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View Poll Results: How much did you spend last year?
Married: Less than 30,000 5 2.75%
Married: 30,000 to 40,000 5 2.75%
Married: 40,000 to 50,000 16 8.79%
Married: 50,000 to 60,000 18 9.89%
Married: 60,000 to 70,000 11 6.04%
Married: 70,000 to 85,000 29 15.93%
Married: 85,000 to 100,000 14 7.69%
Married: 100,000 to 125,000 14 7.69%
Married: 125,000 to 150,000 9 4.95%
Married: over 150,000 15 8.24%
Single: Less than 20,000 9 4.95%
Single: 20,000 to 30,000 9 4.95%
Single: 30,000 to 40,000 9 4.95%
Single: 40,000 to 50,000 3 1.65%
Single: 50,000 to 60,000 8 4.40%
Single: 60,000 to 70,000 5 2.75%
Single: 70,000 to 85,000 0 0%
Single: 85,000 to 100,000 1 0.55%
Single: 100,000 to 125,000 1 0.55%
Single: over 125,000 1 0.55%
Voters: 182. You may not vote on this poll

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Old 08-25-2008, 08:10 AM   #41
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We spent just under $60k last year for two, no kids, no payments of any kind, all income from a COLA'ed pension. This year that will almost double because I started working again. The plan is that half of the additional after-tax income will go to savings and spend the other half. After six months the company will match 50% of 401k contributions up to 6% of gross so that's a no-brainer to do. In reality I doubt we'll spend all of the other half of new income after the first six month's "rush" is over, for stuff like a new stereo system, computer, downstairs freezer, etc. I wanna travel trailer and a motorcycle, DW is less than enthused about either.

It's a contract job where I can be dismissed for being ugly, so we'll not put ourselves in a position that we "need" the job. And the company's plan is to hire enough people so that a normal work week is 32 hours, which is just about perfect for me. DW will finish her BA degree next May and plans to get a job after that, however jobs that pay enough to make a commute worthwhile are very hard to find around here.

Neither one of us buys clothes until the ones we're wearing have holes in them, two vehicles are fairly new (6 years) and we don't travel much. We do like to keep the house very warm in the winter (natural gas to go up 42% this year - yikes!) and sometimes have a penchant for filet mignon but otherwise we're fairly frugal.
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Old 08-25-2008, 05:54 PM   #42
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Oops Sorry didn't include taxes. I voted just under $30,000. I can't deal with taxes right now.
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Old 08-25-2008, 06:32 PM   #43
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Poll suggestion

While there are >100 replies, the poll is difficult to interpret because there are 20 possible categories. It might be helpful to limit the number to 7 or 8 so we can see whether the distribution is "normal" (statistically).
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Old 08-25-2008, 06:35 PM   #44
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While there are >100 replies, the poll is difficult to interpret because there are 20 possible categories. It might be helpful to limit the number to 7 or 8 so we can see whether the distribution is "normal" (statistically).
I believe too much granularity would be lost. Build a stem and leaf chart. You could do more aggregation if you want, but the data would still be there.

Ha
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Old 08-26-2008, 01:22 AM   #45
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perhaps I oversimplified my vote.

I know what my annual pension is, and I know how much I'm drawing down my retirement investment. Adding those two together tells me what I spent. (including what I spent on taxes).

Some of what I spent really went into a couple of savings buckets I maintain for emergencies or big purchases.

Rick
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Old 08-26-2008, 08:58 AM   #46
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Eh, it seems pretty straightforward to me. Singles are broadly skewed but seem to spend less than 70k a year. Marrieds are broadly skewed but to a higher level.

So there isnt much of a 'settling' at primarily one or two income levels. Its all over the map. Nor is there any settling at a 'frugal' level or 'big spender' level.

Going back to Marthas original question, the 'three to four thousand a year' people are well in evidence, especially the singles. But among the married camp there are some bigger spenders.

I'm thinking either a lot of people who arent retired voted, or I'd have to be surprised that we have ten retired couples spending over 150k a year which means they've either got >$4M or a possibly unsustainable withdrawal rate...?

The other option is that we've got up to ten comedians. I've unfortunately had that problem with polls before. I ran a bunch of them a few years back to try to establish some demographics but after the 5th or 6th I found the results were conflicting and didnt jibe. What I ended up with was a pretty clear indication that as many as a third of the poll votes were people goofing around.
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Old 08-26-2008, 09:14 AM   #47
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Well, I will self-identify and admit to being one of the ten. I don't want to go into detail about all of my expenses, but there were three categories that added significantly to my expenses last year. Last year I started the process of adjusting my AA, and the first step was some sales that created some hefty capital gains and upped the tax bill. Plus, I have a kid in a top 100 national university that is a private school and I paid both the Fall and Spring semester tuitions before year end. Finally, we took some very nice vacations. Not quite extravagant, but darn close. Add all of those up and the total is about $80K.

I'll also admit that I was feeling pretty flush last year and spent more than I planned on is some areas. But, it works for me, and I stayed under my SWR.
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Old 08-26-2008, 09:17 AM   #48
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Ah, so we had a lot of one-time expenses incorporated. That'll certainly skew the results to make them not be very reliable to determine regular annual expenses. A good number of the 'frugal folks' Martha feels are missing might have had a one time $30-50k expense last year that made them look like big spenders when they're typically not.

I spent an extra $75k last year, all one-time. I didnt include that.
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Old 08-26-2008, 09:26 AM   #49
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I spent an extra $75k last year, all one-time. I didnt include that.
I could have winnowed down some of the one time expenses in the other categories, but my sons are both sophomores so I know the education expenses aren't going away until 2015. They might fluctuate (lower, I hope) but I'm stuck with them for a while.

This year I've been delaying the re-balancing act in my taxable account and trying to do it all in the tax-deferred, but I've got issues in the taxable account that I am going to have to deal with by making some more sales this year and most likely next year as well. And the vacations, well, two of those trips were just phenomenal and pretty much fit the bill of the kind of stuff I want to be doing at this stage of my life. At least one of the trips I plan on duplicating this winter.

As of today (just wrote a tuition check Friday) we're on track to hit at least $150K.
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Old 08-26-2008, 10:59 AM   #50
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I'm thinking either a lot of people who arent retired voted, or I'd have to be surprised that we have ten retired couples spending over 150k a year which means they've either got >$4M
First, why not? That would be a very middle success for someone who cashed good options and didn't pee it away. And second, have you checked how big governement pensions often are? All you need is teachers, or a double dipper and a very modest portfolio.

I have no problem imagining >10 couples on this board who spend that. What is hard is imagining the very low end.

Ha
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Old 08-26-2008, 02:24 PM   #51
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We're definitely attracting a "better" class of retirees. In the 2004 thread "How much is needed to retire" the highest reported spending was $90k.
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Old 08-26-2008, 03:43 PM   #52
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Inflation!
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Old 08-26-2008, 03:44 PM   #53
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I daresay those spending $150k a year are more concerned with spending their principal than sustaining it. Too much money and not enough time.
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Old 08-26-2008, 04:16 PM   #54
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Having way too much discretionary time on my hands now
I did keep good track of what we spent. I RE'ed in July 07. For the 1 year from 7/07 to 7/08, we spent $108k.

However, here is the outlayer that bumped this up a bunch:
$44k in fed and state income taxes due to exercising some stock options from megacorp. ... and this (the $108k) still includes FICA which I believe I will no longer have to pay.

I estimate that 2008 fed and state taxes should be around $9k (and no FICA). So my yearly expenses probably around the $70k mark.

This includes a pot load of traveling (in the 1st year of RE we were gone 8 months from homebase). We have figured out how to do it 'on the cheap'. It also includes a mortgage payment of around $15k/year that run for another 5 years or so. I could pay that off, but at 4.8% why bother, since I have the cash flow to keep it.

p.s. almost forgot, it also includes 1/2 year of medical insurance @ $695/mth. I believe that this goes up to around $900/mth in 2009, so the $70k could be more like $75k. ... oh well ... you can't take it with you
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Old 08-26-2008, 06:40 PM   #55
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First, why not? That would be a very middle success for someone who cashed good options and didn't pee it away. And second, have you checked how big governement pensions often are? All you need is teachers, or a double dipper and a very modest portfolio.

I have no problem imagining >10 couples on this board who spend that. What is hard is imagining the very low end.

Ha
I voted well below the max. Then I read the thread and saw taxes were included. That changes things a bit since as ha suggested, I dumped exercised some options that put my tax bill above the max last year.
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Old 08-26-2008, 11:50 PM   #56
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Second, if I use post-tax savings to live on first, that mean no taxes on that part, but when that runs dry, I have to gross everything up by 20% or whatever (ouch).
Rich, I'm not retired yet either, but I have given a lot of thought lately to withdrawal strategies in retirement for future planning purposes. My advice would be to first withdraw from your tax deferred accounts to fill up your lower tax brackets (0%, 10%, 15%), only then should you withdraw from your post-tax savings or Roth IRA accounts. I think it would be a mistake to withdraw only post tax savings for any given year and give up the opportunity to fill up your lower tax brackets with withdrawals from tax deferred accounts.
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Old 08-27-2008, 04:08 AM   #57
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My impression when I first joined the board was that there were many people who were retired or going to retire on three to four thousand a month. I remember once we had a poster who said he needed $100,000 to $120,000 a year and we kind of gave him a hard time. Now it seems like a regular occurrence for people to want/need that much and it seems quite rare to see people who claim to live on less than $50,000 a year.

Is my impression right? How have things changed? Is it just because more people are on the forum? ....
Yes, I got the same impression, joined three years after you. One of the reasons I post here is to balance the ticket, so to speak. You can get to FI on a relatively modest salary.

I didn't vote because I wasn't retired last year but I plan to live on $40,000/year including taxes and health insurance premiums.

Edit to add: single category.
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Old 08-27-2008, 11:21 PM   #58
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We bought a new home here in Florida,so my over $150,000 doesn't count.
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Old 08-27-2008, 11:33 PM   #59
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I didn't include taxes. It just screws things up too much. Taxes are related to what my investments do a given year, not what I spend.

My annual expenses tend to stay within a certain range +/- 10K each year. The taxes, however are all over the map and difficult to predict.

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Old 08-28-2008, 02:47 AM   #60
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My impression when I first joined the board was that there were many people who were retired or going to retire on three to four thousand a month. I remember once we had a poster who said he needed $100,000 to $120,000 a year and we kind of gave him a hard time. Now it seems like a regular occurrence for people to want/need that much and it seems quite rare to see people who claim to live on less than $50,000 a year.
It is interesting. Perhaps many of us over estimate our needs.


I am targeting about 40% more than we currently spend while w*rking. The main reason for that is that we believe we will spend more due to travel. Of course, if inflation moves higher than planned, that discretionary spending could be reduced and shifted to fund normal lifestyle (at home).

I think that extra money either reflects future desired spending or a buffer to cover the unknown. For some it could just represent their current spending habits that are much higher than will be needed when they retire (i.e., includes mortgages, car payments, kids in college, etc).
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