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Re: Two people....what do you spend?
Old 03-21-2007, 10:16 PM   #21
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Re: Two people....what do you spend?

If I subtract out Mortgage Interest, Taxes, Child Support, and Kids, in the last month the rest of my expenditures were at an annual run rate of $9,085. Single person.

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Re: Two people....what do you spend?
Old 03-21-2007, 10:34 PM   #22
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Re: Two people....what do you spend?

One person with paid for house
After taxes and health insurance: Pension ~$26K/year
Still saving
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Re: Two people....what do you spend?
Old 03-21-2007, 11:20 PM   #23
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Re: Two people....what do you spend?

Yes, yes, yes!

This is exactly the kind of info I'm looking for. Of course, I realize that, yes, it depends on your lifestyle and spending habits. And everybody is different.

But - hearing about after ER spending is very helpful to me.


We track pretty much everything we spend (less than 1 percent in that "not accounted for misc cash spending" category).

But I still am trying to find that elusive figure for ER annual requirement. Hard to visualize what life will be like when college bills are over and kids are gone. When you don't need to drop off a ton of stuff at the dry cleaners anymore. Needing to visualize what the minimum, middle and max range is.

I'd see us eating out less after ER - more time to cook. Cut out the commute. We already do all our own repairs and car work, cutting firewood, etc. (Um, "we" is an overstatement as DH does the work and I'm available to - ahem - 'supervise' whenever needed).

Travel would increase some, hopefully. Might do the RV thing for a year or two.

Sounds like health insurance is the wild card here (we're in good health). I'd need a laptop and a cell phone as they would no longer be supplied by work.

Keep the info coming.

Thanks,

spncity
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Re: Two people....what do you spend?
Old 03-21-2007, 11:24 PM   #24
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Re: Two people....what do you spend?

Curious about this:

Quote:
Originally Posted by Sparky
We are in our mid-40s, retired for 3 years (which nobody knows about),
Nobody knows about? Do you mean your neighbors? Friends? Family that live far away?

So do you leave the house during the day so that they think you've gone to work?



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Re: Two people....what do you spend?
Old 03-22-2007, 01:46 AM   #25
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Re: Two people....what do you spend?

Two people. We both quit our jobs eleven years ago, but DW was offered a job-share situation and went back to work for three six-month stints ending in 2000.

Our total yearly budget for 2007 is $43,644. We allocate $31,416 to ordinary ongoing expenses, $7207 to amortization of large infrequent expenses and $5021 to optional fun stuff (mainly travel).

We adjust each of these categories for inflation each year. The odd values are the result of applying inflation adjustments to our budget since 2000.

We usually end the year on budget or very close in the ordinary expense and fun categories. The infrequent large expenses are obviously wildly variable. The $7207 is our current best estimate of the long term yearly average.

Factors that help to hold down our spending are free health insurance from my wife's prior employer, a small house owned free and clear, and a net state and local tax bill close to zero.

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Re: Two people....what do you spend?
Old 03-22-2007, 02:24 AM   #26
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Re: Two people....what do you spend?

A warning - I notice, tkp, that you plan to pay for your own health insurance for awhile. I made the mistake of blissfully assuming that, like other times I'd taken a break from work, I could just buy private insurance when I quit my job. But things had changed! It took months to be turned down by several private insurance companies. I finally got into my State's high-risk pool, paying through the teeth. Get this - I was not sick, I just had had some things happen in the distant past.
Things may be different where you live. But I highly recommend being sure you have coverage BEFORE you quit.
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Re: Two people....what do you spend?
Old 03-22-2007, 05:36 AM   #27
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Re: Two people....what do you spend?

DO NOT ignore the health insurance situation. As I reported in an earlier thread - Fidlelity reports that at that golden 65 a couple will currently spend $1100 for medicare and other typical charges and they estimate a 7% inflation rate on that (free) health care.

We are ER beginning next year - house paid for- and anticipate a budget of about 48K - that does include some travel money - I don't know how we could do it on 30k but again our major expense is health insurance.
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Re: Two people....what do you spend?
Old 03-22-2007, 06:04 AM   #28
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Re: Two people....what do you spend?

Lets see if this will help:

We are just 2 and older (mid to late 60's). We live in a state with income taxes (about $1K a year). We are both on Medicare (remember it cost for that now ($2,244 a year for to people and rumored to go up about 17% in 2008). Our RE taxes run about $7.5K a year on this condo.

So these fixed costs we cannot do anything about (unless we sell, move, etc.,)

SS Medicare: $2,240 (I guess this could equate to a pre-65 yo medical insurance cost)
RE Taxes: 7,500
Other Fixed: 3,525 (Car Insurance (one car) $600, Condo Insurance $165, Condo Fee $230 a month ($2,760 a year); includes Water, Sewer, Trash, Outside Maintenance, Snow and Lawn Service and Insurance).

So total fixed are about $13,265 to which the variables like utilities (Electric, Gas, TV, Phone, Internet), then Gifts, Car Maintenance (which I do myself, for the most part) and usually have driven cars under warranty (spend too much on cars), Gasoline for local and trips, Other travel expenses, Food (we do not eat out very much) and other unforeseen large expenses. I have pretty good data on what we spent over the past 10 years or so, but your figures will vary. We spend about $27,000 a year, in todays dollars, to live. Our RE Taxes are high, we live in a Income taxed state, live in a pretty winter-cold state (Central Ohio) so you may have to adjust to those numbers. As an example we lived about 20 years in Florida (1986-2005) and spent about $22,000 a year down there in 2004 dollars.

Edit the above costs INCLUDE Federal Income Taxes (just to clarify).

PS: We have 0 debt, Condo paid for, 05 car paid for, credit cards ALWAYS paid off monthly and are in reasonably good health (for a couple "older than dirt").

Hope this gives you enough detail to help you.

OAG

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Re: Two people....what do you spend?
Old 03-22-2007, 09:34 AM   #29
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Re: Two people....what do you spend?

This is becomming a VERY interesting (and helpful) thread.......

Please keep it up. But don't hijack it, keep it "on point", please.....

tkp
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Re: Two people....what do you spend?
Old 03-22-2007, 09:52 AM   #30
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Re: Two people....what do you spend?

Roughly $4000 per month plus health ins ($525) and taxes (about 24% on top). Total approx $67K per year.
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Re: Two people....what do you spend?
Old 03-22-2007, 09:56 AM   #31
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Re: Two people....what do you spend?

tkp,

You might want to check out the Kaderli's book as well (Billy on this board) - they show what they spend - also, Nords just wrote in the thread where he was interviewed about what he spends a year in early retirement.

Also, I believe we've got a thread on this in the Best of area....

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Re: Two people....what do you spend?
Old 03-22-2007, 09:57 AM   #32
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Re: Two people....what do you spend?

Are you people including federal income taxes in your yearlly expences or not. Need to clarify that.
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Re: Two people....what do you spend?
Old 03-22-2007, 10:05 AM   #33
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Re: Two people....what do you spend?

I always try to include everything - taxes included.

I mean what I spend is well - what I spend.

heh heh heh - hmmm is there a tax fairy I should know about?
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Re: Two people....what do you spend?
Old 03-22-2007, 10:36 AM   #34
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Re: Two people....what do you spend?

I second what Want-to-Retire said about about test driving your proposed retirement budget in pre-retirement. Any spending that you can't categorize, still got spent, so that is still part of your lifestyle. We just deducted all of our annual savings and some taxes (easily known) and looked at the remainder. That was our annual spending, regardless of where it went. To produce our savings, we had already cut back our spending for many years prior, not just one or two, so there was no reduction there for ER. I'm skepticle of ERing into a reduced lifestyle that starts on retirement day, wouldn't that chafe after a while? I assume the costs of working (commute, clothing, etc.) are used up by travel and hobbies in ER.
Your SWR includes taxes, investment expenses, etc. so your take-home is not your gross, even in retirement.
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Re: Two people....what do you spend?
Old 03-22-2007, 12:39 PM   #35
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Re: Two people....what do you spend?

I clarified my previous post (Page 2) regarding Federal Income Taxes.

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Re: Two people....what do you spend?
Old 03-22-2007, 02:58 PM   #36
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Re: Two people....what do you spend?

My wife and I retire at the end of 2007. I will be 59, the wife 57. The plan is to withdraw $48,000 a year until S.S. kicks in at 62. At 62 we will start adjusting our withdrawal amount for inflation. The $48,000 includes taxes.

We have great insurance coverage from my employer that costs us $85 a month, part of my retirement benefit. I am a do it yourselfer and do all house and car repairs. We will retire in Oklahoma, cost of living is very reasonable there. Our house and vehicles are paid for, we are debt free. The kids are through college.

Our working income is $150,000 yearly. Retiring on $48,000 will be a big change but we have tested the budget and it works. This thread is helpful to me also.

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Re: Two people....what do you spend?
Old 03-22-2007, 04:26 PM   #37
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Re: Two people....what do you spend?

There was a "how much did you spend last year" thread early this year. It got a lot of detailed answers.

Sorry I'm to lazy to search for it.

Audrey
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Re: Two people....what do you spend?
Old 03-22-2007, 04:28 PM   #38
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Re: Two people....what do you spend?

Quote:
Originally Posted by modhatter
Are you people including federal income taxes in your yearlly expences or not. Need to clarify that.
Uh, what federal income taxes? I have been stunned at the amount of income taxes we've paid (last year $300). In 2006, we put in energy star windows and central a/c and are getting back $140. Our accountant costs us more than our income taxes.
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Re: Two people....what do you spend?
Old 03-22-2007, 09:31 PM   #39
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Re: Two people....what do you spend?

Lets see Pre ER Post ER

Mortgage P&I 1400 Now 305
Taxes Real estate 670 Now 275
Car Payments 2 Cars 715 Now 0


So right off the bat leaving New Jersey and paying off my cars with my sick time payoff when I retired in January My big expenses went from 2,785 to 580

A savings of 2,205 a month 26K a year

Now my heating bills are 40% less a year electric is running at 30% less this year and our transportation costs the drive of 120 miles roundtrip a day is no more saving 125 a month on gasoline.

Car insurance is 30% lower and even my homeowners insurance down here in NC is lower by 60 a year than in NJ.

We are living better down here than I was living up in NJ with a pension of 32K and my part time sub Teaching and coaching which is adding about 16K. Was making about 90K in NJ with three jobs.

We eat out as much we do not deny ourselves, the kids are all grown and out of the house married and not our financial problem anymore.

I believe moving out of a high cost area is one reason we are able to do this.

In NJ I would still be working. A 225K mortgage and 8K a year taxes means you better be working.


Now the wife starts a 3K pension in a year and in 8 years she will get around 900 a month in SS and me in 11 years around 1600 a month of SS .

It really is all good.
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Re: Two people....what do you spend?
Old 03-23-2007, 05:58 PM   #40
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Re: Two people....what do you spend?

Quote:
Originally Posted by spncity
Yes, yes, yes!

This is exactly the kind of info I'm looking for. Of course, I realize that, yes, it depends on your lifestyle and spending habits. And everybody is different.

But - hearing about after ER spending is very helpful to me.


We track pretty much everything we spend (less than 1 percent in that "not accounted for misc cash spending" category).

But I still am trying to find that elusive figure for ER annual requirement. Hard to visualize what life will be like when college bills are over and kids are gone. When you don't need to drop off a ton of stuff at the dry cleaners anymore. Needing to visualize what the minimum, middle and max range is.

I'd see us eating out less after ER - more time to cook. Cut out the commute. We already do all our own repairs and car work, cutting firewood, etc. (Um, "we" is an overstatement as DH does the work and I'm available to - ahem - 'supervise' whenever needed).

Travel would increase some, hopefully. Might do the RV thing for a year or two.

Sounds like health insurance is the wild card here (we're in good health). I'd need a laptop and a cell phone as they would no longer be supplied by work.

Keep the info coming.

Thanks,

spncity
I think you've pretty much answered your own question here. The best process I can think of is:

1. Know what you're spending now.
2. Add to that your increased expenses in retirement (travel, RV, laptop, cell phone)
3. Subtract from that your decreased expenses in retirement (college, kids, dry cleaning, eating out, commuting)
4. Investigate some of the bigger unknowns (health care)

I think the more detailed your budget is, the better chance you have of being able to go through each line item and decide if it will go up/down in retirement. I track to the penny but I don't think I have enough categories at the moment.

2Cor521
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