Can You Offer Advice on My Retirement Budget?

[nico08]

I have put together an estimated budget in retirement. I have created two budget scenarios- one is a standard budget and the other is a "barebones" analysis. The problem is that both of these scenarios still create an annual retirement budget that is higher than I would like it to be. Not factoring in Social Security or a small government pension (that I am vested into) , I only have enough net worth to support a $22,400 annual retirement spending budget (based on a 4 percent withdraw rate). I am 41 now, and unless I am laid off, I plan on working for a few more years, so hopefully that number will go up. Part of the issue, I think, is my desire to stay in Central New Jersey which has high property taxes. I don't think I want to be a renter. I don't think that I want to live an extravagant lifestyle, I just want to budget enough so that I don't feel like I will need to scrimp for the rest of my life. Depending on the current state of my investment portfolio, FIRECalc tells me that I may be able to FIRE somewhere between 6 to 9 years from now. I want to stay employed until after (hopefully) the health insurance exchange goes into effect.

I was just wondering if someone would take a look at my retirement budget scenarios and provide any feedback that you may have to try and bring the overall number down. Or if you have any other insight in regard to the budget scenarios, that insight would be appreciated too.

I would prefer to send the retirement budget scenarios to you via private message, if that is ok with you.

Thank you for your advice.

 

[FANOFJESUS]

I think New Jersey is a killer on that kind of money. Now in the midwest we can start talking.

http://frugalzeitgeist.com/cheapest-places-to-live-in-america-topeka-ks-for-under-840-a-month/

 

[Mulligan]

Midnighter, I'm not a good budget person for you, but does the health insurance premium have to come out of the 22k? I have read about some awful premium costs for people up there as they push into their 50s and 60s.

 

[Surewhitey]

We're headed to Mexico expecting to budget $2500 monthly ($30k annually), but this is in one of the more costly places. We're going to keep track to see what it actually comes out to be...we'll keep you posted. Hopefully we end up under budget like some we've talked to do down there.

Playa del Carmen, fyi...

Btw, we got a major medical policy for DW & I for around $300 / month with 4 doc visits annually if needed & 1 annual exam. That comes out of our $2500, so we'll live on $2200 monthly.

$750 rental - 2br / 2ba, 1/2 mile from beach
$400 food
$200 transport (occasional car rental, otherwise public & bikes)
$100 contribution to local church
$250 internet, elec, gas (avg)
$300 local travel & 2 round-trips annually to states (avg)
$200 misc (clothes, toiletries, everyday stuff)
$300 health insurance

 

[Ally]

I have no real advice other than to say that sometimes I feel sort of poor compared to some of the folks here who have millions saved. We are both 60 and hope to retire in 2-4 years, with a govt. pension and social security and hope not to touch savings until we are 70 or so. Luckily, in West TX, our cost of living is very low and we owe no money, and our mortgage is paid. Nevertheless, while we can travel some, we won't be going to exotic locations, etc. Not working, spending time together and with family and pets, you can't beat that.

 

[brewer12345]

If you get out of Jersey you will do fine. If you stay, not so much.

 

[harley]

If you get out of Jersey you will do fine. If you stay, not so much.

And that's true pretty much no matter how much money you have.

 

[Ally]

I looked at the budget and think the same thing. In a low cost area of the country, you can pay so much less for a home. For us, the estimated food costs are low.

 

[artist59]

NJ living

We live in NJ and have been looking into less expensive towns to live in; closer to husband's job, kids have graduated HS so no need to live in the expensive town we're in, etc. I've found a few places that are relatively inexpensive.

If we sell and use the equity to purchase (or at least put down 60-70% of the purchase price) we can have our monthly mortgage, taxes and homeowner's insurance be about $600-$800 per month. Some areas are Toms River, Manahawkin, Barnegat, etc. If you check on Zillow you'll see the property taxes, figure you're down payment, and how much you're mortgage (if any will be per month).

There are other states where it is cheaper overall to live in but if the job is in NJ and it's worth staying for some years, there are some towns that are less expensive. It may cost the same as moving to a different state or country.

 

[LARS]

We live in NJ and have been looking into less expensive towns to live in... no need to live in the expensive town we're in, etc. I've found a few places that are relatively inexpensive.

I think this is a very good point. You can always find less expensive areas in otherwise expensive states. Clearly in NJ if you are in the NYC metro area costs will be high. But look out in small towns in Hunterdon Cty, for example, and your money will go a lot further.

I would imagine this becomes especially true if you look in Southern NJ, away from the shoreline.

 

[nun]

Minimizing housing costs are key to ER in the North East. I'm in MA and once the mortgage is paid off my budget will be $3k/month

$550 real estate tax and home insurance
$600 food and drink
$350 health insurance
$100 transport, bus, gas (I mostly ride my bike)
$80 car insurance
$300 utilities
$400 federal and state tax
$600 misc (clothes, toiletries, repairs, medical expenses, everyday stuff)

 

[SJ1_]

I have no real advice other than to say that sometimes I feel sort of poor compared to some of the folks here who have millions saved. We are both 60 and hope to retire in 2-4 years, with a govt. pension and social security and hope not to touch savings until we are 70 or so. Luckily, in West TX, our cost of living is very low and we owe no money, and our mortgage is paid. Nevertheless, while we can travel some, we won't be going to exotic locations, etc. Not working, spending time together and with family and pets, you can't beat that.

There will always be someone that will make you feel poor compared to them.

"spending time together and with family" - nothing beats that!

 

[obgyn65]

Hello - please feel free to send your budget scenarios to me by private email. I'd be happy to provide comments.

I would prefer to send the retirement budget scenarios to you via private message, if that is ok with you.

Thank you for your advice.