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Old 11-23-2008, 02:28 PM   #41
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I'm also lazy. So, rather than keep track of various spending categories, we used a very gross measurement of our expenses to determine what our retirement needs would be:
Expenditures = checking balance at year start + money coming in - money to savings - checking balance at year end

For these purposes money coming in is net - after tax, after 401K, after health insurance.

To get the final estimated need for retirement income we then added estimated amounts for health insurance taxes to the post-tax expenditures numbers.

After tracking expenditures in this way for a few years we were pretty confident about our needs. Health insurance was and still is the biggest budget risk.
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Old 11-23-2008, 05:21 PM   #42
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I think that my expenses in retirement will be the same or even slightly more than they are now that I am working. I just don't understand the idea that expenditures will drop---except for the amount that I am saving each month for retirement.

Commuting costs---I have a short commute and I figure that I will not want to stay at home every day.

Lunch---I bring my lunch to work most days and only eat out occasionally. I figure eating my leftovers at home versus at my desk---no savings and I will still want to go out to lunch with friends occasionally.

Clothes---truth be told---when did I last actually by clothes that I really needed versus wanted. I figure I will still want the occasional new item of clothing---just different clothing since I will no longer go the office. I probably have clothes in closet right now that after retirement I can just get rid of---but I will probably want more casual clothes than I currently have.

I do think that I will want to spend a little more on hobbies than I do now.

Current retirees---if my thinking on this is not what you have experienced then I would appreciate hearing your experiences.
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Old 11-23-2008, 06:51 PM   #43
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Our normal expenses are about the same. However, we have spent more on big ticket items than I thought we would have. 2 scooters, 1 car, a craft room for wife, big tv and sound system. All in 3 years. Each of these purchases were made staying within a 4% swr, so there was a lot or rationalization going on. I think/hope that slows down next year, unless that is, they want to give us another stimulus to spend.
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Old 11-23-2008, 08:07 PM   #44
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My core expenses haven't changed (shelter, food, utilities), however, I have no taxes to pay and I am not putting 6% of income into a 401K. Just the 401K, FICA, and Social Security are a sizable amount of "salary."

-- Rita
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Old 11-23-2008, 08:15 PM   #45
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Quote:
Originally Posted by FIYes View Post
I think that my expenses in retirement will be the same or even slightly more than they are now that I am working. I just don't understand the idea that expenditures will drop---except for the amount that I am saving each month for retirement............

Current retirees---if my thinking on this is not what you have experienced then I would appreciate hearing your experiences.
At 29 months into RE, that's been pretty much my experience. We aren't saving for retirement anymore, obviously, but, other than that, expenses are about the same. The few bux I save not going to work are more than offset by higher health insurance costs. Everything else is pretty much the same.

Bottom line is that out retirement budget is pretty much our pre-retirement budget net of retirement saving.
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Old 11-23-2008, 08:54 PM   #46
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I know there have been 'what are your annual expenses' surveys but I am interested in people who have gone from moderate to high income levels then drop to 50% or less in retirement. Did you do it? Any problems? Things you would do different?

i essentially cut my total gross income in half. the combo of my own GS-13 salary and my survivor pension had me in too high a tax bracket with no really big deductions for Schedule A. Add to that year end cap gains and dividends in normal market conditions...sheesh!
i was losing a whole lot of the whole shooting match to federal taxes and normal payroll deductions. and i hated my j*b.
the only problems i've had since FIRE is inflation. i have no trouble meeting my bills. i just have very little mad money for a month or two after i pay my property tax bills. it is a mental adjustment, not a $ crisis.
i am not pulling anything out of my retirement portfolio. it's way too early for me to do that.
things i would do differently? i should have FIREd sooner once i found my escape pod. i was aware of the path to FIRE, but it was one of those big decisions i was not supposed to make for a year. so i planned it all out and waited 2.5 years...maxing out my TSP to the IRS limit, replaced the roof, bought my 'Stang...then I FIREd on April 1, 2007.
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My tracking method
Old 11-24-2008, 01:41 PM   #47
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My tracking method

is a number of envelopes listing expense categories that I tuck all receipts into as I get them. For the rare item that does not have a receipt, I make up one. Once a year I total everything up for an Excel spreadsheet. I spend about 6 hours a year balancing everything out, income, expenses, assets, liabilities, cash flows. I have almost 30 years of data.
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