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Old 04-04-2013, 11:22 PM   #21
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DH has been retired almost 3 years and I semi-retired (work a day or 2 a year) for the same period.

We have a lot of high expenses the past couple of years based upon selling once house and buying another (complicated situation) but those are non-recurring.

Otherwise -


Electric - Before no one was at home during the day so we could set program the thermostat not to use a lot of electricity during the day. Now, someone is home all the time so we don't get to do that.

Health Insurance - we went from DH's workplace plan to subsidized retiree medical. That wasn't all that bad for the first couple of years but last year had an over 250% premium increase (Megacorp doesn't subsidize hardly anything of the increases). My big worry is that Megacorp will drop the plan and we will have to get insurance through exchanges and it will be much more (we will not be eligible for subsidy).

Income based Medicare premiums - DH went on Medicare a few months ago. Due to those aforementioned house issues we had larger withdrawals than usual from the IRA for a couple of years and I was still working part-time during those years. Adding all that together we hit the threshhold to pay extra for the Part B and Part D premiums for this year and next year. It is only temporary but it is a substantial increase over the regular Medicare premiums.

Life Insurance - We wanted to maintain some life insurance on DH after he retired since I am 7 years younger and if he died before I became SS eligible, particularly while we still have kids in college, I would not like having to withdraw more from the IRAs than I really want to withdraw. Basically I see the life insurance as a bridge that could be used until I become SS eligible. He had life insurance through Megacorp and could convert the policy when he retired but it is really expensive. 3 years later, we have decreased the amount of coverage but it is still expensive. We will eliminate it in a year or two.
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Old 04-05-2013, 12:40 AM   #22
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My biggest surprise in last 13 years is not an expense but the drop in interest rates. More impact than a little price rise, in my opinion.

Although healthcare cost have doubled in the 13 years I've been retired, the dramatic drop in interest rates have dwarfed every else.

As I was finish my mom's taxes and doing the preliminary work on my tax I was struck by how much my and her interest income dropped.

On a 50/50 $1,000,000 portfolio the 3% interest rate drop is $15,000/year that is huge.
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Old 04-06-2013, 10:27 AM   #23
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Like other have said health care has gone nuts...can be over 20k per year...went with a high deductible to get back down to around 10k

Comcast is also nuts. I have triple play at home and at a cabin...lam paying way to much for this stuff.

Positive!
Taxes.....qualified dividends are taxed at zero or 15%.....I hit the sweet spot on the chart and paid feds only 2% and the state less than 3%.
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Old 04-06-2013, 01:14 PM   #24
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Health insurance is the big one. I have also done more home repairs.
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Old 04-06-2013, 01:22 PM   #25
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Approaching the eight year mark, no real surprises - at least not yet.

Other than the first year when (as is the general rule) we spent very cautiously, our spending has been roughly the same overall as when I was working. We really ramped up spending in year two with a major purchase (RV) then have seen our annual spending decline year over year during years three through eight.

The decline during the last two years has been primarily due to the two of us going on Medicare (me in late 2011 and DW earlier this year). I think we've found the equilibrium point in spending and won't see further declines for the next several years - until we give up the RV and traveling a couple of months out of the year.

i would love to buy a class c rv. how did you convince the wife
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Old 04-06-2013, 01:33 PM   #26
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i would love to buy a class c rv. how did you convince the wife
Told her once we retired I was planning on buying an RV and traveling, asked if she would like to go with me.

Seriously, she was on board from day one. We've had some sort of RV on and off since buying a used, bare-bones pop-up when our kids were small.
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Old 04-06-2013, 01:39 PM   #27
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Told her once we retired I was planning on buying an RV and traveling, asked if she would like to go with me.

Seriously, she was on board from day one. We've had some sort of RV on and off since buying a used, bare-bones pop-up when our kids were small.

i'm on board and can afford it. however the wife is not as enamored about it as i am.

oh well
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Old 04-06-2013, 03:37 PM   #28
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Coped with the "surprises" with not much trouble. Now that we're in the final "wind-down" years... the surprise comes from being able to look ahead to what we believe will be flat and predictable expenses.

We are aging, and while we still exercise, and do healthy things, we expect an optimum of ten more years, and by living in retirement communities for over two decades, can see the lifestyles of those in their 70's, and 80's. We are comfortable with that.

If I were starting over, I 'd plan a two tiered financial budget. The first, allowing for the variables of fun, travel, and new interests and hobbies. The second, in Continuing Care Retirement Communities, with known expenses and activity.

With meals, transportation, utilities, entertainment and healthcare all included, the cost planning is limited to projecting inflation rates. The simplicity of planning comes from calculating total assets... Home, Savings and Social Security, and dividing the total by the expected lifespan.

If I were starting over, I would have planned the last ten+ years separate from those years age 75 and earlier.

The "surprise" was that there is way to live within known expenses, without worrying about buying/repairing cars, new roofs, airconditioning, insurance, and other expenses that come from home ownership.
.................................................. ........................................
Those who still expect to do world travel or yachting in the Bahamas at age 90... well... YMMV!
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surprise expenses
Old 04-06-2013, 05:14 PM   #29
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surprise expenses

I was surprised, even though I expected inflation & health care cost to eat into our budged:

1.significant jump in health insurance & LTC premium - health care cost is 36% of our spending
2.drop in interest rates close to zero for years is the worst one - no more CDs for us - qualified dividend instead
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Old 04-06-2013, 05:36 PM   #30
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Curious for those who have taken the leap what are the few surprise expenses you have encountered in FIRE?

I ask because it is a concern about prescription drugs and I hope to learn more so am totally prepared.
Katrina. Aka a significant unplanned event.

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Heh heh heh - plan and prepare to the best of your ability. BUT when it comes time to adjust - adjust.
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Old 04-06-2013, 05:42 PM   #31
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I'm just starting, so there's not much so far. I feel the interest rates can go no where but up from here, so maybe I'll get something for nothing.

We're going to see how to qualify for the subsidy for health insurance, but don't expect much as I personally think they'll pump the rates on the exchange. We'll keep the budget for our current policy.

Taxes I'm excited about...sounds weird, but we'll be in extremely low brackets and "moving" to TX to skip out on the 9.3% we paid in CA.

Also looking forward to the non-commute savings with gas, clothes & going to lunch. At least we'll try to eat healthier.

LWBM is definitely where we are now. Keeping expenses below $2,500 / month for everything the next couple years. This should keep our egg growing while having good times in Latin America.
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