$4,000 a month

[pb4uski]

We still keep two vehicles. But we live on a rural area. Most of DH's destinations are west; most of the time I go north. It would be very inconvenient for us to have only one vehicle. Doable, but inconvenient. I imagine we will have two vehicles until we are on our late70's or so.

+1 rural area and it seems DW and I are either heading in different directions or in the same direction at different times. I can't imagine making do with only one car.

 

[MDJO]

I am bad here.... I keep 3. One for DW, One for me and one for fun. as mentioned it is my only weakness.

I was doing the same thing until I retired last month. Now I am selling one of the three cars....but keeping the fun one that won't go in snow deeper than an inch or so (with winter tires and wheels that I plan to purchase with the money from the sold car). We "usually" have mild winters, and if we don't, I guess I'll be begging DW for her car that has 4-wheel drive.

 

[brett]

I guess that it depends on where you live and what your individual activities.

We have two cars. One be going to my son. We live in a large city-near good public transit.

 

[LazyErik]

We did OK on one car for over ten years. We recently became a two car family. We loved having one car because it was so so cheap. Inconvenient, but cheap. We expect to go back to one car when we FIRE. We also have two bikes. . and a riding lawnmower.

 

[youbet]

We have 3: his, hers and a truck to pull the camper. When we get over the camping urge (no sign of that yet) we'll drop down to 2 cars. Our schedules make it a pita to have only one car so, as long as we can afford it, we'll go with 2.

 

[youbet]

You will find people on this site who spend a lot less that $4k per month and those that spend a lot more than $4k. Depends on a variety of factors....mortgage payment, yes or no. Retiree health care...yes or no. I could go on and on.

And it depends on what you mean by "spend." I'm always surprised when folks leave out expenses like taxes or discretionary spending like vacations or dining out.

IMHO, if a couple is going to state that they can live nicely on $48k/yr in retirement, they should mean $48k gross covering ALL expenditures they'd prefer to make for life to be "nice." And even with that level of consistency in defining income and expenses, other factors such as supporting capital (paid for house, room for a big garden etc), skills (do all home maintenance and car repairs yourself, etc) or health needs come into play.

DW and I could not do it on $48k here in the Chicago suburbs. We understand how we'd do it if we had to, but we wouldn't have retired early (55 and 58) for that lifestyle.

 

[arky]

And it depends on what you mean by "spend." I'm always surprised when folks leave out expenses like taxes or discretionary spending like vacations or dining out.

........

+1

 

[farmerEd]

Our property taxes would eat up more than half of that. .

That's downright scary, simple math means you are paying somewhere around $25,000/year in property taxes - that's 4 time as much as what I pay for a 5BD house on almost 200 acres (in a rural part of New England).

 

[Corporateburnout]

And it depends on what you mean by "spend." I'm always surprised when folks leave out expenses like taxes or discretionary spending like vacations or dining out.

IMHO, if a couple is going to state that they can live nicely on $48k/yr in retirement, they should mean $48k gross covering ALL expenditures they'd prefer to make for life to be "nice." And even with that level of consistency in defining income and expenses, other factors such as supporting capital (paid for house, room for a big garden etc), skills (do all home maintenance and car repairs yourself, etc) or health needs come into play.

DW and I could not do it on $48k here in the Chicago suburbs. We understand how we'd do it if we had to, but we wouldn't have retired early (55 and 58) for that lifestyle.

+1
If 48K was sufficient for us we would have retired 5 years ago. DW retired a year ago @59 and I plan to retire next March. Our retirement budget is 75k excluding income tax which would be minimal until RMD.

 

[bob boag]

I've been retired two years. My wife will work 3+ more years as an elementary school teacher. Per Quicken we have consistently spent ~$100K/year for the last four years.
Since I'm a fancy man we don't pinch pennies but honest to God we are not particularly extravagant. House is paid off. 1500 square feet, built in 1955. We drive two 10+ year old cars. Here's where it goes: We live in Los Angeles county. We have two teenage boys, age 15 and 17. I buy toys on Amazon, maybe $10K/year. We spend about $10K/year on vacations. My wife loves to eat out. I'm hoping when DW retires and the boys are out of the house we move to a sane state and get our budget down to ~75K/year in 2013 dollars.

 

[bentley]

$4000/month is just fine......as long as my 2 rental properties continue to have good renters that pay each month.

Actually, $5k/month is a workable number for us. But we have several hobbies, and Amazon is my friend.

Home and 3 vehicles along with boat and camper are all paid for.biggest expense is health insurance.

B

 

[seraphim]

No mortgage. Truck payment (657). Few months on car loan (233) Long term health insurance payments (700). $3850 a month ( after taxes and after health insurance premiums taken out of pensions) just about covers everything essential. ( we're also covering a few things for son - insurance and a car lease). We could lose the truck, except it hauls the camper. It really is not essential.

$4k a month after taxes should be doable for a well prepared and frugal retiree, depending on where they live.

 

[jon-nyc]

That's downright scary, simple math means you are paying somewhere around $25,000/year in property taxes - that's 4 time as much as what I pay for a 5BD house on almost 200 acres (in a rural part of New England).

Yes, and its a modest home (~2400 sq ft) on 1/3 acre. Westchester county has the highest property taxes in the country. People pay it because of good schools and an easy commute to high paying jobs in the city. FWIW, 1/3 of that sum goes to local pensions.

In NYC my taxes were only 4500 on a property worth 3 times what my current house is worth. But there lots of people pay 30k per kid per year for private school, so the deal in Westchester starts to look like a bargain, especially with more than one kid.

 

[scrabbler1]

Yes, and its a modest home (~2400 sq ft) on 1/3 acre. Westchester county has the highest property taxes in the country. People pay it because of good schools and an easy commute to high paying jobs in the city. FWIW, 1/3 of that sum goes to local pensions.

In NYC my taxes were only 4500 on a property worth 3 times what my current house is worth. But there lots of people pay 30k per kid per year for private school, so the deal in Westchester starts to look like a bargain, especially with more than one kid.

But when comparing local taxes between NYC and an area outside of NYC, shouldn't you include the NYC income tax which is used to offset property taxes (and collect from the many renters in NYC)? You probably still pay more to Westchester anyway but it would make the comparison better. (I am assuming you do not live in Yonkers which has a small, local income tax; you would have to include that.)

 

[jollystomper]

And it depends on what you mean by "spend." I'm always surprised when folks leave out expenses like taxes or discretionary spending like vacations or dining out.

IMHO, if a couple is going to state that they can live nicely on $48k/yr in retirement, they should mean $48k gross covering ALL expenditures they'd prefer to make for life to be "nice." And even with that level of consistency in defining income and expenses, other factors such as supporting capital (paid for house, room for a big garden etc), skills (do all home maintenance and car repairs yourself, etc) or health needs come into play.

DW and I could not do it on $48k here in the Chicago suburbs. We understand how we'd do it if we had to, but we wouldn't have retired early (55 and 58) for that lifestyle.

+1

Our target $100K/year budget is due to covering all of those factors. Estimate for taxes, mortgage, heath insurance premiums for us alone are over $3K/month, which on a $4K/month budget would leave $1K for everything else.

 

[jon-nyc]

But when comparing local taxes between NYC and an area outside of NYC, shouldn't you include the NYC income tax which is used to offset property taxes (and collect from the many renters in NYC)? You probably still pay more to Westchester anyway but it would make the comparison better. (I am assuming you do not live in Yonkers which has a small, local income tax; you would have to include that.)

Absolutely. In my case I retired just before moving so my taxable income is quite a bit lower than last year as well. I'm definitely paying lower tax now than last year.

 

[explanade]

Does anyone have a good budget calculator or spreadsheet?

I gave this one a try, padding most of the categories with figures greater than what I'm currently spending (not retired) in all the categories:

https://personal.vanguard.com/us/insights/retirement/tool/retirement-expense-worksheet

Ironically, it came out to just over $4k, $4060 to be exact.

 

[Katsmeow]

Does anyone have a good budget calculator or spreadsheet?

I gave this one a try, padding most of the categories with figures greater than what I'm currently spending (not retired) in all the categories:

https://personal.vanguard.com/us/insights/retirement/tool/retirement-expense-worksheet

Ironically, it came out to just over $4k, $4060 to be exact.

That is a fairly good general list of categories. The biggest thing that I didn't see included were things that are household related but aren't repairs or maintenance, particularly things such as furniture, appliances, linens, kitchen utensils, decorative items. Many of these you may not buy very often, but almost all of them will be acquired at some point.

About 60% or so of Americans own a pet. For those who do that needs to be a category.

Also, people tend to leave out home improvement that isn't a repair or maintenance. And people tend to leave out the large expenses that occur infrequently: new roof, new HVAC, new paint, new carpet, new major appliances, etc.

 

[explanade]

I found this on Bogleheads:

Budget models of retirement spending - Bogleheads

That's where the link to Vanguards budget calculator was as well as other ones.

There are a couple of spreadsheets too, one of which has entries for one-time or big purchases.

 

[Kaufmanrider]

I think everyone will have different expectations/requirements for monthly income in retirement. Lot's of variables, location, bills/debts, leisure activities, life style, etc.

Personally, I think $4,000 a month is adequate for me. That is about what I'll be bringing home monthly next year. That will be take home after health insurance, taxes, survival benefit deduction for spouse.

We are in the process of paying off bills and will only have our house mortgage going into retirement. Kids grown. We live in Texas so mortgage is cheap, no State taxes.

Our monthly bills (Mortgage, utilities, auto/motorcycle insurance, phones/cable/internet), everything except food, entertainment, play will be a tad under $2,000 a month. We'll have some cash for emergencies in my brokerage account and my Fed TSP (401K) will be rolled into an IRA to ride along. If I need extra cash I can take some 72T withdrawals or maybe work part-time I'll be 49.

 

[Malcolm2]

I agree, but that is what I paid! I purchased the last one on the lot at the end of September 2012. I basically got the last one in my area. Black Black, diesel. I did pay it all in one lump sum and saved a payment or 2, but I do have a $595 return fee if I do not lease or buy another MB. It was a Zero % Interest deal I remember that. So I guess $11k would be closer if I rounded it up. In addition, I put the whole thing on my AMEX and got 2% back. AND what is even better is I was working last year in sales, and wrote the whole amount off as a 1 time payment. So it actually probably really cost me about ~8k.

It had ~450 miles when I got it so it could have been a demo. I have learnt over the years that buying at the end of the model year at the end of the month, gets the best deal.

I just looked at the window sticker and it say $67,435. (OK So I rounded it to $70k)

Interesting, great deal! I have always been discouraged from similar deals due to the low mileage allowances (10-12k). Did you negotiate that?

 

[ShokWaveRider]

Interesting, great deal! I have always been discouraged from similar deals due to the low mileage allowances (10-12k). Did you negotiate that?

Yes but it did not take long. I do not do much mileage as I live in a resort town, not far to anywhere. So I got a 10k lease. I have had it a year exactly on 8/25/2013 and have 6k so far. Not only that, we just came back from what we call a long road trip 745 miles and the old girl did an average of 44.5mpg. Not bad for a 3000+ pound car.

So all those Prius and Hybrid owners driving glorified shopping carts and getting 45mpg can keep on doing it and leave the real cars for others. I will stick to my E350 BTEC.

We really need more diesels in the USA. We all talk about efficiency and fuel dependencies in cars but have to succumb to the oil companies lobbying to keep diesels out as they make so much more money selling petrol (gasoline) to Truck owners and gas guzzlers. Sometimes we are all like sheep and just comply with the status quo. I think we should all demand diesels and not buy gas cars ever again. Impractical perhaps, but sooner or later they will get the idea.

All that being said, next year there will be an Audi S4 Diesel and a C class Mercedes diesel. I simply cannot wait for them).

 

[RE2Boys]

AND what is even better is I was working last year in sales, and wrote the whole amount off as a 1 time payment. So it actually probably really cost me about ~8k.

Lease payments, if made as a one time payment, must be spread out over the lease term when deducting for business use of auto (and pro-rated between personal and business use). See IRS Pub 463 Chapter 4.

 

[aja8888]

Yes but it did not take long. I do not do much mileage as I live in a resort town, not far to anywhere. So I got a 10k lease. I have had it a year exactly on 8/25/2013 and have 6k so far. Not only that, we just came back from what we call a long road trip 745 miles and the old girl did an average of 44.5mpg. Not bad for a 3000+ pound car.

So all those Prius and Hybrid owners driving glorified shopping carts and getting 45mpg can keep on doing it and leave the real cars for others. I will stick to my E350 BTEC.

We really need more diesels in the USA. We all talk about efficiency and fuel dependencies in cars but have to succumb to the oil companies lobbying to keep diesels out as they make so much more money selling petrol (gasoline) to Truck owners and gas guzzlers. Sometimes we are all like sheep and just comply with the status quo. I think we should all demand diesels and not buy gas cars ever again. Impractical perhaps, but sooner or later they will get the idea.

All that being said, next year there will be an Audi S4 Diesel and a C class Mercedes diesel. I simply cannot wait for them).

I've been driving VW diesels for years and would love to move up to a MB diesel. I darn near bought a 2006 model year MB diesel sedan a couple of years ago for under $20K with less than 100K miles on it (lease turn in). I should have bought that car, but if you can lease these for what you say, then I might go that route when I retire later this year as I won't be driving as much.

I did try a Prius rental on a business trip and was unimpressed as it feels tinny and underpowered. I guess since I have been driving more powerful, higher torque, diesels, I don't feel right in an econobox hybrid, especially since I can attain near the same MPG with a more substantial car.

Thanks for the info!

 

[Al in Ohio]

Yes but it did not take long. I do not do much mileage as I live in a resort town, not far to anywhere. So I got a 10k lease. I have had it a year exactly on 8/25/2013 and have 6k so far. Not only that, we just came back from what we call a long road trip 745 miles and the old girl did an average of 44.5mpg. Not bad for a 3000+ pound car.

So all those Prius and Hybrid owners driving glorified shopping carts and getting 45mpg can keep on doing it and leave the real cars for others. I will stick to my E350 BTEC.

We really need more diesels in the USA. We all talk about efficiency and fuel dependencies in cars but have to succumb to the oil companies lobbying to keep diesels out as they make so much more money selling petrol (gasoline) to Truck owners and gas guzzlers. Sometimes we are all like sheep and just comply with the status quo. I think we should all demand diesels and not buy gas cars ever again. Impractical perhaps, but sooner or later they will get the idea.

All that being said, next year there will be an Audi S4 Diesel and a C class Mercedes diesel. I simply cannot wait for them).

You mean more diesels in the warmer climate areas of the USA. Diesels are very hard to start in colder northern climate winters if you never had one up north. That's why they won't catch on up here. Then there's " the knock"!