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Old 08-08-2009, 06:41 AM
 
70,830 posts, read 71,210,489 times
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not being retired yet ourselves im just wondering how much over budget you all figure each year over and above your actual costs that year.... like a fudge factor... like saving the extra you didnt spend towards the major house repair, the surprise dental expense, having to replace you car etc..... some people allow themselves to calculate based on say 10,000 over their actual expenses each year , some 20,000 .... just curious about what some do to leave slack for lifes zingers . you can just give us and idea of percentage of yearly spending if you dont want to post a dollar amount.... so if you spend 40,000 a year and figure 50,000 in your budget then you figured an extra 25% for safety... if you budget 50,000 and spend 50,000 normally without the extra zingers then you have a safety figure of zero

i hope i explained the question well enough so everyone understands what the question is.

Last edited by mathjak107; 08-08-2009 at 07:19 AM..
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Old 08-08-2009, 07:30 AM
 
Location: DC Area, for now
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I calculated I will have a good 25% extra unbudgeted money without dipping into savings so I feel confident it will work for me. This is true even by adding in 3 trips a year that I don't currently spend. Does it work out? Don't know, I'm not there yet. But soon... I'll spend that and probably a bit more doing some house remodeling the first year.
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Old 08-08-2009, 07:33 AM
 
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our comfort number seems to be about 25% over too..... we are just laying the groundwork for pulling the plug on working a year from january...maybe sooner if some investments do better then expected.....truth is we can do it now but i think im just scared! ill be 57

Last edited by mathjak107; 08-08-2009 at 07:51 AM..
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Old 08-08-2009, 07:48 AM
 
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ive heard of people who use a bucket system setting up a "cup"... they will throw say 5 or 10% of their nest egg in it, they wont count it in any calculations for figuring withdrawls and they will hold it as emergency money for the big stuff so as not to upset their withdrawl rate or calculations.... with 2 more potential weddings coming up for the kiids eventually the cup sounds like a good idea
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Old 08-08-2009, 08:04 AM
 
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We use our pension as our basic income. Everything else is on top of that. The extra is investments and Social Security. Investments and SS also become our hedge against inflation. We are also guaranteed each others pension so the only thing we would lose if one us dies involves each not getting full SS.
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Old 08-08-2009, 09:09 AM
 
Location: SoCal desert
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Hmmm. You made me go look at my spreadsheet :-)

30% extra.
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Old 08-08-2009, 09:27 PM
 
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my wife and I alao consider our income as our pensions.i have a IRA that I have never touched. Savings which we have used for sudden expenses. Our pension have COL and are figured at 5% interest per year and in years that are better we get extra payments at years end.The penson fund loss 1.3% for the last year which is the first loss in decades and we got no extra checks.I am about to get ss which will go into the net money for sometime at least.My wife get SS in four years.I have been retired for ten years and like most wander if the plan I had for retirement was sound and so far its worked great.Actually my safety net is worth more now than when I retired which surprises me really.
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Old 08-09-2009, 07:43 AM
 
Location: Forests of Maine
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I think that 25% is a good number.

I am retired. Bought land w/ cash and began building a house, ran out of money. So now we live in a partly completely house, and we make repairs very slowly.

So we 'feel' strapped for cash. But all of our living expenses are covered fine.

I just wish that we had been able to have finished the house, before we ran out of savings.
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Old 08-09-2009, 08:02 AM
 
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Quote:
Originally Posted by texdav View Post
my wife and I alao consider our income as our pensions.i have a IRA that I have never touched. Savings which we have used for sudden expenses. Our pension have COL and are figured at 5% interest per year and in years that are better we get extra payments at years end.The penson fund loss 1.3% for the last year which is the first loss in decades and we got no extra checks.I am about to get ss which will go into the net money for sometime at least.My wife get SS in four years.I have been retired for ten years and like most wander if the plan I had for retirement was sound and so far its worked great.Actually my safety net is worth more now than when I retired which surprises me really.
That is the advantage of a safety net. It is savings. Your statement about it being worth more now is what many people miss. Yes we had a stock bubble burst and the value of investments fell. However they only fell if you took the money out. Yes the bubble burst big but the runup as you can see was probably bigger then the net lost now. The Dow has gone from 6,500 to 9,300since March 6. That was a lot of money to be made or recovered if you were still in the market. It is very possible to be within striking distance of your October 2007 peak and probably well ahead of what that pot was worth 3-5 years ago. Folks just need to look at mutual funds five-10 year gain and that will tell it all. Remember that ten year gain includes multiple bursting bubbles. Park it and watch it grow!
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Old 08-09-2009, 08:15 AM
 
Location: SW MO
23,605 posts, read 31,374,464 times
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We are retired and in escrow on a house in a different state. We factor about 25% of income for savings and investments and have my modest IRA which we don't touch. That's our unforseen emergency fund. We also have a money market fund we increase monthly just because, a savings account for unplanned, non-major expenses and another put-and-take savings account for planned purchases.

I have a pension from my state, as does my wife, and I'm drawing Social Security, as my wife will also beginning next year.

What works for us is paying ourselves first with every check that arrives. That means that savings and the MMF come before bills and household expenses. My wife's entire SS check will be saved and invested when they start arriving.

Good luck to you when the time comes!
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