budget predictions

[engr]

Hello All,

I have perhaps two years before I can retire. DW and I are looking at the present budget allocation. I have two columns with the first column listing present expenses (one daughter just moved out with boyfriend but I don't consider totally independent yet - helping a little with her loans. Our son is a junior in college. Column two lists our predicted new values once the kids have left home. Eventually, it will only be DW and myself. I have been trying to get a handle on how much expenses may go down (eg groceries, dept store stuff) and what may go up (medical). I realize these values are subjective but I thought there may be some concensus data on what the percentage of retirement income is allocated for typical 'middle class' retirees in the $100K bracket. I tried looking at pie charts on Google but have not found anything meaningful. Does anyone know of a good reference site? Thanks.

 

[Mulligan]

Personally, I think it is interesting to see what people spend on various things, and we have had a few in the past. The trouble is everything is so subjective, and subject to regional costs, and whether you take a mortgage into retirement, pay your healthcare, etc. For example, this year I have flown halfway across US to Vegas 7times, Aspen skiing for a week,Tahoe, a trip to another lake for a week, and 2 jaunts to Minneapolis. To some that might sound like a jet setter life, but in reality I spent under 50k the last year, and have a house payment, college payment and child support. I just allocate my resources in the manner I want and enjoy.
For me, the best thing to do is analyze your income stream in retirement and make sure that is correct. Also, track your expenses in 2 categories: 1) the essential expenses such as healthcare, food, utilities, etc. 2) non essential expenses such as vacations, entertainment, etc.
There were certain things I had to make sure I had the income for before I retired. Once I was sure my standard of living was covered with $1000 extra a month, I retired. I tracked for 2 years, and felt pretty confident at that time. Plus knowing my child support and college expenses are nearing the end will provide even more bonus income.

 

[braumeister]

The major problem with this is there is an incredible amount of variability due to differing lifestyles and geographical locations.

For a trivial example, DW and I eat very well, but we mainly eat what we cook at home. So our grocery budget is high, compared to some, but our dining out budget is fairly low.

Another problem is that people tend to set their budgets up based on categories that make sense to them, but don't necessarily have any relation to another household. My two biggest budget categories are "household" and "miscellaneous". I'm perfectly comfortable with what's included in each of those, but many people would want to subdivide them.