Poll: Retirees: What’s Your Real Monthly Budget? Post tax.

[audreyh1]

So for your X, do you factor in the tax that will be due on that money also? If you receive $10,000 in dividends you don’t actually have $10,000 available to spend.

It’s easy for me to think in terms of after tax spending because the first thing I do after I withdraw my annual amount in Jan, is set aside the amount I expect to pay in remaining prior year income taxes plus current year estimated taxes.

 

[NW-Bound]

I spent a total of $379 in the first 2 months of the year. It would have been $232 if I didn't pay my 3 month water bill the day I got it. I spend less in a year than many here spend in an average month.

Some people have an electric bill higher than your total expenses in 2 months. My electric bill in the mid-summer may be higher than that when the high is 115+F, and the low 90+F, if I do not have my DIY solar power. You never fail to amaze us. You own your place, if I recall correctly.

There was another poster who also spent little. And he even lived in California, and worked in academia, whether teaching or doing research I am not sure. I have not seen him post for a while, and I am terrible at remembering names (but am good at remembering events and instances).

 

[Still Learning]

I know it varies. Some months we buy a new car or take a big trip, and other months spending is minimal. But when you look at the full year — after taxes — how much do you realistically plan to spend? I’m curious what number people actually budget for, not just what they hope to spend in a quiet month.

I want to stress that this is after–income tax money (net spending).

Our current base budget is $4,638/month which is living costs plus dining out & allowances. We also have to include our discretionary budget of $2,500/month which covers house improvements and travel. For our first 6 years of retirement we have been able to close out each year within $200. We review bills/investments once a month together.

 

[aaronc879]

Some people have an electric bill higher than your total expenses in 2 months. You never fail to amaze us. You own your place, if I recall correctly.

There was another poster who also spent little. And he even lived in California, and worked in academia, whether teaching or doing research I am not sure. I have not seen him post for a while, and I am terrible at remembering names (but am good at remembering events and instances).

Yes, I do own my own small ranch home. It's paid off and in a lower cost of living area.

 

[jollystomper]

In retirement we really do not budget. Our base expenses are around $6K/month. We expect to spend on average at least $8K a month, otherwise we are back in savings mode. We do not always hit that. We have to "work" to spend more than $12K/month after taxes.

 

[Dtail]

The forum is indeed open to all, but the impression I have gotten from reading this forum for a couple of years is that the most active or vocal posters are financially very well off. I didn't mean to imply I believed they are more active because they are well off, though that may indeed be a factor--I really don't know. I have seen posts now and then that suggest the poster lives an unusually austere retirement (so-called "Lean FIRE" types, perhaps), but they are not names I see pop up often. Rather, on a day to day basis you tend to see a concentration of the same names in many threads, and from reading their posts you get a sense of what kind of resources they have. It's certainly possible that there are others of more modest means who read the forum and participate in polls but for whatever reason do not post much in the threads. Anyway, just an observation about polls here in general.

Since I joined in 2018, it would appear that the forum has become wealthier, probably mostly due to the stock market. There has definitely been an increase in humble bragging type of posts, sometimes in very clever ways. OTOH, there are larger spenders who clearly don't come across in that manner.

 

[MC Rider]

We don't have big bucks rolling in, but we have enough.
Not really interested in air travel, and there's a lot to see here that we have not seen.

Don't eat out often, don't do bars, and there is no movie theater here. Well there's a closed for years one, you might buy it and re open it.

Two cars and 1 motorcycle for 2 people. Might go to 2 bikes because the best number to own is N+1, where N = the number of bikes you now own. It's a slippery slope. None of them are fancy but we like them. Same for the paid off house. So we have enough and we are content, and can buy nice things now and then. Maybe a little bored here and there, but I am working on that.

 

[Koolau]

Yes, I do own my own small ranch home. It's paid off and in a lower cost of living area.

I always look forward to your posts. I may not be able to relate but I think it's great to hear that there are people, places and ways to retire early - even without barrels of money. Thanks for your example!

 

[Car-Guy]

After tax, it comes out to be 15k to 20k per mo, as of last year. But that includes charitable contributions and gifting.

 

[NW-Bound]

The OP asked for a budget. We never had a budget, not when we were working and not now in retirement. We always underspend our income. LBYM is in my gene.

PS. The thread title says "budget", but the poll asks for "expenses". OK, I know my actual expenses. I have not exceeded $100K for many years (excluding income tax), even with gifting, travel, and charity donations. Once the mortgage is paid and there's no college tuition, what does a guy spend his money on, if he does not have expensive habits or hobbies?

 

[GenXguy]

I would spend about $2000/mo with discretionary if I "include" taxes and "exclude" sinking funds, basing on last year, but I'm expecting some larger chunks on home expenses this year. But I'm not sure how much at this point.

 

[disneysteve]

Once the mortgage is paid and there's no college tuition, what does a guy spend his money on, if he does not have expensive habits or hobbies?

Depends where you live. We pay about $700/mo for property taxes, $2,000 for health insurance, $280 for auto insurance, internet, phones, streaming services, gym, synagogue dues, etc. The list goes on and on. We’re already well into the thousands each month easily. Add groceries, gas, dining out, travel, entertainment (beyond tv at home), clothes, OOP medical, home and auto maintenance…. It’s quite easy to hit 10K monthly without doing anything particularly extravagant.

 

[NW-Bound]

Depends where you live. We pay about $700/mo for property taxes, $2,000 for health insurance, $280 for auto insurance, internet, phones, streaming services, gym, synagogue dues, etc...

YIKES!

I don't know your home value, but where I am, I pay about 0.45%/year of the actual value of the home. And that's how I could afford two homes. And we are on Medicare/Medigap which costs $400/month/person even with IRMAA. And I just looked up our auto insurance: $220/month for 4 vehicles.

 

[NW-Bound]

Since I joined in 2018, it would appear that the forum has become wealthier, probably mostly due to the stock market.

I joined in 2008. Throughout the subprime market crash of 2009, we were commiserating about the portfolio loss. Some people were regretting taking ER, had no income and had to sell stock low to live on. Some said goodbye and dropped out. Some doubled up on financial stocks and suffered larger losses. And we were talking about the Great Depression, the soup lines back then, the Dust Bowl.

Darn, that was interesting time. My contracting part-time work was interrupted for a few months because no employer was safe from a cash crunch. Still, I had lived through the dot-com bubble, and was more jaded this time. People have short memory, but I still remember the hard periods in life I lived through. And the dotcom and subprime market crashes were not as scary as I personally went through early in life.

PS. The posters who are financially secure tend to be older, in the 70s or close to it. Back 20 years ago, many were still whippersnappers.

 

[skyking1]

We are in strange and wonderful or awful times right now building the house, but I do want to participate in these discussions.
Before I retired, I tracked about 3.5K a month for 2 years, including lumpy things like the 4K property tax.
The planned spend at the new situation is about 1.5K to keep the doors open, the property taxes, the insurances, utilities.
We used to spend about 2K on everything that we put on the main credit card, on average.
I figure that will bump to 3K.
The monthly spend is going to be in the 4.5~5K range, not counting:
New car?
Travel?
Boat?
We have never traveled like we plan to now, so it is pointless to guess what that reality will be. I am buying a CD ladder for 6 years for a 30K travel "budget", when we sell the old house.

@NW-Bound , taxes around here are closer to 1%.

 

[Onda]

So for your X, do you factor in the tax that will be due on that money also? If you receive $10,000 in dividends you don’t actually have $10,000 available to spend.

Yes — in my framework X is already net of taxes where taxes apply. In other words, X = (taxable dividends after paying dividend taxes) + (dividends from traditional IRAs net of the taxes I expect to owe) + (Roth IRA dividends which are tax-free) + (a bit of interest on cash net of the taxes).

 

[Onda]

PS. The thread title says "budget", but the poll asks for "expenses". OK, I know my actual expenses. I have not exceeded $100K for many years (excluding income tax), even with gifting, travel, and charity donations. Once the mortgage is paid and there's no college tuition, what does a guy spend his money on, if he does not have expensive habits or hobbies?

The poll doesn’t ask about expenses. I withdraw a sum Z in cash; if I spend less, the saved portion goes into a “pile” of money that I can use anytime for anything.

My approach also serves as a forced withdrawal (and, in a way, forced spending), because once the money is withdrawn it goes into that pile to be spent. If we don't spend it on expenses we will spend it on some trip or on bathroom remodel, new car etc.

 

[Dtail]

The poll doesn’t ask about expenses. I withdraw a sum Z in cash; if I spend less, the saved portion goes into a “pile” of money that I can use anytime for anything.

My approach also serves as a forced withdrawal (and, in a way, forced spending), because once the money is withdrawn it goes into that pile to be spent. If we don't spend it on expenses we will spend it on some trip or on bathroom remodel, new car etc.

Conceptually I do the same.

 

[Ronstar]

We have $9518 from SS, pension, and small annuity coming into our checking accounts per month. We spend the whole amount. This covers everything but large expenses - cars, new roof, etc. I can pay some of the income tax and real estate taxes from this incoming cash, but usually I have to pull some out of investments to cover.

 

[old medic]

Generally all of it... We get 3 checks each month, After paying the need to bills and leaving a $5k cushion, the rest goes to paying down on debts. We should be debt free beside our truck by the end the year, It by mid-late 27.

 

[DrRoy]

We were mostly in the $10K-$15K range, but last year and this year have jumped due to more expensive travel.

 

[Surewhitey]

We're just now getting into the $6k/mo, all in. In the past 10 years, only 3 have gotten >$6k though. The largest just under $9k in 2019 which includes the "new" car & home remodel.

When we go full time RE, I expect to be closer to $8-9k with much more travel.

 

[srblanco7]

We are newly retired and set our year one budget at $14,800/month (after taxes). We had a bunch of “one-off” expenses in Q1 as we transitioned to retirement - for example, vacations, helping kids with car expenses - but are starting to settle in. I strongly suspect that once things normalize we’ll find ourselves with excess cash (beyond what’s already budgeted) each month to dump into sinking funds for vacations, home repairs/upgrades, etc…

 

[Badger]

I really can't answer the poll. After retiring 14 years ago our average monthly spending has been all over the place. Surgeries, gifting, donations, vacations, RMD, QCD, new cars, new HVAC system, etc. all contribute to fluctuating annual expenses in which most will vary from year to year. We tried to get our savings into a comfortable range that would see us through our final years as well as eliminate all debt including our home, cars, CC, etc. with enough left over for the children.
Once we achieved our retirement goals we stopped being concerned as long as the dollar doesn't devalue and we continue to live comfortably for our needs.

 

[racy]

Since 2009, inflation adjusted, $10,015 per month. Includes taxes I have to write a check for i.e. not withheld and vacations.