View Post
no , there was no reason to ...whatever we had was what we had at retirement time ...what our expenses were when we had 2 pay checks coming in are irrelevant when all you have is what you have .

basically we just backed in to what we had to work with
Quote:
Originally Posted by jakabedy View Post

I think it's true to an extent that "you'll have what you have," but that doesn't mean you shouldn't maximize savings and minimize waste while you can.
I guess I kinda, sorta can see that “you’ll have what you’ll have” approach if you for some reason know you’ll work till some age and not a year longer. Most people I know have a lot more leeway, and they are making the choice as to when they retire based on having enough for their perceived spending needs. I guess on the poor end of the spectrum, there are those that are cutting spending to fit whatever their modest SS checks are providing them, and just getting by. And on the wealthy end, there’s those that have enough wealth as to be set no matter when they retire. But in the middle, I think the more typical case is trying to decide if you have enough at 62 or 65 or whatever, or working another year or three. (That said, I retired at 50, so no “backed in” approach for me. Very careful planning)
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Old 08-26-2019, 11:58 AM
 
2,387 posts, read 1,198,302 times
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No, we knew how much we need to live comfortably, and how much our income would be once retired, pretty simple math.
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Old 08-26-2019, 12:00 PM
 
7,610 posts, read 8,813,206 times
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When you have several years (or better, even more) before you will or plan to retire you have time to ramp up your saving and investments before pulling the plug. It makes a difference to figure out what you expect to be spending and determine if you have enough to cover your needs or not. You'd be surprised what an extra 5 years of maxing out retirement buckets and investing additional $$$ can achieve even when the markets are kind of iffy.
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Old 08-26-2019, 03:17 PM
 
7,036 posts, read 3,902,212 times
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Quote:
Originally Posted by RobertFisher View Post
I am nearing an age needing to do this. I wonder how detailed i need to do this.

I can be very meticulous and itemize the food and gas i will buy in one month, but I wonder if that's overkill.


Is it enough to Just make a general estimate?

I'm a bit compulsive, as well as single (no one else to help me, if I get into trouble), so I worked and re-worked the numbers numerous times. I'm not wealthy, so the budget mattered. I also used about every retirement calculator out there. There is an excellent one on Marketwatch.com (join up--it's free; click on retirement; click on Retirement Planner). It uses a complex accepted method of calculating the years ahead...assets & income vs expenses. It takes into account taxes, inflation, the return you expect to get, the differences in costs of different categories of expenses. It's pretty thorough.

THEN I started using PersonalCapital.com. It connects with your accounts, so it restricts you in that regard. But one tab is for "retirement planning," where you enter a number of scenarios for your expected retirement expenses. There are others like this out there. You might check out Mint, if that's still around.

I created a budget spreadsheet, down to the dollar, using every category that I spend in reality. I included those expenses that crop up only at intervals....like a new car, new roof, a big unexpected medical or other expense.

I also find that when I have to estimate an expense, or log an expense, I watch my expenses more carefully. I also can see where I'm going off budget, when that happens.

I still maintain a budget spreadsheet. (Admittedly, I'm proficient in spreadsheets, so this comes natural to me.) It is very detailed, automatically calculates things after I input entries...I log my expenses every month, it automatically does a total, I input my income every month...and come out with a negative or plus (under or over budget).

I'm just more comfortable doing this than winging it, because I can't afford to come up against a "Oops! I didn't consider getting a new roof! How is that going to affect my future retirement?"

If you are a few years before retirement and still working, you should go on a strict budget now and start putting away as much money as you can for your retirement. You'll be so glad you did. A Roth IRA is best, then a 401k or employer plan. If you have additional money, start a taxable account. If you do a large savings account, look for an online one that pays a top rate.
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Old 08-26-2019, 03:44 PM
 
2,591 posts, read 673,837 times
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Quote:
Originally Posted by fluffythewondercat View Post
I created a detailed and frequently updated spreadsheet that indicated a comfortable retirement.

Then my spouse blew it all to hell by making unilateral decisions like refusing to rent out our second house — after we’d agreed we would. And withdrawals from the IRAs are a no-no, “because we’d have to pay taxes!”
And starting payments from an annuity, “more taxes!” I don’t know where he thinks the money will come from. Maybe the tax-free money fairy.

He has no Medicare or any kind of health insurance. Could not be bothered to enroll.

Stop the planet, I want to get off.

Last edited by RationalExpectations; 08-26-2019 at 03:54 PM..
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Old 08-26-2019, 04:31 PM
 
Location: Colorado
96 posts, read 21,651 times
Reputation: 441
Quote:
Originally Posted by silibran View Post
Do what makes you feel most secure about your retirement.
Yes, at the end of the day you have to do what allows you to sleep at night. I am about 16 months away from retirement. I estimated our income for my wife if I died before my retirement. Our income if we maximized SS or did not max out our SS. Estimated my income if I survived my wife. Estimated lump sum vs monthly pension. I estimated our medical before and after Medicare and I took a guess at our taxes in retirement.

This approach has allowed me to research different retirement options and this allows me to sleep like a baby. (I don't wake up to go to the bathroom.)
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Old 08-26-2019, 10:13 PM
 
Location: New Mexico
6,906 posts, read 3,823,549 times
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My wife was squeamish about retirement so I did some basic spreadsheets and graphed out income and expense estimates to show how we would managickene. That was enough. I use Quicken so I had prior years' numbers available.
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Old Yesterday, 02:24 AM
 
Location: Cebu, Philippines
4,698 posts, read 1,820,498 times
Reputation: 8684
I made even less than a general estimate. I had what I had, and had to live on it.

SS for everyday living, savings for all else, if and when it arose.

Enforced frugality was in order, but I learned that from my depression-era parents.
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