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Old 05-19-2011, 03:43 PM   #41
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So you are saying that you are putting off retirement (for the rest of your life) just because you may have to purchase two cars, at the same time?
I am only 41 and hope to retire in amount 8 years. I don't really have a budget for new vehicles since my overall budget is pretty tight right now. I am putting additional monthly money into a MMS account which is my emergency fund.

I would probably use some of the MMS to fund at least a down payment on a vehicle if needed. I don't anticipate needing one anytime soon, though.

When I say my budget is tight, I mean in regards to ER. I am saving about 28k a year and paying down a mortgage.
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Old 05-19-2011, 04:42 PM   #42
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Just musing here - - - you know, my expenses in retirement have been pretty much the same as before retirement, more or less, even though I have purchased some nice things since ER.

So now I am thinking that maybe my expenses when I am over 85 will be the same as they are now at age 62. Sure, I will be able to do fewer of the things that I presently do. Still, if I live to be as old as I hope, then eventually I will need things like a nice walker, handicapped modifications to my shower so I don't slip, and visual aids (maybe a wall sized computer monitor will be common by that time, who knows, but it might be pricey). I might want to hire more help around the house or someone to shop for me once I am too old to do that.
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Old 05-21-2011, 09:49 AM   #43
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I'm using a combination of ideas that have already been mentionedóbasing a retirement budget on my actual expenses (I use Quicken to track where the money went), and allowing a cushion in case of higher taxes, lower Social Security payments, and for hard-to-estimate expenses like future health care costs. The other thing I've been doing is test driving my pension for the last few years. At the beginning of the year, I use the retirement system website to estimate what my pension would be if I had just retired, and base my spending for the upcoming year on that amount, less taxes and tithe. The first year was an uncomfortably tight budget, last year not quite so much so, and this year even a little better. My target date is two years away and I expect I will have a pretty good feel by then for what I'll be able to spend when I pull the plug for real.
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Old 05-21-2011, 10:55 AM   #44
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Just musing here - - - you know, my expenses in retirement have been pretty much the same as before retirement, more or less, even though I have purchased some nice things since ER.

So now I am thinking that maybe my expenses when I am over 85 will be the same as they are now at age 62. Sure, I will be able to do fewer of the things that I presently do. Still, if I live to be as old as I hope, then eventually I will need things like a nice walker, handicapped modifications to my shower so I don't slip, and visual aids (maybe a wall sized computer monitor will be common by that time, who knows, but it might be pricey). I might want to hire more help around the house or someone to shop for me once I am too old to do that.
W2R: OK, when you're 85 and need a walker (hopefully, you won't), and assuming you have as much money as you do now, do you think you'd spring for a top-of-the-line walker (the walker you absolutely fall in love with, maybe even spending an extra $20 for the color walker you want) or would you make some compromises as to the walker you select?
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Old 05-21-2011, 11:20 AM   #45
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While I don't track every dollar of expenses...
How can you plan for where you are going, if you don't know where you have been?
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Old 05-21-2011, 11:33 AM   #46
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I am only 41 and hope to retire in amount 8 years. I don't really have a budget for new vehicles since my overall budget is pretty tight right now.
Regardless of age (and retired or not), you still have to budget for vehicle replacement.

IMHO, your "plan" is not a plan at all, for your current possible expenses, let alone retirement...
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Old 05-21-2011, 12:00 PM   #47
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While I don't track every dollar of expenses...
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How can you plan for where you are going, if you don't know where you have been?
I don't track every dollar of expenses either, but I know exactly how much I spend every year. The big stuff is easy to track and plan for. I'm fortunate that I don't need to sweat the small stuff, although there have been many years in the past when I've needed to do that.
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Old 05-22-2011, 12:58 PM   #48
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W2R: OK, when you're 85 and need a walker (hopefully, you won't), and assuming you have as much money as you do now, do you think you'd spring for a top-of-the-line walker (the walker you absolutely fall in love with, maybe even spending an extra $20 for the color walker you want) or would you make some compromises as to the walker you select?
Yes, probably the top of the line in my favorite color! I remember that my (dear departed) mother wanted the snazziest walker in the assisted living facility, and got it. She loved all the features - - compartments in which to hold her stuff, and who knows what else. It wasn't cheap, either, and all the other old folks there loved it and wanted to see it, and some ordered the same one. She went for the best one she could find. And like mother, like daughter...
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Old 05-22-2011, 06:11 PM   #49
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Wow, you're as classy as your avatar.
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Old 05-23-2011, 04:10 PM   #50
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Interesting stuff here...
Long time lurker, with a question.
I don't believe I've ever seen a discussion of how costs go down, over time, during retirement.
I'm not talking about well-covered things like increased costs (vacations, health insurance, restaurants) and decreased costs (no commute, no expensive work clothes) and the like.
And I'm not talking about inflation.
I'm talking about a gradual reduction in day-to-day and big-ticket expenses simply because one is less active, etc. For example, I expect to travel a fair amount... for some number of years. But not more than maybe ten years. So after that, travel costs go way down. I expect to go out to a restaurant more often. But not so much as I age. If/when we sell the big expensive house and move to an apartment or condo, I would expense repair and maintenance costs to drop significantly.

Am I on solid ground here? Does FireCalc allow for this kind of reduction, over time? Do other calculators?

Thanks for your inputs.
Cheers!
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Old 05-23-2011, 11:26 PM   #51
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Interesting stuff here...
Long time lurker, with a question.
I don't believe I've ever seen a discussion of how costs go down, over time, during retirement.
Cheers!
Firecalc has an option under the Spendiing Models tab for Bernicke's Reality Retirement Plan, with a link to the article on which that is based. It assumes declining expenses due to lifestyle changes up to a point after which things level out and then need to keep pace with inflation.

But in another sense, depending on lifestyle choices and also depending on what point in life you are using for comparison, I think there are a number of places where spending can go down over time. The accumulation phase for some of us hasn't only been about money, but also about stuff we buy once and will continue to use for the rest of our lives. How many times do you need to buy a good socket wrench set, cookware, china, furniture, piano, etc. Many of these can be bought once and then you're pretty much set for life. Sure there may be additions and upgrades for some - electronics being the perfect example - but durable things acquired with an eye for quality may only need to be in your budget once in a lifetime.
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Old 05-24-2011, 12:54 AM   #52
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So now I am thinking that maybe my expenses when I am over 85 will be the same as they are now at age 62. Sure, I will be able to do fewer of the things that I presently do. Still, if I live to be as old as I hope, then eventually I will need things like a nice walker, handicapped modifications to my shower so I don't slip, and visual aids (maybe a wall sized computer monitor will be common by that time, who knows, but it might be pricey). I might want to hire more help around the house or someone to shop for me once I am too old to do that.
In my limited sample of older relatives, those who could afford to do so spent as much or more are they aged. They traveled less, but more slowly and luxuriously if they did. They hired help to do chores they used to do themselves. They used in home care when they could and graduated to progressively more expensive levels of assistance as needed. They found generous ways to indulge grandchildren or encourage people to visit them by subsidizing trips. Those with limited means did spend less as they aged, but I don't think they would have chosen to do so if they had had the ability to do otherwise.
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Old 05-24-2011, 01:35 AM   #53
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In my limited sample of older relatives, those who could afford to do so spent as much or more are they aged. They traveled less, but more slowly and luxuriously if they did. They hired help to do chores they used to do themselves. They used in home care when they could and graduated to progressively more expensive levels of assistance as needed. They found generous ways to indulge grandchildren or encourage people to visit them by subsidizing trips. Those with limited means did spend less as they aged, but I don't think they would have chosen to do so if they had had the ability to do otherwise.
My observations (also from a limited sample) have been the same.
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Old 05-24-2011, 07:51 AM   #54
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My observations (also from a limited sample) have been the same.
DW/I agree. We planned for "quality" over "quantity" as we age ...
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Old 05-24-2011, 05:32 PM   #55
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In my limited sample of older relatives, those who could afford to do so spent as much or more are they aged. They traveled less, but more slowly and luxuriously if they did. They hired help to do chores they used to do themselves. They used in home care when they could and graduated to progressively more expensive levels of assistance as needed. They found generous ways to indulge grandchildren or encourage people to visit them by subsidizing trips. Those with limited means did spend less as they aged, but I don't think they would have chosen to do so if they had had the ability to do otherwise.
It's started with us already at 63 yo. We always considered household chores and light remodeling/maintenance as part time jobs in RE. But we've started to throw in the towel on that and now have a landscaping service for routine yard work and even brought in some help to tear out some overgrown bushes we wanted to replace. We did plant the replacements ourselves, but that was fairly easy. Last winter I paid to have the LR and DR painted, something I would have never done before. We recently hired a guide while on a fishing trip, mainly to do the heavy lifting. It's a treat that we can afford this kind of help as the aches and pains acquired while doing these things ourselves are getting harder to schrug off.

I really think that as long as we can bring in some outside help, we'll be able to stay in the house and continue outdoorsy activities for many years. But that help costs money and I'm glad we planned for it.
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Old 05-24-2011, 08:30 PM   #56
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In my limited sample of older relatives, those who could afford to do so spent as much or more are they aged. They traveled less, but more slowly and luxuriously if they did. They hired help to do chores they used to do themselves. They used in home care when they could and graduated to progressively more expensive levels of assistance as needed. They found generous ways to indulge grandchildren or encourage people to visit them by subsidizing trips. Those with limited means did spend less as they aged, but I don't think they would have chosen to do so if they had had the ability to do otherwise.
And, yet, that hasn't been my experience with my older relatives or DH with his. My parents slowed down a lot. From mid-60s to mid-70s it was a gradual slowing but they drove less, went on fewer trips, and so on. Perhaps it was that they were always frugal but the didn't do anything more luxuriously, except possibly gifts to my son (their first grandchild) when they were both 70.

Unfortunately my dad died in his mid-70s and since then it has just been my mom who is now in her late 80s. Yes, some expenses have gone up. She now pays someone to do her yard which she never did before. But, she drives much less now, gets tired very easily and just isn't interested in trips and such.

There is just a big difference between someone in their 60s and someone in their 80s. We've offered for her to go on vacations with us a number of times and she went once about 10 years ago and has refused every other time. It isn't a financial issue -- we would have brought her with us at our cost -- but she simply says it is too tiring for her. When she visits us or we visit her, she will go out to dinner maybe once because it is tiring to her to go out.

My parents were always very frugal and she still is but really she just doesn't have the desire or need to spend a lot of money at this time.
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Old 05-24-2011, 09:05 PM   #57
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I have seen some academic studies that suggest people do spend less as they age, particularly among the older old (except for end of life medical care). So I think there are plenty of people who agree with you. All I have is my anecdotal evidence, but I'm making my plan based on that. If I'm right, I'll be glad to have the means to do the things I want. If I'm wrong, I'll leave a larger than expected inheritance and potentially could have retired sooner. I can live with that as the cost of additional safety in my plans.
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Old 05-24-2011, 09:08 PM   #58
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I want that deluxe walker! Well, I will want it when I am old enough to use a walker,that is.
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Old 05-24-2011, 09:57 PM   #59
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And, yet, that hasn't been my experience with my older relatives or DH with his. My parents slowed down a lot. From mid-60s to mid-70s it was a gradual slowing but they drove less, went on fewer trips, and so on.
My parents (75 and 70) seem to be doing the opposite. They've always done a reasonable amount of travel but over the last few years they have been doing noticably more than usual.
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Old 05-25-2011, 12:38 AM   #60
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I have seen some academic studies that suggest people do spend less as they age, particularly among the older old (except for end of life medical care). So I think there are plenty of people who agree with you. All I have is my anecdotal evidence, but I'm making my plan based on that. If I'm right, I'll be glad to have the means to do the things I want. If I'm wrong, I'll leave a larger than expected inheritance and potentially could have retired sooner. I can live with that as the cost of additional safety in my plans.

What I am trying to do personally for myself is imagine my life later and get some idea of what I think I will want to do and how I expect to feel. For example, I probably will still want a high end computer when I'm 80 but I don't expect I will want to do a lot of travel.
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