Exactly what is a comfortable middle class retirement? (55, pension, weather)

[nicet4]

What does it take to live a comfortable retirement life?

This will vary greatly around the country with utility costs and property taxes being so much higher in New York and California as opposed to southern Alabama for example.

I have started to lay out our budget and I am thinking we can live very comfortably on $1,950 a month and that's $300 "cushion" for emergencies and maybe some minor travel to see kids etc.

Medicare $300.00 Utilities $450.00 Property Tax $100.00 Auto $150.00 Church $100.00 Recreation $200.00 Food Budget $300.00 Emergency $300.00 Homeowners Insurance $50.00 Total $1,950.00

I know I am high on utilities but that includes gas, electric, water, sewer, garbage pick up, cable television, telephone and high speed internet. Our highest utilities are in summer (air conditioning) and they might all total $400 so I do have some cushion there. Fact be I estimated everything on the high side seeing as how we consider recreation going to McDonalds and getting a $1 ice cream sundae a high point of the week.

Recreation is $25 a month for gym dues and $75 for country club membership. Yes sir, we do live in a less expensive area of the country.

Food is high and while we do not overeat we do eat healthy with lots of fresh vegetables, fresh fish and little red meat.

So what am I missing?

[TuborgP]

Originally Posted by nicet4

What does it take to live a comfortable retirement life?

This will vary greatly around the country with utility costs and property taxes being so much higher in New York and California as opposed to southern Alabama for example.

I have started to lay out our budget and I am thinking we can live very comfortably on $1,950 a month and that's $300 "cushion" for emergencies and maybe some minor travel to see kids etc.

Medicare $300.00 Utilities $450.00 Property Tax $100.00 Auto $150.00 Church $100.00 Recreation $200.00 Food Budget $300.00 Emergency $300.00 Homeowners Insurance $50.00 Total $1,950.00

I know I am high on utilities but that includes gas, electric, water, sewer, garbage pick up, cable television, telephone and high speed internet. Our highest utilities are in summer (air conditioning) and they might all total $400 so I do have some cushion there. Fact be I estimated everything on the high side seeing as how we consider recreation going to McDonalds and getting a $1 ice cream sundae a high point of the week.

Recreation is $25 a month for gym dues and $75 for country club membership. Yes sir, we do live in a less expensive area of the country.

Food is high and while we do not overeat we do eat healthy with lots of fresh vegetables, fresh fish and little red meat.

So what am I missing?

Only you can answer that. You know what your expenses are and what your income is. You know what makes you happy and affords a comfortable life. The only question I have is medical overage costs.

[Tesaje]

taxes - state & fed
clothing
property maintenance - gardening or lawn, repairs
Sundries/cleaning
Does auto include gas + maintenance?
Medical in addition to insurance costs (OTC drugs, co-pays, proscriptions)

Out years - at what point do you replace the car and how will it get paid?
Whatever travel should be folded into a monthly amount as if you are saving for it.
With lots of disposable time, what about hobby expenses?

[nicet4]

Originally Posted by Tesaje

taxes - state & fed
clothing
property maintenance - gardening or lawn, repairs
Sundries/cleaning
Does auto include gas + maintenance?
Medical in addition to insurance costs (OTC drugs, co-pays, proscriptions)

Out years - at what point do you replace the car and how will it get paid?
Whatever travel should be folded into a monthly amount as if you are saving for it.
With lots of disposable time, what about hobby expenses?

Was looking for a minimum.

Taxes, two people making $24k how bad can taxes be?

My hobby is flying and while I did downsize from a Piper Arrow to a Cessna 150 I didn't include the cost of my hobby (budget at $800 a month) in this budget. I wanted to get an idea of a minimum. I will continue to fly as long as I can pass the third class medical. Airplanes don't depreciate in value so when I fail the medical I'll get my money back from that. Nothing grand maybe flying down to Key West for lunch a couple times a month, that sort of thing. So what if it takes 6 hours instead of 4 I'll be retired anyway. The thrill of being stranded at small airports waiting for weather to clear lends to the adventure.

[MadManofBethesda]

Originally Posted by nicet4

Was looking for a minimum.

Taxes, two people making $24k how bad can taxes be?

Wow, the flying to KW for lunch sounds pretty cool.

Be that as it may, even if you leave off any expenses associated with your hobby, I agree with Tesaje that you've left out a lot. You haven't budgeted for any routine house maintenance or repairs, or any routine medical expenses other than Medicare. I also didn't see any personal expenses such as clothes, grooming, etc.

I think that another problem might be inflation. Starting from such a small base, I don't think an annual COLA from SS will be high enough to offset increasing costs in your expenditures. For example, a 3% COLA on $24,000 is only $60/month, but your expenses (Medicare, property taxes, utilities, food, gasoline, etc.) would likely go up more than that. And next year there won't even be a COLA, but I'm sure your expenses will still rise.

[nicet4]

Originally Posted by MadManofBethesda

I think that another problem might be inflation. Starting from such a small base, I don't think an annual COLA from SS will be high enough to offset increasing costs in your expenditures. For example, a 3% COLA on $24,000 is only $60/month, but your expenses (Medicare, property taxes, utilities, food, gasoline, etc.) would likely go up more than that. And next year there won't even be a COLA, but I'm sure your expenses will still rise.

We're all old enough to remember the inflation of the late 1970's and early 80's and my fear is inflation ramps up without the COLA helping to keep SS in budget.

Basically give all social security recipients a 40% reduction over a 4 hour period. We can see that now with some who retired at 65 twenty five years ago and are unfortunate to have lived to see 90. Here they are today trying to live on $800 a month.

Sounds like a lot of people will do fine the first five years of retirement but then look out.

[Paka]

Yea, kinda reminds me of when my father died in 1975....my mom got $75K in life insurance. $75K sounded like "oh my God, you will be set for life" back then. Took less than 10 yrs to go from "set for life" to flat broke. Needless to say she is living with us kids quite comfortably now on her little SS check...but we pay for everything she needs or wants (and are grateful to God that he has allowed us to do this for our mom) because she lives with us. She has 0 expenses every month (doesn't drive anymore) and saves her money except for her Wallyworld trips and the $10 she sends each grandchild in a card for their birthday/graduation/wedding/whatever. Hey, she is 82 and stuck in that timewarp thing...

[Tesaje]

Even if the COLAs do reflect the real inflation, they are always a year behind the inflation. So when prices go up, you need to be able to float it for a year until the COLA catches up. This year is a gift. Last year as prices skyrocketed, people on the edge were really hurting to afford the necessities. But this year, the big COLA and falling prices (until recently) have made it easier. That doesn't happen often.

[Tightwad]

Originally Posted by nicet4

What does it take to live a comfortable retirement life?

This will vary greatly around the country with utility costs and property taxes being so much higher in New York and California as opposed to southern Alabama for example.

I have started to lay out our budget and I am thinking we can live very comfortably on $1,950 a month and that's $300 "cushion" for emergencies and maybe some minor travel to see kids etc.

Medicare $300.00 Utilities $450.00 Property Tax $100.00 Auto $150.00 Church $100.00 Recreation $200.00 Food Budget $300.00 Emergency $300.00 Homeowners Insurance $50.00 Total $1,950.00

I know I am high on utilities but that includes gas, electric, water, sewer, garbage pick up, cable television, telephone and high speed internet. Our highest utilities are in summer (air conditioning) and they might all total $400 so I do have some cushion there. Fact be I estimated everything on the high side seeing as how we consider recreation going to McDonalds and getting a $1 ice cream sundae a high point of the week.

Recreation is $25 a month for gym dues and $75 for country club membership. Yes sir, we do live in a less expensive area of the country.

Food is high and while we do not overeat we do eat healthy with lots of fresh vegetables, fresh fish and little red meat.

So what am I missing?

As I said before in another thread that pretty much cover my experience
in retirement......

"I have a small pension, but no savings, and social secruity and thats' it!

What I've learned is that unless you're a born spendthrift it takes little
money to live very comfortably by staying home to enjoy the peace of
the home you worked so long to pay for. You also have to re-learn a
great deal as to what is and isn't important to YOU and weither or not
it's worth the cost.

Retirement isn't going brain dead. It is an adventure in a new way to live
so make it a good one with money not being everything anymore.

Added to help with ideas on how to save........
Possum Living-How to Live Well Without a Job and With Almost No Money by Dolly Freed

P.S. be prepared for the income boost you'll get when you stop paying the "cost of working".

[texdav]

I really don't think that you can just say medicare $300 as it depends too much on what happens. I know many that went from a 0 medeicine cost to 300 a month on that alone and that is low. I would say that since you say you live simply now then keep a runinng record for three months on what you spend now.Even looking at your present income to outflow. First look at your slary how and how much you save and that will give you a idea of what your cost of living is now.I's add a minimum of 3% per year and that isn't set in stone for inflation overall.