Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Somewhat. I fell somewhere in the middle. Some things were detailed, others estimated. I made three budgets based on when I would start drawing Social Security benefits. Then I had a fee-only financial advisor look them over from the standpoint of telling me if they were realistic or wishful thinking.
He concluded that other than not being able to take that European vacation every year, they were somewhat reasonable. Of course, some things have changed since I retired. I swapped piano lessons for a gym membership with indoor tennis courts, (so I can play during the snowy winters).
He doesn't know how frugal of a traveler I am, so I'm not giving up on those Euro visits yet. Just waiting to get a bit better with my French before I go.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,724 posts, read 58,067,115 times
Reputation: 46190
Everyone will be different...
No 'budget' for me, just a sense of what the spending is and will be in the next 6 - 18 months. I know what I spend on food and entertainment (as per last 40 yrs) ($100 . month) Fuel ZERO (home brew for last 40 yrs), Heating ZERO (wood from my forest), HC coverage... was $300 / month before ACA, then up to $2800 / month, now $3.31 / month...if I live to age 65... ~ $330 / month. (100x more costly than today)
Property Taxes.... Was <$3 / day, now $48 / day (same house, just more worn out)
I have (4) general retiree spending / income plans.
1) to age 65; ~ 60% of pre-retirement budget. ACA qualifications requires limiting MAGI to $65,830 (income) That is no problem, I can survive on $40k or less. Travel budget for >50% of the time.
2) Age 65 - 70; 85% of pre-retirement Budget ...CoL adjusted . Spending down and Roth rolling Tira's and non-Roth 401k; extensive 'independent' travel. >50% of the time
3) Age 70 - 80... 95-110% of pre-retirement Budget + CoL adjusted . ...RMD (minimal) and shifting out taxable qualified $ to Roth (while keeping under 15% tax thresh-holds) - liquidating RE investments; determining Aging in Place future location. Hold the 'pre-estate' auction before age 80.
4) Implementing post age 80 living situation + more medical spending 70% of Pre-retirement budget + CoL adjusted (CCRC ? Cottage co-op ?, shared equity ?, ...)
We’re getting ready to retire at the end of the year
We’ve been tracking expenses for several years
We’re definitely in the detailed budget planning camp
Expenses are key to successfully managing our money in retirement
We have multiple yearly budgets- dependent upon ROI we can adjust our spending accordingly
Honestly.Retirement is something that was something that had to happen for mental happiness reasons. We are ok financially, but no trips to Europe. Im good with settling with being happy
I'd been tracking investments for 10-15 years before retirement; I started a spreadsheet that tracked the balance every year given reasonable assumptions about savings and rates of return. It ended at age 65 and the bottom line was 4% of what I had at 65, in current dollars. That was the number I focused on- could DH (already retired and on SS) and I live on that? The numbers held up pretty well and when I got disgusted with company politics I pulled the plug at 61, figuring we'd live on what we had. It's worked out very well.
I do more detailed analyses of my spending now, mainly to answer the question, "where the heck is all this money going?" The quick answer: 40% to travel and charity, which I can easily cut back if I have to. I've almost made a game of cutting back some of the other categories: got rid of cable, got a Nest programmable thermostat and cut the utilities, have spent $15 on clothes year-to-date (a pack of socks from Costco). OTOH, I'm taking my 5-year old granddaughter to Chicago in September (2 nights, plane trip from Des Moines) and am booked for Hawaii in November!
No major analysis. We knew generally where our money went pre-retirement: housing, utilities, vehicle expenses, food, misc. and such, and planned our retirement with that in mind. Our housing expenses we knew would go down, since we planned to move to a lower cost area and pay cash. That was the biggest item. The others stayed about the same.
What made it easy was that we were maxing our retirement contributions for our last empty nest years, and saving after tax too, so we knew we could keep up the same spending level after retirement without those cash drains.
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
When I started planning my early retirement, I got all my accounts hooked into Personal Capital to track investments, spending, cash flow etc. Mint is also good for this. I rarely use cash anymore, so everything I charge gets sucked into PC and is automatically categorized. A lot of it gets categorized incorrectly, so I have to go in periodically and correct things.
Having all this data in one place is great. While spending in any month can vary quite a bit (a big medical bill here, property tax due there), our spending has been remarkably consistent over a longer timeframe. When I first started, it was eye opening how much we spent on convenience things (such as takeout food). We scaled some things back and it really helped set us up well for retirement.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.