Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
What is your inflation rate for 2010?
Old 12-01-2009, 04:02 PM   #1
Full time employment: Posting here.
 
Join Date: Mar 2008
Posts: 637
What is your inflation rate for 2010?

Granted, we each spend differently, so inflation year over year will vary by regions of the country and personal spending habits.

That said, what % (if any) will you adjust your expenses for in 2010?

How do you arrive at that number?
__________________

__________________
bizlady 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!

Old 12-01-2009, 04:23 PM   #2
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,899
Quote:
Originally Posted by bizlady View Post
Granted, we each spend differently, so inflation year over year will vary by regions of the country and personal spending habits.

That said, what % (if any) will you adjust your expenses for in 2010?

How do you arrive at that number?
Since 2010 will be my first full year of retirement, I won't adjust my expenses. I'll just take 3% - 3.5% of my portfolio and live off of that.

Haven't decided yet whether I prefer 3% or 3.5%. I like 3% because it just about equal to my total dividends, but it seems awfully severe compared with others here (especially when you consider that I am 61 and older than some). So, maybe 3.5%. I have a month to decide.

In January, 2011, I plan to increase that amount by the CPI, subtract what I have left over from 2010, and withdraw that much.

Later, rinse, repeat.
__________________

__________________
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
Old 12-01-2009, 04:27 PM   #3
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,115
Quote:
Originally Posted by bizlady View Post
That said, what % (if any) will you adjust your expenses for in 2010?
We're planning a 0% adjustment.

Although our combined 2010 health insurance and utility costs* will likely increase our overall expenses by 2.5%, we will reduce spending in other areas to compensate for those and other smaller increases.

Quote:
Originally Posted by bizlady View Post
How do you arrive at that number?
I track our monthly expenditures in 35 categories. I started doing this three years prior to retirement and have a pretty good handle on expenses, which makes the budgeting process fairly easy.

*In 2005 we signed up for a wind generated electricity program which will terminate at the end of this month. I anticipate our cost of electricity will go up approximately 30% next year.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 12-01-2009, 04:32 PM   #4
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,115
Quote:
Originally Posted by W2R View Post
Since 2010 will be my first full year of retirement, I won't adjust my expenses. I'll just take 3% - 3.5% of my portfolio and live off of that.

Haven't decided yet whether I prefer 3% or 3.5%.
Heh. The typical behavior of a new (early, LBYM) retiree is to become Scrooge McDuck for a year or two until they get comfortable in their new "OMG, I'm not getting a paycheck!" skin.

Of course if you start out with a pension check, it might take some of the edge off...
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 12-01-2009, 04:48 PM   #5
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
We have reduced our fixed costs by almost 10% this year and we will continue to slash costs in the upcoming year. We are targeting a reduction of 7% for 2010.
__________________
FIREd is online now   Reply With Quote
Old 12-01-2009, 05:08 PM   #6
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,899
Quote:
Originally Posted by REWahoo View Post
Heh. The typical behavior of a new (early, LBYM) retiree is to become Scrooge McDuck for a year or two until they get comfortable in their new "OMG, I'm not getting a paycheck!" skin.

Of course if you start out with a pension check, it might take some of the edge off...
Well, this is my Itsy-Bitsy Teeny-Weenie Federal Pension, y'know. I don't think it will take much edge off at all. It wouldn't even buy me lunch at some of those fancy Napa Valley restaurants in the other thread (not that I plan to ever eat there!)

I do admit that the idea of not getting a paycheck is a little unnerving. I got my LAST paycheck ever today, for $274.33 since it was not for a whole pay period. So, as of today my bank account is fine but I know that won't last.

I am still waiting for paperwork from OPM but I have no reason to think that I will have any problems. They have to notify the TSP before I can get anything from there. (gulp) I understand that takes 30 days. Meanwhile, I still have about 11 months emergency fund in the bank and years more in Vanguard so no need to panic.
__________________
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
Old 12-01-2009, 07:12 PM   #7
Moderator Emeritus
CuppaJoe's Avatar
 
Join Date: Jun 2007
Location: At The Cafe
Posts: 6,866
My inflation rate for 2010 may be zero to slight deflation.

I went on a pre-holiday buying binge but still failed to bring this year’s spending all the way up to 3.5%.

I’m leaving my monthly pay from my PF at about the same number as 2009. My rationale for doing that is: 1) media/govt. talk of deflation; 2) it’s more than enough money to live on, 3) it leaves a cushion to go another half point up to a 4% WD, if necessary.

My health insurance premium went up about 9%, basic meds. have doubled in price but that really doesn’t change the fact that I am living better for less in retirement.

2010 may actually cost less than 2009 because I already have more than enough stuff and pre-bought some expensive tickets for 2010 and 2011. Money should not worry me for the time being as my PF is up about 5.56% from the day I retired 15 months ago.
__________________
CuppaJoe is offline   Reply With Quote
Old 12-01-2009, 07:20 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RonBoyd's Avatar
 
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 5,280
Quote:
Originally Posted by bizlady View Post
How do you arrive at that number?
The usual:
Christmas Price Index
__________________
"It's tough to make predictions, especially when it involves the future." ~Attributed to many
"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."~ Lau tzu
RonBoyd is online now   Reply With Quote
Old 12-01-2009, 08:05 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,471
Mine is going up big time!

I'm going to have an empty house to fill.......

Audrey
__________________
audreyh1 is offline   Reply With Quote
Old 12-01-2009, 08:14 PM   #10
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
I suspect our actual inflation rate is down a few percent. We've been following the CPI for about 5 or 6 years now, but we took 0% for 2009 instead of the 5% or so CPI which seemed inflated by energy prices that were heading down. Looks like 0% again for 2010, which should be more than enough again.
__________________
Animorph is offline   Reply With Quote
Old 12-01-2009, 08:40 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Moemg's Avatar
 
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 10,035
I take a flat 3.5 % to 4% . I retired at the start of the big meltdown so to use that amount and add a cost of living range every year would probably have me eating dog food at 80 .
__________________
Moemg is offline   Reply With Quote
Old 12-01-2009, 08:48 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,615
Like many others, we'll take a % of assets (3.5%) rather than an inflation-adjusted amount.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is offline   Reply With Quote
Old 12-01-2009, 09:10 PM   #13
gone traveling
 
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
My budget spreadsheet shows a net of no increase in monthly expenses vs. plan from Jan thru November, so I'm leaving it at 0% forecast for 2010.

Just got my notification from my former company; no increase in 2010 for medical plan contributions (includes me/DW).

I don't look at portfolio % witdrawl, since we won't have all income sources come "on-line" for another eight years (pensions/SS) and our draw rate dosen't mean much till then.

For instance, in 2009, our draw rate was to be a bit over 5%, but was below 2.5% since my wife still continued to work (not yet emotinally ready to retire.)

Over the next eight years, it is forecast to rise each year through age 69, with an estimated withdrawl rate of just under 10%. At age 70, it drops back down to 2.5% and stays below 4% till age 90.

At that time, I guess we can spend a little more, if we're still breathing ...

That's why we don't (even though we know the suggestion) keep to the 4% withdrawl rate. If we had all our retirement income sources available on day one of retirement, it would be much different, and probably a bit easier to plan...
__________________
rescueme is offline   Reply With Quote
Old 12-01-2009, 09:39 PM   #14
Thinks s/he gets paid by the post
 
Join Date: Sep 2009
Location: Hong Kong
Posts: 1,575
Our expenses will go up a lot:

- we have to start paying for medical insurance ourselves now that DW has stopped working

- my younger daughter will go from half day to full day at her nursery school

- the HK government is unlikely to repeat the partial waivers of rates (property taxes) which were given as part of the stimulus package

- the tax liability on the property portfolio will go up because the high depreciation items on the properties we purchased in 2003 and 2004 have been exhausted

- I will possibly increase the amount of life insurance coverage and will have to pay a higher premium as a result

Hoping that interest rates stay down as all our mortgages are at floating rates.
__________________
Budgeting is a skill practised by people who are bad at politics.
traineeinvestor is offline   Reply With Quote
Old 12-01-2009, 09:47 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Here in northern Illinois, home of the country's highest sales tax and machine politics, I would figure approximately a 2% increase yr over yr to purchase exactly the same things in 2010 that we purchased in 2009. Lots of things have gone up. Real estate taxes, probably state income taxes before eoy 2010, health insurance, booze (big time), groceries, dining out, most entertainment, and on and on. So, to live in 2010 just as we did in 2009, it would cost a bit more.

Our actual budget for 2010 includes new spending for travel and some other "wants" so spending including these increases will probably be up by 15% or so.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 12-01-2009, 10:12 PM   #16
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,899
Quote:
Originally Posted by rescueme View Post
My budget spreadsheet shows a net of no increase in monthly expenses vs. plan from Jan thru November, so I'm leaving it at 0% forecast for 2010.

Just got my notification from my former company; no increase in 2010 for medical plan contributions (includes me/DW).

I don't look at portfolio % witdrawl, since we won't have all income sources come "on-line" for another eight years (pensions/SS) and our draw rate dosen't mean much till then.

For instance, in 2009, our draw rate was to be a bit over 5%, but was below 2.5% since my wife still continued to work (not yet emotinally ready to retire.)

Over the next eight years, it is forecast to rise each year through age 69, with an estimated withdrawl rate of just under 10%. At age 70, it drops back down to 2.5% and stays below 4% till age 90.

At that time, I guess we can spend a little more, if we're still breathing ...

That's why we don't (even though we know the suggestion) keep to the 4% withdrawl rate. If we had all our retirement income sources available on day one of retirement, it would be much different, and probably a bit easier to plan...
My sympathies - - that is really complicated!! It would drive me nuts.

I have ONE of the same problems, with SS not kicking in until 6 months into retirement. Even worse, I really want to wait until 66 to claim SS so that would be 54 months. My approach to that will be to set aside (mentally) the amount of money corresponding to those 54 SS payments, and regard it as "spent". Then I would take the 3% or 3.5% of the remainder.
__________________
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
Old 12-01-2009, 11:05 PM   #17
Thinks s/he gets paid by the post
Bikerdude's Avatar
 
Join Date: Jul 2006
Posts: 1,901
In my expense spreadsheet for the next year I always adjust local taxes and insurance (auto, home and medical) by 5%. For the remainder of expenses I add $$ until I'm at a total 3% increase from the previous year. Over my 10 years of retirement 3% overall seems to have allowed me to continue my lifestyle.
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
Bikerdude is offline   Reply With Quote
Old 12-01-2009, 11:37 PM   #18
Thinks s/he gets paid by the post
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 2,402
I'm not retired yet; 52 more months to nominal FI.

In my FIRE spreadsheet, I plan for my expenses to go up by 3% annually.

In reality, however, I expect my 2010 expenses to be equal to or slightly less than my 2009 expenses except that my income taxes will go up somewhat due to a higher paying job. Also "Recreation:Vacation" might be higher if I decide to take my kids on a real vacation next spring.

2Cor521
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 12-02-2009, 12:49 AM   #19
Thinks s/he gets paid by the post
kyounge1956's Avatar
 
Join Date: Sep 2008
Posts: 2,171
My inflation rate for next year is zero. I'm test driving my pension by using a budget based on the monthly benefit I would have gotten if I'd retired this year. Next year, it should have been a budget based on a pension with another year of employment and higher pay this year, but employees voted to take a ten-day furlough to help reduce the number of layoffs, so I will not earn quite as much in 2010 as I did this year and after contributions to retirement accounts, will take home less than the pension I would have gotten if I had retired.
__________________
kyounge1956 is offline   Reply With Quote
Old 12-02-2009, 09:32 AM   #20
Full time employment: Posting here.
cardude's Avatar
 
Join Date: Feb 2006
Posts: 599
I'm keeping my w/d rate the same this year. I'm new to this ER deal, and I'm not ready to give myself a raise. My W/D rate, according to my sophisiticated expense tracker spreadsheet thingy,has averaged 3.27 the past 8 months of ER. We had some big months this summer when we went to Costa Rica for a month and New Orleans and got drunk and bought a bunch of art in and around Jackson Square.

I'm trying to keep it below 3%, and currently it is-- last month was 2.23%, and the month before that 2.10% now that all the rentals are full and DW is kicking in $1200 of her check to the monthly budget . When she quits, which may be soon since it's driving her crazy already, the W/D rate will jump up to about 2.6% on a normal month and 3.5%-4% during summer months when we travel around (and drink too much and buy art). As long as the average is under 3% I feel OK about it.

Oh yeah, I also started doing a little car wholesaling on the side with an old car buddy of mine, and that's bringing in around 2K per month so far. I'm not counting that in my SWR however since I'm not sure how long it will last. It's just funny money for now. I don't really consider it work since I am really just the money man behind the scenes and don't do much. I do go to the auction a few times per month and help him shuffle cars around some. It's fun. More fun than house cleaning (which I still try to do but am not very good at).
__________________

__________________
cardude 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
2008-2010 zero pct adjusted net capital gain rate Ronstar FIRE and Money 9 07-09-2008 07:16 PM
Implied inflation rate in an inflation adjusted SPIA cashflo2u2 FIRE and Money 6 04-30-2008 08:24 PM
What Inflation Rate Will You Use? TromboneAl FIRE and Money 14 01-16-2008 07:41 PM
Impact/Adjustment on your plan/approach - Sunset on 15% LT Cap Gain Rate in 2010 chinaco FIRE and Money 0 04-18-2007 04:30 AM
CPI Rate in Advvanced FireCalc - Inflation Rate al4trade FIRECalc support 7 10-04-2006 01:40 AM

 

 
All times are GMT -6. The time now is 01:53 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.