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Old 04-18-2011, 03:54 PM   #21
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Hubby just FIRED last week. But our plan is to live on the same amount we have been for the past 3 years, plus inflation, plus 11k for health insurance - income tax decrease.

Bottom line= essentially the same as before retirement.

BTW-- FIRED as in the good way- not the bad -kicked out the door way ! :-)
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Old 04-18-2011, 05:04 PM   #22
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I think a lot of it depends on how much you will change lifestyle before retirement.

In our case, DH retired last year and I move semi-retirement (working about 20-25% time compared to before).

Our expenses have already drastically decreased and basing retirement expenses on our expenses, say, 18 months ago would be wildly different. Some changes we made:

1. One child is now on his own. We no longer pay any of his living expenses. And it isn't just that. Our auto insurance bills went down by 2/3 (he had had a relatively minor but nonetheless at fault auto accident). Food bills are lower, and so on.

2. One child that had been in a private high school is now attending community college. Way less expensive (that will go up when he transfers for his last 2 years).

3. We sold our expensive to pay for and maintain house. Our expenses went down a huge amount (we are going to build a new house but it will be much smaller and much more energy efficient).

4. Commuting expenses. Auto related expenses are down over a $1000 a month. DH and I both had long commutes before. He now has no commute and I go to the office usually one day a week.

5. Eating out is down. Now that we are at home more we are less likely to go out just to get something to eat. Even though I used to take my lunch to work several days a week I would eat out a couple of days.

6. Groceries are down a little bit. We have more time to shop and have more time to prepare things so don't have to rely as much on convenience items.

7. Less household maintenance related expenses. Even apart from selling the house we already had more time to do things ourselves that before we would pay someone else to do due to lack of time.

8. Clothing and dry cleaning. This obviously depends on what you had to wear before retirement, but I had to wear "nice" clothes that had to be dry cleaned. Now I wear that kind of suit once a week and can wear jeans and T shirt the rest of the week. Both DH and I have found those costs have gone down a lot.

Obviously much of this depends upon lifestyle. One of our key decisions was to move from a 4500 sf house to building about a 2500 sf house. We are working on the design now and have designed it to be very energy efficient with no wasted space. Our housing related expenses will, as a result, go down a lot (right we are renting so they are super low).

Had we wanted to keep the large house then the income we would have needed during retirement would have been much greater and we would both still be working full time. But, we really decided we didn't love living in that house enough to want to work a few more years to stay in it.

Once the dust has cleared (i.e. we have built the new house and moved into it), we project spending about $90,000 a year for a couple of years and then $70,000 after that (the difference is child related expenses that will go away), but that has quite a bit of discretionary expenses in it that could be cut if necessary.
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Old 04-18-2011, 05:18 PM   #23
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DH retired last June and I've tracked expenses for the last couple of years. Since his retirement we live on less than $2500/mo = 30K/year. The planned itemized budget actually comes to $2309/mo so there is wiggle room.

There is no mortgage but that does include property taxes and insurance and our portion of regularly occurring medical costs (office visits and prescriptions with high deductible plan). Our area is average to low cost of living. Despite our utility consumption going down some of the costs have increased, like for satellite tv and internet and a water increase.

The 30K does not include 2 major home expenses since retirement - new windows and new HVAC. We had the money in savings but put plans on hold while life changed due to DHs job loss and transitioning into retirement. We've needed the new windows since we moved in in 1983 but kids/college/mortgage always took priority. The HVAC was the original furnace from 1955 so when it needed a part IT WAS TIME!

This has all worked out better than we expected. We can actually accumulate savings every month. That makes a world of difference to me.

Just like many other retirees this could all change with health care changes. Right now we have retiree medical insurance but who knows what could happen down the road if that changes and we have to start covering more of the cost.

But, so far, so good.
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Old 04-18-2011, 05:25 PM   #24
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12k to 89k. Lately running 40 to 50k ballpark. 1993 - 2010.

Agile, moible and hostile.

I've been known to aggresively cut expenses during 'hard times'.



Ran on the cheap end of the range in the 90's while Mr Market did his thing.

heh heh heh - and that really helped 2000-2010. Tested my nerves to 'stay the course' on full auto letting those Vanguard computers rebalance. My main 'emotional response' was to vary expenses on a look back basis. Deferred travel, adult toys, and remodeling were the big variables.
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Old 04-19-2011, 06:12 AM   #25
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Have not fired yet but planning in next 12 to 24 months. Currently spend in a low year $54K and a high year $62K per year. Fired budget looks to be $72K per year. $45k essential and $27k descretionary. HC and LTC Insurance and travel the reason driving the increase.
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Old 04-19-2011, 07:08 AM   #26
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I currently live on about $24K net excluding health insurance which is deducted from my main job. Basically, on my second part-time job pay about $36K/year which I live on and my day job pays for ex-wife's mortgage, child support and a kid in college. I figured post FIRE would be the same about $36K gross would suffice for my standard of living including health insurance until medicare kicks in.

I'm a small town country boy living in the big city and would most likely move to backwoods of the country during post FIRE. I eat what I grow or raise, I drink what I make, and smoke what I grow. I have my life all figured out. Only thing that I have not figured out is how to get there faster than projected age 60 at current pace. I wanted to FIRE at 45, then postponed to 50, then 55 when I reached 50. Now I'm hoping for 60.
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Old 04-19-2011, 09:34 AM   #27
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My current retirement spending plan calls for $48K after taxes which is about $25K less than I am spending now. I am forecasting a large drop due to my 3 biggest current expenses (Mortgage, Child Support and Private School tuition) no longer being valid in ER.
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Old 04-19-2011, 10:27 AM   #28
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Most people on this forum seem to live on $40-60k after tax. We spend a lot more than that, and about 50% more than pre retirement. More real estate, cars,and travel as we have more time to enjoy this stuff.
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Old 04-19-2011, 10:42 AM   #29
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48k for everything. +- 5k depending on what needs to be replaced and what type of trips we take in a year.
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Old 04-19-2011, 11:55 AM   #30
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Most people on this forum seem to live on $40-60k after tax. We spend a lot more than that...
So do we (much, much more), but I don't mention raw numbers. They mean little when you are talking about lifestyle.

Heck, I understand that some members want to live in the woods in an $18K abode when they retire ...

That's not our "style", nor our life. That's also why they make different flavors of ice-cream.
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Thanks !
Old 04-19-2011, 12:10 PM   #31
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Thanks !

Thank you for all the good info. My biggest concern is how much my lifestyle will change when I have more free time. DW and I have traveled a fair amount over the last several winters since our kids flew the nest, and while we greatly enjoy it, I seem to have a hard time not treating the time away as a vacation, and spending accordingly. Your comments and insight tell me that it is possible.
I've not set a "date certain", as I mentioned I've got an interest in a development entity and I'm positioning myself hopefully , to live off the income it provides for as long as possible , allowing our portfolio to continue to grow... hopefully ! Thanks again, I'll look forward to other posts as well.
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Old 04-19-2011, 12:17 PM   #32
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.... That's also why they make different flavors of ice-cream.
And different sizes and options
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Old 04-19-2011, 01:07 PM   #33
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Rescueme,
I could not agree more that raw numbers mean nothing. I personally think ours are distorted. If we lived in CA., say around SF then our home would cost us between two and three million rather than the 300k is is valued at in Texas. The raw numbers do not say anything about standard of living, or weather your home is paid off, or if you got money or assets from other sources. The average household income in the U.S. is about $52k, last I looked. I venture to say those of us living around that mark may be living quite a bit above the level the 'average' citizen is.
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Old 04-19-2011, 01:19 PM   #34
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We currently (pre-FIRE) spend $30,000 net. This is set by our plans to be about equal to DW's portion of SS * .75 plus my defined benefit. My SS will be delayed until full retirement age. All of our additional money funds our retirement investments to pay for the time until retirement ages are reached. Should everything go south, we are covered by this fund alone. This is our way of testing the financial waters. Currently, we live in the Midwest. Our future plans include living abroad.
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Old 04-19-2011, 01:55 PM   #35
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I just changed to a more catastrophic and less expensive health insurance plan, so my annual expenses have dropped to about $19k. In my budget, I include a base amount of taxes but if I have a spike in income like I did last year (due to an unexpectedly large short-term cap gains distribution), then my taxes will also rise. However, I know for sure I will have the income to cover the taxes.

I still live the same way I did before I retired in 2008 at age 45. Just better because of all the negatives I eliminated (the commute, the alarm clock, lunches in New Jersey).
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Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

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Old 04-19-2011, 02:01 PM   #36
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(lunches in New Jersey).
So where do you buy your lunches, now? ...

Heck, in NJ you don't have to pump your own gas. Did you give that up, also?
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Old 04-19-2011, 02:10 PM   #37
 
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I moved into my gr's house (mortgage is paid off) and we share the expenses excluding taxes. My annual expenses are about $36,000 per year. Last year I bought a car which I am not including in my expenses. I am debt free and pay cash for any major purchases.
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Old 04-19-2011, 02:13 PM   #38
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...we share the expenses excluding taxes. My annual expenses are about $36,000 per year. Last year I bought a car which I am not including in my expenses. I am debt free and pay cash for any major purchases.
So as a "couple" you are spending $72K?
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Old 04-19-2011, 02:15 PM   #39
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So where do you buy your lunches, now? ...

Heck, in NJ you don't have to pump your own gas. Did you give that up, also?
I live in New York (Long Island) so I had a long, exhausting (and expensive, about $20 per day) commute via trains to New Jersey. I eat most of my lunches at home except for a visit to an area pizza joint.

I don't mind pumping my own gas. The last time I bought gas in New Jersey was 8 years ago when I was driving through the state on the way to Virginia. I did like that it was cheaper in New Jersey, though.
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Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

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Old 04-19-2011, 02:19 PM   #40
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I live in New York (Long Island)
Is that you Billy (Joel)? ...
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