Do you spend more or less than you thought you would pre-FIRE?

[Walt34]

We're spending about what we thought we would. One surprise was having to replace a car sooner than we thought. DW wore it out going back and forth to FIL's house when he was needing a lot of assistance, especially after he couldn't drive anymore. Very often DW was over there five or even six days a week, almost a full-time job for her for a while. She was grateful that she didn't have to think about holding a job during that time.

 

[Amethyst]

We are spending much more than we expected due to a never-ending onslaught of home-related expenses. It seems like we are rebuilding our house from the ground up. It is 26 years old and some buyer will get a new house.

 

[mh]

I spend about what I had forecasted which was something around. 6000 a year more than my expenses while working. Spent a bit less on gas And things like that, but more for health care which was not a huge factor since I am single and using Kaiser in California which is what I had when I was employed. Also spend a bit more on travel than before


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[daylatedollarshort]

We had a lot of fat and poor spending habits in our budget before so now we are spending quite a bit less these days for a nicer lifestyle than we had before. I have time now to watch for discount tickets and Groupons so we go out a lot more on a much smaller restaurant and entertainment budget.

 

[pb4uski]

You took a mortgage into retirement ? That is an uncommon choice and just was curious how that is working out for you.

I took out a mortgage just prior to retiring (quitting in my case) Has worked out great am way ahead.

 

[UpAnchor]

You took a mortgage into retirement ? That is an uncommon choice and just was curious how that is working out for you.

I took out a mortgage just prior to retiring (quitting in my case) Has worked out great am way ahead.

I did the same. Renting a similar place would cost as much or more and it will most likely be paid off in time for the kids to inherit it.

 

[Scuba]

Thanks for all the input. Healthcare is the most unpredictable I think. We are in our 50's with pre ACA high deductible plan. So far very healthy, no ongoing meds or issues. I increased our travel and eating out and entertainment budgets - figure we'll have more time to play. Didn't decrease anything except taxes so hopefully we will come out ahead.


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[Helena]

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Before I retired I paid off all debt... including my house... so I could live comfortably on a smaller income.

Since retirement I've added to my nest egg every year.

.

 

[CaliforniaMan]

Just 2.5 years in and we are spending pretty close to exactly what we have budgeted over the course of a year, which is a bit over what we spent the two years prior to retirement, where we were saving, paying off bills etc.

We have a bank "Savings" account where we deposit any excess each month for the months we splurge on travel, something for the house, want to help out a family member, etc. We never want to go over our annual budget, but see no point, at this stage in our lives, in trying to spend less than we can. Nice to be able to take some trips (we are now on a 5 week trip to Italy) that we were not able to do before.

We plan to stay on this course, spending 100% of our budget each year, but no more. Right now our fixed expenses are low enough that if push comes to shove, we can cut down on the travel side and extras.

We also set aside in another account each month enough to cover the things like insurance and property taxes, that come annually or semi-annually, so we always have enough to cover them when they come up.

Seems to be working so far, but as I say, we are only 2 1/2 years into it.

 

[brucethebroker]

Many costs have dropped: cell phones, transportation (we only have 1 car now), mortgage (3.5%, and cut it by 40% when we downsized), clothing, eating out (lunch and early bird specials) and Fed. taxes. Some of this has been offset by having the free time to just "pay attention" (How much is our cell phone plan Let me research that one!). I turn 65 this year, so my health insurance costs will drop with a Medicare Supp.

Our largest increases are health insurance ($300 a month more than pre-retirement), improvements to our "new" (60 years old) home, and the vacation condo we purchased shortly after "retirement". But the condo is being held as an investment (foreclosure purchase), and many of the home improvements are for improved livability (finishing the basement, new windows), which were taken into consideration when we made the purchase offer.

Overall, it is going better than planned.

 

[athena53]

For us, saving was a big part of our pre-retirement budget! It was a double advantage to save so much of our income- more saved for retirement, but also used to spending a lot less than we took in.

If I take a simple ratio of (total withdrawals since retirement/beginning retirement assets) and divide it by the number of years since I retired, I get 3%. Not perfect since withdrawals were uneven over time, but I'm happy with that, especially since I should get maximum SS based on my earnings and plan to wait till age 70 to file for it.

 

[jkern]

My medical insurance and dental care went up about $300 per month (expected). Fuel and auto maintenance dropped a bit (expected). Invested about $125k in home upgrades/remodel (planned). All other expenses remained about the same.

 

[FIREd]

Our non-healthcare spending is in line with what I had planned, no big surprise there. But healthcare premiums are going up faster than anticipated.

 

[Options]

The first year, spent much more due to pent up spending demands, such as house remodelling, replacing things, etc. Thereafter, such spending evaporated as there's nothing left to buy. Spend (much) more on travel, much more on healthcare due to COBRA, but these were budgeted for. Mysteriously, somehow am spending about $100/month less otherwise (which could be due to no commuting costs, no daily $5 mochas as a reward for daily slavery, no dry cleaning, etc.). It's a pleasant surprise.

 

[healthyandfun]

My spending has gone much as I had planned with no big surprises. I do spend much less on gifts and virtually nothing on clothing. Have invested energy in decluttering and find i don't want more stuff. I also decided to ramp up travel and do more sooner rather than some over many years. Happy with all my choices.

 

[Lsbcal]

Interest rate on mortgage is 3% fixed; we can do better on our investments over the long run. P&I only $700/month, so very manageable.

+1

Some payoff the mortgage for peace of mind. It can be an emotional decision.

For us, the tax situation makes this expense worthwhile.

 

[N02L84ER]

Our initial expenses matched our predictions. The only real surprise is that our total expenses haven't been climbing as much as predicted due to inflation being lower than our prediction. We have been retired 11 and 4.5 years.

 

[GravitySucks]

It's odd. I feel like I'm spending more than I planned, but when I review my withdraws I'm actually under. Plus it turns out that RIP says I can spend even more. One year and six months till I can tap the IRA and really start spending at a more generous level.

 

[FIREd_2015]

Expenses are higher than I had originally anticipated. I had expected to keep my Honda Accord as long as my two previous cars, 12-15 yrs & 200k miles, but instead traded it in after approx 100k miles for a mid-size SUV and put 30k miles on it the first year. I am traveling more and staying at nicer places when I do - currently staying at Best Westerns and Comfort Hotels and using points for Marriott affiliated hotels. Not quite psychologically ready to shell out hard earned money for Marriott affiliated hotels that cost roughly 50-100% more but I see that changing slowly over the next few years. An ex-coworker in his early 50's recently passed away unexpectedly. I also recently had a health issue that thankfully turned out to be nothing. That's got me thinking about doing more stuff while I'm still in good health. Need to review my expenses for this year and up my projection for following years.

 

[Mulligan]

Interest rate on mortgage is 3% fixed; we can do better on our investments over the long run. P&I only $700/month, so very manageable.

This is me also, my payment including escrow is about $715, with P&I accounting for a bit under $500. That is a bit less than 10% of my monthly after tax take home pension. Being fortunate to have a nice pension, I largely just walked into retirement living financially just like I did in my working years. I have mortgage debt (20 years left) and credit card debt (0%, 2% advance fee) just like I always have had.
It would be nice to be totally debt free, but it is not a priority. I do not live off my investments, but don't want to "steal" from those accounts to pay off my debts. It will happen eventually though, I just need more time...Like 10 years maybe, ha.

 

[6miths]

I don't know but I am guessing less as the children are getting older and there are less things to pay for on their behalf. Although if I included the cost of university expenses it might be higher but those are coming out of their education savings plan. Much less on gas for the car as it no longer commutes 65 miles a day. As long as I have more money at the end of the year than at the beginning I'm not really feeling the need to get serious about tracking things.

 

[jerryo]

We don't closely track specific expenses, but do track cash flow and that appears to be down significantly in retirement. More specifically, I would say:

Health Care: Unchanged (same insurance as when employed)

Housing: Up. Refinanced house from 4&3/4% 30 year to 2&7/8% 15 year mortgage, increasing monthly payment about 15% (but greatly reducing total interest charges)

Transport: Down. Reduced from two cars to one; less mileage without commuting.

Travel: Unchanged (We've always traveled extensively. Now taking longer trips, but total expense about the same).

Food: Unchanged or down

Restaurants: Down (fewer meals out, no work lunches)

Entertainment: Down (better able to schedule at lower cost)

Clothes: Down (less work clothes)

 

[btdt22]

Spending more in retirement, but by choice rather than need.

Spending more on travel, boating, and unnecessary but nice to have 'projects' such as extended porches, air conditioned garage, etc..

 

[bradaz2488]

Only been retired for 3.5 years so not a lot of data. Overall expenses is ~7% less then plan. I do not feel that we are sacrificing anything. Our standard of living is the same as when I was wo*king. I made some cuts in expenses after retirement: fired financial advisor, got rid of DirecTV, no land-line phone and more "bargain" shopping for best deals. Automotive expenses went down too (~50%) with less driving and doing my own maintenance. Have not had any unexpected or emergency expenses yet. The only big ticket item I have allocated funds for a new car every 7 years. I know we will have to slowly replace our 14 year old appliances over the next few years and our AC units are probably on their last leg, but I think I'll be able to absorb those costs and still stay on plan. My (as well as others on this forum) biggest concern is healthcare costs. The healthcare system is so broken in this country. I'm afraid it will get much worse before it gets better. We are 12/15 years away from Medicare. All I can do is plan for the worst and hope for the best...

 

[Helena]

Some payoff the mortgage for peace of mind. It can be an emotional decision.

For us, the tax situation makes this expense worthwhile.

"The tax situation" tells me you are hard at work earning lots of money [while also paying lots of taxes] so you can pay the mortgage plus interest. That is what most people do on their house, cars, etc.

My simplistic approach was different. I worked hard to pay off my mortgage as soon as possible and lived frugally to save my nest egg. Because my outgo became much less... my income needed to service it could be much less [which means my taxes were much less.] This enabled me to retire early. Now that I have plenty of money in the bank and no debt... I can manipulate my annual income to be less than the IRS threshold for taxation.

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