Has your retirement spending matched your estimates??

[Throwdownmyaceinthehole]

Spending a lot more, but it’s all discretionary. Lots of travel, bought a sailboat, higher booze, restaurant and food expenses. Surprising healthcare is much much lower than projected. No big housing or vehicle changes and that’s where the big bucks can kick in.

 

[Ronstar]

Spending a little more. But what used to be spent on clothes, gas for the cars and anything work related is now spent on hobbies and travel.

 

[DrRoy]

Our expenses didn’t drop. They went way up! As expected.

1. We were no longer saving (setting salary aside) - we had been very aggressive savers while working.
2. We had time to spend money - we were too busy to spend much while working.
3. We traveled like crazy which for us was the whole point of ER.

But we anticipated all of this and retired with a generous travel slush fund and the long-term funds needed to support our more spendy lifestyle.

+1. Our spending was right on target last year, except for where we deliberately spent more a couple times.

 

[DEC-1982]

I'm going through budgeting exercises before I retire and see many opportunities for reducing our living expenses and this makes me very optimistic about being FI.

Make sure that you have budgeted correctly for medical expenses after retirement. That's the elephant/gorilla in the room.

 

[grasshopper]

We are spending about 50% more than our 2006 budget when we retired, almost all travel. But we are still only spending 2/3 of our projected possible spending amount.

 

[davismills]

I've been fully retired for 5 years now and our spending has been a little less than we originally projected. It would have been more, but we're a bit anchored in caring for an elderly parent. We had ambitious travel plans forecast that did not materialize.

My pension and DW's SS money has kept us out of the IRAs, so those funds (like many here) have gone up significantly. I'm delaying SS until 70 if possible.

We were also totally debt free upon retirement.

 

[Senator]

My basic living expenses did not really drop. My FUN expenses exponentially increased.

That is the problem with early retirement on a minimalist budget. At what lifestyle are you going to lock yourself into, for the rest of your life?

 

[donheff]

I retired in 2005 and expenses have come in fairly close to what I expected. I put a significant unspecified entry in to cover unexpected occurrences and ended up spending under budget most years as I would expect. I ran through the exercise many here recommend - downloaded all of my credit card statements and banking records for two years and categorized all of the spending to get a solid baseline on expected expenses. Evaluated the impact of taxes and end to savings. Added in anticipated travel. Filled in a placeholder for unusual expenses (car purchases, roof, etc). Worked out pretty good.

 

[Winemaker]

We planned our net retirement income to be the same as our net w@rking stiff income, as DW would never agreed to retire if our standard of living/spending went down. After 3 years 3 months, things have been great. Much more traveling, better grapes, increased healthcare costs and some remodeling costs have all been met in stride. I am going all out this year and increasing my WR from 1.7% to 2.08% of original portfolio. While deep in my brain I think I should do some Roth conversions before we turn 70 in 10 years, all calculators I've used, show it isn't going to make that much of a difference.
We're gonna have 85% of our SS taxed, and we are gonna be in the 22% tax bracket for 10 years at this point.

 

[Bamaman]

We expected expenses to go down, but they are up 20%. We have had to assist our children financially is a big part. I liquidated two houses this year, but have a couple of cars to get rid of. Insurance is really up in recent years.

 

[CaptTom]

Interesting spread of replies here.

If I can summarize, a lot of folks who can, find that they are now free to spend more.

Those who didn't have that extra cushion, seem to be quite happily living at or below their budgeted amount.

I think we're self-selected for good decision-making here. Clearly it's wise to spend what you can, while you can. It's also wise to live well within your budget, if that's a constraint.

I've been pleasantly surprised that, about 18 months in, I'm still pretty close to my original estimates on spending. The first 12 months weren't really a good example, since I had an income for half the prior calendar year, and did a big 3-month trip.

I'll be doing a detailed look once I hit the 24-month mark (June) but projections so far (knock wood) look good. BTW, I'm in the second category; I RE'd as soon as it looked like I'd be able to swing it. Very little extra to worry about how to spend.

 

[GSMAN]

I just completed my first year of ER. My expenses were slightly higher than planned but was within 5%. Got rid of one of my boats and bought another one which was not planned but I am pleased with the way it all worked out. I am not surprised since by nature my DW and I weren't big spenders when we worked so we continue on the same way in ER. Like most of you all, last year was a windfall and I am thinking about buying a new truck with all the bells and whistles! My wife encourages me not to be thrifty in buying a truck. I am drawn into reality real quick when i see the truck i want runs about $55k! Probably should buy it. Need to spend all my money before I head up yonder so my kids will be sad when I die. Don't want my death to be a happy windfall event! j/k!

 

[tb001]

We're not ER, so can't address your original question, but one of the things I did was use the max spending feature to target 85, 90 and 95% success rates across different scenarios. What struck me was that a relatively modest increase in spend (<10%) was enough to shift us from 95% to 85%. It was a good exercise for me to do, as I can see that it could be easy to spend *just a bit more* and not appreciate the impact.

 

[Nemo2]

If I can summarize, a lot of folks who can, find that they are now free to spend more.

Those who didn't have that extra cushion, seem to be quite happily living at or below their budgeted amount.

If we look at our average annual expenditure, deduct our SS type Canadian government pensions, remove the condo from the equation, and amortize the current balance as is, (without including/considering dividends and interest income), we have enough to last us ~60 years....with dividends & interest it would be considerably longer.

I'm 75, DW is 65...the possibility of either of us lasting another 60 years is negligible.......we still don't spend, because there's nothing we want...in fact the travel, (a considerable part of our current spending), will start tapering off.

 

[4legsgood]

I'm only retired 2 years so no pattern is set, but I've been spending way more than I thought I would. A lot of the expense has been due to taking care of some deferred maintenance on my house which I was going to spread out over several years but it seemed like a good time to sell some stock and take care of the problems sooner. Also, I'm gifting more because I'm feeling financially secure.

I'll reel myself back in if the stock market goes South.

 

[Brett_Cameron]

I just went back and looked at my estimated expenses from before I retired. I retired at 55 now 62. Expenses a little higher than the rosy picture I painted back in 2006. Mostly due to dental expenses for family that I did not provide for.

All is good and within margins of error.

 

[SecondCor521]

We're not ER, so can't address your original question, but one of the things I did was use the max spending feature to target 85, 90 and 95% success rates across different scenarios. What struck me was that a relatively modest increase in spend (<10%) was enough to shift us from 95% to 85%. It was a good exercise for me to do, as I can see that it could be easy to spend *just a bit more* and not appreciate the impact.

Good point. Doing sensitivity analyses is a good way to understand the numbers better.

Not to disagree but to riff off your point: conversely, one must reduce spending by a fairly large degree to get from 95% to 100%. The failure scenarios, although rare when they do happen, are quite bad when they do.

If one thinks - as I do - that the future will be slightly better than the past, one can relax the spending quite a bit. Which I still don't do, but that's because of my own mental hangups and not so much the math of it.

 

[FUEGO]

Our living expenses matched our retirement budget pretty closely.

Our annual spending for 4 years of FIRE:
2014 – $34,352
2015 – $23,802
2016 – $38,991
2017 – $31,708

We started with a $33000 budget in 2014 and raised it in 2016 to $40,000/yr after watching the portfolio go up in value and finding unexpected success with side hustle income.

We're spending a bit more than we did while working but that's mostly travel since we can take weeks or months off at a time to travel.

Kid expenses are also creeping up as our oldest 2 approach the teen years.

 

[foxfirev5]

I cringe at posting on these topics. At our age anything can turn on a dime regarding medical/dental etc. So far we're OK, but setting some aside.

 

[daylatedollarshort]

We had some rough health care expense years before the ACA came along, but with the ACA medical expenses are now much lower than budgeted. College costs came in way less than we planned as staying under the limits for FAFSA allowed the kids to get state grants for tuition for college.

We have been pleasantly surprised overall at how much lower our expenses have been for an improved lifestyle with time for more price shopping, making the house more energy efficient, cooking more from scratch, seat filler subscriptions, renegotiating the cable bill, switching to solar and LED bulbs, and a hundred or more other cost saving measures that all really added up.

 

[FI_RElater]

for us; well below expected costs

my prior planning examined multiple years of costs

I used a base of avg + 2 sd along with 25% tax and used fairly conservative returns (2%, 4%, or 6% max) along with inflation of 2% for model. With our savings (couple mil) along with pension, and using max of 3.5% of portfolio, all models showed income well above what we were already spending pre-retirement. as we’ve also relocated, the property tax now is less than half of the prior, we have no sales tax here and, of course, there’s no more commuting cost: net, net we’ve not come close to our expected costs (even after new HVAC, surgery, new vehicle, our WR has been under 2.5% and mostly under 2% and we’ve not even started SS)

 

[Hermit]

I think I win the title for most over expected budget. North of 100% over expected living expenses for each year after retirement in 2013. My actual living expenses are pretty close to predicted, but added costs for house construction and DS living expenses and tuition double that number. Other expenses such as DD's wedding and help with a down payment for their new house were also thrown in. I blew past the original house construction estimates a while back. The house should be done in a year and a half or so. DS has been on a loan program with me providing low cost loans through credit union share-backed loans. That means I have to put the cash in the account and then he can barrow against that money. It depletes my usable cash reserves, but there is a good chance it will be repaid. DS hopefully will graduate in December of this year. There is light at the end of the tunnel.

No financial worries. Large cash bucket at retirement. That bucket is not so large anymore, but all should work out. If not, I can make a larger withdrawal from pretax retirement accounts and pay the piker for higher Medicare and taxes. In the mean time, those retirement accounts have grown more than the cash bucket has dwindled.

 

[Live And Learn]

I am on budget for all the things I could accurately project. I am below budget in medical because DH is still working (so we get subsidized HC premiums through his job) but I planned to pay full freight. In addition I planned to hit the max OOP for both of us each year (which, Praise God, has not happened). I am above budget on "one time expenses" because we used the below plan medical expenses to buy a boat and a hot tub (including adding a room for it !). I am below budget for "recurring maintenance" because I have not yet needed to replace the roof, the appliances or the cars (one of these days I will totally blow the budget for each of these, but it was expected and theoretically I have an accrual built up to cover it).

 

[brett]

Yes, for the past five years it has been spot on in terms of annual totals.

But, our income and investment growth ihas been substantially higher than we anticipated so we are nowincreasing the spend. Not day to day but hitting levels, more expensive travel. Fortunately medical expenses are not an issue for us.

 

[Scuba]

We ER’d about 15 months ago and so far our spending has been as predicted, slightly higher in total than when we were working. Spending dramatically less on cars; I had expected lower fuel costs but the reduced mileage has all almost eliminated maintenance. Spending a lot more on travel and maybe 20% more on entertainment since we have more time, as well as a lot more on health insurance. However, we’re spending far less on cars, clothing, and various other work-related expenses.

The first year, we just spent whatever we wanted and added up the numbers later. The good news is that they were right at what we planned without any tracking or conscious effort to limit our spending. Net worth has increased quite a bit due to great market performance, so overall our situation looks great.