Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 08-05-2012, 05:33 PM   #61
Thinks s/he gets paid by the post
walkinwood's Avatar
 
Join Date: Jul 2006
Location: Denver
Posts: 2,676
Your taxes may go down once you retire. It may be worthwhile working through turbo-tax to figure out just what your taxes will be if you have the same amount of cap gains & divs, but no (or reduced) income.

If you don't have pre-existing health conditions, shop around for health insurance. Do it even if you do - who knows? you may get a better deal.

All the best
__________________

__________________
walkinwood 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 08-05-2012, 07:07 PM   #62
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,369
Quote:
Originally Posted by Live And Learn
Thanks everyone. The budget I posted is my post-retirement budget (not retired yet but hoping to get there in a year). Based on this budget I need to work another 2 -3 years. If I had overstated it (which doesn't seem to be the case !) by 6 - 8k then I could retire this year or next (looking for 90% confidence level of my portfolio lasting to age 95).

HI is based upon my own estimate as we both have pre-existing conditions. Right now I am partially covered through work and haven't yet seriously shopped for individual HI.

I'm sure I've overstated by about 1 - 2k per year but I see that as my cushion.

Looks like I'm left with the same choices I've had for awhile (a) assume the risk of my portfolio running dry at 85 and needing to live on SSI from there on. (b) suck it up and w*rk through 2014. (c) give up the dog and vacations (not gonna happen !).
I know wishing and hoping is not the sound basis for retirement planning, but if the healthcare act survives, it sure seems that you would be a beneficiary of its implementation and maybe your premiums wont be so bad. I remember we had a thread that had some numbers for possible premium costs and it benefitted people with preexisting conditions. Here is a link you might plug a few numbers in to give you a possible guesstimate in 2 years. It will show you an approximate cost without the subsidy that Im sure you will not qualify for.

http://healthreform.kff.org/Subsidycalculator.aspx
__________________

__________________
Mulligan is offline   Reply With Quote
Old 08-05-2012, 09:52 PM   #63
Thinks s/he gets paid by the post
gauss's Avatar
 
Join Date: Aug 2011
Posts: 1,708
I am planning on an annual retirement budget of ~ $80,000 for DW and I which includes taxes and replacement costs.

This was created by looking at years of categorized quicken spending and then eliminating expenses that will go away in retirement (ie mortgage, fica, 401k etc).

DW and I are both technical professionals without children and have always lived below our means.
__________________
gauss is offline   Reply With Quote
Old 08-06-2012, 03:57 PM   #64
Thinks s/he gets paid by the post
Live And Learn's Avatar
 
Join Date: Feb 2012
Location: Tampa Bay Area
Posts: 1,689
Quote:
Originally Posted by Mulligan View Post
It will show you an approximate cost without the subsidy that Im sure you will not qualify for.

Health Reform Subsidy Calculator - Kaiser Health Reform
Yikes - looks like I may not have budgeted enough !
__________________
"For the time being no discipline brings joy, but seems grievous and painful; but afterwards it yields a peaceable fruit of righteousness to those who have been trained by it." ~
Hebrews 12:11

ER'd in June 2015 at age 52. Initial WR 3%. 50/40/10 (Equity/Bond/Short Term) AA.
Live And Learn is offline   Reply With Quote
Old 08-06-2012, 05:57 PM   #65
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,369
Quote:
Originally Posted by Live And Learn

Yikes - looks like I may not have budgeted enough !
Sorry, I was certain it would provide you some comfort, not anxiety! Its not a great comfort, but remember you will be able to deduct all healthcare expenses including health insurance above 10% of your AGI. So if your costs are indeed that high, you should get some relief in your income taxes assuming your income level is more modest in retirement.
__________________
Mulligan is offline   Reply With Quote
Old 08-06-2012, 09:33 PM   #66
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,812
I think the Bureau of Labor Statistics has some useful comparisons. The BLS gets people to keep detailed spending diaries, and puts the results online.

This ftp://ftp.bls.gov/pub/special.reques...byINC/xtwo.TXT
is an example for two person households. You could go down the list and compare your expenses to other higher income people.

If you do this, you should adjust the housing expenses to reflect the distribution of homeowners/renters as shown in the "Housing Tenure" section.

(Note that this table is also available as an Excel file, if that helps.)
__________________
Independent is offline   Reply With Quote
Old 08-07-2012, 07:43 AM   #67
Thinks s/he gets paid by the post
teejayevans's Avatar
 
Join Date: Sep 2006
Posts: 1,220
Quote:
Originally Posted by Live And Learn View Post
HI is based upon my own estimate as we both have pre-existing conditions. Right now I am partially covered through work and haven't yet seriously shopped for individual HI.
I was rejected when I applied for HI, you may not be able to get it and if you can, it will be high, your estimate might be tad low, but it's a good estimate.
TJ
__________________
teejayevans is online now   Reply With Quote
Old 08-07-2012, 07:50 AM   #68
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,419
Quote:
Originally Posted by Live And Learn View Post
Yikes - looks like I may not have budgeted enough !
It's a good estimate IMHO.
__________________
MichaelB is online now   Reply With Quote
Old 08-07-2012, 10:58 AM   #69
Recycles dryer sheets
 
Join Date: Jun 2002
Posts: 367
I'm still (or back maybe I should say) working for the time being. I have a retirement budget that is constantly evolving, but below is what it looks like. The "fun" category is empty for now as I am working on building the assetts simply to support this which does have some fun in it (toy insurance is for motorcycle/boat). R&R is my "repair and replace" budget for house and cars. House covers RE taxes and insurance (1000sqft) I also do almost all repairs myself. House would be paid for. So at this level about 28k, with $1000 added into fun category, about 40k, which is what I'm shooting for, but I should be at the $28k level by year end! I'm in Mass, so my health care is quoted from the exchange at one of the higher income levels, adjusted for copays and meds and should be reasonable. Also, I live alone.
(Sorry about the formatting)


Budget
R&R $250.00
House $300.00
Electric $75.00
Heat $250.00
Water $50.00
misc* $100.00
Food $400.00
hm phone $0.00
Cable $60.00
cell phone $75.00
car ins $55.00
toy ins $20.00
Excise $25.00
Gas $200.00
Clothes $30.00
Gym $30.00
health care $350.00
isp $60.00
income tx $0.00
fun $0

total $2,330.00
annual $27,960.00

__________________
When you walk in the shadow of insanity, the presence of another mind that thinks and acts as yours does is something close to a blessed event. -Robert Pirsig, Zen and the Art of Motorcycle Maintenance
panhead is offline   Reply With Quote
Old 08-07-2012, 06:48 PM   #70
Thinks s/he gets paid by the post
Live And Learn's Avatar
 
Join Date: Feb 2012
Location: Tampa Bay Area
Posts: 1,689
Panhead, yours is one of those examples that I've been comparing myself to.

28 Panhead
12 Panhead fun not included
17 Health insurance difference
12 Taxes
69 Subtotal
8 Second person "fun"
76

The remaining variance between your budget and mine is home + utilities + home maintenance which I calculate as about 8k annual. So ... my 84k looks like its on track given the fact that (a) we have two people (b) healthcare is crazy (c) my home is larger
__________________
"For the time being no discipline brings joy, but seems grievous and painful; but afterwards it yields a peaceable fruit of righteousness to those who have been trained by it." ~
Hebrews 12:11

ER'd in June 2015 at age 52. Initial WR 3%. 50/40/10 (Equity/Bond/Short Term) AA.
Live And Learn is offline   Reply With Quote
Old 08-08-2012, 07:17 AM   #71
Recycles dryer sheets
 
Join Date: Jun 2002
Posts: 367
L&L:
Yes, I agree. It's been said, but once you subtract out health care and taxes your budget is extremely reasonable. You could always try to restructure your portfolio to reduce taxes (more dividends than interest in taxable side) and move bond allocation to tax advantaged, but if you plan to live off the income from the taxable account until 59.5, than that may not make sense. Then there's the fiscal cliff.....

If PPACA holds up, it may help you out as you would still be paying regular rates even with pre-existing conditions.

I'm planning a budget for very close to half of yours, so I think you are ok, but hopefully you will be able to get the health insurance down to about half of what you are paying. As for taxes, they are a consequence of making money.

-Pan-
__________________
When you walk in the shadow of insanity, the presence of another mind that thinks and acts as yours does is something close to a blessed event. -Robert Pirsig, Zen and the Art of Motorcycle Maintenance
panhead is offline   Reply With Quote
Old 08-08-2012, 08:47 AM   #72
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,369
The way you calculate budgets certainly effects the way it looks. My general monthly costs are this. House (including escrows) 800, child support 500 monthly bills (all utility, tv, internet,phone) 400, health and car insurance 105, gasoline 200, food 400, entertainment 400, misc. 400. That is about $3200 a month which has stayed consistent for the 2 plus years I have been retired. However, most people prudently plan for sinking costs in their budget which I do not. The reason why is I live off a pension instead of drawing down investments. I usually have about $1500 a month left over and dump it in my savings, IBonds, etc. If some big ticket item needed purchased I would take from there. I also probably spend at least $5-6k a year in trips and my golf membership, but my tax refund covers all of that, so I do not take it out of my monthly budget either.
__________________
Mulligan is offline   Reply With Quote
Old 08-08-2012, 10:03 AM   #73
gone traveling
 
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
Quote:
Originally Posted by rbmrtn View Post
I don't travel. Hate it, had my fill it with megacorp
So do I, due to all the international travel I had to do while still employed (wo*ked for two different Euro firms, for 30 years).

However, since DW considers travel as a "necessary" part of her life (along with me ), I still go quite often (BTW, off to Scotland next month).

It has been, and remains our largest ongoing budget expense line item, both before and after retirement...
__________________
rescueme is offline   Reply With Quote
Old 08-08-2012, 10:21 AM   #74
Recycles dryer sheets
 
Join Date: Jun 2002
Posts: 367
Quote:
Originally Posted by Mulligan View Post
.....most people prudently plan for sinking costs in their budget which I do not. The reason why is I live off a pension...
That pension you have can make a big difference, esp if you are also collecting SS, when considering sinking costs. I would likely do it your way if I was in your situation. Alas, I will never see a pension. I have my $250/mo R&R, plus I have also set up a HELOC. My goal would be to never touch it, but if a big expense came about I could tap that and use the R&R fund to pay it back without raiding a chunk of my nest egg. Before I retire, I plan on talking to the bank to reset the drawdown/payback periods.

I'm working on retiring at/around 45, so I will have a long way to go before I see any SS dollars or have unfettered access to my retirement accts.
__________________
When you walk in the shadow of insanity, the presence of another mind that thinks and acts as yours does is something close to a blessed event. -Robert Pirsig, Zen and the Art of Motorcycle Maintenance
panhead is offline   Reply With Quote
Old 09-03-2012, 09:26 AM   #75
Thinks s/he gets paid by the post
Live And Learn's Avatar
 
Join Date: Feb 2012
Location: Tampa Bay Area
Posts: 1,689
I'm revising this. I seriously overestimated my taxes. Assuming that every dollar I spend comes from taxable sources, all taxed at ordinary tax rates, I think my bill would be about $7500 / year (ie: taxes on 74k of spend + tax bill of 8k). If I bump that up by 20% as a cushion I get a tax bill of $9k as opposed to my original budget of $12k. I know I'm overstating in that at least some of my income will come from tax free sources, but (like most of us) I like to err on the high side.

As for health insurance: I'm looking at the PCIP.gov site and the quote for a Florida resident. The per person amt for the extended plan is $505/month with a $7k out of pocket maximum. That should give me max health care costs of $26k. My budget is $21k which is probably reasonable as I doubt both DH and will both spend the out of pocket max each year, every year.

Of course I can't get the PCIP insurance unless we are uninsured for 6 months (something I'd never let happen if I could help it !), but I can't imagine that the PPACA costs would be more than the PCIP plan.

Anyone see any flaws in any of the above ?
__________________
"For the time being no discipline brings joy, but seems grievous and painful; but afterwards it yields a peaceable fruit of righteousness to those who have been trained by it." ~
Hebrews 12:11

ER'd in June 2015 at age 52. Initial WR 3%. 50/40/10 (Equity/Bond/Short Term) AA.
Live And Learn is offline   Reply With Quote
Old 09-15-2012, 10:13 AM   #76
Thinks s/he gets paid by the post
Live And Learn's Avatar
 
Join Date: Feb 2012
Location: Tampa Bay Area
Posts: 1,689
In my normal "making myself crazy" manner, I've found another site to estimate insurance costs under the Affordable Care Act.

National Health Reform Calculator

For 2 people, with the youngest one at 55 yo and 84k income costs are 18k for premiums with 12k max out of pocket. My 21k again doesn't look like enough.

I understand the 31k is worst case but when planning for ER I'm in the "you've gotta plan worst case" camp. (see my tag line !)
__________________
"For the time being no discipline brings joy, but seems grievous and painful; but afterwards it yields a peaceable fruit of righteousness to those who have been trained by it." ~
Hebrews 12:11

ER'd in June 2015 at age 52. Initial WR 3%. 50/40/10 (Equity/Bond/Short Term) AA.
Live And Learn is offline   Reply With Quote
Old 09-15-2012, 10:16 AM   #77
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: 42,075
If you assume worst case for every possibility you can never retire. Of course since worst case when it comes to lifespan is "today is your last day", you really have nothing to worry about...
__________________
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 09-15-2012, 10:20 AM   #78
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,419
Quote:
Originally Posted by Live And Learn View Post
In my normal "making myself crazy" manner, I've found another site to estimate insurance costs under the Affordable Care Act.

National Health Reform Calculator

For 2 people, with the youngest one at 55 yo and 84k income costs are 18k for premiums with 12k max out of pocket. My 21k again doesn't look like enough.

I understand the 31k is worst case but when planning for ER I'm in the "you've gotta plan worst case" camp. (see my tag line !)
It's not clear why you feel your own estimate for health care is too low. You are budgeting 3k more than the cost of the premiums, which seems pretty reasonable to me.
__________________
MichaelB is online now   Reply With Quote
Old 09-15-2012, 11:50 AM   #79
Thinks s/he gets paid by the post
Live And Learn's Avatar
 
Join Date: Feb 2012
Location: Tampa Bay Area
Posts: 1,689
Simple answer --- I'm a worrywart when it comes to money. Probably comes from growing up well below the federal povery level.
__________________
"For the time being no discipline brings joy, but seems grievous and painful; but afterwards it yields a peaceable fruit of righteousness to those who have been trained by it." ~
Hebrews 12:11

ER'd in June 2015 at age 52. Initial WR 3%. 50/40/10 (Equity/Bond/Short Term) AA.
Live And Learn is offline   Reply With Quote
Old 09-15-2012, 03:19 PM   #80
Thinks s/he gets paid by the post
 
Join Date: Jul 2012
Location: Mississippi
Posts: 1,878
I put my numbers in and I get 1800/yr, way less than what I budgeted

It's a numbers game. Your income is way to high to benefit from this ( other than you can actually buy insurance and not be denied )

If You put in 60K it drops to 5700/yr. Can you get by on 60K instead of 84K. Maybe do some kind of bucket arrangement with pot of cash. Get 60k of income and take 24k from the cash pile. You'd almost come out even with difference in premium.

I don't know if has been determined what exactly will be counted as income. That might influence things also.
__________________

__________________
rbmrtn is online now   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


 

 
All times are GMT -6. The time now is 02:30 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.