How has your retirement spending differed from your projections?

[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.

 

[RobbieB]

Over twice what I expected.

 

[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.

 

[Winemaker]

Up 33% dollar for dollar.

 

[Montecfo]

I have been under the plan. Which makes sense since I thought the plan was conservative.

And it's been much lower the past 12 months since far less travel.

 

[W2R]

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?

My spending (when corrected for inflation) has been about 98% of what I projected and planned to spend.

I can afford to spend more, and have been trying to spend more, but I am pretty set in my ways so it just hasn't been happening.

I underestimated what I would spend on dental work and medical care. I overestimated what I would spend on clothes and gasoline.

 

[2017ish]

Ignoring taxes and work-related expenses, we are spending a bit more than double what we did when working. But, that was more or less expected; we planned to have discretionary spending (travel) be more than half of our expenditures. The actual amount each year is supposed to be based on size of portfolio as of 12/31 (I have difficulty in getting DW to conform to this, however!).

 

[Finance Dave]

We are quite a bit lower, maybe 20%, but that's mainly due to the pandemic and no travel and little eating out. I anticipate we'll end up slightly above expected when all is said and done, as utilities have gone up a bit more than planned (although again this may go down when we're not at home all the time after the pandemic lol).

 

[tb001]

Our baseline level of spend is a little under my estimates, maybe by 5%, but it gives us a fair bit of wiggle room that we’ve been taking advantage of. That said, DH has been doing some part time consulting work and the portfolio has grown a lot, so we’ve been spending more than we budgeted on home improvements and hobby stuff. Our portfolio is now at 100% success rate above our projected spend, so we’re using ‘extra’ to finish up a few more projects and buy some toys to enjoy.

I’m sure we’ll tighten up the purse strings a bit when we don’t have the extra income coming in, which will be fine.

 

[FlaGator]

Was running right about initial expectations until 3+ years in.

That's when I met the lady who is now my wife . Between travel to her out-of-state home, getting her here, and upgrading the house from the slacker single dad standard, I'm at about 150% for the last 2 years. This may be the year things settle down.

Point is, things happen, and some of them can be really good. Helpful to have some cushion in your forecast.

 

[Ed B]

I spend more on groceries than I expected. At least 50% more. We cook at home the vast majority of the time. That has been good for my weight ( I have lost over 20 pounds since I retired on May 30th 2018) but I underestimated how much that would cost.

I also spend more on auto fuel costs because of putting a lot more miles on my pickup than I expected. But that is a lifestyle payment.

We have also had far more lumpy expenses than we anticipated. Some medical and others break/fixes.

All that being so we still have a little more in the portfolio than when I retired.

 

[DrRoy]

Four years RE. 1st year was on plan at about even with pre-RE. Have spent more every year so far, up to 1.67X the first year in 2020. Some of the increase was for travel, but most was to remodel the house. Still at it this year.

 

[grasshopper]

Spending has been lumpy for us. Normal travel didn't raise the bar much, but a Galapagos/ Machu Picchu, and Zambia walking safari, put us way over the top.

 

[racy]

I adjusted my pre-retirement spending to reflect inflation. It turns out our average post-retirement spending is almost the same, actually 1% higher.
What changed were the categories of expense. Pre-retirement spending on family support and mortgage were replaced by vacation and healthcare insurance spending.

 

[EastWest Gal]

Close to what we planned. Somewhat over, because of our cushion of 50% more spending then in our budget before FireCalc has less than 100% success. We decided to spend last year's travel budget fixing our driveway and sidewalk.This year we need to replace the old carpet/flooring upstairs, targeted for the fall. I think we will be under budget this year.

I should say, I planned. DH has never done a budget. He's not good at financial planning, but is good at spending very little. It's all good.

 

[Midpack]

Our spending was exactly as projected for the first 8 years after I retired. But we completely adopted our projected retirement spending 2 years before I retired to make sure - before pulling the retirement trigger. I’d recommend it to anyone who can. Since then we’ve increased our spending about 50% but a conscious choice and relocation to another state and higher COL area.

It’s easy to project the frequent recurring expenses.

• Some people miss taxes but that’s unnecessary.
• The two other places most people miss while projecting spending are medical and...
• ...all the infrequent big ticket items. Big things that happen every 5-15 years or so, replacing cars, replacing roofs, replacing furnace and AC, home update/remodeling/additions, replacing patio/decks, travel splurges, furniture replacements, periodic TV, PC, mobile devices, boats/RVs, landscaping, new hobbies (who knows over 30 years), etc.

Our infrequent big ticket expenses (last bullet) alone fluctuate a lot and we can time some of them, but on average they’re about 20% of our total annual expenses. And our medical expenses are our biggest spending category even though we’re both healthier than 90% of our peers...

 

[DayDreaming]

I'm retired 12 years now, I spend about the same post-retirement as I did pre-retirement, which is about what I expected. So reality has matched my expectations.

 

[PaunchyPirate]

I'm now starting my 3rd year of retirement. My spending has been very much in the same ballpark that I expected it to be. I meticulously tracked my spending for 2 full years prior to retirement and for the first 2 years of my retirement. For the first 2 retirement years, I also set up a "budget" that compared my estimated spending with my actual spending on a monthly basis. This year, I'm still tracking what I spend, but I've stopped comparing it to any sort of budget or pre-planned estimates.

Bottom line is that I'm spending less than I could if I wanted. I'm happy with that.

 

[scrabbler1]

I have been retired 12 years. Medical expenses and taxes have been the most volatile, but everything else has been rather stable.

I have seen big increases and decreases in medical expenses. I retired before the ACA so I faced increases due to the unfavorable individual market prior to 2014. I was also underinsured for a few years so I had some decreases, too. With the ACA I have had increases and decreases, too, but more manageable. Some years I went over the cliff, some years not.

With taxes, only when I had income spikes due to cap gain distributions did I see tax increases (which means I always had the money to pay it). Adjusting my portfolio to more index funds has taken care of that, with the benefit of seeing my ACA premium subsidy return and increase, too.

 

[lem1955]

I've been semi-retired since December 2015. I didn't plan on working after that. But I was recruited for a part-time, work-from-home opportunity that appealed to me and took it. I'm glad I did. Despite that extra income, I still had to withdraw more from my tIRA for home improvements than I had planned on in the first four years of retirement - new siding, new roof, new windows, new appliances, interior paint and carpet replacement. I should have anticipated all that after 30 years in our home. My annual withdrawal rate averaged 6.43% not including ROTH conversions. I have a very conventional 60/40 AA across my portfolio using only mutual funds mostly index style. And the total portfolio is now 20.9% larger than it was 1/1/2016. I expect from here on my withdrawal rate will decrease to 4.5 - 5.5% depending on travel desires. And I'm almost 66 and still haven't applied for SS. I may quit that part-time job this autumn if the travel bug is stronger than the Covid bug! Got my 1st jab yesterday.

 

[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]

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.