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Loads of personal financial stuff here but I really don't care who knows because money doesn't define someones worth to society.
I'm 75 and want to retire and thinking about January 1st but Memorial day at the latest. I never thought I would feel this way but I want to spend the rest of my life with my wife and family. I want to quit and the desire hit me like a stone wall.
So here goes....
As a married couple our combined monthly retirement income for 2024 is $6,426.45 which includes the 3.2% COLA increase. Our combined social security is $4,390 which is higher than normal but I didn't file until after my 69th birthday. My wife receives a small state pension but it is WEP'd so her social security is a little smaller than it would be.
In 1968 I was drafted into the army and served a year in Vietnam and because of that I have a 50% VA Disability which is $1,179.45/month. The big plus here is that money is except from all taxes and all the prescription drugs I take are from the Veterans Administration and totally free. Didn't know we are still paying for Vietnam, did you?
My CPA tells me we will not have to pay any federal or state income tax from our retirement income.
We live in a condo just 5 miles from the grandkids and we love it especially when someone else mows the lawn and shovels the snow. The condo has a swimming pool which attracts the grandkids in the summer.
Our total cost of living in the condo which includes all utilities with internet and cell phones is as follows:
Real Estate Tax & Homeowners Insurance $315.93
HOA Fee $347.00 (Garbage, Water & Sewer are Included in HOA Fees)
Electric $140.77
Natural Gas $128.95
Air Cond and Furnace Maint $27.00
Cell Phones $59.98
Internet $96.48 (we stream television)
Cleaning Lady $120.00 (Twice/month for heavy cleaning)
Total Cost for the Condo $1,236.11
Medical & Other Insurance
Medicare G $401.74
Medicare D $60.60
Kemper (In Home Care Insurance) $73.40
Life Insurance $324.00
Auto Insurance $166.00 (2 cars)
Total Cost for Insurance $1,025.74
We do have dental and eye insurance that comes with my wife's state pension.
So our total cost of living here with ALL of our insurance policies is $2,261.85.
On other monthly payments we have:
Auto Loan $661.65 (It's the only debt we have)
Church Offering $150.00
Monthly Food/Entertainment Budget $2,000.00 (Broken Down Below)
Monthly Total $5,073.50
Our Monthly Food/Entertainment Budget is $2,000 and here it is broke down:
Food $433.00 ($100/Week)
Dining Out $433.00
Gasoline $150.00
Pharmacy/Dental/Glasses $500.00 (For What Insurance Doesn't Pay)
Haircuts $55.00
Sub-Totals $1,571.00
Clothing/Gifts/Fun Money $429.00
Total Monthly Stuff Budget $2,000.00
We have been experimenting with that Spending Budget for three years now and most of the time our actual spending ends up being $1,600 to $1,700 a month so I feel it is more than enough. Last year we actually went over the $2,000 just one time when we went to a wedding in Idaho for a week. Airline tickets and all.
From our total monthly income we should be able to save at least $1,352.95 monthly. We can use this for travel, something exciting or just a "safety cushion" if needed.
The car is our only debt and we could pay the car off, it's a new 2024 Subaru Outback, without dipping into our retirement savings. I am sure it will be our last car and wanted something reliable. But, being cautious, paying the car off would draw our "ready cash" down considerably and I like having "ready cash". What happens if we need a new air conditioner, furnace and refrigerator all in the same month?
When I retire I want to keep busy by volunteering at the VA hospital once a week and work church functions.
How would you feel about retiring if you were in my shoes?
If I was in your shoes, I would definitely retire at the end of 2023. Enjoy your time with your wife and your grandchildren over the holidays and be ready for Spring break and summer with the grands.
It looks like you are in good shape to retire. I don’t understand how you wouldn’t pay federal tax. A few years ago my income was 2500/month and I paid 134/month in federal tax.
It looks like you are in good shape to retire. I don’t understand how you wouldn’t pay federal tax. A few years ago my income was 2500/month and I paid 134/month in federal tax.
I have never calculated my own tax returns I have a licensed CPA that does it for me. Taxes is something I leave up to the pros.
The $14k I receive in VA compensation is totally exempt from any income taxes.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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You mentioned "without dipping into our retirement savings" but didn't mention what that was. In most cases retirement savings will require a minimum distribution. If you have a few hundred thousand there then that could be drawn minimally and put into a "rainy day" savings account for the sudden need for a new appliance or car repair. In a condo you also have the possibility of a significant HOA assessment if there is a major failure of a common area feature like a clubhouse roof or pool pump replacement. We are planning to retire in the spring at ages 71 and 70. Though I love my work I really can't imagine working until 75, but our health is not that great, and the commute even two days a week has gotten really miserable. Good luck!
My HOA fee is about equal to yours, but I pay for water, garbage and recycling separately. Still it's only a $100 a month.
My food bill includes paper towels, toilet paper, dishwasher and washing machine soaps, bathroom spray cleaners. With these extra's my food bill is $300 per week and I estimate $1,500 a month - in case there are five weekends in a month.
Don't underestimate taxes!!!
Yeah, your budget looks fine. You'll be fine so enjoy your retirement.
Is the social security amount net of medicare premiums?
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