Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Two people....what do you spend?
Old 03-21-2007, 04:44 AM   #1
Dryer sheet wannabe
 
Join Date: Mar 2007
Posts: 11
Two people....what do you spend?

Just wanting a little "gut check" as my wife and I pursue the "when" to ER decision.

We are 52 and 53, have a paid for house, no debts of any kind and enough assets to live a modest but NOT extravagent lifestyle. We will have to pay for our own health insurance until medicare, however.

People who meet these conditions (paid-for house, no debts of any kind, must pay for their own health insurance AND who are ALREADY retired....Here is my question --

How much do you find yourself spending per month on EVERYTHING....Living expenses, health ins, travel, taxes, etc. ??

Thanks in advance for any help you can provide as we would like to get a sense of things from people who are ALREADY DOING IT.

Thanks again, this board is a great service!
__________________

__________________
tkp is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Two people....what do you spend?
Old 03-21-2007, 06:29 AM   #2
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,905
Re: Two people....what do you spend?

I'm not a couple, but I have a great exercise for anyone who hasn't done it yet and if you haven't done it, you might find it to be helpful. Try this. Once a year, I do my budget to see exactly what I've spent. I total up the utility bills separately, and I get my gas expenditures from my debit card records, and so on. I limit myself to a certain amount each month from the ATM, and that category is simply "miscellaneous"; I don't feel a need to break it down any further. With my bank statements it really doesn't take very long to do all of this. Then, I reconcile it with the amount I have saved, and my paycheck total.

Generally I average about $1300/mo, give or take $50. Of this, $800/mo is what I thought I was spending, and $500/mo is the unexpected stuff like fixing a broken A/C unit, buying a TV to replace the broken one, and a root canal and crown (all of which happened last year, for example, but other things happen other years). Like you, I have my house paid off, and also my car is paid off and I have no loans or credit cards to concern me.

Analyzing my past expenses has been a great help in retirement planning, because it gives me some idea of what I will need after taxes. I add the $150/mo that I will be required to pay for my lifetime medical from the federal govt. Then I add some for long term expenses, some more to figure out what I will WANT, and adjust everything for inflation.....
__________________

__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Re: Two people....what do you spend?
Old 03-21-2007, 06:59 AM   #3
Recycles dryer sheets
RASAP's Avatar
 
Join Date: May 2006
Posts: 53
Re: Two people....what do you spend?

We're not retired yet but we are very close. Here's some input that MAY help anyway.

I have been tracking our expenses for several years now in preparation for retirement. With the help of Quicken, I can filter out work expenses. We have then look at the remaining annual expenses and have make projections in other areas. At this time, it looks like $35k per year will do quite well for our lifestyle - minimal travel and low cost hobbies / activities. To this we will have to add taxes and health insurance. The health insurance part is the biggest unknown at this time as it could be anywhere from $7k to $15k per year depending on how the carriers view some of our minor preexisting conditions. Our situation is similar to yours - about the same age, house is paid for, no kids, no debts. It seems to me though that a lot depends on the cost of your optional activities during retirement.
__________________
My wife asked, "What I was going to do today?"
I said, "Nothing".
She said, "You did that yesterday".
I said, "I know, I wasn't finished."
RASAP is offline   Reply With Quote
Re: Two people....what do you spend?
Old 03-21-2007, 08:32 AM   #4
Thinks s/he gets paid by the post
grumpy's Avatar
 
Join Date: Jul 2004
Posts: 1,321
Re: Two people....what do you spend?

We are retired with similar circumstances except the gov't pays 70% of health insurance premiums. Our total monthly expenses average $7000. However, the "necessities" probably only run $5500. We live in a high cost of living area (D.C.)

Grumpy
__________________
...you can check out any time you like, but you can never leave...
grumpy is offline   Reply With Quote
Re: Two people....what do you spend?
Old 03-21-2007, 08:46 AM   #5
Thinks s/he gets paid by the post
 
Join Date: Mar 2006
Location: Houston
Posts: 2,155
Re: Two people....what do you spend?

This is a great topic. I can't contribute as I'm not qualified. Still have 2 kids in the house.
__________________
Sam is offline   Reply With Quote
Re: Two people....what do you spend?
Old 03-21-2007, 08:55 AM   #6
Thinks s/he gets paid by the post
SteveR's Avatar
 
Join Date: Jul 2005
Posts: 2,803
Re: Two people....what do you spend?

The problem with asking an open-ended question like How much you you spend? is like asking How high is up? Everyone here has different expenses numbers and different investment mixes. Some have pensions, some COLA'd other not, some have 401ks, some not, some have $millions in investments, some not.

Good luck on getting an answer that will help you much. The only way to answer your question fully is for you to really know how much you will spend in ER including taxes and health insurance and then see if you have enough to pay for it; if not, then you will either have to lower your expenses or keep working.

There really is no magic number...our financial situation is not the same person to person. You can get a general idea of what people spend by doing a search of the older threads. There are a number of polls out there that have a lot of information on this.

Good luck.
__________________
Work? I don't have time to work....I'm retired.
SteveR is offline   Reply With Quote
Re: Two people....what do you spend?
Old 03-21-2007, 09:06 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Two people....what do you spend?

Couple of numbers that have a wide range of variability but are good starts...

I've budgeted down to the fine details on the elusive "miscellaneous" category...everything from toothpaste to rabies shots for the dogs to oil changes in the lawn mowers. With tax and a cushion...about $5k per year.

On capital items, like car replacements, car maintenance, home repairs and upgrades, appliances and so forth...also close to $5k per year.

I do all my own repairs, maintenance and installations unless it requires yanking stuff out of an electrical panel or blowing flames into an open gas main, so my costs are a good bit cheaper than someone who expects to pay others to do the work...yet I find many people severely underestimate their 'misc' bucket and then wonder where the bleeding is coming from. Many also dont draw back their future capital costs to assure they're generating the funds required on a yearly basis and accounting for those. More surprises that can hole-shot your ER.

So 10k plus your food, utilities, debt servicing, medical care, travel and vacations, insurance, taxes...you've probably got a decent baseline there. Add eating out costs because we almost never do, and add a bunch to both expense categories and capital categories if you're going to pay someone to do all the work for you.

Then its a useful exercise to pare that down to the bare necessities, see what your baseline number is that you may wish to employ should we hit a great depression type scenario, and be realistic with yourself on how many years you could live like that.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Two people....what do you spend?
Old 03-21-2007, 09:41 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,409
Re: Two people....what do you spend?

Quote:
Originally Posted by Cute Fuzzy Bunny

Then its a useful exercise to pare that down to the bare necessities, see what your baseline number is that you may wish to employ should we hit a great depression type scenario, and be realistic with yourself on how many years you could live like that.
Work in progress here - SWAG in Missouri 3k/mo - new stuff is health insurance, mortgage, and yuck taxes cause I'm now single and tapping trad IRA. Ran well under 2k/mo(except for two remodeling years) first eleven years in Louisiana(3 people). Smearing out capital replacement costs and misc going forward is going to be a number pulled out of my you know what - a fish camp to an 1100 sq ft house in da burbs is a new ball game for me.

heh heh heh - and yes I made one year in the 90's for 12k - she didn't call me a cheap bastard for nothing.

__________________
unclemick is offline   Reply With Quote
Re: Two people....what do you spend?
Old 03-21-2007, 09:51 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,644
Re: Two people....what do you spend?

Quote:
Originally Posted by Cute Fuzzy Bunny

I do all my own repairs, maintenance and installations unless it requires yanking stuff out of an electrical panel or blowing flames into an open gas main, so my costs are a good bit cheaper than someone who expects to pay others to do the work...
I enjoy fixing stuff - when I can. But my dad couldn't screw in a light bulb and passed his genes to me so I suck as a handy man. I end up paying the pros for most stuff. When I was in college I had a similar problem with my junker cars so I took an adult ed shop course at a local HS and ended up getting pretty good - rebuilt carburetors, replaced starters and generators, dropped and engine or two, etc. (I wouldn't touch a car today)

But, what about adult ed courses on general fixit stuff. Do they exist? Are they any good? I would probably do well at something designed for the stereotypical helpless woman.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Re: Two people....what do you spend?
Old 03-21-2007, 10:29 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Two people....what do you spend?

Your local lowes and home depot usually have regular classes on how to do stuff yourself.

As far as cars go, except for oil changes and tire rotations, I dont think you can do too much yourself without some expensive equipment.

But I saved about 4000 on delivery and installation fees for all my appliances and my water heater. Painted my house exterior for about $250 worth of paint instead of $2200.

It adds up...
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Two people....what do you spend?
Old 03-21-2007, 10:34 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Re: Two people....what do you spend?

Two of us (DW and I): $3000 a month

Two rugrats? $3000 a month

SO I need $6k a month now, and $3k a month when they leave home...........

Just kidding.............
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Re: Two people....what do you spend?
Old 03-21-2007, 10:54 AM   #12
Thinks s/he gets paid by the post
 
Join Date: Mar 2006
Location: Houston
Posts: 2,155
Re: Two people....what do you spend?

Quote:
Originally Posted by Cute Fuzzy Bunny
As far as cars go, except for oil changes and tire rotations, I dont think you can do too much yourself without some expensive equipment.
You can still change the spark plugs, alternator, belts, starter, coolant, oil switch; Replace bulbs, headlights, dash board console; Upgrade the stereo; Clean, wash, and wax. Altogether, those represents 50% to 75% of maintenance/repair cost.

Most importantly, you can diagnose your car problem to determine the root cause, then have a mechanic fix exactly what you want. When you bring your car in for service and have absolutely no idea what the problem is, your chance of getting a correct/honest diagnosis and repair is pretty slim.
__________________
Sam is offline   Reply With Quote
Re: Two people....what do you spend?
Old 03-21-2007, 11:25 AM   #13
Thinks s/he gets paid by the post
frayne's Avatar
 
Join Date: Oct 2002
Location: 19th Hole
Posts: 2,534
Re: Two people....what do you spend?

Approx. $3500 a month. We are both in our mid fifties, retired, no debt, own our home but have retiree health coverage that costs about $75 a month.
__________________
A totally unblemished life is only for saints.
frayne is online now   Reply With Quote
Re: Two people....what do you spend?
Old 03-21-2007, 05:31 PM   #14
Dryer sheet wannabe
 
Join Date: Mar 2007
Posts: 11
Re: Two people....what do you spend?

Thanks so far to everyone who has responded.....

My wife and I think that we will probably need about $3000/month to cover our basic living expenses, including taxes and health insurance.

We also want to budget about $500 per month for travel and another $500 for "large ticket, not in budget" items like occasional car, new roof, etc.

So we are looking at about 4 grand per month, adjusted upwards with inflation. And then a (hopeful) raise when Social Security kicks in at 62 or 66.

Anyone else under similar circumstances want to weigh in? Any help is appreciated?

Thanks!
__________________
tkp is offline   Reply With Quote
Re: Two people....what do you spend?
Old 03-21-2007, 05:41 PM   #15
Thinks s/he gets paid by the post
 
Join Date: Mar 2006
Location: Houston
Posts: 2,155
Re: Two people....what do you spend?

Quote:
Originally Posted by tkp
So we are looking at about 4 grand per month, adjusted upwards with inflation. And then a (hopeful) raise when Social Security kicks in at 62 or 66.

Anyone else under similar circumstances want to weigh in? Any help is appreciated?

Thanks!
Count me in. I will be in an almost identical situation a few years from now. The only difference is that I will take SS at 62, not one single day later. My biggest issue right now is health insurance in this country. I'm not willing to pay the current exorbitant premium. And if it keep getting more expensive, I might not be able to afford it at all.

However, I have a backup plan. I can always retire outside of the US, where my expense will be lower, my standard of living will be the same or higher, and health insurance is so affordable that it's not even worth mentioning.

__________________
Sam is offline   Reply With Quote
Re: Two people....what do you spend?
Old 03-21-2007, 06:22 PM   #16
Recycles dryer sheets
 
Join Date: Mar 2005
Posts: 242
Re: Two people....what do you spend?

We are in our mid-40s, retired for 3 years (which nobody knows about), own home and vehicle outright, no debt, pay $220 per month for catastrophic ($5,000 deductible) health insurance, buy high blood pressure meds from Canada. We spend around $3,000 per month. However, we sold and bought and renovated in 2006 and spent about $80-$100,000 and we are still well within the 4% withdrawal rate.

__________________
Sparky is offline   Reply With Quote
Re: Two people....what do you spend?
Old 03-21-2007, 06:28 PM   #17
Recycles dryer sheets
 
Join Date: Mar 2005
Posts: 242
Re: Two people....what do you spend?

And we also drink decent wine and try to eat whole (expensive) foods and go out here and there for lunch and/or dinner. What we learned during the sale and purchase of our homes is "don't sweat the small stuff".
__________________
Sparky is offline   Reply With Quote
Re: Two people....what do you spend?
Old 03-21-2007, 07:02 PM   #18
Full time employment: Posting here.
 
Join Date: Aug 2005
Posts: 942
Re: Two people....what do you spend?

Many of us approaching possible retirement have probably spent hours penciling out future living costs while retired. It is really difficult for us to to acuratly say if we will be able to live on this budget, as we are not living on it now.

As my retirement will require that I spend considerably less than I do now while still working, I can only guess at that "miscellaneous" cost. I can figure my taxes, utilities, phone, cable, etc, etc., but have a hard time putting a number on that "miscellaneous" You know- the one for buying stuff for the house or clothes or Christmas presents, or repairs, root canal, vet bills, new washer and dryer. Those are the unknown to me. When I do pencil out my new proposed spending allowance I put in a $1,000 miscellaneous figure down. Sometimes I think that's too much and sometimes I think it is not enough. How about you.
__________________
modhatter is offline   Reply With Quote
Re: Two people....what do you spend?
Old 03-21-2007, 07:16 PM   #19
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,905
Re: Two people....what do you spend?

Quote:
Originally Posted by modhatter
Many of us approaching possible retirement have probably spent hours penciling out future living costs while retired. It is really difficult for us to to acuratly say if we will be able to live on this budget, as we are not living on it now.

As my retirement will require that I spend considerably less than I do now while still working, I can only guess at that "miscellaneous" cost. I can figure my taxes, utilities, phone, cable, etc, etc., but have a hard time putting a number on that "miscellaneous" You know- the one for buying stuff for the house or clothes or Christmas presents, or repairs, root canal, vet bills, new washer and dryer. Those are the unknown to me. When I do pencil out my new proposed spending allowance I put in a $1,000 miscellaneous figure down. Sometimes I think that's too much and sometimes I think it is not enough. How about you.
Why does your working budget have to be so much higher? I suppose you might need a little more for clothing or gas, but surely you can estimate that. You could try living on your retirement budget now, while you are still working. That way you can see if it works, you can add the excess to your retirement nestegg, and it won't be such a jolt when you reach retirement.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Re: Two people....what do you spend?
Old 03-21-2007, 08:32 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,386
Re: Two people....what do you spend?

Last year, for myself only, I spent cash of $2650 per month. No accruals or sinking funds for unusual expenses.

I live fairly low on the hog, so I figure a lot of you guys must be doing some shoplifting to come up with the figures you do.

Ha
__________________

__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Mental Accounts or why some people find it hard to save bssc FIRE and Money 3 05-20-2007 08:59 PM
Killing people and breaking things. Mr._johngalt Other topics 48 11-01-2006 09:03 PM
Why Did I Buy That Dry Bubble Gum? JPatrick FIRE and Money 25 08-17-2005 07:38 PM
What do you tell people you do? farmerEd Life after FIRE 49 03-11-2004 10:30 AM
I would like to see more people posting ShokWaveRider Other topics 57 02-10-2004 05:08 AM

 

 
All times are GMT -6. The time now is 08:10 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.