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I'll adjust household spending based upon other purchases. I am very debt adverse. Our retirement income will be about the same when DH retires next year, once we hit 55-60 other pensions/savings come into play.
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I think I am overly obsessive about budgeting because I always worked for my living and the way I am I keeping wondering how can we live if we're not working?
Part of what I am worried about is I am one of those that still has a mortgage and I would feel a whole lot better without one but the numbers keep telling me we'll be just fine even with the mortgage.
After we pay all of our Medicare premiums and supplement plans along with dental and life insurance we should have $4,335.87 left over every month. Our monthly expenses are as follows:
Mortgage &Tax $999.90
HOA Fee $239.00
Homeowners Insurance $20.92
Utilities $127.00
Cable/Internet $155.77
Cell Phone $200.77
HVAC Furnace Maintenance $20.00
Church $110.00
Auto Insurance $43.33
Auto Maintenance & Gasoline $200.00
Gifts $150.00
Pharmacy $150.00
Food $433.00
Entertainment $433.00
Clothes, Hobbies and Beauty Shop $216.50 Total Expenses $3,499.19
If we stay within budget we should have $836.68 left over every month and if I pay that on the mortgage we can be rid of it in a few short years. If I kept working putting that income against the mortgage the mortgage would be gone in less than two years which would put an additional $750 into our monthly budget.
There are places we could cut back on too. The biggest is the cell phones and there plans that are a whole lot cheaper we could use after I totally quit work.
Basically food, entertainment "play money" would be $250/week and that is how we would budget that as a lump sum.
Looking at these numbers my mind tells me we are in extremely good shape, even if we do still carry a mortgage, but this little nagging voice in the back of my head keeps nagging me about working because I always worked.
I'm scared to take the big step. Living in a relatively low cost of living are in the Midwest I know I am ready to take the big step but I'm still scared... maybe if I worked another 20 years..... if only social security kept adding an additional 8% per year for not taking benefits to age 90.....? Big baby I am!
Call your cell phone provider and tell them you want to drop a line. They will probably give you a nice discount.
My budget is written in sand, not chiseled in stone. I live in a low COL area. I do my own hair and clothes shopping is $10 a couple times a year at the local thrift store. My budget busters are the once a year bills like insurance and house taxes. Those are my lean months. The electric bill is very high in the summer so that means less fun for me. Another thing that wreaks havoc with the budget short term is buying meat in bulk like 40lbs of hamburger from Zaycon Foods. But in the long run it's smart because it will last me 6 months or so. The freezer is always full.
Electricity $50 with no AC. $300 with AC
Natural Gas $20
Trash and Sewer $30
Water $25
Internet $120
Cell Phone $25
Hulu and Amazon $20
Gasoline $40
Dog Food $70
Food and Household $600
Total $1225
I'm sure you have already thought of this: however, have you ever considered replacing A/C with a swamp cooler? I got one for my son last summer in desert part of SoCal, when temps were in the high 90s and he did NOT have an A/C.
He says the swamp cooler works fantastically well, cools off his immediate 400 sq ft area within ten minutes. In a frenzy of maternal concern, I bought the size for the next higher square footage. Your expenses are $40/mo over your baseline "no A/C" number: also filters to change once per month. These things are so low tech that I ordered the ones I got for son from Wal-Mart. Enough extra filters to last for the hot season. I'm going to assume he can figure out how to order replacements, lol!
Whatever. He now comes home from work (outside skilled trades) and can take a nap in comfort the minute he gets home from work (in the hottest part of the afternoon).
Just consider it. The swamp coolers are designed to work most efficiently in desert areas. Relative humidity, and all. So, I think one could work really well in Las Vegas. Best to you.
I don’t budget, but track. Maybe that’s the same thing if , like me, you’re not a spender.
It IS the same thing when you have a significant amount saved that is not needed to generate income to live on for essentials. If one is fortunate enough to absolutely know that they have a guaranteed income that literally always exceeds by a significant margin whatever their essential and discretionary costs would be, inflation adjusted for life, the excess of which would just add to an already large savings (all of which is not rare when a high earnernis a non spender), then there is no budgeting, as the budget is self preserving.
The majority of people have a budget that rises to meet income, or have little fat in the budget to trim to allow any savings or growth for inflation. That was always my fear, to end up one of those, like so many of my relatives, especially after my second divorce took me to essentially square one at age 36. Luck, sweat equity, good investing, a strong career with a pension and LWBYM lifestyle allowed me to build up to the point where living “at” my means is more than I would naturally do.
Like the OP, though I am just 60, I still fear taking that plunge now, even though all the boxes are checked and all the programs say I can. I’m sure everyone knows they should recognize when they are ready to retire. It is why I joined this forum a few years back, to help me focus, inspire, and reality check my feelings and decisions.
The last 24 years have been a lot of work, with the 14 before that a fiscal and emotional nightmare. I have found it surprisingly difficult to comprehend the realization that I can stop, mainly because I am making more than I ever thought I would at a basically enjoyable low stress position, with a pension that still grows significantly each year I work. In my mind, if things stay as is, after 2 more years, I would be lucky enough to say, “well, it just makes no sense to keep on working” while maintaining this lifestyle. Many of my similarly aged friends and coworkers will retire next year after age 60, because they have more than 30 years with our company, and they were LBYM and strong savers, dual careers all their adult lives. If my later start only means I am two years behind that goal, then I am truly fortunate in my mind.
It IS the same thing when you have a significant amount saved that is not needed to generate income to live on for essentials. If one is fortunate enough to absolutely know that they have a guaranteed income that literally always exceeds by a significant margin whatever their essential and discretionary costs would be, inflation adjusted for life, the excess of which would just add to an already large savings (all of which is not rare when a high earnernis a non spender), then there is no budgeting, as the budget is self preserving.
The majority of people have a budget that rises to meet income, or have little fat in the budget to trim to allow any savings or growth for inflation. That was always my fear, to end up one of those, like so many of my relatives, especially after my second divorce took me to essentially square one at age 36. Luck, sweat equity, good investing, a strong career with a pension and LWBYM lifestyle allowed me to build up to the point where living “at” my means is more than I would naturally do.
Like the OP, though I am just 60, I still fear taking that plunge now, even though all the boxes are checked and all the programs say I can. I’m sure everyone knows they should recognize when they are ready to retire. It is why I joined this forum a few years back, to help me focus, inspire, and reality check my feelings and decisions.
The last 24 years have been a lot of work, with the 14 before that a fiscal and emotional nightmare. I have found it surprisingly difficult to comprehend the realization that I can stop, mainly because I am making more than I ever thought I would at a basically enjoyable low stress position, with a pension that still grows significantly each year I work. In my mind, if things stay as is, after 2 more years, I would be lucky enough to say, “well, it just makes no sense to keep on working” while maintaining this lifestyle. Many of my similarly aged friends and coworkers will retire next year after age 60, because they have more than 30 years with our company, and they were LBYM and strong savers, dual careers all their adult lives. If my later start only means I am two years behind that goal, then I am truly fortunate in my mind.
Intriguing comments Perry.
Deciding when enough is enough is such an emotional decision, yet has to be grounded in emotionless decision making, if you know what I mean. Tough to balance the two.
From what I’ve read of your situation on here, I think you have absolutely looked at every angle of this decision. And the finances you have discussed would certainly be comfortable for me, but I am not you.
In my own decision making, ignorance was kind of bliss.
Unlike you, I hated my job at the end, and knew my career path had imploded(long story....off topic). So, it was easy to pull the plug .
I had no guaranteed income at the time and still do not. What I did have was about $1M in liquid assets, 50% equity in a $1m home, and a large parcel of land that I had no idea of its worth (and still don’t know what it was worth then). I was 42.
I had no idea how much I was spending, but knew that it was less than what my $1m liquid assets was providing. At the time, that was my idea of good personal finance. Like I said, ignorance is bliss.
You have done the work of tracking your expenses, trying to control them, and trying to anticipate future needs. That’s all anyone can do.
I think you are in a great position in that you are fine working- seem to enjoy it, or at least tolerate it, and you are prepared to walk. You should celebrate!
So you retired at 42 with a $1M portfolio? How many years now? That is impressive and you should be congratulated on taking such control over your life. I sometimes think that those who retired young and chose a life of relative freedom even if it meant a somewhat more austere lifestyle are better off as they have proven their concept at a time when they are still young enough to change their mind or recover if things go south. If I was single, I think I would find it much easier to pull the trigger. It is definitely a set of emotional hurdles that I am dealing with, though as of this moment in time, I have to stay working for at least another year in order to qualify for a mortgage on the new home before I sell this one to avoid 2 moves. The fact that I felt distinct relief at being “forced” to stay working tells me I’m not ready to retire yet.
And as you said, a career I enjoy and am well compensated for doesn’t help the “have to retire” side of the equation. But the “you only have maybe 15 years of do whatever you want time left” camp is louder than ever.
Well, a budget doesn’t mean you have a limit to what you are allowed to spend. It is simply an acknowledgement of what your current costs are compared to what your income is. Budget includes inflow and outflow. In retirement, income is typically a combined source of fixed & variable income and safe investments withdrawal rate. If your budget shows your outflow is more than your inflow can support, THEN you need to adjust. I still have a budget even though my outflow is far less than my inflow while I am working. It means I know what I am spending. The surplus is savings. In retirement in 2 years, I will know what line items in my current budget get deleted, increased or remain.
There is reverse budgeting in retirement where monthly savings and investments are fixed and your budget. Every thing after that is fair game for spending. What is left at designated points gets dumped into savings/investing in addition to what is fixed.
I guess that is a budget now that I think about it.
That is an interesting approach. I would imagine that is true for early retirees, but at some point in retirement time why would there really be any reason for a fixed budgeted amount to save & invest? I don’t plan on any additional savings besides what is not spent. I mean, that was the whole point of my saving for retirement so that I never have to save or worry about having enough to do whatever I want or need. I certainly am not toing to not do something I want in order to further increase my NW for my heirs. Maybe if I had heirs that actually improved my life and theirs, rather than were a constant drain and heartache I would feel different.
That is an interesting approach. I would imagine that is true for early retirees, but at some point in retirement time why would there really be any reason for a fixed budgeted amount to save & invest? I don’t plan on any additional savings besides what is not spent. I mean, that was the whole point of my saving for retirement so that I never have to save or worry about having enough to do whatever I want or need. I certainly am not toing to not do something I want in order to further increase my NW for my heirs. Maybe if I had heirs that actually improved my life and theirs, rather than were a constant drain and heartache I would feel different.
As we have discussed previously we are blessed with multiple pensions and SS along with investments. We have CCRC plans and don’t want to be dependent on a government in deep debt for our old age well being. After savings and investing there is still a chunk left with no need to compromise.
Also we want to be positioned for a freeze in pension/SS COLA or a 25% reduction in benefits for both.
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