What you actually spend vs planned to spend in retirement

[orbops]

Retired early in 2017. Estimated to spend $50K/year, and actual is all over the place, but generally am spending about $60K/year.

 

[Global Wizzo]

I’ve been “free” going on 8 years. We don’t budget, but annual income without wife’s RMDs stays little over $100k. No debt, just pay off cc monthly. My overall costs went up when I retired. Company used to cover things like internet, full med w/zero ded, cell phones and lots of travel. So bit of a hit when I had to pay that. Once wife’s RMDs start, I’ll have to protect a lot of income from taxes.

We still travel pretty extensively internationally and little domestically. 100-130 nights a year in hotels. Yes, I pay for them and flights in business class.

Budget, nope, I don’t bother, just watch the checking balance. It does fluctuate, but as long as my emergency pad is there, I don’t worry.

 

[street]

Less than what I planned for in expenses. Even with higher costs with everything we buy now, compared to 7 years ago when I retired, it still is less than what I had planned for.

Never had a budget when we worked or since we retired.

 

[CincyDave]

Never had a budget while working. Before retiring I made a budget of all expected expenses including large ticket items ( amortized). So far we've been spending less than my estimated budget for a couple of reasons. The only big ticket item we've had in almost three years of retirement was a new roof. Also, due to a buyout offer at work, my health insurance is less than I had budgeted. The only category we're spending more than budgeted is travel. We are spending more overall in retirement than we did while working.

 

[retire48in2018]

We’re spending to our budget - which is about 15% reduction from our spending pre-retirement.

However - we just sold/bought a larger home, moved, etc. if we consider those expenses - amortized over the 3 years since we retired - we are net spending 25% more.

We built up a cash reserve over last few years of working to do this move, and we did not take any money out of market investments.

 

[robls]

We have been retired 12 years, and our expenses have pretty much matched what he planned, with slight variations. We have a massive Excel spreadsheet that we pump all the numbers in.

 

[5Miler]

I have been retired for 11.5 years and DGF for just over 9 years. Our spending has been pretty much on plan as I started an automatic monthly IRA withdrawal to go along with my pitiful non COLA pension to match my w*rk era net take home pay. I never increased the withdrawal amount as I never spent it all anyway. Before retiring I was autosaving about 40% of my gross pay. Started SS two years ago which greatly increased my net even having 12% taxes withheld to fund some Roth conversions. My current withdrawal rate is 0% since starting SS.

DGF had it a bit rougher as she depends upon ACA for healthcare so we manage her income to enable taking a Silver Plan and qualify for cost sharing. She also has more expensive tastes than me. We have met the plan for her each year although it has been getting more difficult with the rise of inflation. DGF will start SS in Jan 25 as she will finally be off of ACA next July so her income restraints will end. If she were to take a 4% withdrawal rate along with her estimated SS (today's values) her income will top $125K. Needless to say, she is anxious.

Keeping our spending to plan was mostly possible as our home and vehicles have been paid off for many years and we do not carry any debt. I have always covered the costs for the house and R.E. taxes as the house was mine before we got together. Old school that way. Our major expense is travel as we have spent approximately $27K for travel this year. I will start RMDs in 2026 myself so the income keeps going up as my 0% IRA withdrawal days and Roth conversions must end then.

 

[Chuckanut]

I use a variable withdrawal method as one indicator of how much I can withdraw for the year. So far I have underspent every year, and this year despite my first trip overseas since Covid, a new heat-pump mini-split, and an expensive chair to ease my back, looks like I will come very close to spending my full withdrawal amount. Maybe I will go over it by a few percent.

Try as I might, I can’t take on the persona of a Big Spender. Keep in mind that Big Spending for me is lost pocket change for some others on this site. A bit of an exaggeration, but you get the point.

Next year will be interesting in regards to the withdrawal amount. The stock market is So-so this year, but interest income should be noticeably higher. We’ll see what happens in the next 2 months.

 

[hiker88]

I'm seven years into retirement from age 55. Spending a tad under planned (100% success rate in FIRECalc). However, that is about double my typical spending when working mostly due to additional travel expenses in retirement.

 

[mickeyd]

Did you spend more or less

Been retired for abut 20 years so my memory is shady. I believe that we are spending more than I planned years ago when I was in the accumulation phase of my life. BUT...I am happy to report that my income stream and my investment stash is far superior than I ever though it would be.

So there is that.

 

[SecondCor521]

I will start RMDs in 2026 myself so the income keeps going up as my 0% IRA withdrawal days and Roth conversions must end then.

Taxpayers can still do Roth conversions on top of RMDs. But some Bogleheads insist that there are ordering rules, and of course the taxation situation might mean it doesn't make economic sense to do so. But it is permitted if one wants to.

I might have my Dad do a small Roth conversion later this year to max out a tax bracket. He's in a lower bracket due to very high medical expenses this year.

 

[5Miler]

Taxpayers can still do Roth conversions on top of RMDs. But some Bogleheads insist that there are ordering rules, and of course the taxation situation might mean it doesn't make economic sense to do so. But it is permitted if one wants to.

I might have my Dad do a small Roth conversion later this year to max out a tax bracket. He's in a lower bracket due to very high medical expenses this year.

Understood but the point of doing Roth conversions now to the top of the 12% is to provide a pool of tax free money I can use when having to take RMDs which will pop me up close to the top of 12% with RMDs alone.. I don't want to do conversions on top of that up into the 22% bracket which will actually be higher due to the SS tax torpedo or whatever you want to call it. Anyway, closer to 44% at that time until I reach to point that 85% of SS is taxed. All the math for it makes my head hurt anyway.