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Old 02-13-2013, 04:21 AM   #21
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I am single, 47 years old, turning 48 this year. My income is higher. My planned expenses during RE are about 80k-100k per year over my 47 year-plan, or 100k-120k with the use of annuities. My personal annual expenses are about 40k, trying to force myself to spend 50k this year, as documented in another recent thread.
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Originally Posted by cinman2000 View Post
Those of you that are in the same ballpark as us from an income perspective in your working years, but have retired recently: What is your annual budget amount? I'll go first:

$96,000 + $10,000 in taxes = $106,000

(Other income brackets please join as well, this could be a great help for many of us that are on the bubble)
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Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
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Old 02-13-2013, 04:48 AM   #22
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Im 57, DW 58. Our combined income was similar to yours before I went part time. Our planned expenses are around $100k to include taxes beginning this/next year when DW retires. Our taxes will be low initially because I'm using up post-tax $ first. Good luck on keeping your tax burden at $10k.
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Old 02-13-2013, 06:38 AM   #23
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Originally Posted by cinman2000 View Post
I'm 52, DW is 50. Our combined income is 210k and we have been able to max out on all retirement savings options for many years.
Almost exactly like us (except I'm 51).

My current plan is to retire at 55 and my expense projection (not including mortgage) is $93k/year. That does include $26k of taxes (but $8k of that is property tax).

My biggest challenge has been getting an accurate read on budgeting for medical. Right now I've got $12-14k plugged in.
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Old 02-13-2013, 07:13 AM   #24
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Our income situation is similar and we are looking to retire this year if all goes as planned and I can get over my phycological weakness.

Looking back after three years of meticulous expense tracking using Quicken, we are spending $77,550. That includes $20,042 in housing expenses (PITI). That's leave $57,508 for discretionary spending.

We are a family of 5 with 2 grade schoolers and 1 in Jr High. I purchased ESPlanner recently to see if my assets would hold up to this budget and it predicts a $75,566 discretionary spending level, so I'm fairly comfortable that we are financially ready for ER.

This ESP number assumes "cautious" spending with an average portfolio gain of 1/2 the mean for our specific portfolio makeup. Basically the "Lazy" Vanguard portfolio.

I'm very happy to have reached this point in life, but I will say the decision to ER and leave the workforce is not an easy one.

Good luck in your decision.
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Old 02-13-2013, 07:23 AM   #25
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Make sure you expect the unexpected.

For me the big surprize is kids never leave.....really. My kids had kids, many of them and I've started 529's for all of them the way my parents did for my kids. Then, health care.......I need a lot of dental work.....implants aren't cheap. Back to grandkids, birthday and Christmas presents cost more than I originally budgeted.....who knew that my kids would give me so many grandkids.

Another surprise.....new roof! Just replaced 3 years ago but the material went bad and roofing company, out of State, said sue me....my lawyer told me it would be cheaper to pay 8k for the roof than go through the lawsuit.

Overall, I'm really fine but budgets need some space for unexpected challenges. I have a neighbor with a six year old car, she owned it for 2 years, financed it for 4 years and it just lost the engine......now she has to spend thousands that she didn't expect.....and she doesn't have it to spend.

I set aside a grand a month to cover unexpected expenses.....have about 15k in my fund so I don't worry.....maybe, I'll use part of it to get my fantastic DW something nice for Valentine's day. Good luck to all.....overall, I think we're really lucky!
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Old 02-13-2013, 07:40 AM   #26
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...ooops... stumbled into the wrong thread...
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Old 02-13-2013, 08:04 AM   #27
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I agree with those who say other peoples' numbers won't help you. A better question to me is, "do your estimated expenses hold up during ER." I think we have covered that ground before but it can't hurt to revisit the question now and then. I am not a dedicated expense tracker. Fore decades we saved a boatload and spent the rest without paying close attention to where or how. For a couple of years before ER, however, I carefully tracked expenses to confirm whether my gut feeling that we could afford ER was correct. I assumed expenses would continue as is with a few changes (no more mortgage, no more college expenses, substantially increased travel budget, substantial figure for unanticipated expenses). Several years after pulling the plug, the expenses have turned out as expected. The extra fudge factor has also worked out well - i.e. we are not spending as much as we prepared for. We use about a 3.5% WR and have returned about 20% of that withdrawal to an emergency fund. The bottom line for us has been that expenses adjusted for things that will clearly change like taxes, mortgages, tuition, etc have stayed remarkably flat.
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Old 02-13-2013, 09:22 AM   #28
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am wondering if we are really going to have the same mental approach to spending in retirement.
My mental approach to spending (and lifestyle) really didn't change once I retired but that was my pre-retirement planning basis. I didn't retire until Firecal and my own custom spreadsheets (and my common sense ) said I could retire without a change in "lifestyle spending" and still gave me a "projected"100% success rate out to 100 years old. To be honest, I don't think I'll continue to spend at my current rates (a bit higher than your quotes) for the rest of my life but I've allowed for it. Nor do I think I'll live to see 100.
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Old 02-13-2013, 03:00 PM   #29
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Originally Posted by LOL! View Post
I just don't see how one can pay $10,000 on $96,000 of income. Have you put your numbers into tax software? Or do you have zero qualified dividends and zero long-term cap gains and zero carryover losses which would mean that all your planned $96,000 will come from IRA or 401(k) withdrawals or pensions?
I have struggled with this one. We have about 600k in after tax investments. My current plan calls for doing an SEPP that takes us up near the 15% tax bracket and funding the rest of our expenses with capital gains income from the 600k taxed at 0%. The tools I have found don't do a good job of modeling this and appear to me to be overtaxing us. It makes me nervous.
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Old 02-13-2013, 03:02 PM   #30
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I didn't retire until Firecal and my own custom spreadsheets (and my common sense ) said I could retire without a change in "lifestyle spending" and still gave me a "projected"100% success rate out to 100 years old.
You must have really enjoyed your job
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Old 02-13-2013, 03:07 PM   #31
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Make sure you expect the unexpected.
I set aside a grand a month to cover unexpected expenses.....
Wow, I have $500/month based on a 5 year history, thanks!
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Old 02-13-2013, 03:12 PM   #32
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I agree with those who say other peoples' numbers won't help you.
Many have made this point and I think it is a good one. We are tracking expenses against our budget as of Jan 1 and for Jan were 25% under budget. If this continues for 6 months or so, I think I will have my answer Thanks to those willing to share numbers, it does give me some comfort to know that I am not way out on the end of the normal curve.
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Old 02-13-2013, 03:14 PM   #33
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I will say the decision to ER and leave the workforce is not an easy one.

Good luck in your decision.
Thanks and agree completely!
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Old 02-13-2013, 03:16 PM   #34
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Not retired yet, but since this is turning into an informal poll....

FWIW:

31, married, 1 kid. Been tracking spending for 3 years now. We average $50-60k/yr, which includes $20k in mortgage/property-taxes. So, $30-40k in discretionary funds, in a fairly high COL area.
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Old 02-13-2013, 03:17 PM   #35
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My biggest challenge has been getting an accurate read on budgeting for medical. Right now I've got $12-14k plugged in.
I have had a hard time with this also. I'm currently using 14K in today's dollars and indexing at 6% based on advice from my CFP. I think this is high, but still working on proving that.
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Old 02-13-2013, 03:32 PM   #36
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51, single, and planning to retire at 55 (maybe sooner). My gross income is $145k ($130k salary, $15k rent) , taxable income is $70k. Tax is $13.5k and other expenses are $30k. No mortgage. When I ER my budget is for $4k taxes and $36k expenses....the extra $6k is for health insurance.
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Old 02-13-2013, 03:47 PM   #37
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To the OP, we have similar income and slightly older (55) and are planning for about the same amount We have 15 years of expenses in Quicken that I've been using to forecast (of course "past performance is no guarantee of future results") using various rolling averages to get a ballpark idea of expenses, and they tend to converge between $95-$110K.

I agree with the earlier advice of trying to live on your target expenses before you retire to see what is possible. We did that a couple of months last year and it was a real eye opener (in mostly good ways), and will start again next month (would have started this month but decided to deal with some pre-retirement expenses first).

The big wildcard is going to be health insurance. I get a pension but not health insurance (just a "fund" to help pay for health insurance premiums). Keeping our insurance as is will cost around $16K in premiums, going to a higher deductible reduces it to around $13K. According to the PPACA calculators our premiums might be as low as $8K if we keep income below $93, but if it goes higher it jumps to $19K. We are waiting to see how that truly fleshes out to get a good feel for our expenses.
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Old 02-13-2013, 10:45 PM   #38
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You must have really enjoyed your job
Actually yes "for the most part", until I reached my FI goal... Then my perspective seemed to change very fast
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Old 02-14-2013, 12:42 AM   #39
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59 years old and still working. No debt, married, no kids at home.

Gross last year was $115,000.
Savings amount was $52,000.
Taxes were $34,000.

Spending amount was $29,000.
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Old 02-14-2013, 12:05 PM   #40
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Our expenses will not exceed our income: Targeting $40k or less before taxes. Income could be about 50% more than that (depending on how things turn out), but planning on $40k.
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