Increasing budget in retirement... the kids and extra travel

[Aiming_4_55]

I'm thinking more about retirement in 2 years, at age 50. I anticipate more time for personal activities and family time. With this I can see my budget increasing which I'm ok with as long as the spend increases the enjoyment of time, enrich our lives.

A little background - married, 2 kids, no debt (no mortgage, cars paid off, pay off credit cards monthly, etc.), college funded for state university, and something in mind for first car and wedding.

In 2019, the kids will be in 8th and 6th grade. We follow a basic theme, school/saving first with fun activities through out the year. Fun activities are weekly at the YMCA/associated classes along with Park District classes. We do casual dining out and take out. A few vacation weeks away and weekend roadtrips. We fund our 401k and taxable savings with some extra discretionary funds left.

So, what should I be thinking about in respect to budget increases, i.e. middle school years, high school years, etc. An extra 10 - 20% spend for 6 years, age 50 to 56? The college fund is set aside and separate.

What have been your experience? Our current budget is 65 - 75k, but thinking it could be 80 - 90k. Any gotchas other than teenager drivers and car insurance?

 

[kcowan]

If it works, why not go for it? The only downside is that the kids might spend more time at college than the budget. Can you handle that?

 

[MBAustin]

Expenses in middle and high school vary greatly with the kids' interests and appetites. The good news is that you're out of the childcare and babysitting expenses. But if they are into traveling sports teams, anything requiring private lessons, or things like that, you've got thousands per year per child. Summer camp can also be pricey (or not).

We gave each kid a reasonable allowance and a budget for clothing. If they wanted more, they worked for it (babysitting and refereeing primarily). We did pay for DS to play select soccer for several years, but he had to come up with the $$ for his uniforms.

Also if they are active, plan on some OOP medical expenses (broken bones, physical therapy after injuries, etc.).

Overall, I think our expenses during middle and high school were lower than elementary school due to no longer needing after school care and 8 weeks of day camp during the summers.

 

[Gill]

I've been amazed that, having been retired now for nearly 19 years, I'm spending considerably more than I made when I retired. Much of it is thanks to SPIA's and a good stock market over that period. Also, the older I get the more I'm inclined to think if I don't spend it now when will I.

Gill

 

[Fedup]

I think you will need more, so budget for more. For example, I had to pay money to have my two kids' wisdom teeth pulled out, even with dental and health insurance, it was not cheap.

 

[Aiming_4_55]

If it works, why not go for it? The only downside is that the kids might spend more time at college than the budget. Can you handle that?

If the extra time in college is due to a major, yes. If due to lack of focus or effort, no. I believe I have a reasonable 529 fund of 100k for each kid by the time I RE, so hopefully it'll grow a bit over 7 - 10 years, providing more to what we are willing to fund.

 

[Aiming_4_55]

Expenses in middle and high school vary greatly with the kids' interests and appetites. The good news is that you're out of the childcare and babysitting expenses. But if they are into traveling sports teams, anything requiring private lessons, or things like that, you've got thousands per year per child. Summer camp can also be pricey (or not).

Agreed and thanks for the reminder, sports and injury go hand in hand. We were out rollerblading yesterday and I was bracing myself for my son's fall.

 

[Aiming_4_55]

.... a good stock market over that period. ....

While I hope for a dip, I'm hopeful for modest gains in the future recovery. I'm for some lifestyle creep to enjoy the fruits on my hard work and luck.

 

[Aiming_4_55]

I think you will need more, so budget for more. For example, I had to pay money to have my two kids' wisdom teeth pulled out, even with dental and health insurance, it was not cheap.

Loud and clear, health/dental care is my wild card and unknown. I have about $20k/year in budget and reserves for health/medical and such "life events".

How much more than 90k/year would you suggest?

What were some other kids related extra expenses?

Thanks for the reply.

 

[Fedup]

I would think $10k. Other extra expenses like braces, that costed about $3-$5k each. Maybe extra money for proms? I know I spent about $500-$1000 for dresses, shoes, etc. for my kids. Car insurance is also bad. I used to pay $1200 for 2 cars and then they started driving and car insurance went up to $5k for 4. Money for extra car, I bought each a brand new one after the old ones expired. Gas money for them if they drive. I'm sure you can limit them but this is off my head. I was working so I didn't limit them.

 

[Aiming_4_55]

I would think $10k. Other extra expenses like braces, that costed about $3-$5k each.

100k annual budget is within Firecalc 100% success rate =)

Probably doing braces before RE. That'll come from current discretionary spend =(

I'm playing with the idea of International travel for 2 crowns for the wife. $3k here in Southbay clinic vs $400 in Manila. She can visit family and vacation after the dental work.

 

[Fedup]

100k annual budget is within Firecalc 100% success rate =)

Probably doing braces before RE. That'll come from current discretionary spend =(

I'm playing with the idea of International travel for 2 crowns for the wife. $3k here in Southbay clinic vs $400 in Manila. She can visit family and vacation after the dental work.

Braces you have to go every month for tightening or something like that. Crown is a one time off so it may work with international traveling.

 

[rodi]

I retired almost 3 years ago and currently have an 8th grader and 10th grader. Here are my thoughts.

You can spend as little or as much as you want... My kids know I'm "cheap". I've made it clear that they won't be given a car and that use of my car will involve some personal contribution towards car insurance. My 16 year old is getting a job this summer to earn money towards car insurance. Even still - car insurance will increase - but not to a budget busting level.

Sports - we're opting for the inexpensive approach to this. Older son swims on the school swim team ($92 for uniform jammers and warm ups plus a contribution towards pool rental fees. The latter was not required but I refuse to sell candy or wrapping paper and prefer to send cash.) Younger son plays water polo in the park and rec leagues... he just got done with basketball in the park and rec league... We spend well under <$1000/ for sports fees, equipment, uniforms, etc for 2 kids.

Food - this might be different for girls... but my boys have kicked their eating into overdrive. I prefer they eat semi-healthy so the extra fruit and milk drives up the grocery bills.

Clothes - they no longer accept what I buy on sale for them... darn kids have developed strong opinions on what is acceptable to wear. Fortunately, I've taught them to only propose purchases of stuff on sale and reasonably durable/practical.

I'm finding, overall, that teenagers are a bit cheaper than the full time daycare years (diaper and preschool age).

Now a statement about the advantages of retiring when your kids are teenagers:

- You have freedom to get them from point a to point b - this gives them opportunities to participate in more after school activities. If I was still working my son would not be able to do swim team because the practice is 3 miles (in the wrong direction) from school and he wouldn't be able to get there in time. I was able to schlepp him to the FRC robotics competition the other week without being late to work.

- You have time and energy to "be in their business". I'm much more aware of what is going on with schooling, friends, etc... I have time to have deep talks about social issues, drugs, etc. They are very aware that I'm paying attention. They know that I'm talking with their friends parents as well, comparing notes. This definitely helps them keep in line.

- If you choose - you have time to volunteer at their schools. My sons' schools are facing budget cuts and need periodic help... I volunteered 3 times in the past 2 weeks to help proctor international baccalaureate oral exams... I help out during text book check out and text book check in sessions.

I have no regrets about retiring in my early 50's and being more involved with the kids.

 

[copyright1997reloaded]

One thing I've noticed is they eat more, and eat more expensive things as they get older. Also with no more kids meals, it is adult pricing for trains, amusements, and so on.

 

[rodi]

Forgot to mention braces. I got them done or at least started/paid for when I was still working. Even still - it was something that could be fitted into the budget... $3-5k/kid. I did have to pay OOP $740 2 weeks ago for a new retainer for older son. He'd had jaw surgery last fall and it changed the contour of his gum line... (Had a pretty serious ameloblastoma) While I would have preferred not to pay it - it didn't break the budget.

 

[Aiming_4_55]

.... I used to pay $1200 for 2 cars and then they started driving and car insurance went up to $5k for 4. ...

Wow, I knew about insurance going up, but not that much. I'm thinking we can get by with 2 cars, maybe a 3rd, if kids commuter forcollege if they stay local. DW & I won't drive all that much. We are also within a mile from the mall for any part time work opportunities for the kids so biking or walking are great options.

 

[Fedup]

Wow, I knew about insurance going up, but not that much. I'm thinking we can get by with 2 cars, maybe a 3rd, if kids commuter forcollege if they stay local. DW & I won't drive all that much. We are also within a mile from the mall for any part time work opportunities for the kids so biking or walking are great options.

It's for 4 cars. Sorry it was not for 2 cars. It's a bit cheaper when they didn't have their own cars. One of my kids did bike in the beginning, but the minute they could drive alone, I wanted them to drive. I was not into chauffeuring them around to activities. Another expense to add is driving lesson for them. We didn't want any conflicts with us, so we paid for somebody to teach them properly. Maybe $500 each per person at 16. They are both very good drivers thanks to that.

 

[Aiming_4_55]

...I have no regrets about retiring in my early 50's and being more involved with the kids.

That'll be my motivation, everything else is just noise. There will be lean and good years for the budget. We will adjust as needed.

 

[Aiming_4_55]

One thing I've noticed is they eat more, and eat more expensive things as they get older. Also with no more kids meals, it is adult pricing for trains, amusements, and so on.

Yeah, I'm seeing some of that now. Our 10 year old daughter's meal can cost 10 - 20 per meal and she eats like a rabbit, so I prefer take out. We still go out for the social aspect with friends and visiting family so the cost is not the deal breaker.

 

[Aiming_4_55]

.... Another expense to add is driving lesson for them. We didn't want any conflicts with us, so we paid for somebody to teach them properly. Maybe $500 each per person at 16. They are both very good drivers thanks to that.

Ok, sounds like a deal. I'll send them to driving school and I'll get track time, nice trade.

Thanks for the suggestion as only time I think of private driving school is to "buy" the license and avoid true testing.

 

[rodi]

I think in California you *must* do some professional driving school. First an online course in order to get your permit... then some behind the wheel training by a professional school (at least 3 lessons) before you can get your license. From my research (I have a 16 year old) it runs about $500 for this minimum.

Our district (san diego unified) used to offer drivers training in school - but that was cut for budgetary reasons a LONG time ago.

 

[Mdlerth]

Car insurance is also bad. I used to pay $1200 for 2 cars and then they started driving and car insurance went up to $5k for 4. Money for extra car... Gas money for them if they drive.

+1 Worth it.

We have five kinder, so it wasn't possible to get to, or deliver them to, every activity they wanted. Once the oldest got his license, we covered his insurance and designated a car for his use with the caveat that he was now a part-time chauffeur for his younger siblings. Ditto for the next one, etc. It may not have been the cheapest decision, but it allowed all our children to do, learn and enjoy some life experiences that they otherwise wouldn't have been able to do.

One of the great things I love about this forum is that it includes aspects of ER besides just the money ones. After all, the whole point of FIRE is attaining freedom to do what we really want so we can build the best life we can build.

 

[DrBrisket]

Wow, I knew about insurance going up, but not that much. I'm thinking we can get by with 2 cars, maybe a 3rd, if kids commuter forcollege if they stay local. DW & I won't drive all that much. We are also within a mile from the mall for any part time work opportunities for the kids so biking or walking are great options.

Your insurance rates will go up once your kids get a license even if they don't have a car that they are the primary driver for; a learner's permit did not affect our rates. At least not in Texas and later with a second child in Florida. I do not remember the cost of a driving teenager without a designated car on the our policy, but I think it was just under 1000/year.

We were close to what Fedup mentioned, 1100/year with DW and me. Added 2k/year/car&driver, so we are now around 5k/year for 4 cars and 4 drivers.

 

[rodi]

We have five kinder, so it wasn't possible to get to, or deliver them to, every activity they wanted. Once the oldest got his license, we covered his insurance and designated a car for his use with the caveat that he was now a part-time chauffeur for his younger siblings. Ditto for the next one, etc. It may not have been the cheapest decision, but it allowed all our children to do, learn and enjoy some life experiences that they otherwise wouldn't have been able to do.

This doesn't work so well in California. For the first year a minor has a license s/he cannot drive other minors in the car unless s/he has another licensed adult over the age of 25. Not even siblings unless there is a note and a specific/limited reason. If you're caught in that first year of provisional license with other minors (friends or younger siblings) you lose your license.

Trust me - this is a factor - my kids go to a highly rated school that is not in our immediate area - it would be a BIG deal if older son could drive younger son next year... it would sway the decision towards him getting his license sooner.

Another factor on the multiple cars thing. DH and I have discovered that now that we're retired we rarely need 2 cars. So DH's old pickup could be used some of the time by kid(s). Not sure we need to buy a 3rd or 4th car.

Provisional driver license restrictions during the first year

After you pass your driving test, you will be issued a provisional driver license. With your provisional driver license, you must be accompanied and supervised by a licensed parent, guardian or other licensed driver 25 years of age or older, or by a licensed or certified driving instructor when you:

* Transport passengers under 20 years of age at any time, for the first twelve months.

* Drive between 11 pm and 5 am for the first twelve months.

This means you cannot give anyone under 20 years old (your friends, your brother(s), sister(s), cousin(s), etc.) a ride unless you have a licensed parent, a guardian or other adult 25 years old or older in the car with you. You are also not allowed to drive between 11 pm and 5 am during your first year after getting your license unless you have a licensed parent, a guardian or other adult 25 years old or older in the car with you.

https://www.dmv.ca.gov/portal/dmv/detail/teenweb/dl_btn2/dl

 

[Fedup]

I think in California you *must* do some professional driving school. First an online course in order to get your permit... then some behind the wheel training by a professional school (at least 3 lessons) before you can get your license. From my research (I have a 16 year old) it runs about $500 for this minimum.

Our district (san diego unified) used to offer drivers training in school - but that was cut for budgetary reasons a LONG time ago.

That's what I was referring to. But I think a parent can teach a kid to drive, I mean some people cannot afford this fee. So it's not a requirement.