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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 08-28-2008, 08:23 AM   #61
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We're not yet FIRE'd (another 5-6 years I think), but here's how I do our planning.

Start with what we make today (these are not real numbers since I don't want to tell everyone my salary....but we'll use them for mathematical purposes).

$100,000 Gross

Then we adjust for things that will decrease. For example, say we save $22,000 per year and we'd stop saving at retirement. Then our house will be paid off the year we retire...so that's $18,000/year less. Then work expenses such as dressy clothes/shoes, briefcases, gifts at the office, expensive lunches out each day, etc....so we'll deduct $2,000/year for that. Auto costs will decrease...we have 4 cars today (hobby of mine), but we'll be going to 3 cars, plus reduced gas driving to work - we'll say $1k here. Also taxes will decrease since our income wil go down...so I did detailed analysis of tax reduction...say $4,000/year for this purpose.

$100k Minus
-$22k
-$18k
-$ 2k
-$ 1k
-$ 4k
______
$53k

Then we add on for things that will increase, such as health insurance (we will rehire before medicare kicks in), so add $6k/year. Utilities will be higher since we're home more, add $1k/year. Groceries increase due to eating lunch at home, add $1k/year. Travel costs will increase...we plan to take one additional vacation/year at $5k. Then we added in a few other things like increased hobby spending, higher home repairs (house is aging), and more trips to visit family nearby (driving trips...only 100 miles) , so let's add $2k for these items. Lastly we'll buy LTC as soon as we rehire at $5k/year.

$53k (start point)
+$ 6k
+$ 1k
+$ 5k
+$ 2k
+$ 5k
_____
$72k Total spending estimated

Each year we refine these as we learn more. Doing this we've found a silver lining. Although the above numbers are "made up", in real life we save 30% of our gross. So we can live on about 30% less with no other changes in lifestyle. So much for the "you need about 80% of your pre-retirement income" rule. Couple that with paying off a mortgage and so on, and we have some breathing room.
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Not exactly last year but July07 - June08
Old 08-28-2008, 09:39 AM   #62
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Not exactly last year but July07 - June08

We moved to a third world country April-07 so my expenses are not directly comparable and I am not yet retired, I am sure that I will live very close to this even if I am retired.

My expenses are around $15000 including rent, kids education and car for 4 people. I bought a new car and some other stuff since I did not have any household stuff, 15k does not include those, add around $20k one time expense for that. My company pays for medical insurance with around $12000 max. I guess premium for that would be around $400/yr. It only covers only hospital stay and things done there. My taxes were around $10k.
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Old 08-28-2008, 10:18 AM   #63
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Lot of people who retire to central and South America also come back to the US for medical care.
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Old 08-28-2008, 11:59 AM   #64
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Quote:
Originally Posted by Finance Dave View Post
We're not yet FIRE'd (another 5-6 years I think), but here's how I do our planning.

Start with what we make today (these are not real numbers since I don't want to tell everyone my salary....but we'll use them for mathematical purposes).

$100,000 Gross

FD,
Good work - Sounds as if you are in the ballpark for what you will need.
I would suggest you do a line item budget of what you currently spend and adjust it for after retirement.
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Old 08-28-2008, 03:37 PM   #65
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Quote:
Originally Posted by dex View Post
FD,
Good work - Sounds as if you are in the ballpark for what you will need.
I would suggest you do a line item budget of what you currently spend and adjust it for after retirement.
Thanks dex...have already done that. Just didn't want to show the details.

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