Retirement Expenses - Critique & Abuse Me!

[Midpack]

We are still working and our actual expenses are about $60K/yr. We live in a relatively low cost of living area and own everything outright with no debt. We have a modest 2270 sqft home, hope to downsize eventually. We're in very good health, but my wife had a health event that required hospitalization, so our Med out-of-pocket costs were unusually high. But I have to be prepared to hit deductible limit ($5000) in some years, presumably more often the older we get. And I've left off income/sales taxes - who knows how much more of a bite that will take in the decades ahead...

I read about people here (and elsewhere) who are comfortable in retirement at $24K/yr and $36K/yr and I believe them, but I don't understand how it's done. So here's my actuals for 2009, I'd welcome suggestions on how I get to $36K/yr.

I've left off boat expenses (a no-brainer to reduce costs), but even if I cut grocery expenses in half and eliminate most entertainment expenses (which would probably increase my wine/liq spending), I am still over $50K/yr.

I would welcome casual or comprehensive comments. Don't be bashful, I wouldn't have taken the time to put together this table if I wasn't really asking. Thanks in advance.

Category	Annual	Monthly
Allowance (pocket money DW & DH)	$3259	$272 ($40/wk ea)
Auto Gas	$1937	$161
Auto Insur	$1638	$137
Auto Maint/Repairs	$1847	$154
Boat
DH Clothes/Personal	$857	$71
DH Haircuts	$297	$25
Dog Food/Vet	$732	$61
DW Clothes/Personal	$868	$72
DW Hair/Nails	$382	$32
Entertain Dining	$3815	$318 ($73/wk)
Entertain Internet	$603	$50
Entertain Movies/Plays	$801	$67
Entertain Chicago Parking	$102	$ 9
Entertain Dish TV	$761	$63
Food Grocery	$6443	$537 ($124/wk)
Food Wine/Liq	$641	$53 ($12/wk)
Gifts	$645	$54
Home Insur	$1256	$105
Home Lawncare	$490	$41
Home Misc/Repairs	$707	$59
Home Assoc Fee	$885	$74
Home Prop Taxes	$2265	$189
Med Insur Prem (Hi Ded)	$6540	$545
Med Out-of-Pocket	$6525	$544
Misc Off Supplies	$94	$8
Misc Postage	$215	$18
Util Elec/Gas	$1849	$154
Util Phone	$559	$47
Util Sewer	$780	$65
Util Trash	$309	$26
Util Water	$450	$38
Vacation	$1197	$100
Accrual*	$9965	$830
Grand Total	$59715	$4976

I realize the accrual is large, but we can't expect everything we own to last 30-40 years and many are big ticket items. These things have to be accounted for somehow no?
* DW car (every 5 yrs) $4226,
DH car (every 5 yrs) $3287,
travel (every 2-3 yrs) $1565,
Home Repairs (roof 20 yrs, paint 5 yrs, etc.) $1043,
furniture (once) $435,
PC (every 5 yrs) $391,
bed (every 15 yrs) $348,
appliances (furnace, AC unit, stove, dishwasher, washer, dryer, fridge, etc.) $196,
TV (every 15 yrs) $174.

 

[REWahoo]

Looks like going to one car might be the biggest single reduction to expenses - insurance, maintenance & repairs, and replacement accrual. The Entertain Dining category is also a big number.

 

[ksr]

As you point out, your Accrual category is large. I'm willing to bet that most people who post an annual budget of $24 - 36K have little in a category like that. So you have to make sure you're comparing apples to apples.

Other than that, just a couple of general comments. In terms of general spending, I give myself a monthly "allowance" of $100, and that covers clothing, gifts, haircuts, and hobbies. I rarely spend more than $200/year on clothes, although I probably spent a little more when working for megacorp.

Are there some things you'd be willing to take on yourself to save money? Lawncare, minor home repairs, DW nails, etc? I stumbled upon this article on lawncare a couple of years ago: Organic Lawn Care For the Cheap and Lazy
I spend well under $100/year on the lawn, plus it looks better than it has in years.

The other number is that is really impacting your budget is health insurance/health care. Probably nothing you can do about that. I think a lot of that depends on where you live and your health history.

 

[Charlotte]

You might find that in retirement you will have more time to take on lawn care yourself, or various home repairs yourself rather than paying others. Perhaps having more time for walks/exercise and cooking healthier might take a bite out of your out-of-pocket healthcare expenses? Gas and even auto insurance might go down in retirement, I'd think.

We are running around $50k/year in expenses (no mortgage, no car loans, etc, modest paid-for home in NC, family of 4), that includes out-of-pocket medical, but not the actual health insurance - adding health insurance in I suspect we'd be right at the same with you.

I don't see anything out-of-whack in your numbers... I, too, am amazed at how low some folks manage to go $$-wise, but I also think I would not want to give up the travel, entertainment, good food, pets, etc. to get to those numbers.

Charlotte

 

[fritz]

Your obvious control/reduction areas are all located in the top half of your list (except for the last item, but you already know this).....

 

[golfnut]

We are still working and our actual expenses are about $60K/yr. We live in a relatively low cost of living area and own everything outright with no debt. We have a modest 2270 sqft home, hope to downsize eventually. I read about people here (and elsewhere) who are comfortable in retirement at $24K/yr and $36K/yr and I believe them, but I don't understand how it's done. So here's my actuals for 2009, I'd welcome suggestions on how I get to $36K/yr.

I've left off boat expenses (a no-brainer to reduce costs), but even if I cut grocery expenses in half and eliminate most entertainment expenses (which would probably increase my wine/liq spending), I am still over $50K/yr.

I would welcome casual or comprehensive comments. Don't be bashful, I wouldn't have taken the time to put together this table if I wasn't really asking. Thanks in advance.

Category	Annual	Monthly
Allowance (pocket money DW & DH)	$3259	$272
Auto Gas	$1937	$161
Auto Insur	$1638	$137
Auto Maint/Repairs	$1847	$154
Boat
DH Clothes/Personal	$857	$71
DH Haircuts	$297	$25
Dog Food/Vet	$732	$61
DW Clothes/Personal	$868	$72
DW Hair/Nails	$382	$32
Entertain Dining	$3815	$318
Entertain Internet	$603	$50
Entertain Movies/Plays	$801	$67
Entertain Chicago Parking	$102	$ 9
Entertain Dish TV	$761	$63
Food Grocery	$6443	$537
Food Wine/Liq	$641	$53
Gifts	$645	$54
Home Insur	$1256	$105
Home Lawncare	$490	$41
Home Misc/Repairs	$707	$59
Home Assoc Fee	$885	$74
Home Prop Taxes	$2265	$189
Med Insur Prem (Hi Ded)	$6540	$545
Med Out-of-Pocket	$6525	$544
Misc Off Supplies	$94	$8
Misc Postage	$215	$18
Util Elec/Gas	$1849	$154
Util Phone	$559	$47
Util Sewer	$780	$65
Util Trash	$309	$26
Util Water	$450	$38
Vacation	$1197	$100
Accrual*	$9965	$830
Grand Total	$59715	$4976

I realize the accrual is large, but we can't expect everything we own to last 30-40 years and many are big ticket items.
* occasional travel, replacements (DW car, DH car, roof, housepainting, furnace, A/C unit, dishwasher, washer, dryer, stove, fridge, misc home repairs, PC, TV/DVR, bed, furniture, etc.)

Midpack,

My wife and I are starting to evaluate our expenses as well so I cannot offer you and advices. One comment I have:

- We live in Chicagoland as well - western burbs. I wish our real estate taxes were as low as yours. We're paying 4x your amount. Maybe, we should think about moving.


I'll be monitoring this thread closely for the expert advices you'll surely receive.

Golfnut

 

[LOL!]

Thanks for starting this thread. I don't think I can help you much. We are in the same spending range and cannot seem to get lower for the necessities. I had just used $60K a year in the Fidelity Full View retirement planner.

We still pay a mortgage and lots of charity. My spouse would rather work to pay for charity than to retire and not make charitable contributions.

I do see that you pay too much for haircuts and clothes. Even now when I am not retired, I pay about $90 for shoes (usually athletic), $50 for pants, $200 for shirts and underwear per year. So instead of $857, you could go under $350.

Our internet is half the cost of yours. We do not have cable. We do pay for NetFlix. We pay more for entertainment (e.g., Sweet 16 tickets are $200 each).

Your cost for lawncare is probably OK if you do-it-yourself with annual flowers, fertilizer, gas & repairs for the lawnmower, and replacement costs for things that break.

Our utilities (sans phones) are about $2200 a year and dropping. We no longer pay for water since our water meter is broken and even though we have reported it twice, they have not fixed it.

We spend more eating out, but if our income didn't cover it, this would be the first thing we would cut back on.

I believe folks who do not spend much live in smaller, cheaper houses and do not go out much. Their entertainment is cooking cheaply and the internet.

 

[Tesaje]

Interesting. I just retired and am not spending nearly as much as I had budgeted despite a new bicycle andtricking it out.

I question why you would buy 2 new cars every 5 years. 10 years seems a more reasonable lifespan. I cut my own hair (I hate salons & the blatent insults they levy to shame me into crap I don't want or need) and doing nails is not my thing. Clothing is much less. I live in jeans & tshirts. The few work clothes. I'll keep will give me any dress up that I'll need for years to come at 0 expense. I'm not spending as much for entertainment. No mortgage but my tax is quite a bit higher. My vet bills are a lot higher with geriatric pets.

 

[FIREd]

Including accruals, we have spent an average of $75K/year for the past 6 years (in a fairly low cost of living area). That's with a mortgage (about $10K/year) and charitable contributions (variable). Without those 2 items, we would be close to your spending range.

Your budget seems very reasonable and, reading your table, nothing stands as outrageously high. Of course you could always cut back on discretionary items but you will have to balance spending cuts and quality of life. That's a decision only you can make.

It sounds like your housing costs are on the high side compared to mine, especially property taxes and sewer, but that surely is a reflection of where you live.

DW and I used to live on about $25K-30K/year about 10 years ago and I know that it can be done. We lived in a 2-bedroom condo with very low maintenance costs, very low property taxes, low insurance costs and very low utility costs (at least compared to the mid-size family-detached home we currently own). We drove cheaper, used but paid-for cars (buying new cars was out of the question). We could afford to go to Europe once a year to visit my folks ($1,400 for the 2 of us), but it left us very little money for dining out, home improvements, and other discretionary spending. Entertainment was mostly watching TV (basic cable), surfing the internet and cheap things like hiking, picnicking, and going to the $1 movies. We did a lot of our shopping at Walmart and Target. And we had to watch our grocery bill very carefully (shop with coupons, track sales, etc...) so that it would stay under $200/month. We had no cell phones either. I remember being able to live happily on that amount, but I also remember feeling more financially vulnerable because the smallest [-]emergency[/-] unplanned expense (unexpected car repairs, flying to attend a wedding/funeral, etc...) had such a large impact on our budget. Today, our budget is large enough that we can absorb most emergencies without fretting about it.

 

[Moemg]

...

I read about people here (and elsewhere) who are comfortable in retirement at $24K/yr and $36K/yr and I believe them, but I don't understand how it's done. So here's my actuals for 2009, I'd welcome suggestions on how I get to $36K/yr.

am still over $50K/yr.



/QUOTE]




Most of the people living on 24K to 36K are single and some have SO's that are also living on that amount so as a couple there expenses are higher than yours .If you poll most couples on here I think you will find the $50K to 60K pretty common . If you don't have to live on 36K why even try ?

 

[chinaco]

...

I read about people here (and elsewhere) who are comfortable in retirement at $24K/yr and $36K/yr and I believe them, but I don't understand how it's done. So here's my actuals for 2009, I'd welcome suggestions on how I get to $36K/yr.
...

I assume by accrual, you mean putting money back to replace cars periodically, etc.

Is the 60k gross or after-tax (while you are working?) If it is gross, you will reduce certain taxes when you retire. Plus, there is a cost to working (perhaps parking costs, more driving, etc.)

IMO - Even if you are able to trim some fat you are unlikely to cut half without making changes in lifestyle.

I believe it is good to look for unnecessary spending or cost reductions on your recurring bills (like prop insurance, cable TV, phone, etc). Reducing those expenses for the same services (or acceptable replacement) is like finding money.

Once you have done that, something has to go or change. I would start with the big hitters that have big recurring expenses like house and vehicles.

Regarding car replacement. It looks like you plan to replace vehicles every 5 years. If you go to a 10 year (or longer) replacement cycle and stagger the replacement every 5 years (or a little longer)... You can save money and still have a relatively new car for trips. What we have found is when DW retired, she puts few miles on the car. Plus smaller more fuel efficient cars!

Downsize the house. You could probably get by with a slightly smaller house. That will reduce Prop tax, insurance, certain utility costs, (should reduce the cost of certain types of repairs ... smaller roof = less replacement cost). When you move, buy a house that does not require an association fee!

Shop your property insurance every 3-5 years to look for a lower rate.

Consider budgeting some of your discretionary spending costs (or substituting). Look for deals. One trick that many people use is to eat out at lunch or early bird instead of prime time... you can get the same/similar meal at a lower cost.

Do your own home repairs (when practical).

But, I would only reduce my lifestyle if I had to do so (or wanted to do so in certain areas). My credo is: I worked for it, if I can afford it and want it.... I am going to spend my money and get it. Of course I also adhere to the old adage: Waste not want not.

 

[calmloki]

Retirement Expenses - Critique & Abuse Me!

your dogs ugly and your feet smell.

I'm impressed by the minutia in your budget. A year ago I did a guesstimate/budget based on our current spending + projected and was at $60k - figured taxes would run about another 1/3 between state and fed, so $80k was the target. That figured us spending about $2100/month on a mortgage and car payments. I think I'm fooling myself, normal procedure, and we spend much less.

 

[Nords]

You're asking for help in cutting your budget, but if you really want to do that then you're going to have to cut your lifestyle. Which goal is more valuable to you?

A couple big-picture suggestions:
- After you make the "how many cars" decision then carry the highest deductible you feel comfortable with on your vehicle insurance. If they're over five years old then drop the comprehensive/collision insurance or at least go for a max deductible.
- Stop buying retail appliances. If one of your appliances craps out then buy a replacement through Craigslist, where you'll pay about 20-50% of retail.
- If you're getting five years on a paint job then you can buy better paint and try to stretch it to 10. Even in Hawaii we get 8-10 years with good paint.
- We routinely get over 10 years per car, although admittedly this may be a challenge in Chicago. Are you replacing them on some mechanical criteria or just the calendar?

Otherwise I'd try to figure out why you two are pissing away nearly $300/month on "pocket money". 5% of your budget is a pretty big category for "misc." This isn't a lifestyle critique as much as an observation that if you don't measure or quantify it, then you can't decide if it adds value to your life.

 

[tinlizzy]

To me 60K seems high - never hurts to budget for more than you'll need.

Until this morning I have never really tried to guess what I live on but I gave it a shot.

According to my Social Security statement 1991 - 2009 I earned (all numbers rounded)
$803,000
+50,000 Child support
$853,000
-60,000 SS and medicare pymts
$793,000
-127,000 401k contr (not what I have, only what I've put in)
$666,000
-70,000 Taxable investments (again only what I've put in)
$596,000
-60,000 Mortgage (low home prices 1988, high interest, 1700sq ft Iowa)
$536,000
-75,000 Guess as to Fed/State taxes last 18yrs
$461,000
-36,000 Tuition for 13yrs parochial school, 1 yr college
$425,000

That leaves $23,611/yr in the last 18yrs that I spent on utilities, food, daycare, insurances, property taxes, school lunches, clothes, car for child, etc. etc. etc.

I have only owed 2 cars in 18yrs and they were both 2 yrs old when purchased. We have always had cable/internet and I have purchased new living room furniture, 3 computers and I have had a menagerie of pets to support over the last 18yrs . I've had my house roofed, re-stuccoed and painted. I got a new boiler, kitchen counter tops and fridge, stove, dishwasher, new.

Vacations for me and DS:
10 day Disney World, stayed on property, paid for Grandma to come along
3 day Disney Cruise
7 day Disney Cruise
5 - 7 day Carnival cruises (DS took along a friend on 2, I paid)
NYC, Lion King
NYC, Macy's Day Parade, took Grandma
NYC, Beauty & the Beast, took Grandma and niece
NYC, Jersey Boys, took DS friend Kyle
I paid for all the extra ppl (happily I might add, we invited them) and we stayed in Midtown at normal hotels, they were all 5-6 day trips.
2 one week vacations to Ft. Myers Beach
28 day Europe vacation, Venice, Paris, all over Switzerland (no hostels, apt. in Paris and Venice, B&B's in Switzerland, Eurorail pass) No tours though.
3 weeks in Hong Kong, mainland China and Japan - not a tour, normal 4 & 5 star hotels and ryokan. Again no tours - one bicycle guide in rural China.

We never eat out (except every meal on vacation) and I don't carry cash. I honestly don't think that $24-36k/yr would be hard or restrictive.

 

[Midpack]

Retirement Expenses - Critique & Abuse Me!

your dogs ugly and your feet smell.

The feet maybe, but the dog - no way!

 

[kyounge1956]

...

I read about people here (and elsewhere) who are comfortable in retirement at $24K/yr and $36K/yr and I believe them, but I don't understand how it's done. So here's my actuals for 2009, I'd welcome suggestions on how I get to $36K/yr. (snip)

Most of the people living on 24K to 36K are single and some have SO's that are also living on that amount so as a couple there expenses are higher than yours .If you poll most couples on here I think you will find the $50K to 60K pretty common . If you don't have to live on 36K why even try ?

I'm single and I don't know how they do it! After maxing out my retirement accounts, my spendable income is probably between $30K and $35K, and I'd sure like not to be on quite such a short leash, spending wise. About the only large expense I have now that will go away after retirement is the P & I on my mortgage, and that money plus maybe more will need to go into savings for long-term expenses like car and roof replacements.

 

[fritz]

You're asking for help in cutting your budget, but if you really want to do that then you're going to have to cut your lifestyle. Which goal is more valuable to you?

A couple big-picture suggestions:
- After you make the "how many cars" decision then carry the highest deductible you feel comfortable with on your vehicle insurance. If they're over five years old then drop the comprehensive/collision insurance or at least go for a max deductible.
- Stop buying retail appliances. If one of your appliances craps out then buy a replacement through Craigslist, where you'll pay about 20-50% of retail.
- If you're getting five years on a paint job then you can buy better paint and try to stretch it to 10. Even in Hawaii we get 8-10 years with good paint.
- We routinely get over 10 years per car, although admittedly this may be a challenge in Chicago. Are you replacing them on some mechanical criteria or just the calendar?

Otherwise I'd try to figure out why you two are pissing away nearly $300/month on "pocket money". 5% of your budget is a pretty big category for "misc." This isn't a lifestyle critique as much as an observation that if you don't measure or quantify it, then you can't decide if it adds value to your life.

Already commented above, but would add here that Midpack didn't state they actually "had" to get to $36K (or wanted to). If they do - the upper half of the list obviously has to change.

 

[Midpack]

Already commented above, but would add here that Midpack didn't state they actually "had" to get to $36K (or wanted to). If they do - the upper half of the list obviously has to change.

I don't have to, but would like to reduce outlay. Thought it might be helpful to see how folks at $36K/yr do it.

 

[RedHawk]

Until this morning I have never really tried to guess what I live on but I gave it a shot.

According to my Social Security statement 1991 - 2009 I earned (all numbers rounded)
$803,000

Depending on how much your gross salary is/was, you might have actually more earned more than $803,000 since only a certain amount of your salary is subject to SS (~approximately 106k today but has been indexed for inflation).

 

[mb]

Category	Annual	Monthly
Allowance (pocket money DW & DH)	$3259	$272 ($40/wk ea)
Auto Gas	$1937	$161
Auto Insur	$1638	$137
Auto Maint/Repairs	$1847	$154
Boat
DH Clothes/Personal	$857	$71
DH Haircuts	$297	$25
Dog Food/Vet	$732	$61
DW Clothes/Personal	$868	$72
DW Hair/Nails	$382	$32
Entertain Dining	$3815	$318 ($73/wk)
Entertain Internet	$603	$50
Entertain Movies/Plays	$801	$67
Entertain Chicago Parking	$102	$ 9
Entertain Dish TV	$761	$63
Food Grocery	$6443	$537 ($124/wk)
Food Wine/Liq	$641	$53 ($12/wk)
Gifts	$645	$54
Home Insur	$1256	$105
Home Lawncare	$490	$41
Home Misc/Repairs	$707	$59
Home Assoc Fee	$885	$74
Home Prop Taxes	$2265	$189
Med Insur Prem (Hi Ded)	$6540	$545
Med Out-of-Pocket	$6525	$544
Misc Off Supplies	$94	$8
Misc Postage	$215	$18
Util Elec/Gas	$1849	$154
Util Phone	$559	$47
Util Sewer	$780	$65
Util Trash	$309	$26
Util Water	$450	$38
Vacation	$1197	$100
Accrual*	$9965	$830
Grand Total	$59715	$4976

I realize the accrual is large, but we can't expect everything we own to last 30-40 years and many are big ticket items. These things have to be accounted for somehow no?
* DW car (every 5 yrs) $4226,
DH car (every 5 yrs) $3287,
travel (every 2-3 yrs) $1565,
Home Repairs (roof 20 yrs, paint 5 yrs, etc.) $1043,
furniture (once) $435,
PC (every 5 yrs) $391,
bed (every 15 yrs) $348,
appliances (furnace, AC unit, stove, dishwasher, washer, dryer, fridge, etc.) $196,
TV (every 15 yrs) $174.

I'll comment on items where I think that I spend less than you. I don't spend less than you overall - a bit more acutally. I just spend it on different things. Obviously you have to decide on your own priorities.

- My (DH) clothes. I wear dockers and a dress shirt to work. I have a couple of nice suits that I can wear when needed that should last the rest of my life. I wear shorts and t-shirts the rest of the time. I often get dress shirts as Xmas gifts. T-shirts and shorts last for ever and I get my t-shirts from running races. I can usually get away with maybe 2 new pair of casual pants a year for work and a pair of dress/work shoes every couple of years. I do spend ~$500/year on running shoes though. Running shoes are recycled to use as casual shoes after their running days are over.
- DW clothes. DW is REed now and also dresses in shorts and t-shirts almost 100% of the time and has enough "special occasion" clothes to probably last a life time. I think that DWs clothes spending for the last year was $0.0 except for running shoes and sports apparel. (It helps being casual and living in CA.)
- My haircuts. I used to pay $12/cut and have it cut about every other month. I now cut it myself with a pair of electric clippers. (I'm folically challenged and just cut it short.)
- No cable or satellite TV.
- No alcohol.
- Dining budget is probably a third of yours.
- We do our own yard care. (We do have a couple of weeds ) A couple of years ago I replaced about 75% of the lawn with California native plants which are adapted to our climate and require little or no watering.
- No home association fee.
- Cars. I expect a car to last a minimum of 10 years with few repairs. My current car was purchased in Sept '99 and has 103k miles and I expect it to last at least 5 more years and perhaps 10 more years.

 

[youbet]

I read about people here (and elsewhere) who are comfortable in retirement at $24K/yr and $36K/yr and I believe them, but I don't understand how it's done. So here's my actuals for 2009, I'd welcome suggestions on how I get to $36K/yr.

From my viewpoint here in the Chicago 'burbs, your $60k/yr post tax number looks very realistic. Some categories a little higher than me, some a little lower. Remember, one issue that accounts for many of the folks who post very low annual expense numbers is that they are single. Double what they say to get a estimate of how their number would apply to you. (Yeah, I know some couples who also post very low numbers, but that is another issue.)

I realize the accrual is large, but we can't expect everything we own to last 30-40 years and many are big ticket items.

I like your accrual number and think many folks vastly underestimate this. I RE'd with a 30 yr old home, mid-aged cars and well worn hobby "stuff." A remodeled bathroom, new kayaks, a new camper and some other misc stuff over this first nearly 4 years of FIRE proved to me I was wise to allow for these items in my budgeting. Of course, you could say you'd buy everything new just prior to retirement and have a long time until replacement needs come around, but then your FIRE portfolio would be reduced by a chunk right at the start..... there's no free lunch. So, yes, your accrual schedual looks good and it's the right thing to do.

edit - just went back for another look. Your vacation amount is very low. It's your decision of course, but if I could only spend $1.2k/yr on vacations in retirement, I'd do some work to get some more $$$. Perhaps you and DW are traveling extensively for your jobs now and just want to stay home in retirement, I don't know. But your number sounds really low. It would support one decent domestic trip per year. I do see you have $4k - $5k per 3 yr period accruing for travel. Still, a spartan regular vacation schedule interrupted by a major trip every three years wouldn't be enough for us. We'd do something financially to allow a major trip every year. Again, up to you. It's a trade off between giving up other things and/or working longer and subject to your personal preferences.

 

[plex]

Well, I'm one of those $18k people (actually it is $9k since I'm a single, but I have one roommate with a similar budget). There aren't too many people on the board in the sub $20k range because it is difficult to get much more frugal than that without making unhealthy choices. People in this range almost never have children, or their children are grown up. People in this range won't have a mortgage, or they will be renting (I am renting, and rent is 66% of my budget). People in this range are usually young if they are self-insuring (or they are making the foolish decision to not insure their health for catastrophic occurrences).

That all said, I could probably stay around $9-12k/year in costs for most of my life. Mortgage/rent costs will go down as insuring my health costs would go up, but only because I classify paying down a mortgage as savings.

Anyways, I think people have covered the OPs question pretty well. While there is some fat in there, it mostly revolves around lifestyle choices. I don't have any expensive lifestyle choices (but I do have some fat), but the OP has many. I think it is very very hard to make big lifestyle changes, there needs to be some sort of strong driving force behind it. For me, the driving force is reducing the time I will have to work, once that is gone, I will likely lose most of my motivation, so there is no way I would choose to make negative lifestyle changes after that point. I think this is the same for most people.

Below are what areas you could cut, but by no means that you should cut, as you need to enjoy life:

These have been covered by the others. Very high allowance, you drive a lot (joyriding?), since you drive a lot, you appear to put 30-40K miles on your cars each year (or are not accounting for resale value at all), the wife's clothes budget seems reasonable, but the husband's is extremely high (I spend less and have a white collar work dress code, including dry cleaning), you dine out a lot (this is entertainment mostly), your Internet is high (I have near top of the line speeds+unlimited usage at $25/month), you have a TV when you can watch TV over the Internet now, your grocery bill for each person is 4x higher than mine, you actually have a whole separate liquor budget, gifts are a little high but fine, home insurance is fine, you have a large lawn, home repair budget without the accruals in it is extremely high, you actually have a home association fee, property taxes are about normal, Medical looks right, Postage is a little high, Gas is fine, Phone is high (get a prepaid cell at $10/month), sewer is extremely high, trash is fine, water is mostly fine but you have large yard to water, vacation is fine, additional travel costs are high, accrued home repair is high, furniture is high (use craigslist), PC is exactly right, bed is fine, appliances are fine, you keep buying TV's when this should be covered now by your PC budget.

 

[haha]

Remember, one issue that accounts for many of the folks who post very low annual expense numbers is that they are single. Double what they say to get a estimate of how their number would apply to you. (Yeah, I know some couples who also post very low numbers, but that is another issue.)

There was a pretty good thread here several years ago that brought some government data onto this question. I think typically it is considered that a couple needs 167% of what a single needs to live. Clearly a lot of assumptions will matter. Can the couple get by with one car? In the city, sure, in the suburbs or country likely not. How social are they? Typically singles go out more than couples, but some couples go out a lot, and it costs them about 200% of what a single costs to have a meal out.

Another issue just comes from probability. Extreme frugality and self denial is a rare trait in society, if not on ER.org. What are the chances that both spouses will be as hawkish on expenses as the most frugal one?

Married people will spend some money just to avoid divorce. How many guys in their expensive opera boxes alongside their wives might be happier at home watching basketball?

I have never understood how a group that will not accept that any active money managers can have long time superior records will easily accept essentially unbelievably low living expenses. I remember one guy who claimed to live on about $10,000 per year. Then it came out that his roomate paid a lot of his expenses. Yeah, I guess that would work wouldn't it? Or believe assertions that spending more money does not improve the experience of life. Give me a break! Spending it unwisely is a mistake, but in my market I can guarantee that I would be happier living in an apartment that rents for $2000 than a $1000 apartment.

That said, I have improved my spending since logging on here for the first time. Attention to spending matters, even though it may not be as dramatic as what is sometimes reported. I spend about the same as before, but that means that I have defeated 5+ years of inflation.

Ha

 

[youbet]

Well, I'm one of those $18k people (actually it is $9k since I a single, but I have one roommate with a similar budget). .

One of things you'll have to watch out for as you get older is medical costs. At 62 yo I'm realatively healthy yet spent about $8k in 2009 for my employer subsidized health insurance, deductibles and out of pocket expenses and some relatively minor dental bills. That's just me. DW's medical expenses were on top of those. Nothing unusual. A check-up, a few preventative tests typical for my age, some common prescriptions, etc. It adds up quickly and would eat up your $9k in a hurry.

Of course, if your income were only $9k, you'd likely qualify for a lot of welfare benefits but that's another thing altogether.

 

[walkinwood]

I don't have anything to add to the many great suggestions on how to cut your spending.

$60K, with rather generous accruals, in an urban area is quite reasonable.

My question is - why do you want to cut your spending? You are obviously aware of your spending habits and yet spend $60K.

Are you ready to cut spending drastically to reach ER earlier only to find yourself (or DW) being miserable because of the low budget?

My advice: Continue to track your spending & check each category to make sure that the satisfaction you get matches the outlay. Reduce the ones that don't and see if it affects you adversely. For us, eating out was one such category.