Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Old 12-01-2014, 02:31 PM   #21
Thinks s/he gets paid by the post
38Chevy454's Avatar
Join Date: Sep 2013
Location: Cincinnati, OH
Posts: 3,213
Welcome to the forum. You have some good advice about getting a good understanding of your expenses and therefore what is a realistic budget. One thing to keep in mind, as daylatedollarshort suggested, many expenses may be eliminated or reduced once you retire. Another thing is that your taxes will be much less than current, as a percentage.

As for budget, it is a good idea to have two categories of expenses. Mandatory are those that must be paid, such as: medical insurance, prop taxes, utilities, car insurance, rent or mortgage if applicable, groceries, and others that are critical expenses that you must pay each month. Then second category is Discretionary expenses that are not critical, but are the more quality of life expenses, such as: eating meals out, entertainment, travel, newer car purchase, and similar. I view the mandatory expenses as must be covered by your monthly income, no matter what happens to your savings. SS is a great solution for this as it can help cover the minimum and then use your savings for the balance. If you have sufficient savings, then take some extra and use that for the discretionary. Key point is the discretionary can raise or fall depending on the financial health of your savings and returns on those investments. There are alot of withdrawal strategies, the 4% rule is just one of them. Your planning should consider 35-40 years of potential retirement, given your age. Once SS kicks in you have that as a basis to build on, the key for now is to bridge that time between retirement at 55 and SS at 67 (or whenever you decide to take it).
The advice we're giving you is invaluable, that's why it's free
Experience is a good teacher, but the tuition can get expensive real fast

Semi-Retired 7/1/16: working part-time (60%) for now [4/24/17 changed to 80%]
Retired Aug 2, 2017; age 53
38Chevy454 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-01-2014, 09:52 PM   #22
Recycles dryer sheets
Join Date: Nov 2014
Location: Texas
Posts: 164
Jerry welcome I am new also !!
Dave Ramsey has some really good strategy's on managing money

I am 53 and little behind you on assets. I too plan on 55 to 57 to throw in the towel and live on my nest egg.
I make a whole lot more than we live on but but 50k is a lot lower than I would expect to live on. Thank goodness my wife is 52 and plans on working till 59. She makes right around that number 57 k So the year before I leave we are going to bank my check and live on her income. Should be interesting LOL
Once SS plays in plus her pension we should be good.
I am learning ( reading these forums plus books) on how to managing my money through vanguard. I see that as a huge discount or savings in my spend if I self manage.
Good luck !!

Sent from my iPhone using Early Retirement Forum
Terryjm51 is offline   Reply With Quote
Old 12-02-2014, 10:06 PM   #23
Jerry1's Avatar
Join Date: Nov 2014
Posts: 5,703
Thanks for all the replies. Things taken to heart to begin working on. The budget. I will do the two prong budget (mandatory and discretionary) as mentioned by 38chevy454. I was coming to that conclusion on my own that the first step in analyzing my current spending is to determine essentials. I'm an accountant so basically my fixed costs.

I also like the idea of trying to live on an expected amount of money (trial year). That will be hard because I would still be going to work and needing to do a lot of things that I won't be doing in retirement. Still, I think the exercise will bring value.

I will also be running calculators and see what assumptions I'm most comfortable with. I like the Bernicke model in FireCalc. I believe and have seen from my father and mother in law that in their late seventies and into their 80's, that you just don't spend as much later in retirement as you do out of the gate. Not sure what percentage reduction to use in the assumption, but I think one is warranted.

Looks like a lot of work to look forward to in the coming year. Thanks for the great start. I'll be doing a lot of reading here and be in touch.
Jerry1 is online now   Reply With Quote
Old 12-02-2014, 11:48 PM   #24
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 12,259
One thing I did to figure out my spending, was since my pay was auto deposited into my bank account, I logged in and could see all the account transactions.
My bank allows me to view the withdrawls (so few lines), and limit the range, so I picked 12 months and copied & pasted the display into a spreadsheet. (or maybe they allowed download I really don't recall).
Point is, since my pay went into this account, and I either took $$ out to spend or paid a credit card or wrote a check, it was an easy way to see exactly how much I had spent in 12 months. (I didn't count moving $ to IRA/ROTH as spending).

Now I make it a point to deposit a check in full, and then withdraw cash, so that later I won't have the inaccuracy caused by taking money out of a check deposit at the time of deposit. Just in case I want to inspect my spending again.
Sunset is online now   Reply With Quote
Old 12-03-2014, 05:35 AM   #25
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 30,334
I did a bottoms up budget based on our spending categories, historical information on spending we had in Quicken and adjustments for changes expected as a result of retiring. If I didn't have the historical Quicken information I just would have done a through analysis of our spending for the last couple years and used that.

One could also do a top down budget based on take home pay and other income less what was saved, assuming that whatever was earned and wasn't saved was spent, and then adjusting the spending for certain one-off items (like kid's college or a wedding or whatever) to see if the bottoms up total is sensible.
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
HI....Want to ER but Want a Good Lifestyle TOO! nicolette Hi, I am... 10 08-25-2008 01:40 AM
Hi, I'm Harrison and want to retire as soon as possible Harrison Hi, I am... 10 04-21-2008 04:28 PM
24 and I want to retire early whitepepper Hi, I am... 7 01-27-2008 04:15 PM
Want to retire and just travel... taylshaw Hi, I am... 10 12-30-2007 05:04 PM
I'm 22 and I want to retire at 45 thefed FIRE and Money 41 12-02-2005 05:50 AM

» Quick Links

All times are GMT -6. The time now is 11:17 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.