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Old 03-26-2014, 12:50 PM   #21
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Even though we planned for them, meeting maximum out-of-pocket medical and family member's expenses can be a 'gotcha'.
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Old 03-26-2014, 01:02 PM   #22
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I way overestimated on beer. Don't need nearly as much when you are retired.
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Old 03-26-2014, 01:02 PM   #23
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Questions to you all - did expense go up as much as inflation did? Less or more? I am trying to figure out impact of inflation to the RE expense.
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Old 03-26-2014, 01:18 PM   #24
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I way overestimated on beer. Don't need nearly as much when you are retired.
I spent a lot of my first summer in RE drinking beer with a friend. He is on a diet and has lost almost 100 lbs. The only beer he allows himself is Michelobe Ultra. In the spirit of his new found healthy habits, I joined in drinking it. That stuff is like water but priced as a premium beer. My beer budget at least tripled.

This summer I think I will buy him his Ultra, but I will to stick to something that tastes more like beer.
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Old 03-26-2014, 01:46 PM   #25
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Only two full years in for me but I would say very close overall. We have tracked expenses in Quicken for over 10 years prior to retiring so I had a lot of good data and out lifestyle in retirement is about the same as when I was working other than a larger vacations/travel budget and health care.

Lower than expected taxes was a pleasant surprise but that has gone up since I decided to prioritize Roth conversions over 0% LTCGs but is still less than I thought they would be when I retired.

Health insurance has been lower. I used our COBRA as my budget but was able to find individual insurance that was about 40% lower. In fact, even after 13% and 9% increases in 2013 and 2014 what we are paying for health insurance is still lower than the COBRA from when I retired - and the plan benefits are broadly comparable. So that has been a pleasant surprise but I thought I was probably being too conservative to begin with. Co-pays and deductibles have been close to plan.
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Old 03-26-2014, 02:21 PM   #26
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We tracked expenses for three years. While there were several changes, most were off setting. i.e. we spend more on travel, but less on eating out. New house is more remote and we don't go out as much, but we have taken more cruises. So on the expense side we are just about on track.

I would call it the 'Unexpected' expenses that have surprised me. These are things I never thought about spending on while saving for retirement, but now spend money on. We spend more on toys now than we use to.
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Old 03-26-2014, 02:41 PM   #27
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Absolutely plan for this if you don't have healthy teeth.

My dental bill this year? About 50K.
This could be another thread but I've found those rechargeable toothbrushes to be an excellent investment. Changing the heads is probably cheaper then replacing standard toothbushes too. Before I used one I always had way more need to go to the dentist then now.

Not to say that this fixes all teeth issues. DW had about 10k in work about 1 year ago.
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Old 03-26-2014, 03:24 PM   #28
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I tracked what we spent each year for many years before we retired, and planned on spending as much as we did, on average, during the last 2 years which included an additional rented 2 bedroom apartment. (My last 2 years were spent on an out-of-State project so we kept our place in Texas, lived in Louisiana and traveled back every 6 weeks). Our parents also got sick during those 2 years so the 3 trips to England I figured would be typical of overseas travel costs when in retirement.

No unexpected expenses so far, now in our 5th year of retirement.
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Old 03-26-2014, 03:39 PM   #29
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Six months into retirement and we already underestimated our exposure to bad hearing (unexpected), bad teeth (unexpected), and bad knees (expected). We have great health and dental insurance and we're still over budget by 30 percent this year. Hearing aids and dental implants can be a hurt on your budget. And we're in general good shape!

I'm also thinking we have some additional expenses and exposure to taking care of elderly parents. Thank goodness we don't have any boomerang children to handle.
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Old 03-26-2014, 03:48 PM   #30
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DW RE'd 11 years. Me 8 years.

Fed Taxes - Higher. Roth conversions are the main culprit.

Dental - Higher. Who knew I'd crack a molar and need an implant?

Heath Insurance - Higher. Part D and Part B penalties due to income. (See Roth conversions above.) DW's employer eliminated her retiree plan.

Funding disabled grandchild's trust - Higher. Grandma says no amount could ever be enough and no one is happy here if Grandma ain't happy.

Funding other grandchildrens' 529b's and Coverdells - Higher. See Grandma notes above.

Everything else is within expectations. Minor changes to routine living expenses (we're modest/frugal consumers) and discretionary spending are insignificant when bounced against the issues listed above.

So, higher taxes, higher medical/dental and more gifting to family. Routine living and discretionary spending about on expectation. BTW, pre RE we tracked routine expenditures on a very rough cut basis and this has turned out to be more than accurate enough.
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Old 03-26-2014, 04:38 PM   #31
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I'm not retired but I've seen it mentioned to allow for future inventions. I don't think people who retired in the 70's had an expense line item for a $60-$100 a month cell phone bill.

I wonder what inventions, I'll have the income for in 30 years :-)



I've been watching "Almost Human", and I'm thinking SexBots could be quite expensive.
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Old 03-26-2014, 04:50 PM   #32
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I started a spreadsheet about 2 years before actual retirement. At the time, I hadn't planned on ER. After the 2 years, I was way ahead in savings, so at retirement I redid the sheet into one of the super duper all dancing multi-tabs described earlier to obtain a more accurate picture.

That was 8 years ago. Today, I'm still ahead of the curve (have more assets than planned to have for year 8). The reason is probably because I included a compounded inflation increase of 7 1/2% yearly for spending, and only put increase in assets at 3 1/2% yearly between pensions and investments. I'm happy with the results as I predict that at some time in the future, inflation (or unseen spending requirements) will catch up. I track year to year expenses and I do not believe government yearly inflation figures. They can't be that low. Then maybe I'm being well over cautious. My proposed rate of inflation has been close to my actual yearly rate given our circumstances, at least for the past several years.

The problem I now have is I'm tempted to think why am I doing this, and should I now loosen up the fun spending a bit. We have one of those lifestyles where non-essential spending is the same as pre-retirement, or may have possibly increased since retirement.

BTW, if I reduce yearly inflation on the sheet to 5%, I'm good well past 100. I know I'll never make it that long.
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Old 03-26-2014, 07:18 PM   #33
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I way overestimated on beer. Don't need nearly as much when you are retired.
Whaaaaa?
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Old 03-26-2014, 07:29 PM   #34
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Medical expenses have been a lot higher, true, but other expenses (notably income taxes) have been lower than I expected. No big surprises overall; the surprises are just in the details.
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Old 03-26-2014, 07:30 PM   #35
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If I look at the sum of Food, Shelter, Clothes, Cars, Cleaning supplies, Charitable contributions, Christmas & BD gifts to kids, Social, and Miscellaneous, I was right on (after 7 years).

Medical was way off. I had anticipated a slow increase as my former employer got thriftier with retiree medical. Instead they cancelled it -- about half way through my wife's chemo treatments.

I planned for significant travel expense. Very little of that happened. I didn't plan to provide any financial support for relatives. That has easily exceeded my planned travel expense.
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Old 03-26-2014, 07:42 PM   #36
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Thanks everyone for sharing - the medical/dental expenses increasing unexpectedly seems the most unanticipated.

But - that does seem to make sense.

Is it the premium increases or the co-pays/deductibles that are the 'killers'??
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Old 03-26-2014, 07:56 PM   #37
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It is the premium increases and the co-pays/deductibles that are the 'killers'.
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Old 03-26-2014, 08:16 PM   #38
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Thanks everyone for sharing - the medical/dental expenses increasing unexpectedly seems the most unanticipated.

But - that does seem to make sense.

Is it the premium increases or the co-pays/deductibles that are the 'killers'??
"Killers" depends on how tightly you want to define your budget. Our 10k dental billings in 2012 were unexpected buy a one time event. Unexpected premium increases could go on and on but who knows for sure.
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Old 03-27-2014, 06:41 AM   #39
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Thanks everyone for sharing - the medical/dental expenses increasing unexpectedly seems the most unanticipated.

But - that does seem to make sense.

Is it the premium increases or the co-pays/deductibles that are the 'killers'??
so far it has been unanticipated dental work. i budgeted to meet max out of pocket on medical every year because we always reach it.

i anticipate massive increases in retiree health care insurance premiums in the near future.
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Old 03-27-2014, 08:28 AM   #40
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So, instead of a luxury vacation to Hawaii one year, it's dental copays and deductibles?

Does this happen more often than not?

I have budgeted a certain amount of yearly expenses for 'vacations' - so, in any given year the same amount could be used for medical/dental expenses, but it would be nice to actually have a vacation!
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