Maritimeboy said:
Hi,
There seems to be a consensus among the forum members who have replied to my post so far. I need to track my expenses for a few months before retirement to (hopefully) show we can live on $3000 per month - and if so I would likely worry less about ER. I will have to force myself to start tracking expenses, because it seems as if it must be a pain to do it.
Thanks for the advice.
Maritimeboy
It is good business to know where your expenses go and how much they add up to each month. It takes a good 6 months of spending (and preferably a year to get a full cycle of your expenses that will vary according to season) to get a good feel for what expenses are. Use a spreadsheet or software such as Quicken or MS Money to track them.
You don't necessarily have to know where every dollar goes, but you do need to know what are the fixed expenses, e.g. how much do you use in cash each month (for food, household expenses, personal hygiene), how much are your utility bills each month, and gasoline. Don't forget to factor in monthly equivalent of annual insurance payments (life, house, auto) and property taxes. Once you know the difference between $3000 and fixed, then you can see where you can best allocate the rest of your expenses (travel, clothing, entertainment, gift, an allowance for significant purchases like appliances every 15 years or so, home repair, a replacement vehicle every 10 years or so and a new roof every 20 years or so).
You should also visit the CPP page on the gov'ts website and obtain an estimate of the CPP payments you will get to supplement your DB pension at 65 (or at 60 on a discounted basis) and then OAS at 65. You haven't said whether your wife has worked and is entitled to CPP or not, but that would add more income. She will also get OAS at 65 regardless of whether she worked or not. There is a raging debate on whether to take CPP at 60 or 65, but my view is that a bird in the hand is worth 2 in the bush. I will take CPP at 60 (3 yrs from now). You can also income split CPP equally between you and your wife.
Personally, I believe $3000/mo (net) is a bit tight but many couples live on less. And it will increase as you collect CPP and OAS. Additionally, there is nothing wrong with some part time work from time to time to supplement your needs. Retirement isn't necessarily going from a 40-50 hour work week to 0 hours. It is about having choices to now do what you want. Doing 10-15 hrs a week on a seasonal basis isn't necessarily a bad thing. I can think of a lot of things I would enjoy doing 10-15 hrs a week.....even at $10/hr too.
Add: I am a retired Canadian in Alberta