QA my retirement expense plan

[corn18]

Ok, with the help of everyone here, I think I have a good handle on my retirement income. That's pretty simple: COLA military pension + SS @ 70.

I humbly ask everyone to take a look at my expenses. Feel free to comment on the amount, but I am really interested in what I am missing. That will bite me hard. This is the budget we are maintaining now and we plan to retire in Mar @ age 55. So here it is (amounts are monthly followed by annual):

Auto 674 8,094 This includes a new car every 5 years (2 cars, each kept 10 years), maintenance and gas
Clothes 400 4,800 My wife buys a lot of clothes
Pets 200 2,400 Our cat is 12 but we may get another pet
Food 1,500 18,000 Includes dining out and alcohol
Gifts 404 4,850
Health / Beauty 260 3,120
House 1,669 20,034 This includes property tax, maintenance ($2k / year) and misc ($4,800 / year)
Entertainment 150 1,800 We have a separate blow that dough budget of $25k / year
Misc 600 7,200 Who know what this is
Insurance 625 7,495 car, home, term life
Medical 605 7,260 This is misc expenses that Tricare does not cover. This goes up @ 65 to cover Medicare premiums
Cell Phone 120 1,440
Utilities 320 3,840
Internet 150 1,800 Includes streaming (YouTube TV and HBO max)
Taxes 858 10,302 This assumes I do Roth conversions from 56 to 70 up to the top of the 12% bracket

TOTAL EXP 8,536 102,433

We have an additional $25k / year for travel / blow that dough.

Still deciding whether to pay off the mortgage or not, so that is not included.

Is there anything I am missing? That is my worry, that I've completely forgotten something.

Thanks,

Corn

 

[l8_apex]

Have you been tracking your actual expenses this way already? How do the numbers compare?

 

[corn18]

Have you been tracking your actual expenses this way already? How do the numbers compare?

Yes, this is the budget we have been using for the past 2 years.

 

[SecondCor521]

Things to consider, maybe you already have:

Home improvements
Landscaping
IRMAA surcharges (Medicare)
Gifts to charity
Gifts to family (kids / nieces / nephews)
Dental costs (insurance, crowns)
Umbrella insurance

Only other thing that stood out is whether to consider canceling the term life insurance. Maybe still needed, maybe not.

 

[Z3Dreamer]

SecondCor has a number of good things. To that, I add: Home gym equipment or cost of joining a gym. Hobby costs.

I wish to expand upon SecondCor's home improvement. 10 years after building our retirement home, we found we wanted/needed to spend approximately 15% on major maintenance and changing our custom home. 15% of the original cost of the house. Expanding the living room, rearranging the master bath and replacing other things. YMMV

I have some cost saving ideas but you didn't ask for that.

 

[corn18]

Things to consider, maybe you already have:

Home improvements
Landscaping
IRMAA surcharges (Medicare)
Gifts to charity
Gifts to family (kids / nieces / nephews)
Dental costs (insurance, crowns)
Umbrella insurance

Only other thing that stood out is whether to consider canceling the term life insurance. Maybe still needed, maybe not.

Home improvements / landscaping - hmmmm, have to think about this one. We have home maintenance but not home improvement. My first thought is that would come out of our blow that dough budget, but home improvement can be quite large. We just bought a custom new build home this year, but my wife is already talking about patios and landscaping.

IRMAA surcharges (Medicare) - will be well below IRMAA if I do Roth conversions. Will be close if we do no conversions.

Gifts to charity - I knew I was missing this but have thought about how to manage it. I am purposefully not drawing my 401k down to zero with Roth conversions between 56 and 70 so I have some left for QCDs.

Gifts to family (kids / nieces / nephews) - this is in the gift category

Dental costs (insurance, crowns) - I included the cost of insurance, but may switch to self insured.

Umbrella insurance - I have a $1M policy included in insurance.

SecondCor has a number of good things. To that, I add: Home gym equipment or cost of joining a gym. Hobby costs.

I wish to expand upon SecondCor's home improvement. 10 years after building our retirement home, we found we wanted/needed to spend approximately 15% on major maintenance and changing our custom home. 15% of the original cost of the house. Expanding the living room, rearranging the master bath and replacing other things. YMMV

I have some cost saving ideas but you didn't ask for that.

We spent a lot of money last year equipping our home gym. Have a Peloton, treadmill and elliptical. I also have a full power rack for power lifting. Also got a pair of ebikes that we really enjoy. Hobby costs would come out of the blow that dough budget.

I know we could save money in most categories and used that to make the decision to retire this year. Lots and lots of fluff in that base budget.

 

[capjak]

Are you covered for long term care or are you going to pay out of pocket or use your home equity or other?

 

[corn18]

Are you covered for long term care or are you going to pay out of pocket or use your home equity or other?

My head is in the sand for LTC. Actually, we made the decision to self insure. We don't need any savings after SS kicks in, so the plan is to have $800k in savings at that point for LTC. Not sure if that is the best plan, but that's our plan.

 

[OldShooter]

@corn18, being in or around the military you certainly know General Helmuth von Moltke the Elder's observation: "No plan survives first contact with the enemy."

Better is the enemy of good. The consensus I see here is that you have a pretty good plan. I would suggest that you just roll with it. The only thing you can be absolutely sure about is that your exact spending plan will not happen. So perfection is unattainable. Shut down the computer and go with a nice glass of wine and some good cheese.

 

[jcretire77]

When you join the country club for golf, tennis, swimming $$$$$

Actually, any new expensive hobby.

 

[corn18]

@corn18, being in or around the military you certainly know General Helmuth von Moltke the Elder's observation: "No plan survives first contact with the enemy."

Better is the enemy of good. The consensus I see here is that you have a pretty good plan. I would suggest that you just roll with it. The only thing you can be absolutely sure about is that your exact spending plan will not happen. So perfection is unattainable. Shut down the computer and go with a nice glass of wine and some good cheese.

I hear ya! I am driving my wife nuts. But I can't help it. I was the same way when I decided to retire from the Navy. Planning, numbers, what if this, what if that. It did not turn out anything like I had planned. It turned out much, much better. At least the financial side. Other aspects of life threw me some serious curves and I almost died, but other than that, all went according to plan!

I do have an appointment with an FA that I met 2 years ago. He was good, but not good enough to give a 1.5% AUM fee. I'll have him take a look at my plan with my wife and I and if he doesn't find any glaring errors, it might be time to crack open a nice bottle of wine. I might even go nuts and get a bottle of Louis XIII cognac.

 

[OldShooter]

... But I can't help it. ...

Make that two glasses of wine and call me in the morning if the urge hasn't passed. Analysis paralysis is a stressful disease and needs to be treated.

 

[SecondCor521]

I hear ya! I am driving my wife nuts. But I can't help it. I was the same way when I decided to retire from the Navy. Planning, numbers, what if this, what if that. It did not turn out anything like I had planned. It turned out much, much better. At least the financial side. Other aspects of life threw me some serious curves and I almost died, but other than that, all went according to plan!

I have the same sort of issue, so I can empathize.

Maybe note that I have possibly wasted some of my life on analysis beyond the point of reasonableness. Time I could have spent, you know, living and enjoying. I think I missed some opportunities because of that.

You don't have to make the same mistake. OK, you probably do, but maybe you can correct it sooner.

(I agree with the previous poster - I think your planning is fine. QA approves release of version 1.0.)

 

[corn18]

@corn18, being in or around the military you certainly know General Helmuth von Moltke the Elder's observation: "No plan survives first contact with the enemy."

Better is the enemy of good. The consensus I see here is that you have a pretty good plan. I would suggest that you just roll with it. The only thing you can be absolutely sure about is that your exact spending plan will not happen. So perfection is unattainable. Shut down the computer and go with a nice glass of wine and some good cheese.

I have the same sort of issue, so I can empathize.

Maybe note that I have possibly wasted some of my life on analysis beyond the point of reasonableness. Time I could have spent, you know, living and enjoying. I think I missed some opportunities because of that.

You don't have to make the same mistake. OK, you probably do, but maybe you can correct it sooner.

(I agree with the previous poster - I think your planning is fine. QA approves release of version 1.0.)

Excellent! I am now ready for contact with the enemy! 83 more days to go.

 

[socca]

Is there anything I am missing? That is my worry, that I've completely forgotten something.

FWIW, the expense section of the Excel spreadsheet I use for budgeting has only 6 major categories: Income Taxes, Residence, Food, Medical, Auto, and Reserves. Some of these major categories have several sub-categories.

I like having a separate category for reserves because accounting for necessary expenses that are unpredictable over the short term but predictable over the long term is a key aspect of budgeting.

My reserves major category has the following sub-categories:
• A/C replacement
• roof replacement
• misc home repair
• car replacement
• car repair
• computer replacement
• dental - major
• medical deductible

For 2020, my reserves category equals my income taxes category. All other major categories are far less.

I'm not going to comment on your particular situation, except to say that it looks like you've got plenty of fat built in which can be trimmed if things get tough.

 

[sakowitzm]

What do you do with the cat when you travel? With a $25K travel budget, if the cat needs boarding, that could add up to "real" money.