How has your retirement spending differed from your projections?

[pacergal]

Pretty much on target for day to day spending.
Gifting has gone up since retirement (help with a wedding, house, two grand babies)--but good spending and the money is there.

[jldavid47]

Quote:

Originally Posted by disneysteve For those of you who are retired, how close to your projections and predictions has your spending actually been? Where did you find you underestimated, or overestimated, how much you would spend?

Our spending habits have not changed much since we both retired and is pretty much what I expected. I don't really look too hard at various categories (except as a year-end review) and don't really worry about it.
We don't feel "deprived" at all but then we've never been big spenders.

[street]

Our projected expenses for retirement were down 25% of what we thought we would spend, for the first year of retirement. After just about 5 year into retirement we have spent more each year, then the first year but still under the planned expenses for our retirement years.

So, we have been under what we expected it would cost us. I can say that there is always that unexpected expense that throws us a curve ball.

Gifting and charity we can cut back on, if we need to, but for now we are enjoying not going over budget.

[Out_the_Door]

Retired in Jan 2020 so I don't have a historical perspective of "spending in retirement" but covid had me spending 33% less than I had budgeted. Entirely on entertainment as I buy yearly subscriptions to the Hollywood Bowl and to one of the Playhouses. Plus all my travel plans were cancelled.

[Bamaman]

We're spending more than we wished to spend. But we never knew we were going to have to raise a 9 1/2 year old granddaughter.

We're not traveling with Europe closed down for a couple of years. But our food bill is out of sight with us cooking 95% of the time. We seldom eat out any longer.

[Animorph]

I've been budgeting ever since I started working. No real budget surprises, other than the relatively unknown shift from workplace medical insurance to ACA to Medicare. Most often we are well below budget, but we try.

As of 2004, about 3 years before my retirement (DW finally retired 5 years after me), I froze the budget except for CPI inflation indexing (using the SS number each year). 100% of raises after that point went into the retirement portfolio. We've been on that budget, plus modifications as we switched insurance, added discretionary travel, and the kids moved out, ever since. The one exception was in 2009 the CPI was 5.8% and I used 0% instead because inflation wasn't going to be that bad in a recession. It has never felt restrictive so far.

[Dawg52]

Spending in my early years of retirement was low and well below what I planned. Mainly because I spent a few years staying close to home looking after my mother. After she passed its gone up a lot but still well below the magic 4% w/d most point to.

[MRG]

May marks 8 years of wage freedom. Our budget was pretty tight and we managed to it for 6+ years. Last year I blew it, went nuts took out more money than we ever made. Blew my ACA subsidy, bought a new Tesla. Basically went stir crazy. Had fun but didn't manage to spend it all. Oh well there's 2021.

[SecondCor521]

I started tracking everything in Quicken in late 2006. My approach was to take what I was spending except income taxes and compare that with my FIRE stash, with the usual 25x multiplier.

There were only two minor surprises:

1. I spent more on auto gasoline than I thought I would - I assumed I would drive less because I wouldn't be driving to work. Although the prediction about not driving to work did turn out to be true, with more time and energy on my hands I apparently drove more elsewhere, and my work mileage really wasn't a big percentage of my driving anyway. In the grand scheme of things, my Auto:Fuel category is a small portion of my spending, so this is more of a interesting tidbit than anything actionable for me or anyone else.

2. My income tax situation turned out better than I thought. With more time and energy in retirement and an interest in learning about taxes and the various options and strategies out there, I basically only pay as much income tax as I decide is useful in avoiding the tax torpedo.

My actual spending is, on average, 40% higher since retiring (comparing 9/2012 through 2/2016 vs. 3/2016 through 2/2021). But my retirement income is higher, and my portfolio is higher, so my net WR is only 1.39%. Honestly I would try to spend more except I'm too busy just doing what I like to do (which is apparently pretty cheap things) and I also have the ingrained frugality habit that I might need to break.

Overall, I retired pretty much as soon as the conservative numbers said I could. My estimates did in fact turn out to be conservative (at least so far five years in), so in that sense things have turned out fine and I could have retired even a year or three earlier. But who knows, I could have retired into the face of a recession and things could have turned out worse than they did. I'm thankful that my FIRE date has so far worked out pretty well.

[PoorOldCountryBoy]

Quote:

Originally Posted by disneysteve We all try to model what our retirement spending will look like so that we know when we are financially ready to retire. But then reality happens. For those of you who are retired, how close to your projections and predictions has your spending actually been? Where did you find you underestimated, or overestimated, how much you would spend? I read so many stories of people discovering new hobbies and interests after retirement which weren't part of their pre-retirement planning. Surely that must sometimes impact the anticipated spending. Share your real life experiences with those of us who are still planning and dreaming about retirement down the road.

We spend the same as we used to when working. Saved some in some categories, spent it on others (like fun)

[karen1972]

We are a bit under in everything except taxes. That was due to a change in thinking as when I retired I wasn't planning on doing mass conversions and thus keeping my ACA subsidies, but since then I've decided to suck it up and do the conversions thus medical spiked w/o the subsidy and so did the taxes it. It nets out to be about a 10% increase from plan; however it should ideally work out to more money long term to spend... in theory at least.

[Dash man]

We’re under unless you consider buying and remodeling our Florida beach condo, buying a Jersey Shore home, buying a townhouse for my son and his family and replacing its roof, buying a new BMW that’s on a ship from Germany as I write this, paying taxes on Roth conversions, funding our grandkids 529 plan and buying a Subaru Impreza wagon for my stepson’s family when the twins were born. Somehow our net worth still grew!

[Big_Hitter]

Spending was pretty much on target last year, our first year in FIRE.

Taxes are nailed too. With the stimulus money (which I never received) looks like we will have negative income taxes this year

[rodi]

Our spending is pretty much on track. We splurged on some big travel when first retired (9 week tour through Europe with 2 kids in tow).. but that was on budget and money pre-allocated for that.

Things that changed between working and retiring:
- More cooking from scratch at home (re-visiting a former hobby I didn't have time for before)... net reduction in budget.
- New hobby/exercise regime of walking the dog on the beach most days - FREE and totally enjoyable.
- Less money spent on books since I upped my library power user game (reserve several books ahead of time... so always have something to read.... Less kindle impulse purchasing.

Travel (not counting last year) is about what we budgeted... several small trips and 1 big trip a year... Really big trip every four years. (That will change when young adult children are launched.... more travel then.)

I still track what we spend... and if it looks like it's getting out of line, I tend to pull in on spending elsewhere.

[bada bing]

I didn't have much confidence around my spending number when I retired 5 months ago. Still don't. My retirement lifestyle is radically different from my old work lifestyle. My initial planning was putting $30K into checking on retirement day with the intention that it last 3 months. I still have $10K after 5 months, so I'm spending less than expected. I think my spending will ramp up next month after I complete the covid shots. I may go to Bali, Thailand and Vietnam in the fall. I've already put deposits on a Panama trip and a repositioning cruise in 2022.

My budget planning is to stay under $120K/yr. I can obviously easily do that, there is at least $60K/yr of fat in that number. The real budgeting will be picking and choosing what I "blow that dough" on. At this point it appears as though I worked a bit too long, I'll see if that holds over a more relevant time frame.

[Palmtree]

Quote:

Originally Posted by Ready My spending has been consistent both pre and post retirement. The only thing I noticed is that in the past year, due to COVID I find myself spending a lot more money on stuff for the house and almost nothing on travel and restaurant dining. But the total amount I’m spending is still about the same, just on different stuff.

I was going to comment, but this post pretty much mirrors it for us.

[Out of Steam]

I noted elsewhere that, because of COVID, we are about $400 a month under plan. We would be about that much over our plan otherwise.

[levindb]

About 9 years into this phase of our lives and spending has been very chunky and lumpy. We have significantly more in our buckets than we started with and we keep raising our annual spend to run out of funds by age 105.

The markets have done well, and we have taken some of those profits to blow that dough on travel (world cruise, 6 week safari, month in Alaska) purchased our forever home, sold a rental property with large capital gains/tax impact.

We do not have detailed plans on how to spend our annual allotments, and taxes have certainly grown much higher, as well as Medicare costs...but we are fortunate enough to be happy and healthy...and we have a lot of flexibility in our spending.

[MarieIG]

DH retired (I'm teetering on the brink).

He's spending more than anticipated due to unexpected family needs.

[Markola]

Good timing on this post, as I was calculating exactly this figure last night. Our pre-FIRE plan called for $12K more annually in “everyday spending” than we are experiencing, i.e. not the mortgage, healthcare, travel, major home projects or cars, which is just how our plan with Vanguard does it. I have tracked our spending religiously on YNAB for probably 8 years, so I have a strong, habitual grip on knowing where every dollar goes. I attribute the changes to:

- My personal spending of about $500/month on my personal needs basically evaporated after all costs-to-work went away, i.e. lunches out, work clothes, commuting, parking, car repairs, holiday gifts and beers out for staff, etc. If I spend $100/month now on me on average, it’s a big month. I just increased that line item to $225/month because I’m starting to look like a caveman.

- We dumped our stupid Verizon $190/month plan for a Visible $75/month one for our three phones.

- Eating out less and concert tickets. I expect maybe $3,000/year of such local entertainment to return post-Covid.

- And this and that minor trim.


The biggest wild card will be seeing what our 2020 taxes are. It was such a complicated year for us that I have no idea what to expect. Anyway, not spending about $12K that we expected to opens up all kinds of enjoyment possibilities and increases portfolio survival several points to 99%, so I’m thrilled.