How much you'll really spend in retirement

[NW-Bound]

^^ I gave Fedup a hard time about spending money in Europe not being patriotic. I deleted my post when realizing she said "since getting back from Europe".

 

[Fedup]

^^ I gave Fedup a hard time about spending money in Europe not being patriotic. I deleted my post when realizing she said "since getting back from Europe".

Yeah, I need to spread my money globally too. Done boat load of shopping in Milan too. YOLO.

 

[NW-Bound]

I will save my "patriotism" for when the market tanks, and all you big spenders pull in your horn.

Somebody will have to spend then, and I will step up to the plate. The stores will not be so crowded then. Airplanes will also be empty.

 

[DrRoy]

This article (granted, in a NY based publication) assumes a pretty fat retirement.

$400 a week on groceries
$450 a week on dining/drinking out
$120 a week on entertainment (concerts, sports etc.)
$90 a week on gifts
$120 a month on riding horses
$1,800 per month on car payment/insurance/maintenance
$8,000 annual country club membership
$4,000 per month on housing (including insurance)
$3,000 per month on healthcare

This is in our range for total spending, but not where it is spent. We are sharply lower on all these categories but have $2,000+ /mo on travel and $1,000+ /mo on taxes.

 

[GravitySucks]

I will save my "patriotism" for when the market tanks, and all you big spenders pull in your horn.

Somebody will have to spend then, and I will step up to the plate. The stores will not be so crowded then. Airplanes will also be empty.

Yup.
'08 we got the slightly used Cadillac DW always wanted for dirt cheap.
Hope I have the cajones to buy the toys I'm waiting on now that I'm not working next recession.

 

[RobbieB]

I'm spending more than I made when I was working. And I'm still not spending enough.

Got plenty of spending in reserve -

 

[PointBreeze]

Been retired for 10 months now (retired at 58). DP retired 5 years ago at 70.


Careful analysis led me to believe we'd spend about 67% of our combined working salaries in retirement. So far, I've spent less than I expected, but I think we're going to be replacing some appliances soon, and I've found evidence of carpenter ants, so who knows what the rest of the year holds! Good thing we can afford it all



I have found the whole percentage thing ridiculous. Every single one of us is a different case, as many have already mentioned.

 

[Martha]

From the personality test I just took I apparently am not conscientious. Thus, I don't know how much money I spend in retirement. I do know it is more than before I retired.

 

[deserat]

This article (granted, in a NY based publication) assumes a pretty fat retirement.

$400 a week on groceries
$450 a week on dining/drinking out
$120 a week on entertainment (concerts, sports etc.)
$90 a week on gifts
$120 a month on riding horses
$1,800 per month on car payment/insurance/maintenance
$8,000 annual country club membership
$4,000 per month on housing (including insurance)
$3,000 per month on healthcare

I have a subscription to the WSJ and saw this article as well - $450/week on dining/drinking out - YIKES!!!! I don't think I spend more than $450/mo on groceries - that's some serious eating out dough. $90/wk on gifts? I'd like to be their friend....another poster made a comment on the horses...$3k on healthcare might be valid, depending on your insurance, deductibles, co-pays and your actual health condition. That car payment/insuranc with my back of envelope calculations depending on the amount of time a car loan is (4-6 years?) could be for a car that was $75K-$125K.....hmmmm, that's a bit rich for my taste, although if I had the dough, I'd be paying cash for a 1-2 yr old used Porsche just for grins *after* I had a more reliable, roomy ride......

 

[daylatedollarshort]

The average annual expenditures for households 65+ in 2017, according to the Consumer Expenditure Tables, was $49.5K.

 

[RobbieB]

Yeah, averages.

I spent 45 grand on a car a month ago and I spent three grand last week on my step daughters UCLA orientation. We had a good time at Disneyland and Universal while she was oriented.

Four grand this week on getting the popcorn ceilings removed, re-textured and repainted.

Blow That Dough!

 

[Retired Expat]

Somewhat interesting. I am not a big fan of rules of thumb. To me, it's akin to when to retire; when to pull SSI. All very personal. But the article does suggest to analyze spending plans in detail. That's good advice that stands the test of time.

Prior to retirement, we lived modestly, but comfortably, on less than 50% of my gross pay. In retirement, we're spending more than that. However, it is still well below 70% of working gross income.

Got my hair cut today. Almost $40 all in (beverage, tip, etc). My barbershop is located inside a pub and doesn't hire kids. Nothing against kids, but, like doctors and pilots, I like my barber to have lots of experience.

YMMV!

See that is why I retired to South America. A haircut costs $6 or 8 if you want a wash too. Although I here the dollar is up so probably $6... but obviously there are lots of things that cost more.

One of the considerations to make in retirement however is you have more time to find better values for your money. Spend more time managing investments and expenses, take advantage of mileage bonuses on credit cards and earn that free travel... etc. There are many simple things to do to save money that I never had time for before... make your own Bbq sauce or rubs, grow more veggies, shop in bulk and repackage. Helps if you have a vac saver.

It is also healthier living.. use store bought stock? Now we save the veggie trimmings and leftover chicken bones in the freezer and periodically make our own stock, shop less, less packaging and you know what you are eating....plus it seems like a money saver!

 

[NW-Bound]

The average annual expenditures for households 65+ in 2017, according to the Consumer Expenditure Tables, was $49.5K.

$50K for an elderly couple over 65 is not unreasonable, when you have no mortgage nor car payments, all children grown and needing no support, you are old and have enough of travel, can't eat nor drink that much, do not care for much, etc... And if your body aches, all you want is for the pain to subside, and yet no money can buy you that.

I am not there yet, but can imagine myself getting there. Heck, I still have a couple of years to get to 65.

 

[kgtest]

Yeah, averages.

I spent 45 grand on a car a month ago and I spent three grand last week on my step daughters UCLA orientation. We had a good time at Disneyland and Universal while she was oriented.

Four grand this week on getting the popcorn ceilings removed, re-textured and repainted.

Blow That Dough!

Love it! You are one of my few hero's lol. Do you have those fancy rounded edge corners on your walls? You need to do that to the place it would look nice with the new ceilings!

As for averages. I have my spending (prior 5 and next 13years to 2031 ER) at about 111% of my current spend working yrs (over next 18 years).

But in RobbieB fashion, the next 18 years, from 69 to 87 (if I'm so lucky) spend will increase 333% from my next 18 years of working essentially doubling quality of life every 6 years over a nice glide path.

Will I need to live on a quarter million/yr in 36 years? Hard tellin but I optimize out to 90 with a nicely funded trust for the heirs. Could be 1 million, could be 7 depending on where the world takes me.

RE is also some component that with all the equity beyond principle residence, would likely prop any downturn of that fourth leg up if needed.

 

[pjigar]

The article said 70-130% of pre-retirement salary - not spending. IMO a big difference for most of us here as savings was a big part of our salary. For me, I am living in retirement at about 50% of my average salary. (average of the last 5 years before RE)

I think they may have forgot to adjust for inflation! I NOW pay income tax which is about 120% of my salary 20 years ago! Nominal numbers a funny.

 

[scrabbler1]

This article (granted, in a NY based publication) assumes a pretty fat retirement.

$400 a week on groceries
$450 a week on dining/drinking out
$120 a week on entertainment (concerts, sports etc.)
$90 a week on gifts
$120 a month on riding horses
$1,800 per month on car payment/insurance/maintenance
$8,000 annual country club membership
$4,000 per month on housing (including insurance)
$3,000 per month on healthcare

Part of their analysis was based on an assumption you would back fill the 8-10 hours a day you were no longer working with expensive hobbies and trips to the spa. I have actually found the opposite. Now I have time to pursue the many free entertainment options in our area that I was just to tired to attend before. I have time to cook, whereas we ate out a lot when we were both working 60 hour weeks. I have time to go to the library instead of ordering a book on Amazon. In a couple of years, we plan to go down to one car. I would say the only increases are in travel expenses and electricity - because I'm now home during the day.

Fat? To me that's morbidly obese! The total is about 5 years of spending for me. And I didn't see income taxes in the list.

 

[henny-penny]

I will probably spend 3 times as much as I spend now when my partner is gone. With 20 years difference I will have one spending level when he is alive and completely different spending level when I have to pay everything myself. 2 persons living under one roof is much cheaper per person than living alone.

 

[Dtail]

Fat? To me that's morbidly obese! The total is about 5 years of spending for me. And I didn't see income taxes in the list.

~165k yearly spending in the example.
I believe there was a forum poll with ~20% of the results being >120k yearly.

 

[GravitySucks]

I will probably spend 3 times as much as I spend now when my partner is gone. With 20 years difference I will have one spending level when he is alive and completely different spending level when I have to pay everything myself. 2 persons living under one roof is much cheaper per person than living alone.

I didn't increase that much, but taxes go way up when you're a single and the chores they take on as theirs over the years still need doing. For instance i would need a maid service twice a week to keep the place as clean as when DW was healthy, on top of what I do. It's probably slightly less than what two would pay to live overall. Higher taxes, lower health care and food. Utilities, insurance, pet supplies all stay the same.

 

[braumeister]

My spending has been all over the map. Here's a chart of the last 11 years:



I don't worry about it; it is what it is.

 

[PointBreeze]

I will probably spend 3 times as much as I spend now when my partner is gone. With 20 years difference I will have one spending level when he is alive and completely different spending level when I have to pay everything myself. 2 persons living under one roof is much cheaper per person than living alone.

My DP is 15 years older than me, and I anticipate very little reduction in household expenses when she dies, but unfortunately will lose her SocSec and 2/3 of her $$ (her children's inheritance).



Made it tricky to plan. I appreciate the fact that some of the free online retirement planners gave me ways to model for that.

 

[tdv2]

I'll spend what we've budgeted or less in retirement. If I spent more I'd run out of money.

+1

 

[Dtail]

+1

+2 that's the plan.

 

[Moemg]

$50K for an elderly couple over 65 is not unreasonable, when you have no mortgage nor car payments, all children grown and needing no support, you are old and have enough of travel, can't eat nor drink that much, do not care for much, etc... And if your body aches, all you want is for the pain to subside, and yet no money can buy you that.

I am not there yet, but can imagine myself getting there. Heck, I still have a couple of years to get to 65.

We are an elderly couple at 71 &72 .We may have grown children but we have eight grandchildren that require lots of pampering . We still eat out two times a week and most of our elderly friends eat out a lot more than that . We still travel and are willing to pay more to make travel easier .We live near a large community of older people and they are all still spending and enjoying their life until something stops them.

 

[braumeister]

an elderly couple over 65

Thanks for the good laugh. These days, 65 is a long way from "elderly" for most of us.