Retired in Dec 2024; Tracking Monthly Expenses for One Year After FIRE

[Errollyn]

My last day of work was 20 December 2024. I was 49 years old at the time. My net worth at retirement was $2.176 million and my total investable assets was $1.847 million.

I'm tracking all of our expenses for the first year of RE, mainly to ensure we're not spending a lot more than we expected.

Based on my pre-retirement calculations, I started out with the expectation of spending an average of $4,575 per month. I will try to post monthly updates here to show how my reality is comparing with my expectations. The most important thing here is my spending, because my wife continues to work and her savings will impact our NW in an "unfair" way.

Starting numbers on 20 December 2024:
NW: $2.176 million
Investable assets: $1.847 million
Available monthly income using 4% rule: $6,000
Available monthly income using a 45 year lifespan on FireCalc: $4,958
Expected monthly expenses: $4,575

This is what I initially expected to spend each month (averaged across the year):

 

[pacergal]

Congratulations on your retirement!

I am not sure what you mean by your wife's savings impacting your NW "in an unfair way"?
It looks like your savings will cover your expenses (assuming that includes everything including taxes), so is your DW still working because she is not ready to retire yet?

 

[TheWizard]

Will be interesting to see how you deal with large lumpy expenditures...

 

[Errollyn]

Update #1, January 2025 Expenses
Actual: $4,772
Expected: $4,575
I overspent in January; 104% of my expectations.

Breakdown by category:

Notes about January:

My charitable donations are going to be consistently higher than I was expecting. I do a lot of volunteer work for animal rescues, and it's just too easy to make donations when specific animals are in need.

Before retiring, I explored long term care insurance. I thought my only option was going to be a rider on a whole life insurance policy, which just didn't make enough sense. So we had decided to self-insure for LTC. But I've since learned that I can keep our previous LTC insurance through my ex-employer as long as we continue to pay the premiums. So we're going to do that. As a result, I was expecting to spend $0 in LTC each month, but that'll be closer to $150 per month. That'll give us about $350,000 of LTC between us if we ever need it.

Finally, our total investable assets and NW numbers. This is very dependent on the market.

 

[Errollyn]

Congratulations on your retirement!

I am not sure what you mean by your wife's savings impacting your NW "in an unfair way"?
It looks like your savings will cover your expenses (assuming that includes everything including taxes), so is your DW still working because she is not ready to retire yet?

Thanks!

I only mean "unfair" in a sense that some people don't consider it a true FIRE if your SO continues to work. She's still bringing in income and adding to her retirement savings accounts. She's 5 years younger than me, and wants to keep working for a while...probably until she gets to my retirement age. A big factor for her is that she's financially supporting her parents so they can retire themselves.

 

[Errollyn]

Will be interesting to see how you deal with large lumpy expenditures...

The way I'm accounting for those now is by including them in my monthly expected expenses as an average. So for instance, I expect to pay about $2,400 per year in property taxes, so I've got a $200 monthly expense for that...even though I'll only pay it once per year. That means my monthly costs should sometimes be less than expected in order to account for those big expenses later in the year.

 

[Sojourner]

The way I'm accounting for those now is by including them in my monthly expected expenses as an average. So for instance, I expect to pay about $2,400 per year in property taxes, so I've got a $200 monthly expense for that...even though I'll only pay it once per year. That means my monthly costs should sometimes be less than expected in order to account for those big expenses later in the year.

I think what @TheWizard was referring to is more lumpy, infrequent expenses such as putting a new roof on your house, buying a car, replacing your HVAC, etc. Those things happen much less often than paying property taxes, but still need to be accounted for over time. The way I do it is to use Excel to calculate the annualized amount for all those expenses combined. In my case, I expect to spend roughly $130k over 10 years on all the lumpy, infrequent stuff, so that annualizes out to $13k/year, which I add in to my annual spending projections.

 

[Dtail]

Good for you on your tracking. I continue to do so after 7 years.
Be careful of the budget/expense tracking police.

 

[Errollyn]

I think what @TheWizard was referring to is more lumpy, infrequent expenses such as putting a new roof on your house, buying a car, replacing your HVAC, etc. Those things happen much less often than paying property taxes, but still need to be accounted for over time. The way I do it is to use Excel to calculate the annualized amount for all those expenses combined. In my case, I expect to spend roughly $130k over 10 years on all the lumpy, infrequent stuff, so that annualizes out to $13k/year, which I add in to my annual spending projections.

Those aren't reflected in my monthly budget spreadsheet, but I did include three large purchases in my Boldin planning scenario. Specifically we're accounting for two new cars and one new tractor in retirement. About the same total as what you're using.

 

[Errollyn]

Good for you on your tracking. I continue to do so after 7 years.
Be careful of the budget/expense tracking police.

I'm sure you get a lot of backseat drivers, lol.

 

[TickTock]

I don't see federal and state taxes in your categories - which, to be fair, will be higher since your spouse is still w*rking. And healthcare costs may increase significantly once you're both retired.

These are more for consideration for when your spouse retires... thinking about how total spending may change.

Good luck and congratulations!

 

[Koolau]

Update #1, January 2025 Expenses
Actual: $4,772
Expected: $4,575
I overspent in January; 104% of my expectations.

We'll let it go this time.

Seriously, congratulations on your Early Retirement with Financial Independence!

If you mentioned it, I haven't seen how you are handling health insurance. Are you on your DW's plan or are you using an ACA plan?

Carry on!!

 

[Errollyn]

I don't see federal and state taxes in your categories - which, to be fair, will be higher since your spouse is still w*rking. And healthcare costs may increase significantly once you're both retired.

These are more for consideration for when your spouse retires... thinking about how total spending may change.

Good luck and congratulations!

Thank you!

Yeah, I'm not tracking her income taxes because I'm not really tracking her income as part of my FIRE budget. It's something I'd need to incorporate once we're living solely off our savings. Luckily, Boldin does calculate taxes in its projections, which is what I'm using for long term planning.

Good point about health coverage. Right now it's cheap because we're getting it through my wife. In my Boldin scenario, I have those expenses doubling when she retires in five years.

 

[Errollyn]

We'll let it go this time.

Seriously, congratulations on your Early Retirement with Financial Independence!

If you mentioned it, I haven't seen how you are handling health insurance. Are you on your DW's plan or are you using an ACA plan?

Carry on!!

Thanks! Currently using SO's plans through her employer, with intent to switch to ACA (if it still exists) once she stops working. It's a huge advantage to her still working, I'm not gonna lie, but I also did my planning assuming she would quit working with me and it still works out.

 

[walkinwood]

A worthwhile exercise. I've been doing it since we retired in 2008. The most important number to me is the trailing 12 month total. If that's below our annual budget all is good. We've exceeded our annual budget a few times, but through this exercise, we know exactly why & whether it was worth it. We have enough leeway in our withdrawal rate that we don't let occasional overruns bother us.

After all, we retired early to enjoy ourselves without being totally irresponsible.

 

[Errollyn]

A worthwhile exercise. I've been doing it since we retired in 2008. The most important number to me is the trailing 12 month total. If that's below our annual budget all is good. We've exceeded our annual budget a few times, but through this exercise, we know exactly why & whether it was worth it. We have enough leeway in our withdrawal rate that we don't let occasional overruns bother us.

After all, we retired early to enjoy ourselves without being totally irresponsible.

I tracked all these expenses once before, in 2020, as part of my planning for early retirement. That 2020 data helped a lot with planning my current budget numbers. It's a pain in the butt, but it's so valuable to get sample years of your expenses before and after retirement. Otherwise it's all kind of a guess.

 

[walkinwood]

I tracked all these expenses once before, in 2020, as part of my planning for early retirement. That 2020 data helped a lot with planning my current budget numbers. It's a pain in the butt, but it's so valuable to get sample years of your expenses before and after retirement. Otherwise it's all kind of a guess.

I use Quicken to download all transactions and create the monthly / annual reports. Doesn't take much time at all.

 

[groesbeck]

Your NW and your budget and your age are really close to me. I hope to pull the trigger soon (before 55) and like you my wife intends to work a few more years which clouds the crystal ball some. I'll follow your progress with interest (non-paying interest though).

 

[Errollyn]

Your NW and your budget and your age are really close to me. I hope to pull the trigger soon (before 55) and like you my wife intends to work a few more years which clouds the crystal ball some. I'll follow your progress with interest (non-paying interest though).

If you haven't tried Boldin yet, I recommend it for setting your mind at ease looking at the long term.

 

[groesbeck]

Unfamiliar with Boldin but the Fidelity tool tells me I'm good to go and Firecalc does as well. Right now I'm waiting for a bonus from last year. I'm also waiting to see if this project I'm on at Megacorp gets interesting - which isn't very likely.

 

[WhenIsItTime]

Does she see the forum? You said "to ensure we're not spending a lot more than we expected" and "my wife continues to work".

 

[orbops]

One unexpected expense you may want to consider including is for health coverage, I would assume the max out of pocket annual amount into your projected expenses. I did NOT do this, and 2 years ago I ended up needing a quadruple bypass at 56 years old.

 

[WhenIsItTime]

One unexpected expense you may want to consider including is for health coverage, I would assume the max out of pocket annual amount into your projected expenses. I did NOT do this, and 2 years ago I ended up needing a quadruple bypass at 56 years old.

My family of four was perfectly healthy until I fired. Since, we have had at least 1 person max their out of pocket 3 years out of 5. My out-of-pocket is considerably higher than when I was working.

Maybe OP's spouse has that covered for now.

 

[corn18]

One thing I did today was to do a checkup after four years of retirement. My total expenses have increased 22.06% since Mar 2021 when I retired. Inflation over that same period (based on the CPI) was 19.93%. Glad I have a COLA pension. BTW, I do not forecast inflation. I just leave my COLA income (pension and SS) flat and also leave future expenses flat. Makes it a lot easier than trying to guess what inflation might do.

 

[Errollyn]

Does she see the forum? You said "to ensure we're not spending a lot more than we expected" and "my wife continues to work".

She doesn't, but she does see all the numbers so she's not out-of-the-loop.