What was Underestimated\Overestimated in Retirement

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Rexindex
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What was Underestimated\Overestimated in Retirement

Post by Rexindex » Sun Aug 17, 2014 6:20 am

What cost did you underestimate or overestimate when you actually retired? What did you actually spend more and less on when you stopped working full time?
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Taylor Larimore
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Long-term care

Post by Taylor Larimore » Sun Aug 17, 2014 7:35 am

Rexindex wrote:What cost did you underestimate or overestimate when you actually retired? What did you actually spend more and less on when you stopped working full time?

Rexindex:

I retired 33 years ago. We really had no surprises. We were able to adjust our spending as required.

We did not purchase long-term care insurance which has been my biggest concern -- although the premiums saved payed for a lot of luxuries.

Best wishes.
Taylor
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Re: What was Underestimated\Overestimated in Retirement

Post by Achelois » Sun Aug 17, 2014 7:45 am

I have been retired only a short time, but dental and vision care are not covered by my insurance plan. I was able to continue health care insurance through my former employer at about half the amount I had estimated, so it is not a problem, but I had not realized that those two things would not be covered.

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Re: What was Underestimated\Overestimated in Retirement

Post by Rexindex » Sun Aug 17, 2014 7:49 am

Achelois wrote:I have been retired only a short time, but dental and vision care are not covered by my insurance plan. I was able to continue health care insurance through my former employer at about half the amount I had estimated, so it is not a problem, but I had not realized that those two things would not be covered.


I am curious how people estimated their health and dental, travel and dining.............
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Re: What was Underestimated\Overestimated in Retirement

Post by midareff » Sun Aug 17, 2014 7:54 am

Other than the markets superb performance of the last five years + things are much as anticipated.

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Re: What was Underestimated\Overestimated in Retirement

Post by 2beachcombers » Sun Aug 17, 2014 7:56 am

Vacation cost about 3X what was planned. Playing, entertaining about 10X more. Medical cost more( = 0 when I was employed)

Paying smaller taxes and not saving 35% of income allows above to work.

Net/Net spending about the same as when working


jerry

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Re: What was Underestimated\Overestimated in Retirement

Post by dickenjb » Sun Aug 17, 2014 7:58 am

I underestimated the returns from Taylor's Three Fund Portfolio since I retired in 2010. The returns for VSMGX (which mirrors my portfolio, 60/40 with 30% of equities international) were:

2010 13%
2011 flat
2012 12%
2013 15%
2014 5% YTD

Having said that, reversion to the mean may be around the corner so we have no current plans to ramp up our spending.

"Plan for the worst, hope for the best."

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Re: What was Underestimated\Overestimated in Retirement

Post by Achelois » Sun Aug 17, 2014 8:42 am

Rexindex wrote:
Achelois wrote:I have been retired only a short time, but dental and vision care are not covered by my insurance plan. I was able to continue health care insurance through my former employer at about half the amount I had estimated, so it is not a problem, but I had not realized that those two things would not be covered.


I am curious how people estimated their health and dental, travel and dining.............



For myself, I thought my previous employer would charge about what COBRA would cost, but because of my length of service, I was eligible to keep coverage at half that. For dental/vision, I just called my current providers' offices and asked the approximate costs of my usual services.

I cut back eating out to once per week as I am not so prone to go out with co-workers on the spur of the moment! I have lost some weight, not surprisingly. Traveling, I just pretty much used the same amounts as I had been when employed, but I am not a huge fan of traveling, so that helps. I like BEING different places, but do not like the process of getting there and have no plans for overseas flying. I plan to travel much more when the Transporter is perfected.

I buy a few more audiobooks. My local library has a lot of ebooks available, too, but its audio selection is dismal. I have Netflix, but do not watch TV. I spend about $60 for audiobooks per month and $9 approximately for Netflix. Eating out about $120. Pedicure once per month $50. Haircut $25.

I budgeted $3,000 per month when estimating retirement needs because that is what I lived on pre-retirement--expenses, not salary. I find my spending is actually about $2,000 per month now except when there is the vet bill or the dental bill. Vet is usually once a year, dental twice, eye exam and glasses, about $600, every two years (new glasses maybe less frequent).

I do a lot less impulse, self-indulgent spending now. I may spend more later when I am more comfortable with the idea of being retired and when I start to receive my small pension at age 65. I have not yet started SS, either.

I used firecalc to help plan.

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Re: What was Underestimated\Overestimated in Retirement

Post by dbr » Sun Aug 17, 2014 9:06 am

Estimates were about right or a little too high. Retirement spending is down about 10% compared to similar items before. The one possible surprise is that in spite of what seems like more travel than before, that category of expenses is actually down. The one really big increase percentage wise but not dollar wise is what I call "utilities," and that is due to cost creep in internet, cable, and cell phone costs. We have minimal energy and vehicle operating costs as a fraction of total. Medical costs, driven by insurance, are up a bit due to losing some employer subsidies.

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Re: What was Underestimated\Overestimated in Retirement

Post by nisiprius » Sun Aug 17, 2014 9:10 am

I am not sure that either of these amounts to much and I haven't done any math...

1) The total impact of senior discounts is tiny, but it is as big as some of the falsely precise numbers people use when calculating things. Of course many "senior discounts" are offered by places that offer the same tiny discount to dozens of groups, they are determined to make you feel special and if the AAA card won't do it, something else will. "Senior discount" is the easiest thing to ask for because more places have senior discounts than (say) AAA discounts or affinity-credit-card discounts.

And lot of places use the honor system about what age counts as "senior!"

It is very important to steel yourself to ask, always, "Do you have a senior discount?" There is a department store that has a blanket senior discount of 10% on everything one day of the week, but it is not posted and the checkers are not supposed to give it to you unless you ask. If a checker ever asks you "Do you have any discounts?" they are trying to give you a tipoff. (Or maybe the idea that you don't get it if you don't ask is a charade and they are instructed to give broader and broader hints until you catch on?)

I'll bet that senior discounts can amount to as much as 0.25% of total budget. Discounts on public transportation fares is meaningful. If we ever take advantage of the state university and community colleges' offering free tuition to seniors that will be big.

2) I think there should be a budget item, "Allowance for replacing lost and misplaced items." I know I've lost and replaced any number of things over the past year, let me think, now what were they exactly? :?
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Re: What was Underestimated\Overestimated in Retirement

Post by Lynette » Sun Aug 17, 2014 9:28 am

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Re: What was Underestimated\Overestimated in Retirement

Post by dbr » Sun Aug 17, 2014 9:45 am

Lynette wrote:I'm not retired yet and spending a small fortune on travel so I am trying to estimate my expenses in retirement. I think a huge expense could be replacing a car. Then there always seem to be utilities such as washing machines wearing out.


Major expenses such as replacing a car, major maintenance on a house (new roof), etc., have to be allowed for but are probably not different in retirement, or may go down. Some people would replace a car and hardly use it at all; other people would buy an RV and tour the country or a sailboat and hit the high seas.

Probably a more difficult situation to estimate would be moving to a different part of the country, especially if selling a home and becoming a renter, a very possible situation for many people.

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Re: What was Underestimated\Overestimated in Retirement

Post by heyyou » Sun Aug 17, 2014 10:39 am

I am curious how people estimated their health and dental, travel and dining


When working, we increased our savings rate by saving our pay raises for a couple of decades, and we only retired after our proposed retiree income was equal to our pre-retirement spending. There was no drop in our spending. Stayed at work just long enough to be eligible for the deadwood program (cheap healthcare to age 65 for early retirees with 30 years there), so we had a number for healthcare expenses.

There was little change in the amount of our spending and we still live within our means. We do shop with more patience than when work used up half of each day. We still save up for traveling from our income (our scheduled portfolio withdrawals) as we did when working for paychecks. Our checking account indicates how we are doing at staying within our budget and we spend the surplus.

What was Underestimated\Overestimated in Retirement

Answering the title instead of your posting, I had no idea that retirement would be so joyous. You have time--time to read, to play, to prep healthy food for meals, time to exercise, and none of that is specific to your income. You have time to do both what you want to do, and what you need to do. Contrast that with your pre-retirement life.

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Re: What was Underestimated\Overestimated in Retirement

Post by Lynette » Sun Aug 17, 2014 11:00 am

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Re: What was Underestimated\Overestimated in Retirement

Post by dbr » Sun Aug 17, 2014 11:09 am

Lynette wrote:
dbr wrote:Major expenses such as replacing a car, major maintenance on a house (new roof), etc., have to be allowed for but are probably not different in retirement, or may go down. Some people would replace a car and hardly use it at all; other people would buy an RV and tour the country or a sailboat and hit the high seas.


I suppose I should have included more money for a car replacement in my estimates. I won't drive nearly as much when I retire. What really stunned me was how much I am going to have to pay in taxes when I retire because of RMDs. About 70% of my savings are in a 401K. I asked my accountant to estimate my tax bracket when I retire as I was about to take full SS at 70. I also have pensions. She told me I would be in the same tax bracket when I retire and it was not worth while doing a Roth conversion. I had always assumed I would be in a lower tax bracket. I know I'm fortunate to have pensions. I should be able to live on those and full SS. It was also larger than I expected but I'm paying 25% taxes on it now. I guess I lived my dream by travelling extensively for the past 20 years. I could likely afford to retire but work is OK .. for now.


You have an excellent point there. Estimating future tax costs is a good idea for everyone. I bet there are surprises both ways.

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Re: What was Underestimated\Overestimated in Retirement

Post by littlebird » Sun Aug 17, 2014 11:11 am

over the course of a so far 28 year long retirement, many things have changed. The only major surprise is how well we did financially, thanks to our LBYM lifestyle (admittedly stretched a bit in early retirement) and the great bull market. We had thought that we might have to work part time, but a move to a warm weather LCOL state obviated that need.

The bursting of the housing bubble gave us the unexpected opportunity to put some of our hoard of low yield bonds into a higher-end house than we could ever have afforded (or even wanted) earlier, even in our working lives. This we did largely to provide more comfort and pleasure to make up for our rapidly diminishing abilities to travel, dine out, attend theater, museums and galleries. Having been constrained to become extreme homebodies, we were fortunate enough to be able to greatly upgrade the home.

The end of work definitely does not bring the end of change.

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Re: What was Underestimated\Overestimated in Retirement

Post by VictoriaF » Sun Aug 17, 2014 11:39 am

Lynette wrote:What really stunned me was how much I am going to have to pay in taxes when I retire because of RMDs. About 70% of my savings are in a 401K. I asked my accountant to estimate my tax bracket when I retire as I was about to take full SS at 70. I also have pensions. She told me I would be in the same tax bracket when I retire and it was not worth while doing a Roth conversion. I had always assumed I would be in a lower tax bracket. I know I'm fortunate to have pensions. I should be able to live on those and full SS. It was also larger than I expected but I'm paying 25% taxes on it now. I guess I lived my dream by travelling extensively for the past 20 years.


I recommend that you double-check your accountant's estimate of your taxes in retirement. Even if you are in the same tax bracket, your overall taxes may be reduced by Roth conversions during early retirement.

Victoria
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Re: What was Underestimated\Overestimated in Retirement

Post by Sheepdog » Sun Aug 17, 2014 12:14 pm

19 years retired. Overall expenses are what I estimated as my spending was close to what I was spending my last 5 years of working and I expected it not to change. We were already traveling, so that was not a surprise. We were buying autos, so that did not change. Medical costs including insurance is close to my inflationary expectation. However, I did overestimate taxes. I really didn't expect my retirement tax planning to be so successful. I went from about $25K per year to near zero in 5 years. Never did I expect that. Roth conversions in those 5 years was the key, as Victoria suggests.
I was not in the $1 million camp....not yet anyway, but I did get there a couple of years ago. I did not estimate that the economy and especially my investments would grow so much, not with my living off of them and SS only.

Additionally, I did overestimate future inflation and underestimate interest rates. However, less inflation than expected caused the effect of lower interest rates in earnings not to be as harmful as I would have expected.
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Question for Accountant.

Post by Taylor Larimore » Sun Aug 17, 2014 12:45 pm

What really stunned me was how much I am going to have to pay in taxes when I retire because of RMDs. About 70% of my savings are in a 401K. I asked my accountant to estimate my tax bracket when I retire as I was about to take full SS at 70. I also have pensions. She told me I would be in the same tax bracket when I retire and it was not worth while doing a Roth conversion.

Lynette:

Ask your accountant about converting your 401K and any Traditional IRA to a Roth during your low-income period between retiring and collecting Social Security (age 67) and Required Minimum Distributions (Age 70 1/2).

Best wishes.
Taylor
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Re: What was Underestimated\Overestimated in Retirement

Post by Kersten » Sun Aug 17, 2014 1:44 pm

Some of my answers have to do with $ costs-some not.

1. I underestimated the cost of healthcare/Medicare (including the supplement and Part D and also underestimated the time involved in finding the best plans. In retrospect I needed to advance plan more that I did. Just read "The Bogleheads Guide to Retirement planning" four years after I retired!

2. I overestimated the amount that I would spend on clothes.

3. I overestimated the amount it would cost to travel to Europe. After going a few times, I have found ways in which to do it economically

4. I underestimated some people's reaction to my retiring. Thought everyone would be so happy for me but found out some of my married lady friends were quite annoyed. Maybe it was because I was single. Who knows? Hard to figure.

5. I underestimated the number of people who would ask me to volunteer for various projects, donate $, travel to far off weddings, travel to assist them with various tasks. Probably, they figured I had lots of time and money when the truth is, I retired and then tried to figure out if I could really afford to retire. (Post planning confirmed that I can, but money is not limitless and frugality is important)

6. Underestimated the amount of $ one could save if a do-it-your-selfer) And underestimated the good feelings of being able to do that. But maybe, if I had the $ I would have hired some of it out.

7. Underestimated the amount of helpful information there is on a site such as Bogleheads and another site that has been so helpful, "Retirement, A Full TIme Job".

8. Underestimated the amount of knowledge I needed before I retired and the importance of pre-planning....but found out that with this site and others, I can do it post retirement and fortunately am managing just fine. Although it has added a bit of financial adventure to my life.

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Re: What was Underestimated\Overestimated in Retirement

Post by VictoriaF » Sun Aug 17, 2014 1:58 pm

Kersten wrote:3. I overestimated the amount it would cost to travel to Europe. After going a few times, I have found ways in which to do it economically.


Hi Kersten,

Travel to Europe is a large component of my retirement budget planning. Can you share some sources of your savings? Thank you,

Victoria
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Re: Question for Accountant.

Post by Lynette » Sun Aug 17, 2014 2:43 pm

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Re: What was Underestimated\Overestimated in Retirement

Post by Ron » Sun Aug 17, 2014 2:46 pm

Retired 7+ years; wife 2+ years. Income/expenses as originally forecast, including a bit more due to our PCOL (Personal Cost of Living) increases along the way.

What we didn't count on is to have a bit more in joint retirement investment assets at the current time than we originally planned for. Sometimes you can't beat dumb luck (I could say that we are astute investors, but that would be a lie :wink: ).

On the expense side, travel has (and remains) our largest expense both before and after retirement. It's always been part of our life plan so there was no adjustment to be made just because we retired.

FWIW,

- Ron

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Re: What was Underestimated\Overestimated in Retirement

Post by RyeWhiskey » Sun Aug 17, 2014 3:11 pm

My parents retired about 5 years ago. In the past year I was able to get them on a budget, establish an EF, and get their assets transferred to Vanguard. Now that they have a budget they are astonished at the amount they spend dining out. With me long since out of the home and with both of them in a nice county with excellent restaurants, they dine out frequently, probably every day. This cost can add up very quickly but they are budgeting for it now so no worries.
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Re: What was Underestimated\Overestimated in Retirement

Post by Mel Lindauer » Sun Aug 17, 2014 3:52 pm

I'd say the biggest surprise was the total cost of healthcare, since both my wife and I have been in excellent health. There's the cost of the Part B that gets subtracted from your SS check, then there's the supplemental plan costs (constantly increasing at an alarming rate), the cost of the Plan D and then the non-covered/deductible drug costs. And heaven forbid if you have to get dental surgery or anything done at a periodontist.

How does ~$1000 per month sound for the two of us when you put it all together? Possibly even more if you have expensive dental work done. Obviously, singles can cut that estimate in half.
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Re: What was Underestimated\Overestimated in Retirement

Post by VictoriaF » Sun Aug 17, 2014 3:58 pm

Mel Lindauer wrote:I'd say the biggest surprise was the total cost of healthcare, since both my wife and I have been in excellent health. There's the cost of the Part B that gets subtracted from your SS check, then there's the supplemental plan costs (constantly increasing at an alarming rate), the cost of the Plan D and then the non-covered/deductible drug costs. And heaven forbid if you have to get dental surgery or anything done at a periodontist.

How does ~$1000 per month sound when you put it all together? Possibly even more if you have expensive dental work done.


Hi Mel,

Thank you for the insight. I am now paying about $150 per month pre-tax for a high-deductible health plan and a dental insurance. I assumed that in retirement, I will be spending about $5k/year more on insurance and healthcare, but I may be underestimating it, even if I remain healthy in the foreseeable future.

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Re: What was Underestimated\Overestimated in Retirement

Post by dbr » Sun Aug 17, 2014 3:59 pm

Mel Lindauer wrote:How does ~$1000 per month sound when you put it all together? Possibly even more if you have expensive dental work done.


That is about right with a really good Medigap plan. For a high deductible plan and good health it can be less.

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Re: What was Underestimated\Overestimated in Retirement

Post by VictoriaF » Sun Aug 17, 2014 4:01 pm

dbr wrote:
Mel Lindauer wrote:How does ~$1000 per month sound when you put it all together? Possibly even more if you have expensive dental work done.


That is about right with a really good Medigap plan. For a high deductible plan and good health it can be less.


Is the estimated $1,000/month per person?

Victoria
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Re: What was Underestimated\Overestimated in Retirement

Post by sschullo » Sun Aug 17, 2014 4:10 pm

I retired in 2008, hubby retired in 2000. No surprises, just that our portfolio grown more than expected since 09. Both are covered by good health plans, except for dental. Fortunately, I have excellent teeth.
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Re: What was Underestimated\Overestimated in Retirement

Post by dbr » Sun Aug 17, 2014 4:16 pm

VictoriaF wrote:
dbr wrote:
Mel Lindauer wrote:How does ~$1000 per month sound when you put it all together? Possibly even more if you have expensive dental work done.


That is about right with a really good Medigap plan. For a high deductible plan and good health it can be less.


Is the estimated $1,000/month per person?

Victoria


No, sorry, I should have been clear for two people. What happens, of course, is that these are now all individual plans. There is no more family coverage as there was under the employer health plan. By the way, Megacorp, my esteemed employer, terminated the retiree health plan when Obamacare came on. I bailed from them to Medigap from the get go because it seemed obvious they would do this. They have been so kind as to maintain a retiree Health Care Reimbursement Account that helps pay for these policies.

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Re: What was Underestimated\Overestimated in Retirement

Post by Mel Lindauer » Sun Aug 17, 2014 4:21 pm

VictoriaF wrote:
Mel Lindauer wrote:I'd say the biggest surprise was the total cost of healthcare, since both my wife and I have been in excellent health. There's the cost of the Part B that gets subtracted from your SS check, then there's the supplemental plan costs (constantly increasing at an alarming rate), the cost of the Plan D and then the non-covered/deductible drug costs. And heaven forbid if you have to get dental surgery or anything done at a periodontist.

How does ~$1000 per month sound when you put it all together? Possibly even more if you have expensive dental work done.


Hi Mel,

Thank you for the insight. I am now paying about $150 per month pre-tax for a high-deductible health plan and a dental insurance. I assumed that in retirement, I will be spending about $5k/year more on insurance and healthcare, but I may be underestimating it, even if I remain healthy in the foreseeable future.

Victoria


Hi Victoria:

Since you're single, you can cut that cost in half, so your estimated $5k per year seems about right. My numbers were for both my wife and I and would applicable to couples. I should have made that clear. (I'll edit my original post to clarify that.)
Best Regards - Mel | | Semper Fi

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Re: What was Underestimated\Overestimated in Retirement

Post by Sheepdog » Sun Aug 17, 2014 4:38 pm

Mel Lindauer wrote:
How does ~$1000 per month sound for the two of us when you put it all together? Possibly even more if you have expensive dental work done. Obviously, singles can cut that estimate in half.

Mel,
It looks like mine is the same also. (2 retirees) Our medical expenses averaged $12,160 a year for the last 3 years or $1000 a month.
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Re: What was Underestimated\Overestimated in Retirement

Post by Statch » Sun Aug 17, 2014 6:01 pm

I retired this year. We moved immediately so it was hard to estimate expenses, but I did underestimate the impact of having more time to look for deals and think about cutting expenses. We ask for senior discounts, negotiate expenses like cable TV, and bargain shop more, and I can see the effect in our monthly spending. I also underestimated how much all my 'small' purchases (that added up) when I was working were motivated by stress. Now I think twice and just don't feel the need to buy as many things. (Plus having moved it all yet again, our 4th move in 5 years, makes me disinclined to add to the 'stuff' we have!)

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Re: What was Underestimated\Overestimated in Retirement

Post by nisiprius » Sun Aug 17, 2014 7:28 pm

Mel Lindauer wrote:I'd say the biggest surprise was the total cost of healthcare, since both my wife and I have been in excellent health. There's the cost of the Part B that gets subtracted from your SS check, then there's the supplemental plan costs (constantly increasing at an alarming rate), the cost of the Plan D and then the non-covered/deductible drug costs. And heaven forbid if you have to get dental surgery or anything done at a periodontist.

How does ~$1000 per month sound for the two of us when you put it all together? Possibly even more if you have expensive dental work done. Obviously, singles can cut that estimate in half.
One can quibble about details, but, yeah, that's the ballpark.

in the case of my wife and myself it's more like $700 a month for the two of us (including part D and out-of-pocket drugs cost), for traditional Medicare and high-end Medigap. During the selection phase I convinced myself that it's a myth to think that you can do much better (OR much worse) than that. The Medicare Advantage plans were somewhat cheaper, but not overwhelmingly so, and clearly had more in the way of co-pays and other out-of-pocket costs. The Medigap plan I looked at all had similar "medical loss ratios" in the 85% ballpark, i.e. they all paid out $0.85 for every dollar of premiums, regardless of how complete the coverage. You can pay a lower premium, but the savings are cancelled out by higher expected average out-of-pocket costs.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Toons
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Re: What was Underestimated\Overestimated in Retirement

Post by Toons » Sun Aug 17, 2014 7:32 pm

Our Healthcare is our largest expense every month.Beyond that we are pleased that we seem to have more monies available to us than we anticipated before retirement,,,SS,pension,cap-gains,dividends.No complaints :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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pjstack
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Re: What was Underestimated\Overestimated in Retirement

Post by pjstack » Sun Aug 17, 2014 7:59 pm

This is not financial (or, maybe it could be), but I overestimated how long I would stay in good health!

Now I have a creeping paralysis that severely impairs my mobility. Alas, no more archaeological digs or fossil hunting excursions. It's now practically an expedition to go fetch the mail!

My only (rather banal) advice is to take advantage of your good health while you have it.
pjstack

scrabbler1
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Re: What was Underestimated\Overestimated in Retirement

Post by scrabbler1 » Sun Aug 17, 2014 8:33 pm

I retired 6 years ago at age 45. The only expense which has jumped around a lot has been health insurance premiums. But thanks to the ACA I now have a decent policy again at an affordable price.

Income taxes have spiked only when I had an income spike (from a large short-term cap gains distribution back in 2010). Otherwise, income taxes (federal and state) are only about 1/6 of my total expenses.

Otherwise, all is quite well. :)

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Watty
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Re: What was Underestimated\Overestimated in Retirement

Post by Watty » Sun Aug 17, 2014 9:10 pm

Achelois wrote:I buy a few more audiobooks. My local library has a lot of ebooks available, too, but its audio selection is dismal. I have Netflix, but do not watch TV. I spend about $60 for audiobooks per month and $9 approximately for Netflix. Eating out about $120. Pedicure once per month $50. Haircut $25.


FYI, if there is a different library system nearby, like a different county, you can likely pay to join that library system to get access to their audio books as well as their paper books. My wife does that at a neighboring county to get access to both their eBooks that she can download and their audio books on CD's, it cost about $40 a year.

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LarryG
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Re: What was Underestimated\Overestimated in Retirement

Post by LarryG » Sun Aug 17, 2014 9:16 pm

I underestimated the amount of income I would have because of RMD from a very successful portfolio.
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Achelois
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Re: What was Underestimated\Overestimated in Retirement

Post by Achelois » Sun Aug 17, 2014 9:30 pm

Watty wrote:
Achelois wrote:I buy a few more audiobooks. My local library has a lot of ebooks available, too, but its audio selection is dismal. I have Netflix, but do not watch TV. I spend about $60 for audiobooks per month and $9 approximately for Netflix. Eating out about $120. Pedicure once per month $50. Haircut $25.


FYI, if there is a different library system nearby, like a different county, you can likely pay to join that library system to get access to their audio books as well as their paper books. My wife does that at a neighboring county to get access to both their eBooks that she can download and their audio books on CD's, it cost about $40 a year.



Thank you. I will look into that.

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GerryL
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Re: What was Underestimated\Overestimated in Retirement

Post by GerryL » Sun Aug 17, 2014 10:05 pm

I'm finding this discussion very interesting since I just retired and will need to answer this question for myself. I'm naturally frugal, but now that I know I have enough for a comfortable retirement, I'm being more generous with myself. More frequent eating out. occasional (small) impulse purchases. I just need to make sure I don't go overboard.

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celia
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Re: What was Underestimated\Overestimated in Retirement

Post by celia » Sun Aug 17, 2014 10:30 pm

We don't spend as much on gas as we expected since we pretty much drive locally and walk more to places that are close. (We have to be careful not to visit the fast food places too often.)

However, we are temporarily spending more on gas as we need to look in weekly on a relative who lives an hour's drive away.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.

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Re: What was Underestimated\Overestimated in Retirement

Post by Gill » Mon Aug 18, 2014 7:54 am

I underestimated the income I would have available to me, primarily as a result of strong markets and the purchase of several SPIA's. I currently spend more than I earned at retirement and feel quite comfortable doing so.
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Re: What was Underestimated\Overestimated in Retirement

Post by Gill » Mon Aug 18, 2014 7:56 am

LarryG wrote:I underestimated the amount of income I would have because of RMD from a very successful portfolio.
LarryG

RMD isn't really income. You are just moving assets from one container to another.
Gill

dickenjb
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Re: What was Underestimated\Overestimated in Retirement

Post by dickenjb » Mon Aug 18, 2014 8:31 am

Gill wrote:
LarryG wrote:I underestimated the amount of income I would have because of RMD from a very successful portfolio.
LarryG

RMD isn't really income. You are just moving assets from one container to another.
Gill


I had a hard time explaining that concept to a couple I advise when he turned 70.5

They thought they had to spend the RMD. I explained that the IRS insists that you take it out and pay tax on it, but you are allowed to reinvest it in a taxable account.

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Taylor Larimore
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Thank you, Mr. Bogle.

Post by Taylor Larimore » Mon Aug 18, 2014 11:25 am

Dear Mr. Bogle:

Thanks to you, Pat and I enjoyed a happier, care-free retirement than we ever imagined.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: What was Underestimated\Overestimated in Retirement

Post by technovelist » Mon Aug 18, 2014 12:01 pm

dbr wrote:
Mel Lindauer wrote:How does ~$1000 per month sound when you put it all together? Possibly even more if you have expensive dental work done.


That is about right with a really good Medigap plan. For a high deductible plan and good health it can be less.


That must be for a very high-cost area. We have a no-deductible Medigap plan and our total premiums with Medicare, Medigap, dental and drug coverage is $500 total for both of us, and our drug copays are less than $30/month.
In theory, theory and practice are identical. In practice, they often differ.

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Re: What was Underestimated\Overestimated in Retirement

Post by Gill » Mon Aug 18, 2014 12:09 pm

technovelist wrote:That must be for a very high-cost area. We have a no-deductible Medigap plan and our total premiums with Medicare, Medigap, dental and drug coverage is $500 total for both of us, and our drug copays are less than $30/month.

Can't be. Your Medicare Part B is over $2,400 a year for the two of you. I'm on the other coast of Florida from Mel and my figures align with his.
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trueblueky
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Re: What was Underestimated\Overestimated in Retirement

Post by trueblueky » Mon Aug 18, 2014 9:16 pm

Gill wrote:
LarryG wrote:I underestimated the amount of income I would have because of RMD from a very successful portfolio.
LarryG

RMD isn't really income. You are just moving assets from one container to another.
Gill

The whole "tax rate will be lower in retirement" myth turns out to be wrong. When either of us dies, the survivor will go up a bracket. Same thing when we're forced to begin RMD in ten years. Since we have little room left in our current bracket, I'm just glad that the higher brackets are in the future.

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