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Old 05-26-2014, 01:54 PM   #21
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I've never had a budget but I have a rough idea how much I've spent in total every year. Future living expenses in retirement I can't predict, I'm pretty sure they're going up but hard to say by how much. For me work-related expenses are negative mainly because it very effectively occupies my time and keeps me away from shopping malls and expensive hobbies. So adding up the cost of a nicer apartment to spend the day in and entertainment to fill the hours, my rough guess is somewhere between double and triple my spend while working. In later years entertainment will likely wind down but healthcare will increase no doubt, so I imagine the total outlay stays the same.
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Old 05-26-2014, 03:02 PM   #22
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It may take a bit of soul searching to think of what you want to do in retirement. I also thought that I might be spending more money in retirement because I would have more time. But it turned out that other than more travel, there were no other extra expenses.

My hobbies are low-cost, and speaking of travel, one can only do so much of it. Too much travel, and it becomes a chore, like work, for me.
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Old 05-26-2014, 03:07 PM   #23
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It may take a bit of soul searching to think of what you want to do in retirement. I also thought that I might be spending more money in retirement because I would have more time. But it turned out that other than more travel, there were no other extra expenses.

My hobbies are low-cost, and speaking of travel, one can only do so much of it. Too much travel, and it becomes a chore, like work, for me.
I'm only 9 months in, but I'm figuring out the same things. My main pastimes are free or pretty close to it (reading, games, walking/hiking, gardening/yard work, tv/movies, writing, tinkering with electronics/computers, learning, etc).

For travel, we are somewhat constrained by the kids' school schedule for the next 16 years (barring homeschooling them). At the most, we could do 11 weeks in the summer plus a few shorter trips. I like being at home and doing fun stuff around town too, so I doubt we'll spend the next 16 summers being on the road the whole time.
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Old 05-26-2014, 03:17 PM   #24
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Most hobbies take a lot more time than money. It's because that they demand that one has the patience to develop skills and experience. Take for example photography that is a hobby most talked about on this forum. Putting aside the humongous tele lens that costs a 5-figure sum, it seems to me that most people can have a lot of fun shooting with equipment that cost less than $5K total. That's not bad at all.

Recently, I spent a month or so to refurbish my vintage speakers, and in the process learned a bit more about acoustics that I did not have the time to explore, though I always wanted to since teenage years. This was reported in another thread. The cost was minuscule.
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Old 05-26-2014, 03:17 PM   #25
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It may take a bit of soul searching to think of what you want to do in retirement. I also thought that I might be spending more money in retirement because I would have more time. But it turned out that other than more travel, there were no other extra expenses.

My hobbies are low-cost, and speaking of travel, one can only do so much of it. Too much travel, and it becomes a chore, like work, for me.

I'm like you, NW. 5-6 days a trip, max. Destination air only travel, 3-5 times a year...Eager to plan and leave, just as eager to come home by the 5th day. Any more often than that and I start to dread all the work that goes into getting there and coming back.


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Old 05-26-2014, 03:23 PM   #26
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I do like to go for longer periods, and already did. I am talking 1 or 2-month trips in the RV, and to do that 2 times a year. A 3-month trip through Alaska may still happen, but perhaps for next summer.

But living out of a suitcase and moving from hotels to hotels, well, I can only do that for 3 weeks max, and even while going to exotic places. RV travel is different; it does feel like home.
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Old 05-26-2014, 03:28 PM   #27
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I do like to go for longer periods, and already did. I am talking 1 or 2-month trips in the RV, and to do that 2 times a year. A 3-month trip through Alaska may still happen, but perhaps for next summer.

But living out of a suitcase and moving from hotels to hotels, well, I can only do that for 3 weeks max, and even while going to exotic places. RV travel is different; it does feel like home.

I have never experienced an RV trip so that may certainly be more enjoyable over a longer length of time. Like you mentioned it is the hotel-suitcase issue that gets me ready to wrap up the trip after a period of time.


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Old 05-27-2014, 08:53 AM   #28
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I was just wondering when you are still working, how do you project future expenses?

I was calculating and we spend about $2500/month living and $2500/month mortgage (PITI+HOA). So $5k/month, up to $65k/year. But whenever people talk about retirement and expenses I picture myself not having a mortgage and needing maybe $2500-3k. But that means we need substantially less nest egg to make do.

But that's why I struggle so much. I don't think I'll need an extra $2500/month in retirement after the mortgage is done.

How do you look at your monthly budget? And how to you calculate future expenses? Especially for early retirement.
We are planning to maintain our standard lof living, adding for increased travel and medical costs. So I plan on our current household budget, and I plug in an extra $1000/month for travel, and the same for medical. I doubt we will use that much for travel, or for medical early on, but medical could increase as we age. As ome others have said, I don;t want to plan on cutting back in retirement, though things can always happen to change your plans.
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Old 05-27-2014, 10:16 AM   #29
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I was just wondering when you are still working, how do you project future expenses?

I was calculating and we spend about $2500/month living and $2500/month mortgage (PITI+HOA). So $5k/month, up to $65k/year. But whenever people talk about retirement and expenses I picture myself not having a mortgage and needing maybe $2500-3k. But that means we need substantially less nest egg to make do.

But that's why I struggle so much. I don't think I'll need an extra $2500/month in retirement after the mortgage is done.

How do you look at your monthly budget? And how to you calculate future expenses? Especially for early retirement.
You have two very young children and are looking at a very early retirement, from your previous posts. Look at Fuego's posts for the person closest to your situation (his spouse is still working for a few more years), who had been planning carefully and working toward early retirement for a long time.

I can't imagine forecasting for expenses for fifty years in the future, especially with young children and the uncertainty of what they might need. Good luck!
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Old 05-27-2014, 10:20 AM   #30
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Aren't we all going to speak Chinese in 50 years? Or is it Spanish? Darn, I guess I am old enough to not worry about that. I will be dead.
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Old 05-27-2014, 10:24 AM   #31
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Aren't we all going to speak Chinese in 50 years? Or is it Spanish? Darn, I guess I am old enough to not worry about that. I will be dead.
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Old 05-27-2014, 02:46 PM   #32
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I am about 12 years from retirement, and I have a spreadsheet that tracks annual expenses, roughly. I have specific line items for things that will change in retirement - the mortgage(s), health insurance, savings, taxes, travel. The rest I just lump into "living expenses".

In retirement, we will likely move from the high cost DC area. In the process, we will sell our primary residence, my DH's condo, and our mountain cabin. The money from all of those will cover a new residence in a lower cost area. So, no mortgage cost in retirement.

Then, we eliminate the savings line (as we won't be saving in retirement), adjust the taxes (lower) and healthcare (higher), and add a whole boatload of money for travel in the first 10 years (and then decreasing after that).

Based on those adjustments, our projected expenses in our first year of retirement end up being about 55% of the last working year's expenses. And, since I have blown out the travel budget, there is a lot of discretionary room in there for cutting, if needed.
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Old 05-27-2014, 10:52 PM   #33
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I can't imagine forecasting for expenses for fifty years in the future, especially with young children and the uncertainty of what they might need. Good luck!
The good thing about budgeting for young children is that they eventually drop off the payroll. Typically within 18-22 years, sometimes more.

I figure our expenses might be lumpy in the middle and later years of their childhood, but we've budgeted for kid expenses forever (knowing they will end in the next 10-20 years realistically).

Between DW and I, we can get by very cheap if necessary once the kids are gone. Not that the kids cost that much these days anyway.
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Old 05-28-2014, 05:24 AM   #34
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I've tracked annual expenses with Quicken or equivalent for nearly 3 decades now. I planned on spending as much per year in ER as I did while working, but I am under performing by 25%. Could be something to do with embracing minimalisation and no longer being interested in buying crap I don't need, let alone browse shops for the stuff. Plenty of buffer now, so all is good!
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Old 05-28-2014, 09:45 AM   #35
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In my planning, I take my Quicken 5 year average expenses, not counting savings. I put in an allocation for new car every six years and home repairs. I add in healthcare costs, additional travel, more entertainment, and adjust for potentially moving to a new State (no income tax but higher car/home insurance rates) Once I get a bottom line I determine how much income tax I'll pay on drawing this amount from my IRA to get to a final yearly cost of $97,000 or $8,000 a month.

Our Pre-retirement budget shows us spending $5,400 a month, including income tax, (not including health ins as it is currently covered via employer) I am in awe at how low some of you get your expenses.
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