Best Laid Plans...

[Retire52]

Time2,

Your household has built up some spending discipline muscle we have yet fully developed. It is great that you are in a position to help your future dentist, especially when you put your selves in position to do so on modest income.

I am anticipating the day when we will all see our NW numbers fall on paper. That phase will be the litmus test for my naisant retirement budget.

 

[Time2]

Time2,

Your household has built up some spending discipline muscle we have yet fully developed. It is great that you are in a position to help your future dentist, especially when you put your selves in position to do so on modest income.

I am anticipating the day when we will all see our NW numbers fall on paper. That phase will be the litmus test for my nascent retirement budget.

Our discipline was a way of life for my wife who was an immigrant. I notice 3 months after we married, we had $1,500 saved, having that money saved was new to me, that's when I jumped on the frugal bandwagon, and by the end of our first year we had accumulated $6,000. That year 1982 we earned $18,000 total. I have to admit we did get $586* as wedding gifts that was part of the $6,000. *(wealthy family

As to the modest income, I still look back and I am amazed at how well we have done. I never felt like we were poor, and after crunching the numbers we were on average several percent above the US median income. I always thought our income was lower middle class. The real
kicker is compound interest, which we all have heard, but yes, after 37 years of saving, that compound interest really works. Our net worth is more than we earned over our 38 yr marriage.
I hope that is a little support for those just getting started.

 

[oldphd]

dental school and we are paying the tuition

Excellent planning Time2!

Too lazy to find a link, but a very common theme among ER folks encountering unexpected expenses is in the area of dental work... Need more as we get older and typically have no insurance... I assume you've worked out a "lifetime zero deductible dental care" agreement...

 

[Time2]

Excellent planning Time2!

Too lazy to find a link, but a very common theme among ER folks encountering unexpected expenses is in the area of dental work... Need more as we get older and typically have no insurance... I assume you've worked out a "lifetime zero deductible dental care" agreement...

She has a couple of years of school left, maybe I can get that worked out!

 

[Retire52]

Time2,

Two-saver couple on Median wage beats a one saver-one spendy couple, no matter the wage level, everytime I bet. Luckily, my DW only leans towards spendy

I agree, compound interest is sweet, although I didn't save as well during the early years and played around with individual stocks too much for it to overtake my savings. Compound interest is really kicking in now in RE though!

 

[JayNak]

Thoughts?

Just turned 59.5. Got 1.1mil in 401k, about 160K of it is Roth/after-tax. About 60k in savings/ira. I get a pension of about 2100/month. Wife gets SSI and a small pension and is on Medicare.

Live in Central Wisconsin. No mortgage or car payments. No kids. I've been tracking expenses for a year, minus some 1 time expenses for retirement (trust setup), we spent a touch less than our take home pay. About 5900/month vs 6050/month. My wife and I spend money like water and could cut back in a lot of areas such as I go out to lunch every day (8/day avg), eliminate cable TV and just keep internet (would go from 190/month to less than 60/month), go from 3 vehicles to 2, etc.

I also have a 40 acre woods that I use for hunting and firewood. Would plan on selling it some day, (10-20 years from now). Should be worth around 100K.

Our thought is to keep taxable income under ACA limit and take about 2500/month out of Roth until I'm 65 and then collect SSI. I can get ACA health for myself at less than 200/month.

We don't plan on traveling much. Do have a trip planned for New Orleans and possibly some driving trips to visit relatives. Wife would like to do some house updates, new flooring, redo the master bath, etc. Some of these I am skilled enough to do. I have a number of projects to do around the house and in my shop, so I won't be bored for awhile. I also hunt, fish and golf.

I have thoughts about cash work, such as maintenance/handyman for folks and firewood selling (we live next to a campground).

I'm also negotiating with my currently employer for 2 days a week at a very high hourly rate (not sure I want the headaches). I've worked in IT for over 30 years and am a senior technical person for them currently.

Bottomline, I think I can swing ER without having to work. But MAY work part-time. If I work part-time, then we would plan on living beyond the ACA limit and my health care would be about 500/month.

What are everyone's thoughts? Do you think we can swing ER? Reading some of your experiences where you spend more money in retirement than when you were working, makes me a bit nervous. I don't think this would happen to us, but until I'm retired, I won't know for sure.

 

[Retire52]

JayNak,

Hello and congratulations. You can post your info on the "Hi I am..." page to get feedback.

Copy your message, Goto "Community Forum", then start a new post and others will be able to see your introduction and provide you with their thoughts on your RE plan.

 

[YVRRocketSurgery]

Personal finance is personal of course so it's not surprising that a broad rule (like 70-80% of your working income) would not line up well to one's own situation, especially with the skewed demographic in this forum that is likely more in tune with their finances and have loftier retirement goals. The average Joe is likely scraping into retirement while allocating that other 20-30% during a majority of their work life towards supporting their kids, paying their mortgage, and savings.

Our strategy is about tracking expenses, identifying our retirement goals, and building a buffer with a healthy discretionary bucket. We currently don't budget in the strictest sense but we try to ensure our spend is focused while ensuring our savings goals are met first and then see how our spending is trending at month's end. However, I'm curious how easily mentally, we'll be able to turn on the taps in retirement and if we need to start with a budget to give us more confidence to spend.