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I generally like the Kiplinger site (www.kiplinger.com). However, this "slide show" I found a little more insipid than usual for them. Why am I posting about it then? Well, it's retirement related and I just thought I would throw it out there for comment. For each of the five "surprises" they have a page of explanation, which I briefly summarize unless the meaning is self-evident.
1. Health care costs.
2. Higher spending in general. Now that people have time to travel, they may go overboard on spending for it. Also, giving up the company car may cause additional automotive expenses, etc., etc.
3. Social Security taxes. Some people may not have realized that 85% of their SS benefit is taxable under most circumstances.
4. Taxes on nest-egg withdrawals. From a traditional IRA or from a 401(K).
5. Loss of income for a surviving spouse following the death of a spouse.
My comments: This list, like many others, shows me how knowledgeable we Retirement Forum posters are; we discuss all this stuff all the time here, so that, learning from each other, we find these lists too elementary and self-evident. Also, I had to chuckle about the company car; that may indicate what sort of readership Kiplinger is writing for, as I think only a very, very small percentage of American retirees would have had a company car to worry about giving up. I know I didn't.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Ha, giving up the company car... Yes, maybe it IS THAT clan that forgot to budget for the other stuff mentioned....
They probably need reminders from Kiplingers, since they no longer have us nasty 'Grunt' employees reminding them of such... (Heaven knows they NEED it).
Except for #1 and 5, I would say C-D readership is up to speed, and I trust most of us have #5 covered by correct insurance / planning.
#1 is the wild card, thanks to the tremendous help (?) from our Gov. Those who waited till age 65 are a step ahead (literally) of us who retired in our 30's and 40's. (Not that I would refer to Healthcare costs / needs as a SURPRISE. ) Maybe a DISAPPOINTMENT, but no surprise.. Stuff happens, count on it. You might even have to give up your Company Car
Personally, I kinda hated to give up that Monthly Direct Deposit of Paycheck. (I Thought for sure a nice company could just keep funding me)
I did a lot of traveling when I was young, so I don't have to be concerned about that.
I've been retired for 7 years now. I keep a monthly budget and an annual budget (on Excel).
I am single. I don't have a car payment. I rent, and my rent is pretty high. My food bill is rather high because I buy a lot of organic vegetables. With state income taxes, fed income taxes, Medicare, and a Medigap policy, my annual expenditures are $37,000 a year (my rent eats up $12000 of that). And that's pretty much a no-frills budget (meaning, for instance, that I rarely go out to eat, don't buy expensive clothing or a lot of clothing, don't drink at all, etc.).
And I also don't live in CA.
I don't know how any single/widowed/divorced person can retire on less than $30,000/yr. Add 5% inflation every year (don't talk to me about the government's phony CPI), and I don't know how most people can retire!
And, even with a 2% annual COLA on my pension and living in a less expensive apartment complex, I could easily be out of money by the time I'm 85 -- 20 years from now. Sure hope I die before then!
First Fran I selfishly say I hope you are around and vibrant for much longer then that.
Escort Rider it is very telling on which demographic they cater to. As you said and other threads have pointed out health care is the elephant in the room. Though there is some concern with a reduced income for the surviving spouse there is also a lower need for cash. Yes some expenses remain the same but others decrease or just go away. It also depends on which spouse is the surviving one.
StealthRabbit you hit it out with your assessment that good planning can make the difference.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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If you bought house in a desirable area 15-20 years before retirement, despite the bubble, it's now worth almost what it was in 2007. Stay another 10-15 years until it's paid off, move to a less expensive are and pay cash, and your monthly housing cost is the taxes/insurance, maybe $300/month. With SS, retirement income from employer and any IRA/401K one could still survive nicely at 67
even if that came out to about $2,000/month. Just don't plan on annual trips to Europe and Hawaii.
If you bought house in a desirable area 15-20 years before retirement, despite the bubble, it's now worth almost what it was in 2007. Stay another 10-15 years until it's paid off, move to a less expensive are and pay cash, and your monthly housing cost is the taxes/insurance, maybe $300/month. With SS, retirement income from employer and any IRA/401K one could still survive nicely at 67
even if that came out to about $2,000/month. Just don't plan on annual trips to Europe and Hawaii.
Here's a thought. See your state and then the rest of America first. Never a dull moment!
I generally like the Kiplinger site (www.kiplinger.com). However, this "slide show" I found a little more insipid than usual for them. Why am I posting about it then? Well, it's retirement related and I just thought I would throw it out there for comment. For each of the five "surprises" they have a page of explanation, which I briefly summarize unless the meaning is self-evident.
1. Health care costs.
2. Higher spending in general. Now that people have time to travel, they may go overboard on spending for it. Also, giving up the company car may cause additional automotive expenses, etc., etc.
3. Social Security taxes. Some people may not have realized that 85% of their SS benefit is taxable under most circumstances.
4. Taxes on nest-egg withdrawals. From a traditional IRA or from a 401(K).
5. Loss of income for a surviving spouse following the death of a spouse.
My comments: This list, like many others, shows me how knowledgeable we Retirement Forum posters are; we discuss all this stuff all the time here, so that, learning from each other, we find these lists too elementary and self-evident. Also, I had to chuckle about the company car; that may indicate what sort of readership Kiplinger is writing for, as I think only a very, very small percentage of American retirees would have had a company car to worry about giving up. I know I didn't.
Thanks Escort. I signed-up for the Kiplinger Retirement Newsletter a while back after you mentioned it. As you suggested, some of their lists (and those of others) are a little obvious, but, generally, the publication is pretty good.
In thinking about retirement cost surprises over the past 5-years, I can't think of many ... except, perhaps, we eat-out much more often than I expected. (We have had some high travel costs also, but, that's a choice, not a surprise). - We are getting closer to RMD's and I don't know what impact that will have yet (I'm looking for ways to help offset RMD taxes ... like funding college funds for grandkids, but, that may be wistful thinking.) -- Otherwise, our lifestyle and expenses haven't changed much from pre-retirement (if anything they are lower, but, that is part due to some pay-offs such as house, cars, etc -- to eliminate debt.)
I have been reading Kiplinger for years as in years and they are a very good resource. However as many of you know from Kiplinger, Money and Smart Money they are recycling ideas over the years and modifying them for changes as appropriate. Their readership is more affluent and their retirement newsletter is very good. However you also reach a point of redundancy with that. As Escort noted most participants here who participated across related forums are ahead of the curve. I had to chuckle about the company car as I suspect in jobs where that is common folks who are into retirement planning talk about that while in other areas of employment we didn't. Mileage allowance went away with the job and the need to drive etc etc etc for work. We personally have had no real surprises to the down side (other than the market crash) and a lot of surprises to the up side ( some because of the market crash).
If you live well below your pre-retirement income - retirement will be easy peasy. I don't make all that much - and I contribute a full 30% to retirement savings - saving for myself and my spouse who doesn't have an employer with any retirement plans. So living at a low level isn't difficult and won't be difficult. However, we may surprise ourselves - and find that we have more income than we ever thought in retirement.
If you live well below your pre-retirement income - retirement will be easy peasy. I don't make all that much - and I contribute a full 30% to retirement savings - saving for myself and my spouse who doesn't have an employer with any retirement plans. So living at a low level isn't difficult and won't be difficult. However, we may surprise ourselves - and find that we have more income than we ever thought in retirement.
That's surprisingly true! ... (particularly in light of all the publications and planners who insist we must compile a 'huge $ number' to retire on more than a 'dog food' diet.
IMO the same folks who lived comfortably within their means before retirement, typically do the same in retirement ... and have no significant financial problems. Likewise, those who constantly struggled financially before retirement, often continue to do so in retirement. Both cases have more to do with individual self-discipline than financial resources.
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of us who retired in our 30's and 40's. (Not that I would refer to Healthcare costs / needs as a SURPRISE. ) Maybe a DISAPPOINTMENT, but no surprise.. Stuff happens, count on it. You might even have to give up your Company Car 
