Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Do you spend more or less than you thought you would pre-FIRE?
Old 09-15-2016, 12:34 AM   #1
Thinks s/he gets paid by the post
 
Join Date: Jun 2016
Posts: 4,661
Do you spend more or less than you thought you would pre-FIRE?

I'm curious what others have experienced. We will ER soon and have planned for much higher healthcare costs (no longer employer provided), as well as higher travel, dining out and entertainment expenses since we will have more time. We live in a high COL area, have no intention of moving, and have a nice lifestyle.

What has been your experience - do you typically spend less than you thought? Or more? Is it different early in retirement vs after the first year or two? Thanks for any insights!


Sent from my iPhone using Early Retirement Forum
Scuba 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 Early-Retirement.org 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 09-15-2016, 02:05 AM   #2
Thinks s/he gets paid by the post
skipro33's Avatar
 
Join Date: Sep 2011
Location: Placerville
Posts: 1,788
I can't speak on the health care issue, but my other expenses are either less, or offset by not paying for work related things.
For example, I no longer eat meals while at work; lunches, dinners when working late, etc and my dining costs for the first 3 years of retirement so far has been less. We dine out once a week at least. (Date Nite)

Entertainment has gone up, budget-wise, but other costs go down. Like car maintenance. I used to drive 30,000 miles a year commute. I now drive maybe 5,000 miles a year. Even my car insurance is less now that they know I don't commute to work each day.

Over all, my monthly budget has been cut by 25% or so and we are doing all the things we want to do. We could afford to do more, but there's just not enough hours in the day when you are fully retired. I swear, I don't know how I ever had time for a full time job. I'm way too busy now doing all the stuff I want to get done. Ha!
skipro33 is offline   Reply With Quote
Old 09-15-2016, 04:51 AM   #3
Thinks s/he gets paid by the post
 
Join Date: Dec 2015
Posts: 2,232
Good question. I'm still working this out. As far as healthcare, I've always had to buy ours, but now that I don't run a business it's after tax money. I think I'll be close to what I budgeted, which is what I was spending pre FIRE, but I think I'll be a tad over, due to some expensive car issues, and an expensive household repair.
My first year is classic example of why one needs to budget for "misadventures". Fortunately we did, in the form of basing our WR on the IRAs, and leaving the after tax money out of the equation, set aside for unplanned, yet unavoidable, expenses.
HadEnuff is offline   Reply With Quote
Old 09-15-2016, 05:42 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,746
We are spending about what I planned, maybe a bit more. But that is of our own doing since our portfolio is doing well, DW ended up working about 2 years extra, and I stumbled into a lucrative hobby/side hustle that covers out core expenses. So dropping $10k on our travel budget instead of the $5400 we started out budgeting 3 years ago isn't a problem. And if it becomes a problem, we'll dial it down.

I figure spend it when you got it. I don't have any really expensive vacations planned beyond 2017 (8-9 weeks in Europe), so we can always economize later if we're hurting for money.
__________________
Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (8, 13, and 15).
FUEGO is offline   Reply With Quote
Old 09-15-2016, 06:58 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
athena53's Avatar
 
Join Date: May 2014
Posts: 7,322
We're just 2.5 years post-retirement. Overall I'm happy with spending levels (and I'm the financial control freak in the marriage).

Spending more: travel, but that's OK. Downsizing cost a lot, mostly fixing up previous house, making changes we wanted to new house, finding that the original HVAC system in new house (20 years old) needed replacement, new house not much cheaper than previous house, but much better for us. Health insurance way up but DH is on Medicare, which isn't too bad, and I run up only $200 or so a year against my High Deductible plan. So far so good.

Spending less: clothes. We're under $300 YTD! Mortgage, utilities and property taxes a little lower. Groceries down because we buy more at Costco. Gas about the same; we moved to a town a bit farther out form our doctors, dentist and church and don't want to switch any of them.
athena53 is offline   Reply With Quote
Old 09-15-2016, 07:26 AM   #6
Thinks s/he gets paid by the post
 
Join Date: Sep 2009
Location: Hong Kong
Posts: 1,688
We are coming up to my third anniversary of FIRE.

Expenses are higher than originally budgeted - primarily in travel and me doing another degree and will rise again when our daughters go to boarding school (the older one starts in Feb 2017). Healthcare costs money, but is still much cheaper than in the US so not an anything that we spend much time thinking about. However, even if I assume the higher spending is continued indefinitely, the difference is not enough to move the meter - still zero failures under basic FIRECalc model and my own spreadsheet. In fact there is still plenty of headroom which may get utilised once our home mortgage is paid off in about 5 years.
__________________
Budgeting is a skill practised by people who are bad at politics.
traineeinvestor is offline   Reply With Quote
Old 09-15-2016, 07:48 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Car-Guy's Avatar
 
Join Date: Aug 2013
Location: Texas
Posts: 10,863
I think I've mention this in other similar threads but in our case we have spent a lot more in the first few years of retirement than we did before I retired. That was in my plan and that's the way it's worked out so far. We retired with zero debt, owned our home, land and cars outright. With our base lifestyle, we could probably get by "comfortably" on 70 to 80k a year but have probably spent triple that in recent years because of our post retirement travels, my hobbies (vices) and other unexpected expenses. However, to my surprise, five years into retirement and we have always been within ~5% of my initial retirement net worth. Sometimes a little up, sometimes a little down and I consider myself a conservative investor.

We are to the point now that our travel and hobby interest are changing (or slowing down) so I expect my annual spend rate to start going down accordingly. Pretty much as expected.
Car-Guy is offline   Reply With Quote
Old 09-15-2016, 07:57 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Dec 2014
Location: Huntsville, AL/Helen, GA
Posts: 6,002
You hear all about living on 75% of what you spent prior to retirement. Don't believe it.

We spend substantially more than originally planned due to having to assist our daughter raising her two children. Everywhere we look, grandparents are a big part of their grandchildrens' lives--and end up picking up many bills.

And we have begun to be perpetual travelers--2 or more big vacations per year overseas.
Bamaman is offline   Reply With Quote
Old 09-15-2016, 08:00 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Car-Guy's Avatar
 
Join Date: Aug 2013
Location: Texas
Posts: 10,863
Quote:
Originally Posted by Bamaman View Post
You hear all about living on 75% of what you spent prior to retirement. Don't believe it.

We spend substantially more than originally planned due to having to assist our daughter raising her two children. Everywhere we look, grandparents are a big part of their grandchildrens' lives--and end up picking up many bills.
Ah yes, I am familiar with such post retirement unexpected (well mostly) expenses. Makes me wonder how many retirees are helping their kids and or grandkids (significantly) from a financial perspective.
Car-Guy is offline   Reply With Quote
Old 09-15-2016, 08:10 AM   #10
Thinks s/he gets paid by the post
Koogie's Avatar
 
Join Date: Nov 2007
Location: GTA
Posts: 1,726
Quote:
Originally Posted by athena53 View Post
We're just 2.5 years post-retirement. Overall I'm happy with spending levels (and I'm the financial control freak in the marriage).
................ Spending less: clothes. We're under $300 YTD! Mortgage, utilities and property taxes a little lower.

You took a mortgage into retirement ? That is an uncommon choice and just was curious how that is working out for you.
__________________
Family Motto: "Every penny's a prisoner"
Koogie is offline   Reply With Quote
Do you spend more or less than you thought you would pre-FIRE?
Old 09-15-2016, 08:24 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
athena53's Avatar
 
Join Date: May 2014
Posts: 7,322
Do you spend more or less than you thought you would pre-FIRE?

Quote:
Originally Posted by Koogie View Post
You took a mortgage into retirement ? That is an uncommon choice and just was curious how that is working out for you.

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.
athena53 is offline   Reply With Quote
Old 09-15-2016, 08:31 AM   #12
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 14,169
We're spending slightly more than planned, but way less than pre-retirement. Looking at line items - the increases are in travel and food. I didn't factor the exponential growth in food consumption when my sons hit their teen years. Medical expenses (both insurance and OOP) are higher than I planned... Insurance costs are increasing at a faster rate than I planned... Last year we had very high OOP expenses due to various kid's sports injuries. (Knock wood - we're good so far this year.)

We're spending less on clothes, utilites (which suprised me since we're home during the day now) and eating out.
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 6%, rental income 20%
rodi is offline   Reply With Quote
Old 09-15-2016, 08:39 AM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
harley's Avatar
 
Join Date: May 2008
Location: No fixed abode
Posts: 8,764
Quote:
Originally Posted by Koogie View Post
You took a mortgage into retirement ? That is an uncommon choice and just was curious how that is working out for you.
I don't think it's that uncommon, based on the eternal ongoing debates about mortgages in retirement. I suspect it's the most discussed topic on ER.org. I'm firmly on the pro-mortgage side, and even jumped through hoops to do a refi without income. It's worked out wonderfully well for us, as the mortgage money has been arb'ed into our investments and made far more than the cost. Plus it keeps us from having ~$400k locked into a relatively non-appreciating non-asset. Our area has never recovered from the housing drop, so it's been a good call for us.

As far as the OP is concerned, I spend far less in retirement than I planned for. However, DW spends far more, so we're coming out pretty close to the plan. Maybe a little more, but not too much. It changes from year to year. This is 10 years in.
__________________
"Good judgment comes from experience. Experience comes from bad judgement." - Anonymous (not Will Rogers or Sam Clemens)
DW and I - FIREd at 50 (7/06), living off assets
harley is offline   Reply With Quote
Old 09-15-2016, 08:43 AM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Dawg52's Avatar
 
Join Date: Feb 2005
Location: Central MS/Orange Beach, AL
Posts: 9,067
More. But only by choice. I didn't plan for a vacation condo and all the cost associated with one, but it works in my budget(swr). If it hadn't fit the budget I wouldn't have bought one and my spending would be similar to what I planned pre-FIRE.
__________________
Retired 3/31/2007@52
Investing style: Full time wuss.
Dawg52 is offline   Reply With Quote
Old 09-15-2016, 11:21 AM   #15
Moderator Emeritus
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 47,472
I spent less for my first six years, mostly because I didn't believe what people were saying about lower income taxes in retirement. (It's true.) Then I decided to turn my under-spending around and bought my dream house in July, 2015. I have spent even more since then, getting the house fixed up the way I want it. Now it is just perfect for me and last spring my spending finally started to settle down very nicely.

Then last month during record heat in the hottest month of summer, my AC cratered. It was ancient, so I knew it would need work eventually but was hoping it could wait until next year. It turned out that I had to have the entire AC system replaced except for the ductwork. The house isn't exactly a money pit, but I have been rapidly making use of the accumulated excess from the first six years.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.

Happily retired since 2009, at age 61. Best years of my life by far!
W2R is offline   Reply With Quote
Old 09-15-2016, 11:29 AM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 9,358
Quote:
Originally Posted by Koogie View Post
You took a mortgage into retirement ? That is an uncommon choice and just was curious how that is working out for you.
If you paid off your mortgage instead of investing the money, doesn't that mean you have less investment income in retirement?
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 09-15-2016, 11:30 AM   #17
Thinks s/he gets paid by the post
 
Join Date: Jan 2013
Location: SoCal, Lausanne
Posts: 4,408
Here are my change in expenses:

Health care - Up - I pay 100% of my insurance
Automobile - Down - Use our cars far less
Travel - Up - We travel 4-5 times per year
Health and Fitness - Up - Use our bikes more, run more, swim more, hike more
Food - about the same
Entertainment - Up
Utilities - about the same
Property taxes - up - beyond my control
Home and Car insurance - about the same
Home maintenance/renovations - Up - A lot more projects during retirement
Freedom56 is offline   Reply With Quote
Old 09-15-2016, 11:57 AM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Teacher Terry's Avatar
 
Join Date: Jun 2014
Posts: 7,001
WE used to pay 200/month for health insurance and now pay 900. The first year we lived just on our pensions to prove that we could do it. It was a lean-not so fun year. OUr pensions total 40k. Now we spend about 65-70k/year. We take 1 or 2 big vacations/year. We use our RV more for smaller trips close by. We used to take big trips with it but once I figured out that I could take an RV trip and spend a ton of $ on gas/rv sites/cook all meals myself or take a 2 week cruise for the same amount of $ you know which won. We retired 4 1/2 years ago. WE finished our backyard to the tune of 12K (not included in yearly budget) and I got full implants on the bottom teeth (also not included for 33k). Hopefully, the big spending is done. We spend more on eating out and entertainment then when we were working. Less on clothes and driving. WE now have all home improvement projects done so should be carefree for a number of years in that department.
Teacher Terry is offline   Reply With Quote
Old 09-15-2016, 12:01 PM   #19
Thinks s/he gets paid by the post
Cobra9777's Avatar
 
Join Date: Jul 2012
Location: Texas
Posts: 3,024
After 3 years of ER, our spending is lower than we initially planned. Taxes are quite a bit lower than my initial plan. I probably should have looked at that more carefully. I've also rearranged the investments for maximum tax efficiency, which I learned about on this forum.

I've also been pleasantly surprised at how many things go down if you just pay attention, like cable, cell phone, insurance, and many others. I had initially assumed all that stuff would be the same.

We don't travel by car much except around town, so gas is quite a bit lower than planned. I knew it would drop once we stopped commuting, but not this much.

Also, I've been deferring some large discretionary items like big international trips, a new car, and planned home improvements. The LBYM instincts kicked into high gear when the big paycheck stopped. After 3 years of watching everything work OK, we're starting to get those things done.
__________________
Retired at 52 in July 2013. On to better things...
AA: 85/15 WR: 2.7% SI: 2 pensions, SS later
Cobra9777 is offline   Reply With Quote
Old 09-15-2016, 12:12 PM   #20
Thinks s/he gets paid by the post
Rustic23's Avatar
 
Join Date: Dec 2005
Location: Lake Livingston, Tx
Posts: 4,203
Our expenses are just about what I figured, but way down from what they were when we were working.

Health care - Down
Automobile - Same (Went from two cars to one, but the one is more expensive)
Travel - Up - We travel more often
Food - Less - We eat out less
Entertainment - Same
Utilities - same
Property taxes - up - We bought new home
insurance - same
Home maintenance/renovations - Same, but this is going to go up in a year or two
Savings - Up
__________________
If it is after 5:00 when I post I reserve the right to disavow anything I posted.
Rustic23 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
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
Does the 4% "rule" apply if you spend less than you make? 45th Birthday FIRE and Money 36 05-25-2015 05:02 PM
Bad To Spend Less Than $XXXX On A Car? RetiredGypsy FIRE and Money 16 03-28-2011 07:21 AM
Less is more; Living in less than 1,000 sq ft Frugalityisthenewblack Other topics 43 09-25-2010 01:52 AM
Income: More is less? Less is more? Sam FIRE and Money 9 08-19-2006 07:01 PM
Spending more than you thought?? kz Life after FIRE 15 07-12-2006 08:23 AM

» Quick Links

 
All times are GMT -6. The time now is 06:19 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.