Sobering Stats

[bradaz2488]

Here are some sobering stats from my expenses since year 2000 when I stated tracking them in great detail (to the penny). Not too surprising, but never-the-less sobering. Only been retires since 2013....

Top 10 expenses since year 2000:

10: ATM Cash: $31,792.89
9: House Upkeep: $45,471.86
8: Insurance: $48,286.03
7: Dinning Out: $68,842.10
6: Loan Interest: $79,522.66
5: Automobiles + Gas + Maintenance: $90,658.64
4: Vacations: $94,896.16
3: Bills: $ $106,322.73
2: New house + furnishings: $278,156.49
1: Taxes: $659,616.43 (Wow!!!)

It will take awhile (if ever) to move Taxes out of the #1 spot even though I only pay property tax right now. Insurance should continue to move fast up the ladder with the F'ed-up Healthcare costs. Just hope I can keep Vacations in the top 5 ....

 

[2017ish]

Quite interesting to focus on the cumulative totals--I've not yet done that. We'll almost certainly never get taxes out of the top if we include the 13 years pre-retirement in the rolling total--greater than 50% of spending in most of those years (excluding the direct kids' expenses/college spending).

Our goal will be to get travel (f.k.a. "vacation") closer to number 1 each year.

 

[Bestwifeever]

What are the numbers just since retiring?

PS: "Bills" is a pretty loose category.

 

[bradaz2488]

Good point. So if I only look at total expenses since I retired May 2013:


10: ATM Cash: $6,020.56
9: Taxes: $7,520.48
8: Auto gas + Maintenance: $9,620.70
7: Dinning Out: $11,096.21
6: Groceries: $13,842.28
5: House Furnishing: $14,500.74
4: House Upkeep: $15,233.46
3: Insurance: $18,743.36
2: Vacations: $19,979.82
1: Bills: $27,866.76


Will need to buy a new (used) car in the next few years which will move that category up the ladder. So I hope I can move Vacations to #1 spot, but I fear Insurance will win in the long run.

 

[bradaz2488]

Bills = Cells Phone, Electricity, HOA Fee, Natural gas, Internet and Water/Trash

 

[2017ish]

Taxes category looks much nicer in the revised presentation!

 

[LOL!]

Like the OP, we pay more to eat out routinely than we pay in income taxes.

As for ATM and cash, doesn't the advent of 2% cash-back cards kind of preclude using cash unless you are living under the table?

 

[Bestwifeever]

Not to mention the ATM cash gets spent on one of the categories? Dining? Groceries (not a category so maybe under Bills?)?

Thanks for posting this; it would be interesting to see how categories change as your retirement continues.

We don't track what we spend beyond an occasional back of the envelope calculation but I think travel would win for us, at this point.

 

[bradaz2488]

Like the OP, we pay more to eat out routinely than we pay in income taxes.

As for ATM and cash, doesn't the advent of 2% cash-back cards kind of preclude using cash unless you are living under the table?

I do have a 2% cash back CC and put as much as possible on it, but there are some expenses that I need cash for and do not put on the card. It is only around $1700/year so not giving up that much CC cash back.

 

[6miths]

Yes I would say that paying 3/4 of a million in tax is a problem that many people would love to have. And since retirement you look great in that category. Taxes are so low in fact that if you were in Canada some would likely be suggesting that you should be considering withdrawing from your tax-deferred retirement account(s) to try to decrease taxes when RMDs start. It may be that there are penalties in the U.S. to discourage this but there aren't in Canada so it is often considered as a strategy to decrease total tax paid.

 

[bradaz2488]

Yes I would say that paying 3/4 of a million in tax is a problem that many people would love to have. And since retirement you look great in that category. Taxes are so low in fact that if you were in Canada some would likely be suggesting that you should be considering withdrawing from your tax-deferred retirement account(s) to try to decrease taxes when RMDs start. It may be that there are penalties in the U.S. to discourage this but there aren't in Canada so it is often considered as a strategy to decrease total tax paid.

Only 53 so can not withdraw until 59 1/2. Looking at doing Roth conversions to save on future taxes. Learning a lot on this subject on this site , but have not bottom out on a strategy yet... Right now my plan shows my first withdraws a age 68.. However if I actually get SS then I could potentially wait until mandatory RMD at age 70 1/2... I like paying little taxes now, but I do realize that I need to get serious about limited my tax burden down the line...

 

[ejman]

Made me look. I've spent slightly over a million dollars since I retired end of 2002. Of that, taxes accounted for $59,000, happy about that. A surprising finding is how little variation there has been over the years in average spending. Basically a flatline. I guess inflation has had no impact on my expenses over the last 14 years. Hope that continues.

 

[Dash man]

Our income has fluctuated so much over the years thanks to DW's stock options, taxes are always way over the top. This year and next will be the last now that she has retired and the options will run out by the end of next year, many of which are currently under water. But paying high taxes is a good problem to have, but will be glad when things normalize and our planning can be stabilized.

 

[6miths]

Only 53 so can not withdraw until 59 1/2. Looking at doing Roth conversions to save on future taxes. Learning a lot on this subject on this site , but have not bottom out on a strategy yet... Right now my plan shows my first withdraws a age 68.. However if I actually get SS then I could potentially wait until mandatory RMD at age 70 1/2... I like paying little taxes now, but I do realize that I need to get serious about limited my tax burden down the line...

Yes I thought that there were restrictions in the U.S. on deferred accounts. Happy to have the additional flexibility here.

 

[bradaz2488]

Made me look. I've spent slightly over a million dollars since I retired end of 2002. Of that, taxes accounted for $59,000, happy about that. A surprising finding is how little variation there has been over the years in average spending. Basically a flatline. I guess inflation has had no impact on my expenses over the last 14 years. Hope that continues.

Wow.. Only $59K in taxes on $1M (6%)? I paid $32K jus in property tax since year 2000. Just to clarify my tax categories. Taxes = Fed + State + SS + Medicare + Property.

 

[bradaz2488]

Correction: I forgot to account for Tax refunds of $71,187.86...

1: Taxes: $659,616.43 (Still wow!!)

Here are some sobering stats from my expenses since year 2000 when I stated tracking them in great detail (to the penny). Not too surprising, but never-the-less sobering. Only been retires since 2013....

Top 10 expenses since year 2000:

10: ATM Cash: $31,792.89
9: House Upkeep: $45,471.86
8: Insurance: $48,286.03
7: Dinning Out: $68,842.10
6: Loan Interest: $79,522.66
5: Automobiles + Gas + Maintenance: $90,658.64
4: Vacations: $94,896.16
3: Bills: $ $106,322.73
2: New house + furnishings: $278,156.49
1: Taxes: $730,804.29 (Wow!!!)

It will take awhile (if ever) to move Taxes out of the #1 spot even though I only pay property tax right now. Insurance should continue to move fast up the ladder with the F'ed-up Healthcare costs. Just hope I can keep Vacations in the top 5 ....

 

[MichaelB]

Correction: I forgot to account for Tax refunds of $71,187.86...

1: Taxes: $659,616.43 (Still wow!!)

What about savings?

 

[Just_Steve]

Like the OP, we pay more to eat out routinely than we pay in income taxes.

As for ATM and cash, doesn't the advent of 2% cash-back cards kind of preclude using cash unless you are living under the table?

I live pretty much a cash life and not under the table, the only time I use a CC is for buying something online or making travel reservations. I have two check cards, one for online bill pay and the other for use outside for daily life which I keep a low amount tied to it just incase it gets compromised.

 

[ejman]

Wow.. Only $59K in taxes on $1M (6%)? I paid $32K jus in property tax since year 2000. Just to clarify my tax categories. Taxes = Fed + State + SS + Medicare + Property.

the $59K was for Fed + State. Did not pay SS + Medicare since I've had no earned income since ER @ end of 2002. Property tax adds $14.4K for a total of $73.4K

 

[bradaz2488]

What about savings?

What I know for sure between Auto deposits into saving account + 401K = $439,178

I also saved most of my bonuses and sock options, but do not have an exact "after tax" figure. Best guest is $600K

So total savings since year 2000 = ~$1M

Started professional career in 1988, but probably only saved $150K between 1988 and 2000...

 

[MichaelB]

What I know for sure between Auto deposits into saving account + 401K = $439,178

I also saved most of my bonuses and sock options, but do not have an exact "after tax" figure. Best guest is $600K

So total savings since year 2000 = ~$1M

Started professional career in 1988, but probably only saved $150K between 1988 and 2000...

Nice. Looks like savings is at the top of the list. Makes sense - that's how you get there.

 

[bradaz2488]

Nice. Looks like savings is at the top of the list. Makes sense - that's how you get there.

Gotcha... #1 should have been savings not taxes (pay myself first)

 

[ejman]

Wow.. Only $59K in taxes on $1M (6%)? I paid $32K jus in property tax since year 2000. Just to clarify my tax categories. Taxes = Fed + State + SS + Medicare + Property.

Maybe I didn't explain as clearly as I should have. The $1 million I referred to was my expenses, not income. If one has one million dollars sitting in cash in a bank account and one spends that money taxes due for Fed + State income taxes are zero since that's not income right?. So the taxes I paid were on my income from dividends and cap gains during that period which thanks to our current tax laws are taxed at a much, much lower rate than income earned from working at a paying job. The way our tax laws are set up our money working for us (via investments) is much more tax efficient than our own labor.

 

[bradaz2488]

Maybe I didn't explain as clearly as I should have. The $1 million I referred to was my expenses, not income. If one has one million dollars sitting in cash in a bank account and one spends that money taxes due for Fed + State income taxes are zero since that's not income right?. So the taxes I paid were on my income from dividends and cap gains during that period which thanks to our current tax laws are taxed at a much, much lower rate than income earned from working at a paying job. The way our tax laws are set up our money working for us (via investments) is much more tax efficient than our own labor.

No, you were clear about the $1M of spending since 2002. My bad to assume most of those years you were w*rking and not retired.

On a side note. I guess I started the thread because it was "sobering" to see how much taxes I had spend since 2000 (13 year of a 25 year career). The other sobering thing was to see that taxes represented 44% of my top 10 expense categories. I understand its a good problem to have to "have to" pay higher taxes because that means you are pulling in a big paycheck. My intent was not to start a rant on "taxes". It is what it is. In hind sight this was probably not a very useful or informative thread for discussion. However, it is clear to me that it is time to get serious on a strategy to limit my future taxes when it comes time to withdraw from the tax defer accounts as well as if we actually receive SS.... More fun with numbers

 

[marko]

Our income has fluctuated so much over the years thanks to DW's stock options, taxes are always way over the top. This year and next will be the last now that she has retired and the options will run out by the end of next year, many of which are currently under water. But paying high taxes is a good problem to have, but will be glad when things normalize and our planning can be stabilized.

When I was still working our income fluctuated dramatically (stock options, bonuses, corporate sales) but our spending has remained remarkably stable for almost 20 years.

The amount stays relatively constant but what changes is what we spend it on. We have no budget per se but our lifestyle sort of dictates our spending. I'm actually a bit surprised at how flat it is.