Were expenses what you thought after you retired?

[Senator]

I see you retired today! Congrats!

Actually last year. One year anniversary. Thank you.

 

[6miths]

Yes. I expected there would be expenses and indeed there are!

 

[Souschef]

The one big expense I had not figured on in my early days of retirement was flying.
I got involved with Angel Flight West and Pilots & Paws. Last year I spent almost $8K on aircraft rental. Fortunately, our incomes and RMD's will cover it.

 

[Koolau]

When we were planning our move to Paradise, all the books said to factor in the "Paradise Tax" (higher costs of almost everything.) Well, no matter how "well in hand" you think you have your budget, you just can not believe the costs until you see them. If it were just a few things, it wouldn't be so difficult to believe. The good news is that we could still afford it!

The other thing we noticed is that our personal cost-of-living increase is significantly worse than the official (US gummint COL) figures would suggest. Again, we seem to have weathered these increases so far.

We too run into the "one off" sort of thing (just had a 21 year old bridge replaced at $4K! Yikes!)

Having said all this, we still seem to be pretty close to our original estimates as we over estimated things like taxes and post-Medicare health care costs. As always, YMMV.

 

[Looking4Ward]

My expenses have actually turned out to be much less than I anticipated because I now have the luxury of time to scrutinize and reduce every one of them.

Except for health care, as others have already pointed out is becoming an increasingly ridiculous line item. For instance, I just learned today that despite our paying over $500 a month for premiums a colonoscopy and upper GI scope (performed at the same time by the same doctor at the same surgery center) would cost me $3200 out of pocket because our deductible is $6,050 per individual.

They really need to fix that.

 

[brucethebroker]

My expenses have actually turned out to be much less than I anticipated because I now have the luxury of time to scrutinize and reduce every one of them.

1+.
Plus finding great deals on clothing, eating out, etc. with early bird specials and senior days, because you have "flex" time for shopping. Also using the "Retiree on a fixed income" card (with Dr., dentist, etc.) to get discounts. That tactic worked wonders a couple of years ago to get my Dr. to move us to generic RX when he was a little reluctant.

 

[bclover]

Vet expenses.

Holy flea and tick medicine Batman. My dog hobbes is a senior dog and he's developing health problems. Had to take him to the doggie er. $1000 bucks.

 

[athena53]

1+.
Plus finding great deals on clothing, eating out, etc. with early bird specials and senior days, because you have "flex" time for shopping.

Clothing? Last year DH and I spent $300 in total on clothing. This year I've spent $223 so far, mostly for 2 pair of Birkenstock sandals. I stay the same size and wear things till they fall apart- mostly my giant stash of T-shirts from athletic events. I'm sure the tailor from whom I ordered bespoke business clothes was unhappy to see me retire.

 

[Lstansbury]

Most individual spending categories such as food, utilities, fuel, and similar quantifiable expenses have been +/- 10% of what we expected. Even our "rainy day" expenses have been about what we expected. However, what we spend our rainy day fund on has almost always been a surprise.

We didn't realize we were going to spend many $$ on a new HVAC system. We knew the HVAC was 20 years old but we were hoping for a few more years. Another surprise was many, many $$$ on "waterproofing" the basement. Yes, we knew we had a wet basement now and then but didn't realize a 100 year rain would cause such a problem. Other surprises are $ here and there for automobile repairs. Our plan allows for up to $10k per year on such expenses so spending the money wasn't a surprise, it's what we spend the money on, and when, that's eluded us.

A former co-worker initially retired at the same time as me in 2011. However, he went back to work because he didn't feel comfortable with rising medical insurance costs and was equally uncomfortable with unplanned expenses such as a new water line from the water meter to his house, a new water heater, and the possibility of more unforeseen outlays. I suggested that he plan for the unexpected but that just didn't sit well with him.

As braumeister said, you need a cushion. You don't want a modest withdrawal rate increase to kill your plan.

Do you mind sharing a range on how much HVAC costs were? I'm looking at 11year old system and am trying to save for replacement.. Just not sure what an approx target might be. Thank you!

 

[athena53]

Do you mind sharing a range on how much HVAC costs were? I'm looking at 11year old system and am trying to save for replacement.. Just not sure what an approx target might be. Thank you!

Your question wasn't addressed to me but I had our figures handy so here they are: house has 1,800 square foot footprint and about 2/3 of the lower floor is finished. The rest is basement storage. KC suburb. We replaced the heating system in late 2015 and A/C early 2017. Each was about $7K. Ouch. We used Lennox units, not the highest efficiency but a notch down from that.

 

[gamboolman]

Beachfire - thanks for posting your estimated expenses in a simple format very similar to what we use.
Let's see can I correctly insert the link / pic this time....

We are looking to retire in about 2 years and have been tracking expenses for years now.

We wanted to toss our estimated expenses for our retirement planning out to the forum for review and comments. these are our estimated expenses for After Tax, i.e., Net dollars per month needed

What do you you and the Forum think?

 

[Scuba]

How does this budget compare to what you are spending now? We projected to spend more on healthcare and travel/entertainment/dining out and less on car maintenance/gas, clothing/dry cleaning. Kept other expenses about the same as we were paying pre-ER. So far so good after 8 months.

Other questions:
- I think it's useful to budget a contingency for unforeseen expenses. Did you include any "cushion"?
- Are you budgeting for eventual replacement of major items like cars, roof on the house, etc.?

 

[beachfire]

These numbers look very comfortable from where I sit. My health care is triple what yours is. You have a good bit more allotted to food and eating out. Your charitable is a nice big number ( good for you!). I can't think of anything you are missing. My total expense number without taxes is $8,000/ month. Yours is around $9,300/ month. Those numbers seem to be in a similar zip code.

 

[brokrken]

Beachfire - thanks for posting your estimated expenses in a simple format very similar to what we use.
Let's see can I correctly insert the link / pic this time....

We are looking to retire in about 2 years and have been tracking expenses for years now.

We wanted to toss our estimated expenses for our retirement planning out to the forum for review and comments. these are our estimated expenses for After Tax, i.e., Net dollars per month needed

What do you you and the Forum think?

A couple of items strike me as odd in this list.

1. $1200 a month for groceries plus $800 for eating out seems extreme for 2 people. My family of 3 eats out a ton and we don't come close to $2000 for both.
2. $400 per month for clothes and $300 per month for car maintenance seems high

Also love that you have "car phones" as a line item. I remember when I actually had a "car phone"

 

[Lstansbury]

Wow. 14k total. Good to know. I need to ramp up my savings.

 

[gamboolman]

Thanks Scuba for the feedback. Regarding our expenses and history - This site is great for us - as we are expats living/working in Africa and have not been home except for a couple months per year in the last 15ish.... years, thus we have not been "living" in Texas for a long time.
Getting to read, discuss - and learn from and with other folks who are at similar stage/time of life is invaluable to us.

I did not include that we own our home and have put new roof, new AC's, new kitchen and appliances, new fences, sheds & outbuildings, new flooring and cabinets in recently and all paid for to try and get major expenses done & dusted prior to retiring.

Our adult son is living in our home pursuing post grad degree's and working - until we retire and then he'll move out to his own place. So that is how we have been able to keep our home while not being in it for 10 months per year.

Thank you for the comment on - Health care. We will continue our Medical/Dental/Vision/ insurances from megacorp in retirement. We have doubled our cost for the budget. We may need to bump it up some more - we will likely do so in our budget.

We are planning new vehicles - his & hers....upon retirement - but this money is set aside and not included in the budget or expenses. For vehicle maintenance - we based our number on a lifetime of fixing the kids cars.....You are correct in that our estimated maintenance costs are probably too high for just Mom and Dad. I guess this could be some conservatism/contingency.

I also did not include that we have run our expense numbers with Firecalc grossed up to account for Taxes and with a 3% inflation factor. We are getting 100% for 30 years. So that is encouraging.

Correct budgeting for expenses is key to being able to live the desired lifestyle upon retirement ....and that is why we wanted to see what the folks here at ER think of our estimated budget.

Thank you for the feedback - much appreciated.

Any other advice or pointing out area's of concern(s) would be welcomed.

gamboolman & Ms. gamboolgal.....

 

[Corporateburnout]

Our expenses have been higher in retirement than when we worked. The major driver is traveling and entertainment.

We planned for these expenses before we pulled the plug. We also planned on 15K of unforeseen expenses. In the three years since we retired we spent 20K the first year on dental implants/crowns for both of us and this year we had to replace our washer and dryer (only 7 years old) and put a new trex deck at 8K for both expenses.

 

[W2R]

Beachfire - thanks for posting your estimated expenses in a simple format very similar to what we use.
Let's see can I correctly insert the link / pic this time....

We are looking to retire in about 2 years and have been tracking expenses for years now.

We wanted to toss our estimated expenses for our retirement planning out to the forum for review and comments. these are our estimated expenses for After Tax, i.e., Net dollars per month needed

What do you you and the Forum think?

I think that's a lot, especially for Texas. Here's my post on a thread about how much we spent in 2016. I listed spending for only a few (but not all) categories. This year's spending has been about the same so far. Still, my expenses are probably not comparable since I live alone.
http://www.early-retirement.org/forums/f27/2016-spending-84736.html#post1817863

 

[daylatedollarshort]

I think that's a lot, especially for Texas. Here's my post on a thread about how much we spent in 2016. I listed spending for only a few (but not all) categories. This year's spending has been about the same so far. Still, my expenses are probably not comparable since I live alone.
http://www.early-retirement.org/forums/f27/2016-spending-84736.html#post1817863

Ir seems like a lot to me now but we used to spend more, so I've been on both sides of the spreadsheet. We just got interested in sustainable living and expense optimization a few years back and now that has become kind of a hobby in itself. We cut our grocery budget to $10K a year (with kids) to retire early and now that seems high, but it took me awhile to figure out how to lower it.

 

[W2R]

Ir seems like a lot to me now but we used to spend more, so I've been on both sides of the spreadsheet. We just got interested in sustainable living and expense optimization a few years back and now that has become kind of a hobby in itself. We cut our grocery budget to $10K a year (with kids) to retire early and now that seems high, but it took me awhile to figure out how to lower it.

I think you have done a fabulous job of cutting back on spending, especially given your SF location. I haven't lived in Texas for 21 years, but back then the COL there was surprisingly low. Maybe it has gone up since that time. It's got to be so hard for gamboolman and his wife to plan this since they are living elsewhere most of the time.

 

[wyecrabber1]

View attachment 26279. Thanks for all the insights. Very helpful. I am not sure if spreadsheet will come through on this post. We have about 20% of our budget that is quite flexible. For about 2 years we will have 2 houses, then the property and utility costs will come done a good bit. Any thoughts on big gaps?

Beachfire is your budget for you and your spouse? How many vehicles? How would you rate your health?

I've tracked our expenses for as long as I can remember and I'm amazed at how much we spend on food -- yes, we eat out 2-3 times a week. Wifey retired two years ago and expenses are as expected. I'm looking to pull the trigger in 2018. Fortunately, guaranteed income covers 95% of expenses. Our withdraw rate is less than 1% -- I'm confident things are good.

Thanks for your post.

 

[REWahoo]

I think that's a lot, especially for Texas.

Everyone is different when it comes to expenses, but some of the numbers do look high compared to what we spend 200 miles to the west of the OP. One example: for a 2700 sf all electric house we average ~$200/mo vs your $480/mo for gas and electric. Must be a large house?

And $350/mo for car insurance? That's almost double what we pay to insure three vehicles.

 

[texcurtis]

My expenses for my first two years of retirement have been very close to expected amounts. The third year of retirement will be a bit higher as I've relaxed about money a bit and am doing a few things around the house (thanks good market!). I tracked several years in advance of retirement & still track now, although I've reduced the number of categories for ease of tracking.

 

[beachfire]

Our budget is just for me and my wife. No debt. 2 cars. Will be moving into a fully redone house so maintenance expenses there should be low for several years. Based on responses, I think I have under estimated some of our food expenses (I had 800/ month groceries and eating out).

 

[nvestysly]

Do you mind sharing a range on how much HVAC costs were? I'm looking at 11year old system and am trying to save for replacement.. Just not sure what an approx target might be. Thank you!

I think there is a thread in the subject from a few years ago. In that thread there are several related topics such as gas vs. electric, BTU/tons, efficiency, etc.

We spent around $7k for new compressor (outside unit), new gas furnace/evaporator/blower (inside unit), and adding insulation to all the sheet metal ducts.