Katsmeow
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jul 11, 2009
- Messages
- 5,308
We are not yet retired. I am mid 50s, DH 62. I am trying to project future expenses for two scenarios - one scenario is we both retire. Scenario 2 is that DH works 4 more years and in a year or so I reduce my work hours or go into much lower paying work or retire (I have a highly stressful job). Our household income now is about 320k. I have a the higher salary but my job offers no real benefits except 401k. No pension, retiree health care, etc. DH works for mega corp and has great benefits.
Anyway, reading old threads here I see people talking about basic expenses in retirement of around $40k (some less). Then I see a group who puts it more around $70 to $80k. Those above $100k are to some extent outliers.
I confess that DH and I do not have a lifetime of frugality behind us. Some of that is related to child related expenses, part of it to poor decisions. Over the past several years we have actually lived quite frugally as a large part of our income has gone to debt repayment or child related expenses (kids are all teenagers, two to soon be in inexpensive college). With kids going to college, we do not need the large house we have and plan to move to a much smaller house.
However when I project expenses I find it difficult to get below $90k in such a house even with DH working (our medical would be low since I would be on his plan but we would have college expenses of about $12k a year). If I project retirement for both and no kids I get about $70k expenses not including medical (DH would have retiree medical but I would not).
So I want to go over some expenses and get some feel for what I'm missing on how expenses can be so low for some. Maybe I just am unrealistic in how high I am projecting or maybe I am just valuing some expenses more than others would. I'm not going to mention all expenses as some of them are clearcut (if you have a pool then that is an expense, dining out is easily to analyze).
All expense numbers are annualized based upon data over the last 16 months unless other wise indicated.
Auto repair and maintenance - $3219. We have 3 cars, which will soon be 2 (we are giving one to our oldest son). One car is newish and under warranty. The other two are a 2004 Quest and 1999 Lexus. Even if I assume that this cost is half this when our son gets the oldest car that is still $1600 a year. I can see fuel costs going down substantially during retirement but will repair and maintenance. We do drive a lot know so maybe somewhat but how much would it go down if driving substantially less?
Home Repairs and Maintenance - $6278. That number doesn't include the $8000 in landscaping/tree removal costs post Hurricane Ike or the $1450 for tree branch removal when another big storm came through. We have 2 acres with huge trees. Of that $6278 about 25% of it is household supplies/maintenance/minor repair -- the stuff we do ourselves. About $300 a year is pest control (living on acreage we have to keep the rats at bay). About 60% of it is repairs. About $3000 was repairing the well in a major event. Right now we have a large house (over 4000 square feet), 2 garages, and a guest house. So there is a lot to maintain. We plan to move to a house of about 2500 square feet probably on an acre with less trees. Estimating future repairs and maintenance is really hard.
Insurance -- Homeowners is $2200 a year, umbrella about $1400, auto $4600 (it did not help that our 18 year old son had a relatively minor but at fault auto accident -- we also have another son who will soon start driving so this expense will be high for years). hard to estimate homeowners and umbrella when we move.
Electricity - $6171 - This will go down when we move, not sure by how much.
Overall projected expenses if we moved to a 2500 square foot house near DH's work - 2 adults, 2 teenagers in house - per month
Auto Fuel - $150
Auto Main/Repair - $250
Toll Road - $50
Children/school related - $1600
Property Tax - $350
Dining out - $200
Groceries - $600
Healthcare - $550
Household supplies/repairs/maintenance/yard - $300 (total guesstimate)
Ins Auto - $400
Ins House - $100 (guesstimate)
Ins Umbrella - $100 (guesstimate)
Computers/electronic/software - $200 (computers are getting long in tooth)
Entertainment - $200 (Leisure activities)
Internet/Cable - $150
Travel - $100
mortgage - $1500 (will likely pay off at some point)
Clothing/cleaning - $100
Gifts - $250 - In addition to our 3 children, DH has 3 adult children, 9 grandchildren and 3 greatgrandchildren
Personal care - $50
Pets - $350 (this expense I understand - we have several large dogs and 2 cats)
Electricity - $300 (Guesstimate)
Garbage - $37
Phone - $200
That works out to about $98k a year and I struggle to cut it other than give up activites that we enjoy (the computer stuff for me and DH's dog showing).
Anyway, reading old threads here I see people talking about basic expenses in retirement of around $40k (some less). Then I see a group who puts it more around $70 to $80k. Those above $100k are to some extent outliers.
I confess that DH and I do not have a lifetime of frugality behind us. Some of that is related to child related expenses, part of it to poor decisions. Over the past several years we have actually lived quite frugally as a large part of our income has gone to debt repayment or child related expenses (kids are all teenagers, two to soon be in inexpensive college). With kids going to college, we do not need the large house we have and plan to move to a much smaller house.
However when I project expenses I find it difficult to get below $90k in such a house even with DH working (our medical would be low since I would be on his plan but we would have college expenses of about $12k a year). If I project retirement for both and no kids I get about $70k expenses not including medical (DH would have retiree medical but I would not).
So I want to go over some expenses and get some feel for what I'm missing on how expenses can be so low for some. Maybe I just am unrealistic in how high I am projecting or maybe I am just valuing some expenses more than others would. I'm not going to mention all expenses as some of them are clearcut (if you have a pool then that is an expense, dining out is easily to analyze).
All expense numbers are annualized based upon data over the last 16 months unless other wise indicated.
Auto repair and maintenance - $3219. We have 3 cars, which will soon be 2 (we are giving one to our oldest son). One car is newish and under warranty. The other two are a 2004 Quest and 1999 Lexus. Even if I assume that this cost is half this when our son gets the oldest car that is still $1600 a year. I can see fuel costs going down substantially during retirement but will repair and maintenance. We do drive a lot know so maybe somewhat but how much would it go down if driving substantially less?
Home Repairs and Maintenance - $6278. That number doesn't include the $8000 in landscaping/tree removal costs post Hurricane Ike or the $1450 for tree branch removal when another big storm came through. We have 2 acres with huge trees. Of that $6278 about 25% of it is household supplies/maintenance/minor repair -- the stuff we do ourselves. About $300 a year is pest control (living on acreage we have to keep the rats at bay). About 60% of it is repairs. About $3000 was repairing the well in a major event. Right now we have a large house (over 4000 square feet), 2 garages, and a guest house. So there is a lot to maintain. We plan to move to a house of about 2500 square feet probably on an acre with less trees. Estimating future repairs and maintenance is really hard.
Insurance -- Homeowners is $2200 a year, umbrella about $1400, auto $4600 (it did not help that our 18 year old son had a relatively minor but at fault auto accident -- we also have another son who will soon start driving so this expense will be high for years). hard to estimate homeowners and umbrella when we move.
Electricity - $6171 - This will go down when we move, not sure by how much.
Overall projected expenses if we moved to a 2500 square foot house near DH's work - 2 adults, 2 teenagers in house - per month
Auto Fuel - $150
Auto Main/Repair - $250
Toll Road - $50
Children/school related - $1600
Property Tax - $350
Dining out - $200
Groceries - $600
Healthcare - $550
Household supplies/repairs/maintenance/yard - $300 (total guesstimate)
Ins Auto - $400
Ins House - $100 (guesstimate)
Ins Umbrella - $100 (guesstimate)
Computers/electronic/software - $200 (computers are getting long in tooth)
Entertainment - $200 (Leisure activities)
Internet/Cable - $150
Travel - $100
mortgage - $1500 (will likely pay off at some point)
Clothing/cleaning - $100
Gifts - $250 - In addition to our 3 children, DH has 3 adult children, 9 grandchildren and 3 greatgrandchildren
Personal care - $50
Pets - $350 (this expense I understand - we have several large dogs and 2 cats)
Electricity - $300 (Guesstimate)
Garbage - $37
Phone - $200
That works out to about $98k a year and I struggle to cut it other than give up activites that we enjoy (the computer stuff for me and DH's dog showing).