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Old 08-13-2014, 09:24 AM   #41
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I don't really see a lot of criticism or judging in most of the comments here, most of us are just pointing out the ways in which the OP deviates from the norm in his spending and planning which is what he asked for in the first post.

My question and comments are leading to one question, do you know yourself and your family well enough to nail down a retirement that works for all of you. The OP is in his early fifties and has a lots of options to chose from. Everyone here has a completely different idea of what they want and need everyday. I wouldn't dream of giving anyone here a proper "budget" for food that's not my business. Pointing out someone spends more then average is just a comment not a judgement.
I love DLDS hints about how to save money, but that's the way I do things anyway. More then a few people reading this would prefer working longer and not having to deal with all that penny pinching.
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Old 08-13-2014, 09:44 AM   #42
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In my VERY humble opinion, once you dump the "Main home: $1.1M" boat anchor, and if you're planning to work a few more years, you guys should be set.

My wife and I are almost at the exact same place on the life trail, fwiw.
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Old 08-13-2014, 10:15 AM   #43
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Believe me, I have taken plenty of criticism on my own ER plans from the LBYM contingent on this board. I agree with your approach based on high savings balance / high spend.


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I don't think there is anything intrinsically wrong with high spend. Our issue was that we were spending a lot previously and not getting good value for our money. Our home phone works the same now with Ooma as it did with AT&T. Our Internet service works the same with our own modem except we save $8 a month on modem rent. Our cell phones work the same on a cheaper plan. The LED bulbs work better than CFLS or incandescent and do not have any mercury.

The pack it yourself grocery store is owned by Lucky's and has basically the same products as their retail stores but the everyday prices are much less. I'd rather shop there, save thousands on groceries and have money for a home improvement or a trip to Hawaii each year than go back to doing weekly shopping at the local retail stores. Plays, planetariums and museums are the same places whether we go on a free pass or pay full price - only with the passes we can go as much as we have time for and it doesn't cost anything except gas.

I can work from home at our hobby jobs as much or as little as a want and make Bay Area tech worker type income doing that, but for me the bargain hunting is a new a hobby so I actually find that more fun than working. I know many people here have always been frugal and planning for ER so none of this is new, but for us optimizing our spending is a new idea and has been the Rosetta stone to ER. It was easier to cut over $100K (including taxes) off our annual expenses than it was to save $5M for retirement to cover our old spending habits. I don't live on a super low budget and it is still probably high compared to many posters here, especially those who live in the South or Midwest, but we keep chipping away and keep looking for ways to live better but spend less.

We don't do stuff like ride our bikes to the store to save $1 on gas, make our own yogurt, make our own soap or not go out to eat. We just try to find ways like changing stores or car repair shops or stockpiling products on sale we would have to buy anyway to save money - savings with a high ROI on our time.
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Old 08-13-2014, 08:19 PM   #44
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Wow! Had no idea I would get so many responses. Had a discussion with the spouse today about the grocery category being especially high and upon further evaluation we realized that this also contained a years worth of alcohol, specifically wine. Going to have to work on bringing this cost down .
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Old 08-13-2014, 09:16 PM   #45
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Wow! Had no idea I would get so many responses. Had a discussion with the spouse today about the grocery category being especially high and upon further evaluation we realized that this also contained a years worth of alcohol, specifically wine. Going to have to work on bringing this cost down .
Try the better box wines. We were pretty impressed by a recent sampling of Black Box "Platinum" edition.
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Old 08-14-2014, 03:34 AM   #46
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I think you guys are doing great, and clearly LYBM. You've managed to save a ton of money at a relatively young age, and with your conservative AA it isn't because you bought options on Tesla stock and cashed out.

I'll disagree with the majority here I say don't worry about your spending until you have to. While a 3.5-4% withdrawal rate has historically worked a very high percentage of the time, for many years it is way too low. Realistically if you've got 5 million+ at age 51, you are in all likelyhood going to end up paying estate taxes. Why not spend it instead of giving it to Uncle Sam.

If you retire at age 55 with 5 million and you manage to lose 1.5 million (which would difficult with 45/55 AA) that still leaves you 3.5 million. I am pretty sure that you could cut the budget to $140K. When I retired to Hawaii, one of the few sacrifice I made was giving up drinking expensive wine. I drink less wine, and no more $100 bottles.
I won't say I don't miss it at all but it was relatively easy thing to give up. If the market hadn't crashed in 2000 I probably wouldn't have given it up, but it did so I cut it out.
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Constructive assessment please
Old 08-14-2014, 05:06 AM   #47
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Constructive assessment please

One question-that I do not think anyone has made- surprisingly in this long thread...

How much of your budget is spent on your kids?
The music lessons line in the budget? That has to disappear and should not be part of your 50 years of annual expenses. Your grocery bills seem high to me, and I have to believe that someday your kids will grow up and buy their own food, so that cannot be part of your 50 year budget either. Same goes for car and ultimately health insurance on your kids, and who knows what other stuff you might be spending on that you may not need once they become independent? Life Insurance? With a big nest egg and kids getting older, that is an expense you may be able to eliminate.


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Old 08-14-2014, 02:27 PM   #48
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On the wine front, you might have a neutral third party help you do some blind taste testing and see if without knowing the price or seeing the label you can really tell the difference between cheap and expensive wine:

'You Are Not So Smart': Why We Can't Tell Good Wine From Bad - The Atlantic

"In the second experiment, the one with the switched labels, the subjects went on and on about the cheap wine in the expensive bottle. They called it complex and rounded. They called the same wine in the cheap bottle weak and flat."

No point in paying for marketing and not real product value. I buy our wine from Grocery Outlet.

Wine Tasting: It is Junk Science
http://www.theguardian.com/lifeandst...ience-analysis
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Old 08-16-2014, 10:10 AM   #49
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Originally Posted by urn2bfree View Post
One question-that I do not think anyone has made- surprisingly in this long thread...

How much of your budget is spent on your kids?
The music lessons line in the budget? That has to disappear and should not be part of your 50 years of annual expenses. Your grocery bills seem high to me, and I have to believe that someday your kids will grow up and buy their own food, so that cannot be part of your 50 year budget either. Same goes for car and ultimately health insurance on your kids, and who knows what other stuff you might be spending on that you may not need once they become independent? Life Insurance? With a big nest egg and kids getting older, that is an expense you may be able to eliminate.


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This is what I was thinking. I also have $5k/year total in music lessons for my teen & tween. But it will go away when they go to college. I don't plan on funding future music lessons when they are in their 20's. LOL.

I also have a budget item for extra curricular expenses (baseball leagues, basketball leagues, robotics team, etc.). Again - that's an expense that will disappear in the future. Funding the college funds will go away when they go to college.

Both of those are line items that *could* be eliminated if things turn south and we need to tighten our belts - but we've hopefully built in enough buffer to keep them for the next 7 years.

I'm assuming our groceries will drop when the kids are launched, too - we spend about $12k/year for a family of 4.

Our annual spend should drop a lot when the kids are launched.
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Old 08-16-2014, 09:01 PM   #50
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Music lessons can be expensive: $35k a year for five years at a private college lol. Plus extras. Now he's a starving artist, but very happy *grin*. That didn't include lessons since 5th grade, traveling around the country performing since that age... Count yourself lucky if yours aren't musically gifted.

Your spending seems high to me as well, but I suspect that may be the areas in which we live. Our four bedroom two story cost us $126k when we purchased it. Our vacation home a '95 class B camper - which we USED! We really don't drink - a six pack of beer stays in the fridge for months. We eat out a lot. The two of us spend at least $1k a month on food. We also assist starving artist. He works his butt off.

Our living budget was about 2/3 of yours. Still is, even in retirement. But we travel a lot - almost constantly. But we also paid college expenses out of our pay checks.

In short, I think you can do it at the expense level you quoted, but it's not guaranteed. You'll be at the edge at 4% for some time but if nothing goes south it should be doable. If I remember ages, you'll be supporting the youngest child for another 11 years - at least.

Second the motion - get rid of the big house as soon as feasible and renovate the smaller while you're still working. Get rid of any expenses you don't need. Sacrifice now pays dividends after retirement.

It's hard for us to comment specifically on yours without a detailed list.

Good luck.


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