Senior Retirement Budget

[imoldernu]

From a May 2018 article:https://www.usatoday.com/story/money/personalfinance/retirement/2018/05/31/what-does-an-average-retirement-cost/35455427/

The article posits an average U.S. senior household budget @ $45,756, breaking down the dollar expenses by category.

What areas would you consider to be far off the numbers in the article? As I know many of you include substantial travel expenses in your budget, perhaps to consider your comparison exclusive of your planned travel dollars. ie. a budget that includes $20,000 for travel would automatically change a$50,000 budget to $70,000.

Our own budget is relativelyclose to the breakdown shown in the article, so maybe we're kind of "average".

 

[Teacher Terry]

Our expenses are 48k not counting travel. We spend double on health care but less on housing and cars and more on entertainment.

 

[kimcdougc]

Our expenses are 65k which includes 22k for health care and $15,000 for travel.

 

[aja8888]

$70 K expenses here but about $12K is medical insurance, OOP dental and things Medicare won't cover, and drugs.

 

[jkern]

Statistical averages don't have a lot of meaning. For the most part every situation is different with maybe food being somewhat similar.

 

[W2R]

What areas would you consider to be far off the numbers in the article?

The table below shows how my 2018 expenses compared, by their categories.

I'd say they grossly overestimated the cost of housing and transportation. I guess that is because my house and car are paid off and I did not add anything to compensate for that. In my case they were very close for health care and food. And, their "Personal Insurance, Pension" category only applies to those working and contributing to their pension system (so for retired people like me, that is zero).

They didn't include income taxes, clothing, or miscellaneous expenses (like my Instant Pot, haircuts, etc). They also didn't include gym fees so I put those in "Entertainment".

Overall, I'd say that for me all their numbers are wacky except for food and health care.

Category|Article|me in 2018
Housing|$1,322|$713
Transportation|$567|$178
Health Care|$499|$433
Food|$483|$452
Pers.Ins,Pensions|$237|$0
Cash Contributions|$202|$50
Entertainment|$197|$106
TOTAL but only for the above|$3,507|$1,942 (actually $2,143 for everything but income tax)

 

[jkern]

The entertainment portion seems very low to me. There is a new theater with restaurant near me that a burger, beer and movie for two is $115.

 

[W2R]

The entertainment portion seems very low to me. There is a new theater with restaurant near me that a burger, beer and movie for two is $115.

That sounds like one to avoid, for sure!

We don't go out to movies any more because Netflix or Amazon Prime video is so much more convenient and enjoyable (for us). We haven't been to a theater for probably about a decade and do not feel like we are missing out. So, I have no idea what movies cost here. Most of my entertainment spending is on my video game hobby.

 

[brett]

I believe that averages such as these are completely meaningless.

A retiree living in SFO will more than likely pay much more for shelter than one living in East Rubber Boot. Some keep their large homes, others downsize.

A retiree with a health challenge will most likely spend much more on medical, drugs, etc that one who does not.

Same for travel and hobbies.

I believe that when it comes to retirement there is no average. There is just you, based on your retirement income, real or anticipated, and your spend pattern. What does the average mean to a retiree in Witchita in poor healt who does not travel very often to someone who lives in a NYC highrise and travels internationally for several months a year?

 

[imoldernu]

I did take issue with the healthcare costs as it seems that the Soc. Sec. amount, plus the insurance, plus the prescriptions and even the normal Doctors' visits would far exceed the yearly cost shown ($6,000/ yr.) for a couple.

The other major expense that I wondered about was the housing, which came to almost $16,000/yr. It seemed a little high to me, because I own, and pay fairy low taxes. That is until... I started adding the HOA dues, all of the utilities, insurance, repairs and replacements, and supplies. In my case, another $4,000 for my lake house.

........................................................
This all reminds me that if/when we move to the Apartments in our CCRC, the total cost as a couple will come to less than $35,000/yr, including:

two main meals a day
all utilities including TV and internet.
travel locally for store, entertainment and medical visits. (CCRC Transport)
ih house social gatherings
on site barber and beauty shop
fully equipped and staffed modern exercise center
lounge w/free endless coffee, vanilla and chocolate drinks
card rooms
extensive library
on-site emergency personnel

.........................................................................

Yes... every situation is different. The "average" helps put into perspective our individual differences, by looking at the numbers from the Bureau of Labor Statistics. The post was not meant to suggest that anyone should follow the average in his/her own life.

 

[ShokWaveRider]

$1322 is a little low for mortgage Utilities and Taxes unless I am interpreting it incorrectly. Which is possible. I am old after all. If mortgage is paid off maybe. Ours was $1,432 with home paid off. House taxes are $500pm alone.

 

[daylatedollarshort]

Yes... every situation is different. The "average" helps put into perspective our individual differences, by looking at the numbers from the Bureau of Labor Statistics.

We live in a high cost of living area, but realized we had more than enough to retire after we stumbled on the Consumer Expenditure Survey. We just had to either move to a lower cost of living area and/or get a better grip on our expenses. We did the better grip option.

 

[jkern]

That sounds like one to avoid, for sure!

We don't go out to movies any more because Netflix or Amazon Prime video is so much more convenient and enjoyable (for us). We haven't been to a theater for probably about a decade and do not feel like we are missing out. So, I have no idea what movies cost here. Most of my entertainment spending is on my video game hobby.

Yep, I do avoid that theater because of the high cost. My point was that entertainment can get very expensive very quickly. I include dining out as entertainment. For example, Cirque Du Soleil tix $175 for two, dinner at House of Prime Rib $150 for two, day at the ball game $250 for two, day at the fair $75 for two, etc...

 

[Teacher Terry]

2 movie theaters here lowered their prices to 5 all the time. No reclining or booze but we are good with that. We go weekly.

 

[Dtail]

That sounds like one to avoid, for sure!

We don't go out to movies any more because Netflix or Amazon Prime video is so much more convenient and enjoyable (for us). We haven't been to a theater for probably about a decade and do not feel like we are missing out. So, I have no idea what movies cost here. Most of my entertainment spending is on my video game hobby.

We only go Tuesday for $5 and bring our own drinks and snacks. Unless it is a retirement type movie, the theater is mostly empty.

 

[daylatedollarshort]

That sounds like one to avoid, for sure!

We don't go out to movies any more because Netflix or Amazon Prime video is so much more convenient and enjoyable (for us). We haven't been to a theater for probably about a decade and do not feel like we are missing out. So, I have no idea what movies cost here. Most of my entertainment spending is on my video game hobby.

We don't go out to movies very often either. But when we do go it is $5 - $6 Tuesdays. If we go out to eat it is usually some kind of ethnic food like Indian or Thai with a half off coupon or Groupon so the bill is only $20 or less.