How accurately did you predict retirement expenses?

[whitestick]

The unexpected costs

Thanks everyone for sharing - the medical/dental expenses increasing unexpectedly seems the most unanticipated.

But - that does seem to make sense.

Is it the premium increases or the co-pays/deductibles that are the 'killers'??

6 yrs into retirement, and the two biggest unexpected higher expenses are health costs and taxes. I guess you could say its the co-pays/deductibles but it's really the total costs - Wasn't expecting to get sick, and all of the expensive treatments put me at much higher then I thought. When I blew through the Part B into catastrophic level and bypassed the donut hole area early in the year, that told the story. Short term capital gains getting treated like earned income rates meant significant taxes but the higher income was needed to pay the aforementioned medical costs, so it's a spiral effect. All of the previous time modeling spreadsheets etc, on ordinary expenses put the total of them within about 5% of the modeled levels, so no big deal for them. I know its a good news bad news story, but nonetheless who can predict the total health care costs when you get a serious ailment. (Oh, did I mention that both DW and myself contracted a similar sickness, her's was just quicker acting and more expensive then mine.
Maybe I should increase my beer drinking budget, like some of the others on the board.

 

[daylatedollarshort]

We did have one very high expense medical year, but that was offset by some other areas of the budget with lower than expected expenses.

Overall we have been pleasantly surprised at how much money we save just by having more time to comparison shop and review expenses. For example we switched to off brand ink cartridges that cost $2 each to buy instead of $30 each and we recycle them for $2 each, so our ink costs are now zero. We get printer paper for free from free after rebates programs so that cost went to zero, too. We just never had time to research all these little money saving ideas before but across all our expense categories all these little savings ideas here and there have really added up to lower our overall annual expenses by quite a bit.

 

[gerntz]

100% accurate since we didn't predict, just guessimated. I do know that wine spending is through the roof.

 

[kcowan]

We just never had time to research all these little money saving ideas before but across all our expense categories all these little savings ideas here and there have really added up to lower our overall annual expenses by quite a bit.

We have the luxury of time now. We can go for a day without printing. We can shop at the stores on seniors days. We can comparison shop online then negotiate with a local retailer to match the price (including shipping) and give a discount for cash. All these steps contribute to lower than budgeted costs.

 

[daylatedollarshort]

We have the luxury of time now. We can go for a day without printing. We can shop at the stores on seniors days. We can comparison shop online then negotiate with a local retailer to match the price (including shipping) and give a discount for cash. All these steps contribute to lower than budgeted costs.

We do the same. During the week we go to the pack it yourself grocery store. It is owned by Lucky's and has the same products more or less as their retail grocery stores, but we save $70 a week driving an extra 5 minutes and spending 10 minutes packing our own groceries. I bring my own recyclable bags for an extra 15 cents a bag cash back and pay with a cash back credit card (2%), but I plan to apply for a 6% cash back on groceries card soon. This week I also had a $10 coupon off our grocery bill.

Every time we go there we laugh about if our former co-workers could see us now, since we used to manage multi-million dollar IT projects for megacorps and now we price shop squash. But when we have met up with some of them all they do is talk about how stressed they are and how much they hate their jobs but still are hoping they won't get fired or outsourced because they can't afford to retire.

We'd rather pack our own groceries and recycle ink cartridges in the morning and then have the afternoon free to walk around the lake near our house with fountains and a rose garden or visit a museum for free with a NARM or library pass.

 

[Hermit]

We do the same. During the week we go to the pack it yourself grocery store. It is owned by Lucky's and has the same products more or less as their retail grocery stores, but we save $70 a week driving an extra 5 minutes and spending 10 minutes packing our own groceries. I bring my own recyclable bags for an extra 15 cents a bag cash back and pay with a cash back credit card (2%), but I plan to apply for a 6% cash back on groceries card soon. This week I also had a $10 coupon off our grocery bill.

Every time we go there we laugh about if our former co-workers could see us now, since we used to manage multi-million dollar IT projects for megacorps and now we price shop squash. But when we have met up with some of them all they do is talk about how stressed they are and how much they hate their jobs but still are hoping they won't get fired or outsourced because they can't afford to retire.

We'd rather pack our own groceries and recycle ink cartridges in the morning and then have the afternoon free to walk around the lake near our house with fountains and a rose garden or visit a museum for free with a NARM or library pass.

The last time I used recycled ink cartridges it was a bust. I bought two cartridges and the first one had one color that didn't work and the second one a different color didn't work. I needed to print something so I went to town and bought a new one and it worked just fine. It was over twice the price.

I guess I need to try the refilled cartridges again. I don't think I will buy two though, I wouldn't know if the second one was good or bad for months.

 

[daylatedollarshort]

The last time I used recycled ink cartridges it was a bust. I bought two cartridges and the first one had one color that didn't work and the second one a different color didn't work. I needed to print something so I went to town and bought a new one and it worked just fine. It was over twice the price.

I guess I need to try the refilled cartridges again. I don't think I will buy two though, I wouldn't know if the second one was good or bad for months.

I buy Sophia Global ink cartridges at Amazon with a cash back credit card and have not had any issues. I swapped out the downstairs printer as it was cheaper to buy a new printer that could use the $2 cartridges than it was to keep the old printer that didn't have a Sophia cartridge to fit.

 

[Hermit]

I buy Sophia Global ink cartridges at Amazon with a cash back credit card and have not had any issues. I swapped out the downstairs printer as it was cheaper to buy a new printer that could use the $2 cartridges than it was to keep the old printer that didn't have a Sophia cartridge to fit.

Thanks!
I wrote that down. The last ones were through Amazon and I returned them without an issue. I'll try the Sophia Global next time.

 

[pb4uski]

The last time I used recycled ink cartridges it was a bust. I bought two cartridges and the first one had one color that didn't work and the second one a different color didn't work. I needed to print something so I went to town and bought a new one and it worked just fine. It was over twice the price.

I guess I need to try the refilled cartridges again. I don't think I will buy two though, I wouldn't know if the second one was good or bad for months.

My experienced was a mixed bag. In December, I bought two black and one set of color ink cartridges that had some good reviews rather then the HP brand. I ran out of black ink last week and proceeded to replace the cartridge. The cartridge was leaking ink all over the place - created quite a mess for me to clean up, stained a pair of jeans I was wearing and had black ink on my hands for a few days.

However, once I got rid of the "excess" ink and installed the cartridge, it does seem to print well.

I went to try to return the remaining cartridges, but alas, it was too late to return them so I'll use them but be much more careful when replacing the cartridge next time. If the remaining cartridges go ok, then I'll continue to use them.

 

[youbet]

I'm on the frugal side (understatement) when it comes to printing expenses. I'm still using a decade+ old HP Deskjet 400 printer. I use Printronic remanufactured cartridges and recycle the clean side of paper DW provided when she cleaned out her files from 34 years of working as a special ed teacher. (Thousands of sheets of paper.) Costs are about a penny a page for the ink. I do keep a small amount of new paper on hand in case I need to send out a letter or something...... rare.

I noticed recently while paging through my print out of last years taxes that the opposite side was a bunch of writing exercises done by children with limited use of their hands.

Anyway...... these cartridges remanufactured by Printronic (I think I got them off Amazon) have worked just fine. No leaks. No running dry prematurely.

I've also refilled the cartridges myself, but it's a mess, at least when I do it. Since I only use 2 - 3 cartridges a year, buying remanufactured cartridges seems frugal enough, even for me.........

 

[obgyn65]

I have tracked my expenses over the last 3 years, and I have added $6k a year for medical insurance. I hope this prediction is accurate.

 

[kcowan]

We'd rather pack our own groceries and recycle ink cartridges in the morning and then have the afternoon free to walk around the lake near our house with fountains and a rose garden or visit a museum for free with a NARM or library pass.

When we first retired, we had the same old habits. But within 6 months, we realized that our only source of leverage was to control outflow. So we have applied our best skills at doing just that. There is a liquor store that sells selected stock at 10 and 20% off on Wednesdays. It is unadvertised. Usually it is older stock like wine that must be consumed in a short time. So we only buy enough wine for 2 weeks (and keep it in our wine fridge). But getting brandy for 20% off is a pure win!

 

[daylatedollarshort]

When we first retired, we had the same old habits. But within 6 months, we realized that our only source of leverage was to control outflow. So we have applied our best skills at doing just that. There is a liquor store that sells selected stock at 10 and 20% off on Wednesdays. It is unadvertised. Usually it is older stock like wine that must be consumed in a short time. So we only buy enough wine for 2 weeks (and keep it in our wine fridge). But getting brandy for 20% off is a pure win!

Good find. I love finding bargains like that.

 

[Ozstache]

Our local grocery store has quality clearance meat for 50-60% off with one day use by date left. Now that I'm ERed, I go down every day and see what they have on offer - sometimes nothing but sometimes enough for tonight's meal and to freeze a couple of meat packs for later days. This alone saves us about 25% of our grocery bill from before ER. This is but one of many savings we now make through being ERed and having the time to value shop.

 

[old woman]

I am spending more on home improvements and maint. I fell behind when working then I met a handyman who has been coming to my house 3 days a week doing all my chores. I keep having to buy him sandpaper, paint, boards, light fixtures, hinges, door pulls and other stuff. With his wages and having to buy stuff I am spending maybe an extra $500 a week. Now I need to buy a new back door because mine is ugly and paint for the outside of the house, new porch lights, never ending list. The house can use some work done and my handyman needs the work. I need motivation to get things done so set a schedule and keep him working.

 

[Huston55]

I am spending more on home improvements and maint. I fell behind when working then I met a handyman who has been coming to my house 3 days a week doing all my chores. I keep having to buy him sandpaper, paint, boards, light fixtures, hinges, door pulls and other stuff. With his wages and having to buy stuff I am spending maybe an extra $500 a week. Now I need to buy a new back door because mine is ugly and paint for the outside of the house, new porch lights, never ending list. The house can use some work done and my handyman needs the work. I need motivation to get things done so set a schedule and keep him working.

Just what every woman needs...a good Handyman.

You go Girl!

 

[BellBarbara]

We were pretty accurate with a couple issues mentioned: we needed dental work earlier than we thought (in year 2)....and we are one of the 400K people in Mass who's application for ACA could not be processed due to problems with the SW. So we have been on Medicaid from Aprl until the end of the year. So he money we budgeted for healthcare is sitting there. That will end up giving us 7K we did not expect.

I do not recommend this....what a hassle. I have a total appreciation for poor people and their healthcare needs. Luckily my doctor accepted it, but my hub's doctor left the field and he needed to find a new one. He called 30 doctors, no one would accept him. He ended up with a doctor more than an hour away that is associated with a hospital. This will not happen for next year they say.

 

[retiredunder50]

My planned expenses have been mostly accurate, and I also factored in the once in awhile purchases (new roof, car, appliances, repairs, new HVAC,...), but I never thought that a once-in-a-1000-year storm (sandy - combination of high tide/Noreaster/Cat 5 taking a sharp left turn into NJ) would happen. My insurance covered most after the deductible, but it was definitely not a category in my original budget.

 

[dtbach]

Hmmmm. . . plan?

I did plan for retirement by investing for 30+ years, but that was just to get us to about $80K/yr with a 3.5% WR. Have a military pension that adds $30K to the amount plus the low cost of health. So when I got retired early "right sized", that turned into our plan.

Seems we have enough to cover everything. No excel sheets.


Sent from my iPad using Early Retirement Forum

 

[Live And Learn]

My planned expenses have been mostly accurate, and I also factored in the once in awhile purchases (new roof, car, appliances, repairs, new HVAC,...), but I never thought that a once-in-a-1000-year storm (sandy - combination of high tide/Noreaster/Cat 5 taking a sharp left turn into NJ) would happen. My insurance covered most after the deductible, but it was definitely not a category in my original budget.

My heart goes out to you.

I actually have set aside a hurricane deductible outside of my portfolio because I live in hurricane country. Hopefully I never have to use it.

The dental expenses listed have put a grain of worry in me. Good grief is dental work expensive ! I don't have a reserve for that but perhaps I'll put aside $500 for a Vitamix blender !

 

[cj1717]

I expected to spend much more in retirement and I do.

As predicted.

 

[FUEGO]

So far we are underspending our budget. We planned on $32k per year and we aren't spending quite that much. We should have spent $21k by this point and we are closer to $17k YTD.

I may bust the budget pretty hard later this year since we are planning on a roof replacement and siding replacement. Could be $8k or $16k once I get the quotes in. Busting the budget for 1 year isn't too concerning since the siding and roof are 20 year life cycle items (at least) and I've explicitly budgeted periodic replacements in my long term housing maintenance category.

Overall, I've had more time to economize and save money here and there. We've had a ton of things to replace or upgrade and the time to shop for them now that I'm not working, and we're still making the budget numbers work. I just entered year 2 of retirement, so seeing that the first year wasn't any more spendy that budgeted is good news.

 

[brett]

We never tracked expenses by category or any other way.

When we were preparing for retirement I simply reviewed two years of bank statements-cash withdrawals, automatic withdrawals, monthy CC payments etc. We came up with an after tax number.

We made adjustments to that number for travel etc, then grossed it up to be conservative.

We still only track an annual basis even though I keep a running monthly tally. After three years, we are exactly on the same projected spend. We may go over a little this year but not my much. Time to increase by a few percentage points to take inflation into account.

And in those three years we have completely changed our lifestyle and travelled even more that we thought. We eat much healthier, we shop more carefully. We buy wine buy the case when it is on sale. We buy staples at Costco when they are on sale. We do not have to do this but it is difficult to break habits of a lifetime. This week it was Starbucks French Roast coffee beans at just over $7. lb for 2 1/2 lb bag vs about $15. lb at the Starbucks store. We travel to places on our respective bucket lists when the list item, the travel offer, and the currency all intersect in our favour. So far it has worked for us.

I think it was dumb luck. Because coming up with the two year spend took no more than one hour with my paper tape adding machine. The rest was by guess and by golly. We sold a large house, became renters, got rid of car...all things that delivered some unexpected consequences and benefits. Figured the only way to do the calculation was on an after tax, net basis. Besides, I really do not care what we spend on toothpaste or dry cleaning each year since it will not impact how much toothpaste we use or how often we use the dry cleaner.

The biggest surprise...and a very pleasant one is the growth of our investment portfolio over the past three years. Sequence of returns has made a huge difference to our portfolio and will do so into the future....just like the books said it would. Lucky timing I guess.

 

[Car-Guy]

So far everything is very close to what I expected except for medical which has been more than double over plan.

 

[whitestick]

Like most, I did the detailed spreadsheets, and monitor of expenses before retirement - nailed them pretty well - it is the unexpected expenses that really got me. Wife died, and after some time, found a new girl friend cum future wife -dating is very expensive compared to married at home life, also health insurance and medical expenses due to cancer caused significant higher costs, foundation work on house, and having to support kids and grandkids due to poor employment for their working (also one is going to college to get better skills). All of this occurs at same time for 3-5 years, who knows what is ahead, fortunately investing has helped some, but not enough to cover all of that. May have to increase beer and wine budget to cope with some of these.