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Old 08-10-2009, 07:43 PM   #41
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Ding, Ding, Ding. Folks we have a winner. If you know how much you need, then extra isn't necessary
Are you guys retired? It doesn't work that way!

Audrey
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Old 08-10-2009, 10:54 PM   #42
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Are you guys retired? It doesn't work that way!

Audrey
Ding Ding Ding............
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Old 08-10-2009, 11:06 PM   #43
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Are you guys retired? It doesn't work that way!

Audrey
Even Cutthroat was being pretty creative when he said these things. He is quite well off, and his somewhat younger wife has a good professional job and last I heard has no intention of quitting anytime soon.

When people report that for a couple the necessities budget is $20,000 I really don't know how to relate.

I don't know any two people who live on twice that. I'm single, live a very simple life, and still am close to twice that amount, without any sinking fund for car replacement.

Ha
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Old 08-11-2009, 06:50 AM   #44
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...When people report that for a couple the necessities budget is $20,000 I really don't know how to relate.

I don't know any two people who live on twice that. I'm single, live a very simple life, and still am close to twice that amount, without any sinking fund for car replacement.

Ha
I just did a back of the envelope calculation using the "our" money account data. The total yearly amount we contribute to cover all necessities plus property taxes comes up to about $37K. No mortgage.
There is some built in extra coverage for gasoline prices returning to $4/gallon in this annual figure.
Better safe than sorry...
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Old 08-11-2009, 07:25 AM   #45
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I've been tracking our spending for the last few years and we go through $65k-$70k per year. This includes $11k for health insurance, no mortgage or debt. So I have tracked what we actually spend to a budget. But I also believe that we could get by on $30,000 if we had to, that is our bare bones budget. But that is no country club, one car, no vacation, just sit on the deck and watch the grass grow. Hopefully we wont have to test that plan out.

Our spending has dropped about $20k per year since I retired. But that is mainly from my kids getting out of school and being on their own.
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Old 08-11-2009, 01:30 PM   #46
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I just started all this ER business in April, and I started tracking expenses and setting up an itemized budget and how we vary from that budget each month.

Our budget includes a fairly decent amount of discretionary expenses like monthly travel, dining out, entertainment, annual vacations (budgeted monthly), lawn car and maid expenses if we need it so I don't really call it bare bones.

I am keeping the SWR as far under 3% as possible to leave us plenty of wiggle room since we are fairly young (44) and I'm sure we will have unforseen expenses (or portfolio drops) hit us over the next 50 years. For instance, when our portfolio dropped quite a bit early this year we shot over 3% for a few months. Currently the portfolio has recovered somewhat and now we have another 3.5K per month in theoretical wiggle room before we hit 3.5% SWR limit where alarm bells start going off. I'm not spending up to that 3.5%, but just letting it ride for a rainy day.

Oh yeah, wife is working full time now (she wanted to) and contributes $1200 the monthly budget (the rest she spends on, um, shoes I think), so if she decides to quit that reduces our wiggle room by $1200.
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Old 08-11-2009, 02:40 PM   #47
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I've been tracking our spending for the last few years and we go through $65k-$70k per year. This includes $11k for health insurance, no mortgage or debt. So I have tracked what we actually spend to a budget. But I also believe that we could get by on $30,000 if we had to, that is our bare bones budget. But that is no country club, one car, no vacation, just sit on the deck and watch the grass grow. Hopefully we wont have to test that plan out...
We have been retired for 6+ years. Like dm, we "go through" about $70k/yr including all taxes, utilities, health and LTC Ins, etc. We have no mortgage, car payments, or debt. I estimate that it would be difficult, but not impossible, to cut that $70k to $50-55K but it would be a major stretch to go much lower because of the fixed nature of much of the budget items.

I also got curious about what would happen to our spending budget if one of us passed away. I looked at the major budget components; basically, our HC, LTC, and Medicare Pt B Ins would reduce about $5k/yr, one less car would save about $2-3k/yr, groceries would decrease by $3-4k/yr, and out-of-pocket medical costs would decrease by 1k/yr. I searched through the rest of the budget and couldn't pick up any other >$1k items. Therefore, I estimate that if either of us were to pass away, our spending budget would decrease by $13-15k/yr without any other changes in lifestyle.

JohnP
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Old 08-11-2009, 02:46 PM   #48
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Since you think it's probable that DH won't make it until you turn 60, why don't you analyze whether you alone will have enough at 60 to live comfortably without him and his retirement income which will expire when he does? That seems to be the real issue. Do you alone have enough income to RE given the fact that you are not entitled to any of his retirement income once he passes. I know you mentioned you'll have your own retirement income at 60, but will that be significant years from now when you start collecting it?

I understand why your DH is worried. He doesn't like the idea that if he dies sooner rather than later, you might struggle financially. He no doubt also understands that if he lives a good long time, then your continued working was not required and precious RE time and time that could have been spent together was wasted accumulating funds not required. But since no one knows the future, the answers to these dilemmas as not obvious.

Your frustration is that you are more willing to assume the risk of his early death and your possible financial hardship than he is. Try to make him understand that, for you, the risk of spending time needslessly working and not with him is greater than the risk of financial hardship should his retirement checks stop sooner rather than later.

In your DH's place, I'd feel exactly as he does. He's not worried about you two surviving financially as a couple. He's worried about you surviving alone should his cancer take him (and his retirement checks) out of your life. Do the math with the unpleasant assumption that DH survives only a short time and, hopefully, show him that even in that gloomy scenario, you'd be fine financially. That's what he needs to see IMO. At least that's what I'd need to see.

I hope he lives to be 114.
You hit the nail square on the head! We talked and this is exactly how he feels...but he still is worried about unexpected expenses, ie. a new roof or other big ticket item. He is used to us just writing a check and not worrying about it. But his main concern is me if he isn't here. What I told him was in that case, the worst case scenario is that I have to go back to work...and that's what I'm doing now...so it can't be any worse than it is now. I think that made sense to him. We're going to try the ER experiment beginning Sept. 1st. My checks will go straight to savings and we'll live off of his retirement income. Six months of this should give us a pretty good idea if it's doable.

Ps. I too hope he lives to be 114!
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Old 08-11-2009, 04:06 PM   #49
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Ding, Ding, Ding. Folks we have a winner. If you know how much you need, then extra isn't necessary
Close, but not quite my point. My point was that I wouldn't dream of advising someone they need $X extra without knowing the details of their budget. If they didn't do any allocation for say, home maintenance or vacations or replacing cars down the line, I'd say they better have a lot of padding in their budget. If they've thought through things well, they still need a little padding.
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