What was your 2024 total spending amount?

[AudiDudi]

~3% of NW but a tad less then 50% of total income (includes all taxes).

 

[38Chevy454]

Haven't totaled it all up, but probably around $120k total incl taxes.

 

[Jerry1]

About $110K which is in line with our expectations/budget. Total spend for the year was closer to $150K because we paid off a vehicle loan and gifted some money to daughters. SS and pension cover most of our budget so actual withdrawal as a percent of the portfolio is very small - less than 3%. Plus, DW received some inheritance money, so the portfolio grew before any consideration of market returns.

 

[calmloki]

Don't really budget at all, just try and be smart about income and outgo. Our Oregon and California houses are paid for; I include insurance and utilities and property taxes on them, but balk at including the $29k we spent on roof replacement on both houses and the garage at the Oregon home this year. Also not including the State and Federal taxes we've paid so far, which are just about double the amount I say we've spent. I do include the $7500 spent on a '56 Chevy wagon's slow move toward roadworthiness and some gifts. $66,243

 

[DrRoy]

For budgeting purposes next year, Travel will be our top expense for next year for the first time.

The only year that travel wasn't our top expense, we had done a big remodel to the house.

 

[DrRoy]

$170K this year, including $25K for a Viking cruise w/1st class air next year. Also was a big BTD year with the market up so much.

 

[HarveyS]

135% of budget, 3% of NW. Most of increase was a) travel related and b) new (to us) car.

 

[Flieger]

It's interesting to see the tax of different folks. On my planned ~$110k or so, Fed and State will be about $11k.

Flieger

 

[Golden sunsets]

Projected at $209,000, 33% of which represents Federal and State Income Taxes.

 

[RunningBum]

What's the hurry to come up with your number before the end of the year? The only thing I do in advance is to get my AGI and taxable income as close as possible to do an end of the year Roth conversion.

Anyway, I don't like to share my numbers but I can tell from November end of month that this year will be a good amount higher than normal (but still under my VPW allowance), only partly due to a new roof. The increase irks me until I remember that I'm going to leave so much money behind when I die, so it's fine that I've loosened up.

 

[ShokWaveRider]

I agree that taxes (Federal & State) should NOT be included as part of one's spend, but sales Tax and RE Tax should. JMHO

 

[wmc1000]

Just looked at my totals for 2024.

$78,035 - reg exp. - includes increase on 23 taxes and est. taxes this year. Gifted $17k not in reg. exps.

So, our running annual recap has been:

2019 $60,896 - still had mtg.
2020 $59,874 - pd off mtg.
2021 $40,072 - total reg. exp. plus spent another $81,5k on house remodel and pole barn
2022 $45,213 - tot. expenses
2023 $54,359 - tot. reg. exp. plus spent another $81k on vehicle replacement, property imps.

 

[MarieIG]

Since taxes are my biggest percentage of my spending, and are the first funds I earmark for when spending (i.e. the first priority), I would certainly continue to include them.

 

[TheWizard]

I think of it as moving an asset with a deferred tax liability out of one pocket and moving the net to another pocket.

Not necessarily.
If you pay the tax out of excess retirement income, then the net amount going into Roth equals the gross amount coming out of tax-deferred.

For those of us with zero Earned Income, this is equivalent to making a Roth CONTRIBUTION...

 

[Ronstar]

Since taxes are my biggest percentage of my spending, and are the first funds I earmark for when spending (i.e. the first priority), I would certainly continue to include them.

Makes sense to me.

I can't remember seeing anything in my college accounting books or anything since that taxes aren't expenses.

But it would make me feel better if I didn't include taxes as expenses - it would look like I spent less money.

 

[Jerry1]

Not only are taxes an expense, they are a necessary expense (versus discretionary). I can see separating them for discussion purposes but for budgeting purposes and calculation of a withdrawal percentage, they definitely should be included.

 

[RunningBum]

Not only are taxes an expense, they are a necessary expense (versus discretionary). I can see separating them for discussion purposes but for budgeting purposes and calculation of a withdrawal percentage, they definitely should be included.

So if you stick to a budget with your expenses, would you pass on doing Roth conversions if the tax you pay on them would take you over your budget? Even if you could convert at a lower tax rate than you think you would in later years?

 

[Gumby]

Since taxes are my biggest percentage of my spending, and are the first funds I earmark for when spending (i.e. the first priority), I would certainly continue to include them.

The first $29k of my spending every year goes to taxes (income and property), even with no Roth conversions. I think it would be unwise not to consider that spending in my planning.

 

[ArmchairMillionaire]

$73,385.55 for us, according to our bank, but this was a spendy year for us, as we bought our retirement road-trip vehicle.

Subtracting the vehicle and the $15K we put into our IRAs, our everyday spending came out to $34,187.52.

For our retirement in 2025, we plan on $60K - 20% ($12K) taken out for taxes which will leave us $48K (plus whatever we get for a tax return) next year. We'll still be in the 12% bracket in 2025, but after that, the future is cloudy.

 

[TheWizard]

So if you stick to a budget with your expenses, would you pass on doing Roth conversions if the tax you pay on them would take you over your budget? Even if you could convert at a lower tax rate than you think you would in later years?

Roth conversion taxes are a different sort of thing.
Depending on the reason for doing your spending analysis, they might be in a separate category.
But if your goal is to get your annual spending number up as high as possible, I would definitely include them...

 

[Jerry1]

So if you stick to a budget with your expenses, would you pass on doing Roth conversions if the tax you pay on them would take you over your budget? Even if you could convert at a lower tax rate than you think you would in later years?

I wouldn’t pass on the conversion because in my retirement planning a should have taken the taxes into account. The taxes are going to be incurred either by withdrawing from your IRA or converting. The converting may make them a lumpy expense so it might impact an annual budget but it shouldn’t impact your total retirement financial plan.

 

[flyingaway]

People with different means will have different leves of spending. I am glad to read other people's numbers.

 

[jdmorton]

Our 2024 all-in spending number is about $140,000 which includes health insurance (Medicare Part B premium and medigap supplemental plan), taxes (federal income, county real estate, school, and local), and certain wedding related expenses - including a monetary gift - for our youngest and last child to be married.

I've tracked yearly spending for over 10 years.

 

[Sue J]

I fully realize this is the voice of great privilege speaking but I really can't comprehend how people live on 30K or less for 2 people or even 1 for that matter.

Property tax: $8,000 on a very modest 60-year-old 3BR home (paid for)
Health insurance: $12,000 after the subsidy plus thousands more on OOP costs
Auto insurance: $3,000 (for 3 of us)
Home insurance: $1,000
Utilities (gas, electric, water, sewer): $5,500

That puts us at $29,500 plus OOP medical before we've eaten a single meal or used a single gallon of gas or purchased anything at all.

Here's a comparison.
Property tax - $4,160 (69 year old 4 BR 2 bath house)
Health insurance - $7408 ($4,192 for Medicare Part B for 2 + $3,248 Medigap for 2) minimal OOP costs
Auto Insurance - $598 (2 cars)
Home insurance - $942
Utilities - $3,202

That's $16,310 compared to your $29,500. We are in NE Ohio outside of Akron. For 2024 we will come out around $38,500 for monthly expenses and about another $9,000 for extras. When DH first retired we really could get by on $30,000 for monthly expenses but everything has gone up, everywhere!

 

[djsander]

$9K for A/C? Is that just for a single central air unit with existing vents? That seems high. My central air is over 20 years old and worried I will have to pay around $5K to replace it soon. If it's $9K i'll probably just get a couple window units or live 95% of the Summer in my basement.

We replaced the both A/C and heating unit in 2021. 3 bids and ours was around $12,500. We didn’t go with the lowest, but we went with what we considered the “best” bid. Spoke with each company and went through the particulars. I think you will find a wide range depending on who you discuss it with as some will sell only a certain line, some will try to sell multi stage, some will try to sell the cheapest they can. Do some research and get bids.