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Old 03-15-2015, 12:02 PM   #101
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It certainly is doable if what you want/like to do is spend most of the time at home with inexpensive hobbies and you live in low COL area. And there is nothing wrong with that.

But what if you want to go for 4 months to Amsterdam or Granada Spain? Or what if most of the places you like are medium to high COL areas?

Retirement is enjoying life and not having great restrictions what one can or can not do. Hence personally I would not want less than 100k a year once retired.

BTW it seems to me more interesting/enjoyable to live for example in Mill Valley CA then suburb of Atlanta.

Ol Suzy busted a guy last night on this scenario... He wanted no loss of lifestyle on his 10k a month budget when he plans to retire at 62. He gave himself a "B" grade thinking Suzy would grade him easier as he was harder on himself. Well she gave him an F and said he had to work to 67 if he wanted no changes in his current lifestyle. The major reason was he wasn't figuring in taxes from his retirement account and she expects him to buy that LTC insurance for the two of them.


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Old 03-15-2015, 12:13 PM   #102
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Ol Suzy busted a guy last night on this scenario... He wanted no loss of lifestyle on his 10k a month budget when he plans to retire at 62. He gave himself a "B" grade thinking Suzy would grade him easier as he was harder on himself. Well she gave him an F and said he had to work to 67 if he wanted no changes in his current lifestyle. The major reason was he wasn't figuring in taxes from his retirement account and she expects him to buy that LTC insurance for the two of them.


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Well we are actually living on 60k-70k a year for last 10 years. Which by the way is much less then our annual federal taxes.

When retired we will have more free time so we budget expenses will go up and not down to range of 90k-100k.
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Old 03-15-2015, 12:16 PM   #103
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Ol Suzy busted a guy last night on this scenario... He wanted no loss of lifestyle on his 10k a month budget when he plans to retire at 62. He gave himself a "B" grade thinking Suzy would grade him easier as he was harder on himself. Well she gave him an F and said he had to work to 67 if he wanted no changes in his current lifestyle. The major reason was he wasn't figuring in taxes from his retirement account and she expects him to buy that LTC insurance for the two of them.
Yeah, but Suze Orman thinks everybody should work until 67 and buy LTC insurance. I really like her "Can I afford it?" segments, but her investing advice is awful IMO, and her retirement advice is nearly as bad. Great show, and oddly, I like her personality and assertiveness, but I do think she goes beyond her areas of expertise.
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Old 03-15-2015, 12:20 PM   #104
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Well we are actually living on 60k-70k a year for last 10 years. Which by the way is much less then our annual federal taxes.

When retired we will have more free time so we budget expenses will go up and not down to range of 90k-100k.

I didn't mean to imply you were not doing the right thing, Eta. I didn't clearly write my intent was this man also clearly wanted to retire only at the lifestyle he was presently living at and didn't want to "downgrade" to be able to retire.
He was just caught off guard a bit on that he wasn't on pace at 44. Of course Suzy can be very conservative in her retirement budgets also. And it seems she values money safety over time. She said "working 5 more years isn't a big deal at all retiring at 67 instead of 62. I would beg to differ. I think that is a big difference.


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Old 03-15-2015, 12:21 PM   #105
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Not proud about this, but my expenses last year encroached the 6-figure mark. Mamma mia! How did that happen? I did not plan to spend that much, when I started my retirement in 2012.

Well, one of the homes needed exterior maintenance, and the other interior upgrade. I was still under serious healthcare, so there's the $10K deductible. I did not want my daughter and her fiancÚ to elope to LV, and told them that we wanted a nice wedding, as we have a large family we want to include. So, I paid for a large part of it in advance.

I thought we would be traveling like crazy in our retirement, but as I was recovering from a serious health problem, we only did the 2-month RV trip to the North East, so only spent $7K last year on travel. So, that helps.

Here hoping it's not so crazy in 2015, else I would have to use optimistic portfolio return numbers like many of the pension funds use.
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Old 03-15-2015, 12:25 PM   #106
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I didn't mean to imply you were not doing the right thing, Eta. I didn't clearly write my intent was this man also clearly wanted to retire only at the lifestyle he was presently living at and didn't want to "downgrade" to be able to retire.
He was just caught off guard a bit on that he wasn't on pace at 44. Of course Suzy can be very conservative in her retirement budgets also. And it seems she values money safety over time. She said "working 5 more years isn't a big deal at all retiring at 67 instead of 62. I would beg to differ. I think that is a big difference.


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5 years is not a big deal if you are 40 but she should tell it to someone who is 70 . Especially if you are talking about 5 years when you have good health and can do variety of things.
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Old 03-15-2015, 12:31 PM   #107
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Not proud about this, but my expenses last year encroached the 6-figure mark. Mama mia! How did that happen? I did not plan to spend that much, when I started my retirement in 2012.

Well, one of the homes needed exterior maintenance, and the other interior upgrade. I was still under serious healthcare, so there's the $10K deductible. I did not want my daughter and her fiancÚ to elope to LV, and told them that we wanted a nice wedding, as we have a large family we want to include. So, I paid for a large part of it in advance.

I thought we would be traveling like crazy in our retirement, but as I was recovering from a serious health problem, we only did the 2-month RV trip to the North East, so only spent $7K last year on travel. So, that helps.

Here hoping it's not so crazy in 2015, else I would have to use optimistic portfolio return numbers like many of the pension funds use.

NW, just plug in 8% return and life expectancy of 70 and I guarantee you the calculator will grant you permission to spend all you want this year!


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Old 03-15-2015, 01:03 PM   #108
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Is the 2.5 million post tax, or in a pre-tax account (IRA, 401k etc.)? That makes a significant difference, and is often not specified in these type of articles.
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Old 03-15-2015, 04:07 PM   #109
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No need to go that far. I can still stay with historical FIRECalc return, and with a 30-year duration. While I doubt that I will live that long, my wife may, but that's her problem, or the kiddos will have to pitch in.

So, what I have done was to enter in our SS, then turn on the Bernicke's spending model.

Result: Another big boost in spending power! Way more than the amount that I spent last year.

I did not tell my wife about this, so how did she know to push for the upcoming $12K home upgrade?

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NW, just plug in 8% return and life expectancy of 70 and I guarantee you the calculator will grant you permission to spend all you want this year!
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Old 03-15-2015, 04:19 PM   #110
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Well we are actually living on 60k-70k a year for last 10 years. Which by the way is much less then our annual federal taxes.

When retired we will have more free time so we budget expenses will go up and not down to range of 90k-100k.
This is almost exactly the same figures as us, 60-70k for the five years before ER, and 90-100k for the 5 years since we ER'ed.

So far, so good.
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Old 03-15-2015, 04:53 PM   #111
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This is almost exactly the same figures as us, 60-70k for the five years before ER, and 90-100k for the 5 years since we ER'ed.

So far, so good.
I'm spending more in retirement than I did for the five years before ER, also. I have more leisure time now, and even though I don't care to travel it is nice to have sufficient resources to be able to fund all my non-travel leisure activities.
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Old 03-15-2015, 04:59 PM   #112
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I'm spending more in retirement than I did for the five years before ER, also. I have more leisure time now, and even though I don't care to travel it is nice to have sufficient resources to be able to fund all my non-travel leisure activities.
Isn't it nice to be able to sit back and say, "This is what all those years saving and planning is all about".
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Old 03-15-2015, 05:04 PM   #113
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I'm spending more in retirement than I did for the five years before ER, also. I have more leisure time now, and even though I don't care to travel it is nice to have sufficient resources to be able to fund all my non-travel leisure activities.
That makes sense.

It is much cheaper to sit behind a desk and work then go for bike ride and eat in some restaurant along the way or take car to near national forest and go for 8 hour hike or visit Museum of Fine Arts.

If you are snow-birding add to this cost of moving between 2 locations and maintaining 2 residences.
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Old 03-15-2015, 05:04 PM   #114
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The less one has to spend to be happy, the better.

I was surprised that I ended up spending so much. I guess I would spend less if I did not see how much FIRECalc told me I could. And my happiness level would still be the same.
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Old 03-15-2015, 05:14 PM   #115
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The less one has to spend to be happy, the better.

I was surprised that I ended up spending so much. I guess I would spend less if I did not see how much FIRECalc told me I could. And my happiness level would still be the same.
If you have 24k for discretionary rent you can pretty much live anywhere you want. On 3 month base you will find place in Granada or Amsterdam or Prague for 2k a month.

Now once in destination you can frugally enjoy place. I would imagine one would need simple bike in Holland and you can have great time.

It is not extravagant travelling, but you can not do that with income of 45k a year. With 100k you can.
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Old 03-15-2015, 05:51 PM   #116
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It doesn't include income tax. Also I'm not sure if it includes miscellaneous expenses or fitness expenses, but these might be rolled into other categories. So if they are then that's fine.

Kids and spouses cost money, and we apparently live in different parts of the country. Still, your expenses blow me away. They came to substantially more than mine in almost every single category. Your total yearly budget is considerably more than twice what I spent last year. And I spent more last year than I have ever spent before in my life. I live alone in a slightly smaller house, but gosh, I have been spending freely and buying whatever I want, whenever I want it. I am definitely not living a Spartan lifestyle any more, that's for sure. Unlike me, you do not seem to be spending a lot on "fun stuff" at all, but all the rest seems to be frightfully expensive in your situation.

My advice would be to go through your budget line by line, and try to figure out how to lower each expense as much as possible. Start with your various utilities' costs, which add up to more than twice mine, and maybe your insurance costs. I'd think that by carefully examining your overall spending, it shouldn't be too hard to cut back at least $500-$1000/month. Then when you are done with that, for sure add some "fun money"! You aren't going to want to sit and stare at the walls all day in retirement.

Honestly I think the biggest problem with your spending might be those teenaged kids! They won't stay kids for long (drat, I miss my grownup kid!). So enjoy them when you can, and realize it won't last forever. Before you know it, they'll be grown and gone and paying for their own insurance and cell phones, so that hopefully your expenses will go down.

Yes. Correct. No income tax. I am using after tax expenses here just because I want a baseline of expenses.

As discussed earlier in this thread, a dollar is not just a dollar depending which account type it comes out of (and when).

I'll do the category by category sweep. See where we can shave. But I think there is maybe $300 at best we can cut from posted budget.

Part of challenge is retiring early. Early enough that kids are still at home and not launched. My sister reminds me that my Kids and spouses and raising a family and a dog is more expensive that her living alone with a cat. Certainly different spending. Then the conversation goes toward reminding each other than we can buy just about everything except time.
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Old 03-15-2015, 06:17 PM   #117
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Yes, Alan spent around that much and he and his wife played perpetual travelers. I spent the same or more last year without much travel, but had other kind of expenses. It's OK though, as we cannot be perpetual travelers. We need the comfort of home in between trips.

Anyway, one's budget can expand indefinitely to what one has available. The additional happiness is marginal though. For example, instead of having an expensive 2nd home in the high country to escape the summer heat at the main home, I could just drive my motorhome up to camp out there in the national forest.

In the end, one may spend on a lot of superfluous stuff, just because one can or thinks he can.

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If you have 24k for discretionary rent you can pretty much live anywhere you want. On 3 month base you will find place in Granada or Amsterdam or Prague for 2k a month.

Now once in destination you can frugally enjoy place. I would imagine one would need simple bike in Holland and you can have great time.

It is not extravagant travelling, but you can not do that with income of 45k a year. With 100k you can.
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Old 03-15-2015, 06:28 PM   #118
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Then the conversation goes toward reminding each other than we can buy just about everything except time.
So true, so true.

It sounds like you are on the right track, anyway. I'm sorry I couldn't think of any other suggestions!
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Old 03-15-2015, 06:34 PM   #119
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Oh, money can buy time too, but it can be very expensive.

A recent poster said his wife had been on treatment for stage 4 cancer, and the cost was $200K/yr.
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Old 03-15-2015, 06:39 PM   #120
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Isn't it nice to be able to sit back and say, "This is what all those years saving and planning is all about".
It sure is. I love it when a plan comes together, not to mention the booming market which makes us all feel like financial geniuses.
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