Yikes. If this is the case then my plans are in serious shortfall. 8 years until retirement may be out the window. But I can say my inital calculations based upon current spending patterns do show my annual expenses being much higher than I thought. Not quite current spending levels while still raising 3 kids. But high enough that FireCalc is not encouraging. Was hoping I might hear responses that showed me my estimates are way to inflated. Instead, maybe I'm hearing its time to wake up and smell the coffee that ER is well beyond my 8 year plan of age 55. But not ready to give up yet.
I'm 5-6 years from FIRE. All I can do is give my situation.
I start with gross, then:
1) Following items will go to zero:
* mortgage, 4 years left on 15 year term
* FICA/SS payments since no more j*b
* 401k savings are gone
* Roth/Traditional IRA savings
2) I assume the following will decrease slightly (~10%)
* Car insurance
* Clothes
* Gas for car
* Car payment (we'll share a "nice" car and have a beater rather than two nice cars)
3) Assume following will increase by 10-20%
* Home repairs (house is getting older)
* Property taxes (states are running out of money)
* Groceries (since we'll eat lunch at home)
* Dinners out (this is a luxury we'll indulge)
* Flowers/lawn care/landscapign (wife's hobby)
* Utilities
4) Assume following will increase by 40%
* Vacations
* Hobbies
* Events/entertainment (plays, sporting events, etc)
5) Income taxes (this is a bit tricky, but I filled out a mock return to estimate). For us they will decrease significantly...about $18k less than today
6) Health care is a wildcard, we'll have to buy on open market. I assume $4k/year each
As a result of the above, for us we need only about 55% of current gross income. I know this seems low, but it's important to note the three biggest factors above...
1) We currently save 32% of our gross income
2) Mortgage payments are moderately high and will disappear
3) Income taxes will decrease significantly
The more you save today, the lower % of current income you can live on.