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Old 07-25-2013, 11:52 PM   #41
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Until age 65, for two people, I have $2,100 a month budgeted for Heathcare alone. After age 65 I have $1,250 per month budgeted for Healthcare. I could retire on $4k / month if I were 65, but not before that.
Not sure where you got your numbers but my healthcare only cost me $150 per month for Medicare Supplement. Of course they take a little over $100 per month from my SS for Medicare but I never miss that anyway because I never see it. In a few months my wife turns 65 and that is what hers will cost.
I do claim to be an early retiree even though I waited until almost 65 to make the move. I really feel for anyone who makes the exit before age 65 trying to pay for health insurance. Its worth the wait, at least it was for me.
In todays world I would think someone who leaves work at say age 50 needs a lot of money to make ends meet.
I planned for retirement for many years and so far it has been great. Nobody knows what tomorrow will bring. oldtrig
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Old 07-26-2013, 09:25 AM   #42
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Greaf info - but looks like costs are averages, not median. I would think median much less.
That's correct. I think that for the purposes of the OP, who is simply trying to see if $48,000 is "reasonable", knowing that the mean spending is only $44,000 seems like a useful fact. Presumably the median is even lower, so we can say that more than half the families in that age range live on less than $44,000.
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Old 07-26-2013, 09:36 AM   #43
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Not sure where you got your numbers but my healthcare only cost me $150 per month for Medicare Supplement. Of course they take a little over $100 per month from my SS for Medicare but oldtrig
I have been on Medicare fr a few years and my wife has now. Things cost more the older you get. We have traditional Medicare with supplemental policies and Part D. Costs are

Medicare - ~$100/ month each
Supplemental Plan F (not high deductible) - about $200/month each of us
Part D - ~$30/month each of us.

So, under this scenario, which is typical for really good coverage, it costs us roughly $7,920/year.

Now add in our part of drug costs (wife has COPD) and we add about $2500 more annually.

That brings our cost to about $10,420 annually.

So Live and Learn's $1,250/month budget is not far off the track and has a bit of a margin built in.
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Old 07-26-2013, 09:41 AM   #44
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....We have traditional Medicare with supplemental policies and Part D. Costs are

Medicare - ~$100/ month each
Supplemental Plan F (not high deductible) - about $200/month each of us
Part D - ~$30/month each of us.

So, under this scenario, which is typical for really good coverage, it costs us roughly $7,920/year.....
My great aunt's costs were very similar. She paid $213 a month for her Medicare supplement policy and $44 a month for Rx/Part D in addition to her Part B that was deducted from her SS. But beyond that, the insurance company covered virtually everything.
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Old 07-26-2013, 09:48 AM   #45
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Fascinating to see the difference in the average income/expenditures 65-74 and 75+. $20,000 less per year in income for the latter (with only a .3 difference in household size), while annual expenditures were only $12,000 less per year. Not a good picture.

Good observation. That made me review my retirement income plan for if I should live so long as 75.
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Old 07-26-2013, 09:59 AM   #46
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My great aunt's costs were very similar. She paid $213 a month for her Medicare supplement policy and $44 a month for Rx/Part D in addition to her Part B that was deducted from her SS. But beyond that, the insurance company covered virtually everything.
Believe me, it's worth it to have this coverage at our ages. My wife has a constant battle with breathing and drug costs are high. I am in very good health but had a hip go bad and cost of replacement (by the best orthopedic surgeon in Houston) was zero. Plan F is the best you can get for supplemental coverage and couple that with Medicare and it's all you need.
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Old 07-26-2013, 10:11 AM   #47
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Fascinating to see the difference in the average income/expenditures 65-74 and 75+. $20,000 less per year in income for the latter (with only a .3 difference in household size), while annual expenditures were only $12,000 less per year. Not a good picture.
yes, interesting. I wonder if the trend in decreased spending from 55-64 vs 64-75 vs 75+ is a result of inadequate retirement planning and necessary spending cuts OR the fact that there is just less to spend on (other than the obvious increase in health care costs). If spending needs are indeed lower, should we use a reduced spending model in FireCalc rather than the conventional 3-4% inflation adjusted SWR all the way to age 95 ?
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Old 07-26-2013, 10:23 AM   #48
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yes, interesting. I wonder if the trend in decreased spending from 55-64 vs 64-75 vs 75+ is a result of inadequate retirement planning and necessary spending cuts OR the fact that there is just less to spend on (other than the obvious increase in health care costs). If spending needs are indeed lower, should we use a reduced spending model in FireCalc rather than the conventional 3-4% inflation adjusted SWR all the way to age 95 ?
(emphasis mine) I'd bet on inadequate retirement planning as the culprit. I am 65 and I have spent more this year than during any year from 55-64. Since I can afford to spend a little more I see no reason why I would want to cut back. It seems to me that there are still plenty of ways to spend money as I grow older.
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Old 07-26-2013, 10:37 AM   #49
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It seems to me that there are still plenty of ways to spend money as I grow older.
Thanks W2R for confirming the obvious ..... I was just hoping there was an outside chance that I might be able to fudge my retirement number lower. Time to play the "I'm Canadian, so health care is covered" card.
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Old 07-26-2013, 10:42 AM   #50
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We had budgeted 56,000 annual using prev expenses, and I went to part time in feb. we are spending closer to 70k and still have insurance paid for by my company. Not sure if spending will decrease. Travel, food and wine, housing repairs, all higher than I had planned but I've been able to cover with part time work. So it would make sense to try living on the 4k a month for a while and see if it is doable until you cut all your lifelines. I now look at extra play expenses in how many hours I have to work to cover the costs.
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Old 07-26-2013, 10:47 AM   #51
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Our expenses for the last twelve months were $2,333 (married, me 38 wife 35, no kids, paid for house, two vacations). That does not include health insurance since my wife is still working. She's trying stick it out for four more years.

I recently got a quote for health insurance of $203 per month with $5,000 / $7,500 deductible.

I stopped working in early July 2012 and our expenses have gone down about $200 per month with fuel saving and no gym membership. The biggest savings has come from estimated tax savings of about $560 per month. We were paying quarterly estimated taxes of $1050 federal, $750 state and $250 city. The federal and state taxes were because of our dividends and the city tax was the lack of the city we live in giving credit for tax paid to the city I worked in. Now since of favorable federal tax on qualified dividends, 0% if you stay under the 25% tax bracket, we are no longer paying the fed tax and our state tax has dropped to $350 per quarter. By the way, our dividends should come in about $58,000 this year.

So, we could live off $4,000 since we are living off less now. It all depends on your personal wants and needs. Right now all of our needs our met and our wants our few.
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Old 07-26-2013, 10:52 AM   #52
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We cut a lot off our expenses these past few years from getting sustainable living books from the library. We cut our energy usage by more than half just from simple stuff - LED bulbs, cooking with small appliances instead of built ins, using drying racks, weather stripping, solar lights outside, etc.

For water we put in low flow shower heads and will eventually get rid of the lawn and plant native plants. So there will be no lawn to mow or water. Some of our neighbors have replaced their lawns with edible landscapes. For health care we turn to things like massage, yoga and herbs for anything minor before going to the doctor.

With our expenses lower we were able to drop disability and life insurance. We limited the use of disposable items except for toilet paper and made our own cleaning supplies. We make more food from scratch. I bought reusable bags for produce and sandwiches instead of using ziplocs.

Going green and somewhat anti-consumer might not be for everyone, but it really helped cut our expenses. We are sorry we didn't do this decades ago. We could have saved quite a bit more over the years.

We also compared our budget to the Consumer Expenditure Survey categories line by line to identify areas where our was still high. We kept finding things we could eliminate or reduce for $10 or $100 a month. Every $10 a month cut meant needing $4,800 less in a total 40 year retirement savings and every $100 cut meant needing $48K less.
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Old 07-26-2013, 10:58 AM   #53
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Fascinating to see the difference in the average income/expenditures 65-74 and 75+. $20,000 less per year in income for the latter (with only a .3 difference in household size), while annual expenditures were only $12,000 less per year. Not a good picture.
I'm not as confident in the CEX income data as in their spending data. The survey is designed to track spending.
I notice that the younger group has .6 workers, while the older has .3.
The big difference in income is in "wages and salaries" and in "self employment income".
But, they don't show a line for "pension", maybe that's included with wages.
Notice that the SS income is nearly the same.

I can believe that older people are more squeezed. Some of them have non-COLA'd pensions that have been shrinking. And, they've had more time to spend down assets.
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Old 07-26-2013, 11:15 AM   #54
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It has been an average of $6K month after tax for us over the past three years. No debt...so this is all consumption.

We do not have the heavy burden of health insurance costs (Canada).

We have been travelling quite a bit and intend to do more.
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Old 07-26-2013, 11:24 AM   #55
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.....We limited the use of disposable items except for toilet paper ....
Well, my! You still use disposable toilet paper? How gauche! You obviously have a lot to learn from the truly frugal.

Family cloth: would you go toilet paper-free? | Offbeat Home

Just kidding, you're doing great.
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Old 07-26-2013, 11:28 AM   #56
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I do my parents taxes and know they are living off of $2333 per month and have been for many years at about that rate
They have a paid for home and get help from State?County with Electric bill and Prop Taxes are reduced because of low income.

I pickup their phone bills (including cell) but don't think they get any other assistance.

They have little savings ( under 5K) but somehow make it ok

Also out of the 2333/mo come $433 for their health ins premiums.

And another amount for a dental plan
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Old 07-26-2013, 11:45 AM   #57
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I just looked at my Quicken screen, which told me my health care cost was $10,800 for the last 12 months, of that only $900 was for dental care.

The above did not include the $10K annual deductible, which I spent this year out of an account maintained just for that. When that account is depleted, and it may, then my medical expenses will jump up to $20K+ a year.

But if I stay so sick, then the extra medical expense is canceled out by reduced expenses caused by inability to travel. See how that works out?
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Old 07-26-2013, 11:52 AM   #58
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Regarding the reduced spending model by Bernicke, I should seek out and read the original article.

Consider retiree A who cuts his expenses from $50K to $30K, vs. retiree B who goes from $100K down to $70K. We can see one's cutback is likely to include discretionary expenses, while the other is not.

Bernicke's model may be just the average model, and does not make a distinction for the reason of the cutback. Does anyone here know?
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Old 07-26-2013, 11:52 AM   #59
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I just looked at my Quicken screen, which told me my health care cost was $10,800 for the last 12 months, of that only $900 is for dental care.

The above did not include the $10K annual deductible, which I spent this year out of an account maintained just for that. When that account is depleted, and it may, then my medical expenses will jump up to $20K+ a year.

But if I stay so sick, then the extra medical expense is canceled out by reduced expenses caused by inability to travel. See how that works out?
Actually, if you get and stay sick enough, you won't even need your car or car insurance!
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Old 07-26-2013, 11:54 AM   #60
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Hey, thanks for savings tips!

Would still need to keep one car for my wife to drop off/pick up from the hospital. I guess the other 2 cars and the RV can go.
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