Tear appart my est. for retirement budget

[dex]

I've a little about myslef on the intro board under the subject "Need Advise if I should retire early". I'm not going to make a decision for at least 1 year.
As most I've have been thinking about how much money I would need to enjoy life if I retired early. I do not want to live a subsistance living nor do I have an extravagant lifestyle or needs.
I'm looking for advise that I might not find in a book as to what I might be missing in the budget below. What surprised you financially.

Current situation - single age 49, good heath, home paid for, no debts, while working I've estimated my total expenses this year as 18,765. No I didn't get a chance to go anywhere for vacation this year so let's call the total 22,000 in total in case I forgot anything.

Below is what I estimate my expenses would be if retired. They add up to $20,000 and that included $4,154 contingency.
Before doing the calculation I was thinking that I would need $40 to 45,000 after tax money. If I am correct I would only need about $18,000 to live at a subsistance level.
If I had 40,000 annually that would leave about $22,000 a year for other interests, almost $2,000 a month.

Please pick apart my estimate - thank you
Total Total
Annual Home Annual Monthly
150 Homeowners Ass
408 Home Ins.
2,768 Home Taxes
105 Terminte Bond
622 Natural Gas
138 Water
300 Electric
156 Sanitation
- Cable TV
370 Telephone
275 House Security
288 Home Repair
Total 5,580 465
Car
200 Car Taxes
25 Auto Inspection
766 Auto Ins
819 Auto Gas - cc
81 Auto Repair
Total 1,891 158

Hobbies
300 Club dues
25 State Park Pass
119 Economist
30 Membership fee
68 Books
298 IBD
Total 840 70

Living
975 Food in Credit Card
64 Vitamins in cc
1,022 Clothing
Total 2,061 172
Misc
329 Dinning out in cc
2,145 One time only expenses
Computer pgm, exercise equip
2,474 206
3,000 Est Medical Insurance
3,000 250
4,154 Other? 4,154 346

20,000 20,000 1,667

 

[Cut-Throat]

Hi Dex,

You could probably do this. Maybe be a bit low for the Medical Insurance (this number varies so widely that I'd believe anything).

Do you know what you spend now? - My guess is that you'll want to spend the same or a little more. Having more time on your hands etc.

Do you use Quicken ? - I'd recommend this software for Budget tracking and retirement planning. It is what gave me the courage to leap into ER!

 

[dex]

Cut - Throat,
While working I've estimated my total expenses this year as 18,765. I didn't get a chance to go anywhere for vacation this year so let's call the total 22,000 in total in case I forgot anything.

The medical expenses are for blue cross and blue shield web site actually about $245 a month.

I don't use quicken. I have an on line bank that allows you to catgoize expenses. Also, I only use one credit card that I can itemise the expenses in excell. I will keep very good records going foward.
I thinks the best things I have done are pay off the house and no debt.
Thanks

 

[RedOscar]

Well dex, a few thoughts to consider. I don't see any costs to replace your car. I like to consider for planning purposes the monthly cost for a car payment or lease. Spread the cost over 10-15 years if you desire, but at least plan for such expenses. Also, the forecast of $81/yr for car repair probably won't cut it unless you purchase a new car every 3-4 years.

Another area which should be considered are big ticket items such as reroofing the house. Of course this would not apply if you live in a condo and the association is responsible. But then you would likely have monthly assessments.

What will be your tax burden when retired? It is something to look at. Before retirement, taxes were my greatest expense. Now that award goes to health insurance.

And finally, I agree with Cut-Throat, get Quicken and use it.

Red

 

[newellcr]

Dex,

I am 36 and have been looking forward to ER at age 50 for 15 years, so I am not the voice of experience you asked for, but do have some input. You posted elsewhere that you make a good wage and that you didn't have a non-work passion activity. Hobbies can be expensive. Sailing, golf, skiing, attending the local professional team's home games, etc. can be a significant line item on a budget. My modest sailing budget is almost $4k. An avid golfer can easily come close to this number. Before you try to set the minimum acceptable budget number, you may want to get a better handle on your passion/hobby/entertainment pursuits. Also, your new passion may involve additional upfront costs or more extensive travel. You also zeroed out the cable line. I'd recommend you add in some additional expense for cable/satellite, magazines, and/or books.

On a more general note, I have started to put together a fairly good ER budget estimate. I am not planning on a minimalist budget or lifestyle. You make a good salary and I'm making a rash guess that you might be used to more of the finer things in life than your budget calls for. Certainly, I'm no expert on you Dex, that's just a guess on my part based on setting my own ER budget. I'm just suggesting that you look at this again.

Here is a link you might want to take a look at, http://www.early-retirement.org/cgi-bin/yabb/YaBB.pl?board=costs_board;action=display;num=1062386870.

It is the $50/day thread. Several folks generously replied when I asked about an actual ER budget. Cut-throat had some really good info on the discretionary part of his budget that really helped me.

Good luck,

Chris

 

[Mr._johngalt]

Good point about some hobbies being expensive.
I have lots of hobbies and interests, but the only really
expensive one is boat ownership. The others I can do
"on the cheap", but our retirement dream can not be
completed without a pretty large boat parked in an
upscale marina. This will challenge my financial
creativity, but it's kind of a must for us.

 

[Bob_Smith]

Dex, I would agree that the medical seems low. Food also seems a little low ($18.75 per week), but don't go by me because I eat a lot of all the wrong things and wouldn't have it any other way. I don't see appliances on there, which might run $400 or so per year. There's no dental either. And taxes will eat up a chunk. On the other hand, the $40,000 income you are planning is almost double your subsistence level. All in all it looks very doable to me.

 

[dex]

Thanks for the feedback so far. Maybe I'll wait awhile, do some more detail work and repost it. It might be of help to others in doing their planning.

One way I was thinking of this estimate was to get in all the must have dollars included then see how much money I would have available between the must have and my estimated total income.

RedOscar - car - I'll add that in
Newellcr - cable - I get it for free where I live - You also won't see hair cuts in my budget - I don't have any!
Dental - Bob Smith - I'll add that in.
Food - Bob smith - I'll up that
Appliances - I live in a new house and am single so I think that will last for awhile.
Taxes - I was considering my income net of income taxes. For example if I gross $50K, I would have $40,000 after taxes.

FYI - I don't have expensive tastes I lean more towards the natural and simple life.