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Old 07-04-2011, 01:27 PM   #21
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I currently save 45% of my gross income, and 30% goes to taxes, so I live on 25% of gross.

I have detailed current and retirement budgets, based on years of spending history.

The base retirement budget turns out to be almost exactly what I spend now pre-tax (25 % of gross). It is adjusted to account for the following changes:

- Paying full freight on health insurance ( I got quotes from ehealthinsurance and grossed them up by 25%)

- Figuring out tax rates doing runs of turbotax based on income sources being only from interest, dividends and capital gains

- Lower spending on clothes, dry cleaning, house cleaning, tolls, and home maintenance (doing more myself)

- Higher spending on travel and entertainment, utilities (I'll be home more)

What I call the "swagger" retirement budget increases total spending by 60%, to 40% of pre-retirement income, a level of spending I have never experienced before but like to imagine I could if I had time post FIRE.


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Old 07-04-2011, 01:42 PM   #22
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Originally Posted by Lagniappe View Post
What I call the "swagger" retirement budget increases total spending by 60% to 40% of pre-retirement income, to a level of spending I have never experienced before but like to imagine I could if I had time post FIRE.
It makes sense that if you spend your time spending instead of making money, you're going to need more money to spend.
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Old 07-05-2011, 05:10 PM   #23
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Ive been retired now for 4 years. We need about 35% of our 2006 income to do what we want. We spend more now on some things, health insurance and golf, but about the same on most everything else. Our taxes are lower and we don't save as much, but we could still live well on less if needed.
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Old 07-05-2011, 06:08 PM   #24
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We spend a lot more since we retired but that is because we saved so much while working. Spending covered by dividends and pensions that turned out in the end to be more than expected.
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Old 07-05-2011, 06:49 PM   #25
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I'm saving about 50% of gross, primarily because I am scheduled to cross the finish line Real Soon. I will have a pretty good terminal benefit (i.e., unused vacation) payout that will add to it. This may be going overboard, but I can/t predict what's going to happen with state budgets.
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Old 07-06-2011, 12:07 AM   #26
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As you can see there is a lot of variance in the answers here on" how much will I spend in retirement?" Like Nords and some others said, it all depends on your expenses...especially after you retire.

I have annual expenses broken every way to Sunday for the past 10+ years.

I did projections using many different life-style wants/needs to see where we might spend $$$ over the next 30-35 years. Lots of spreadsheets with moving budget numbers based on multiple factors.

So far 3 years into retirement things have fallen into various grey areas that were not fully accounted for in the planning:
* The stock market and economy tail spin so early in retirement.
* Starting a business and self funding it
* Drop in real estate market
* Support for some family members in unusual circumstances

Our post retirement spending has not been the same in any of the three years; but it looks like it is finally stabilizing at a level we planned on. Income has been close to our projections.

Long term expenses should be close to our plan. Income will still depend on stock market performance over the long haul.

We still have a mortgage but that is our only debt. We have a lot of equity (even in the current market) and our mortgage helps offset some taxes for a while. We plan on downsizing in 5-10 years and having no mortgage and our plan reflects this change in expenses.

Unless you are really well off a plan of some sort is essential to determining what you will spend for the rest of your life. But my plan will be different from your plan. The key is to do your own calculations and projections in several ways to see how you want to live in ER and then see which option you can afford. Repeat often.
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Old 07-06-2011, 12:27 AM   #27
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Originally Posted by GregLee
It makes sense that if you spend your time spending instead of making money, you're going to need more money to spend.
Too true, I notice now when I have a day off we might go out to lunch then hit a movie, do some shopping, by the end of the day we have spent $$$. I figure I should have worked and made some money instead. I can only imagine what type of hole we will put ourselves in if I had everyday off
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Old 07-06-2011, 12:57 AM   #28
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In my working days I used to average about $X/yr (salary and bonus). Today we probably spend $X/yr. That means our current spending, excluding income taxes, is about equal to my gross income before ER. A lot of this is discretionary (like gifts to kids) but like danmar, we find we have much more than we needed. We'll worry about it if our spending ever hits 4% of portfolio.
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Old 07-06-2011, 01:10 AM   #29
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I've been retired exactly 4 years.

married, children gone, house paid off now, age = 59, southern california

we're living on about 65% of our pre-retirement income.

part of that reduction is due to downsizing our house.

**********
biggest missed estimate? I never realized how much we'd be driving. Our mileage actually increased after we retired. We can sit at home and watch TV or we can get out and enjoy our hobbies. We chose the hobbies, but wow on mileage.
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Old 07-06-2011, 01:59 AM   #30
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We are spending about 17% of the combined gross income we used to earn when we were both working. Since I retired, we have been spending the equivalent of 25% of my wife's current gross income.

Our expenses have decreased (slightly) since I retired. I drive less, so we save on gas. I have more time to plan our meals, so we spend less on food. And, I found out, work stress used to induce quite a bit of frivolous spending on my part. My hobbies are fairly cheap, so I haven't seen much increase in that department.
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