Retirement Expenses - Steady or Declining?

[kgtest]

Hard to say...
50-60 we will begin ER and face 3 kids completing college and expensive pre-medicaid insurance
60-70 likely we face some Weddings, Down payment help with kids and likely grandkids
70-80 We might finally have some time to travel, but with FULL SS, Pension, and likely inheritance we will have more than we need.

The future is bright.

 

[Dtail]

Hard to say...
50-60 we will begin ER and face 3 kids completing college and expensive pre-medicaid insurance
60-70 likely we face some Weddings, Down payment help with kids and likely grandkids
70-80 We might finally have some time to travel, but with FULL SS, Pension, and likely inheritance we will have more than we need.

The future is bright.

Make sure you don't wait until 70 y.o. to travel.

 

[ShokWaveRider]

I retired in 2001.

It seems to me that our overall Cost-of-Living has remained about the same.

I would agree for the most part, our personal inflation rate based on the last 10 years of records is basically flat.

 

[kcowan]

We started out cautious and spent less than working while doing home swaps for travel. Then the markets started to cooperate and we decided to buy a snowbird condo. After that our draw dropped while lifestyle increased. Our purchase was in 2007 so we were drawing down funds. When we got our heads up, it was 2009 and the equities were doing well again. We continued to rent our NOTB place and travel to Europe.

Last year, we decided to upgrade our snowbird condo (double) while stopping the renting of our NOTB condo (too much airbnb competition). We are also funding 3 GCs in uni. So it is a bit of a squeeze and we are hopeful that the market swoon will be delayed another year or so. Uni will drop to one next year until the other two grow up.

It has been 17 years and we are pretty confident we will survive the rest of the journey. Two of our three cars are due for an upgrade but there is no hurry.

We are execting an equity swoon of 20%. We are 44% equity.

 

[HMMY]

Only 1-1/2 years into retirement, but my budget calls for level spending. It's a very big picture budget that doesn't take into account inflation, since I'm assuming my assets keep up with inflation. It doesn't include social security, which will likely be used to pay taxes on the RMDs.

I am expecting my expenses to drop dramatically when the kids (currently teenagers) become independent and the parents pass (currently in their 80s). We travel more than I want and there's nothing I want to buy. I already bought my free time, which was the most expensive purchase ever. Truth be told, I have no idea how I'd spend the excess cash currently used to support the kids and parents. Gifting or medical?

 

[rk911]

Not counting increases for inflation, are you planning for a steady annual expense throughout retirement (i.e. 45K per year forever), or a declining expense model (i.e. 50K during the first ten Go-Go years, 45K during the second ten Slow-Go years, 40K during the remaining No-Go years)?

If you're already retired, have your expenses gone up, remained steady, or declined over time?

been retired 14-yrs and while i do keep track it's not to the penny. i'd say including inflation our income/expense ratio is about the same year to year. we have a positive cash flow each month living day to day from pensions and SS only.

 

[Rambler]

I retired at the end of 2012. Expenses have been higher than projected, particularly the past 2 years as we’ve gone thru a move to a new state, to a home that was “almost complete” but needed a few light fixtures, some furniture, ceiling fans, throw rugs, and window treatment$ (not a typo...). We also had a rebound child and her husband and child. We’re all set now though, in a cheaper cost of living and lower tax area. Expect expenses to decline significantly in 2020.

 

[morriss003]

I have only been retired for 3.5 years but my expenses went down from what we thought he would need. We did pad your expenses for a plan for the long haul in retirement but it is considerable less.

Except for a paid off mortgage our expenses are about the same, but our money is now spent in ways different than before retirement.

 

[PointBreeze]

My plan assumes a steady amount (adjusted for inflation). However, my expectation is more of a curved assumption. More per year in the beginning, less in the middle and then a lot in the final years.

+1

 

[nancyfrank232]

Not counting increases for inflation, are you planning for a steady annual expense throughout retirement (i.e. 45K per year forever), or a declining expense model (i.e. 50K during the first ten Go-Go years, 45K during the second ten Slow-Go years, 40K during the remaining No-Go years)?

If you're already retired, have your expenses gone up, remained steady, or declined over time?

We haven’t experienced much increase in expenses, but that should be expected as inflation has been tame for a decade

 

[Navigator]

I made all types of plans and projections before retiring, but the main thing they were good for was convincing me we could afford to retire. Our core expenses have remained the same, but overall spending has increased due to travel, health care, giving money to the kids, etc. We could cut way back on spending if we needed to, but enjoy what we spend our money on.

I saw a national survey a few years ago that said two thirds of people decreased spending after retiring and 16% increase spending. Those that increase spending mainly do so for travel.

 

[corn18]

I just looked at our retirement budget and decided we could afford to plan on some reductions in certain categories. The left column is our current budget that seems to suit us fine @ age 53. We are going to use that from 55-69. The second column is where I think we could plan some cuts that make sense to me. Right now I just keep everything the same from 55-dead and will probably keep it that way in the model, but if the crap hit the fan, I think we could certainly drop to the lower amount (even at age 55) and still lead a very happy life. Now to convince my wife.

The travel/blow that dough budget is not in this. That is another $25k/year.

 

[Dtail]

I just looked at our retirement budget and decided we could afford to plan on some reductions in certain categories. The left column is our current budget that seems to suit us fine @ age 53. We are going to use that from 55-69. The second column is where I think we could plan some cuts that make sense to me. Right now I just keep everything the same from 55-dead and will probably keep it that way in the model, but if the crap hit the fan, I think we could certainly drop to the lower amount (even at age 55) and still lead a very happy life. Now to convince my wife.

The travel/blow that dough budget is not in this. That is another $25k/year.

The kids are not off your medical/cell phone plans until you hit 70?

 

[corn18]

The kids are not off your medical/cell phone plans until you hit 70?

That's a good point. They should be off the dole by 55. Will make that change now.

 

[W2R]

I just looked at our retirement budget and decided we could afford to plan on some reductions in certain categories. The left column is our current budget that seems to suit us fine @ age 53. We are going to use that from 55-69. The second column is where I think we could plan some cuts that make sense to me. Right now I just keep everything the same from 55-dead and will probably keep it that way in the model, but if the crap hit the fan, I think we could certainly drop to the lower amount (even at age 55) and still lead a very happy life. Now to convince my wife.

The travel/blow that dough budget is not in this. That is another $25k/year.

To me, such a reduction in spending sounds like pie in the sky, but then of course everyone's lifestyle and budget are different. I am 71, and I have noticed that my average annual spending last year and this year (since I turned 70), has been $53 MORE than my average annual spending from 2012-2017.

That said, some of what I understand are often the biggest factors contributing to a reduction in spending, do not apply for me:

(1) TRAVEL: Often people say there is a reduction in spending with age due to reduction in travel, but I never had any desire to travel after retirement at age 61. So, I am not seeing that reduction.

(2) DEPENDENTS: Also, I have had no dependents since I retired either, so dependents "dropping off the payroll" has not been a factor for me.

(3) INFLATION: And finally, my numbers don't take inflation into account so that would affect the real value of the money that I spent.

Also, I don't yet know what my annual spending will be from ages 71-116.

 

[gwraigty]

Unless you need work clothes or desire to impress others with your style, I don't see a need to spend hundreds of dollars on clothing each and every month. They don't wear out that fast. What's included in Health/Beauty? Super expensive makeup? Monthly spa treatments? Another good place for cutting. Cell phone costs are higher than probably needed. Don't eat out so much. Cook more. I could probably pick apart more categories, but I'll just stop there.

 

[corn18]

Unless you need work clothes or desire to impress others with your style, I don't see a need to spend hundreds of dollars on clothing each and every month. They don't wear out that fast. What's included in Health/Beauty? Super expensive makeup? Monthly spa treatments? Another good place for cutting. Cell phone costs are higher than probably needed. Don't eat out so much. Cook more. I could probably pick apart more categories, but I'll just stop there.

Please, keep picking. My feeling is that we could start with the reduced budget @ 55 and have a lot more money for travel. We love to travel.

 

[daylatedollarshort]

We probably spend a few hundred on clothes between us a year. Costco has jeans and tops on sale or markdown for $5 - $10. It is part of my simple living plan to get as much as we can from there for clothes and avoid fast fashion. People don't really dress up in our area so black jeans, a knit top and sweater jacket fits in any place from the symphony to a dive bar here.

I made our retirement budget flat but in reality our mortgage will be paid off, we'll likely downsize and most years our basic living expenses go down. I'm really into urban homesteading and sustainable living, so most months I have a few projects that trim the budget a bit more and over time they all really add up. Plus I keep finding different deals and events I didn't know about the year before, like we've found out a local college has amazing plays with senior discount pricing so now we see all their productions every year for some cheap date nights out.

 

[NW-Bound]

Retirement Expenses - Steady or Declining?

I think mine are steadily declining.

But it may be too early to tell, at only 7 years into retirement.

 

[Teacher Terry]

I love the comments next to beauty). Our expenses went down in retirement. My beauty category is 40/month. We probably only spend a couple hundred a year on clothes.

 

[Katsmeow]

DH retired 9 years ago and I semi-retired. I'm now fully retired. DH is 71 and I am 65. Expenses have changed radically over the years. Part of it was that we still had 2 kids in school back then and now we don't. We also moved twice over that period of time and during the years of the moves we had a lot of extra spending. Leaving aside those unusual expenses the categories that have really changed over the years:

1. Healthcare - Moving to Medicare for both of us has resulted in significantly lower spending on healthcare. This has been the biggest reduction.

2. Utilities, house maintenance - House we are in now is significantly smaller than what we had when DH retired (about half the size).

3. Auto Fuel - went down a lot when we no longer had long commutes to work. The house we lived in until last year was about 20 minutes from closest stores though so still did a fair amount of driving. Now we are very close to grocery stores so our fuel cost has gone down radically. We have 2 cars and we usually use the newer car (bought one year ago) but still usually only buy gas once or twice a month. The other car has had its gas tank filled twice this entire year. Used to we would fill each car weekly (when we were commuting) and a couple of times a month for each car after until we moved to current location.

I would say food spending has been pretty stable once the kids were out of our house. Of course, it was more when they were there.

My clothing costs have gone down a from when I had to wear nice office clothes. Still they have averaged about $100 a month for me and $50 a month for DH.

Fitness costs have gone down as last year we had a discount from our Medicare Supplement for a gym. This next year the benefit is better and we won't have a cost for this. Of course could change in future.

Right now, DH is doing the yard work and the pool maintenance and most of the house cleaning (I have allergies so I can pick up but can't dust/vacuum). There will likely come a time when we will hire someone for those things.

Pet costs have come down. We had 5 dogs and some cats but old age (the dogs') has reduced the dogs to 1.

We don't replace computers as often as we used to. Mostly because computer needs change more slowly now.

 

[Lewis Clark]

I just looked at our retirement budget and decided we could afford to plan on some reductions in certain categories.

You've posted a budget, but we can't know exactly what you are spending your money on within each category.

If you aren't already tracking what you spend I recommend you start. Track every penny. In detail. For example, list each clothing item individually instead of lumping it all under "clothes". That's the only way to know exactly where the money is going now. Probably need to do this for at least one full year to catch annual expenses. Then make an allowance for lumpy expenses that occur less often than once a year.

I suspect you will be surprised at where a lot of the money is flowing. Once you are looking at these results, it will be easier (but perhaps not easy overall) to discuss expenses with your wife and agree on where you can cut back.

Good luck!

 

[corn18]

You've posted a budget, but we can't know exactly what you are spending your money on within each category.

If you aren't already tracking what you spend I recommend you start. Track every penny. In detail. For example, list each clothing item individually instead of lumping it all under "clothes". That's the only way to know exactly where the money is going now. Probably need to do this for at least one full year to catch annual expenses. Then make an allowance for lumpy expenses that occur less often than once a year.

I suspect you will be surprised at where a lot of the money is flowing. Once you are looking at these results, it will be easier (but perhaps not easy overall) to discuss expenses with your wife and agree on where you can cut back.

Good luck!

I track every transaction in my spreadsheet so I know where it is all going. Makes me wonder what we are thinking sometimes.

 

[MarieIG]

I have no intention whatsoever in decreasing the beauty budget in my soon to be retiremet, in fact I tend to increase it big time.

Now, working 70 - 80 hours a week, I'm standing in front of the mirror at work cutting my bangs with scissor at 9:00 p.m. at night because they're getting in my eyes. Had one professional manicure in my life when one of DSs got married. Color out of a box. I'm exhausted and look like who-did-it-and-ran.

So, if I want to get my hair and nails professionally done; and if I want to buy skin care/ or see a derm to keep my skin in tip top condition, I'll do it.

Everyone else is welcome to cut their beauty budget to the bone.

 

[Aerides]

I have no intention whatsoever in decreasing the beauty budget in my soon to be retiremet, in fact I tend to increase it big time.

Now, working 70 - 80 hours a week, I'm standing in front of the mirror at work cutting my bangs with scissor at 9:00 p.m. at night because they're getting in my eyes. Had one professional manicure in my life when one of DSs got married. Color out of a box. I'm exhausted and look like who-did-it-and-ran.

So, if I want to get my hair and nails professionally done; and if I want to buy skin care/ or see a derm to keep my skin in tip top condition, I'll do it.

Everyone else is welcome to cut their beauty budget to the bone.

Here here!

I'd love to be one of those women who can comfortably leave the house bare faced, but I'm not. I'd rather eat nails. Am I silly? I don't care.

I put beauty stuff in the "it makes me feel good and I'm not getting younger so why not" category. I have always loved finding a good gift-with-purchase, too. And a spa facial is a mini vacation, much like a massage. I recently had my dermatologist laser off some redness and discoloration that was making me self-conscious.

That said I'm no fool, and nothing is going to reverse time. But if I can afford it and enjoy it, it's no one's business, just like any other discretionary expense.