Retirees: When you cut spending, what do you cut?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Dasnyc
Posts: 61
Joined: Wed Oct 16, 2013 6:51 pm

Re: Retirees: When you cut spending, what do you cut?

Post by Dasnyc » Sun Jun 24, 2018 2:33 pm

delamer wrote:
Sun Jun 24, 2018 1:29 pm
Earl Lemongrab wrote:
Sun Jun 24, 2018 1:17 pm
delamer wrote:
Sun Jun 24, 2018 1:14 pm
I do not know how old you are, but you are very fortunate to have become an adult and never have been kicked in the teeth by life.
61. I don't understand the point. If you don't have a substantial part of your retirement savings that is available for the unexpected then you failed to plan properly. It sounds like you're the one who thinks nothing will go wrong. I think things might well.

No, I think life is too unpredictable to plan for every contingency — or multiple contingencies hitting at the same time.

Therefore, people shouldn’t be considered to have “failed” when they are hit with a tsunami.
+1.

smitcat
Posts: 1979
Joined: Mon Nov 07, 2016 10:51 am

Re: Retirees: When you cut spending, what do you cut?

Post by smitcat » Sun Jun 24, 2018 2:44 pm

Earl Lemongrab wrote:
Sun Jun 24, 2018 1:51 pm
smitcat wrote:
Sun Jun 24, 2018 1:47 pm
Earl Lemongrab wrote:
Sun Jun 24, 2018 12:55 pm
I'm of the opinion that if you have to cut your chosen lifestyle, then you failed. You didn't save enough or you didn't handle the investments properly.
Easily solved - just set your lifestyle goals low enough and you are there.
A quick clarification, my statement should have been, ". . . if you have to cut your chosen lifestyle before or after retirement . . . "
Again easily solved - just make sure that your expectations and lifestyle goals are low enough and you will never fail.

User avatar
Sheepdog
Posts: 5184
Joined: Tue Feb 27, 2007 3:05 pm
Location: Indiana, retired 1998 at age 65

Re: Retirees: When you cut spending, what do you cut?

Post by Sheepdog » Sun Jun 24, 2018 2:53 pm

Miriam2 wrote:
Sun Jun 24, 2018 1:17 pm


Sheepdog! Thank you for sharing your personal stories.
I noticed - sheepdogs are never cut :D
Thanks. You are correct. Our Sheepie's health and welfare go before us. :)
It's not what you gather, but what you scatter which tells what kind of life you have lived---Helen Walton

User avatar
munemaker
Posts: 3517
Joined: Sat Jan 18, 2014 6:14 pm

Re: Retirees: When you cut spending, what do you cut?

Post by munemaker » Sun Jun 24, 2018 5:42 pm

delamer wrote:
Sun Jun 24, 2018 11:09 am
munemaker wrote:
Sun Jun 24, 2018 10:06 am
scottinmet wrote:
Sun Jun 24, 2018 7:53 am

I looked on the ACA exchange and it looks like I could get a silver plan for less than what I pay for my current health insurance. Granted, it's not as good as the plan I currently have, but beggars can't be choosers.
Pretty sure going to the exchange is not an option if you are offered health insurance at work.

That is incorrect. Anyone can buy through the exchange, if they are under 65. The issue is whether you are entitled to any premium subsidy if you do.
I'll take your word that anyone can buy on the exchange (https://www.healthcare.gov/have-job-bas ... lace-plan/), but if you are on an employer-subsidized plan, it is very unlikely you would save any money by paying full fare on the exchange; that is the point I was challenging.

delamer
Posts: 6267
Joined: Tue Feb 08, 2011 6:13 pm

Re: Retirees: When you cut spending, what do you cut?

Post by delamer » Sun Jun 24, 2018 5:52 pm

munemaker wrote:
Sun Jun 24, 2018 5:42 pm
delamer wrote:
Sun Jun 24, 2018 11:09 am
munemaker wrote:
Sun Jun 24, 2018 10:06 am
scottinmet wrote:
Sun Jun 24, 2018 7:53 am

I looked on the ACA exchange and it looks like I could get a silver plan for less than what I pay for my current health insurance. Granted, it's not as good as the plan I currently have, but beggars can't be choosers.
Pretty sure going to the exchange is not an option if you are offered health insurance at work.

That is incorrect. Anyone can buy through the exchange, if they are under 65. The issue is whether you are entitled to any premium subsidy if you do.
I'll take your word that anyone can buy on the exchange, but if you are on an employer-subsidized plan, it is very unlikely you would save any money by paying full fare on the exchange; that is the point I was challenging.
The key is “employer-subsidized.” There are employers who provide access to health insurance, but don’t subsidize the premium. Or subsidize the single coverage premium, but do not provide a subsidy for family coverage (above that provided for single).

So in those cases, it could be that there is a premium that would be cheaper through the exchange. Not saying that the coverage is equivalent, of course.

togb
Posts: 135
Joined: Mon Oct 23, 2017 8:36 pm

Re: Retirees: When you cut spending, what do you cut?

Post by togb » Sun Jun 24, 2018 6:25 pm

things to cut when things are tight:
  • housekeeper, help with yard-- stop hiring people to do things to make life easier
      trim the grocery budget and supplement with a bigger garden.
        dramatically trim, as in pretty much eliminate expenses for eating out.

        Then, along with cutting spending, increase earnings
          rent out that extra room
            get a part time job or even just casual/seasonal work

            But more importantly, before retirement built in something "extra". Don't count every single account, every single asset when you're doing your plan. Keep a reserve account, something that's not in the plan for the way you think things are going so that it's there when something goes awry. You don't always know WHAT will go wrong, but honestly, isn't it always something?

          User avatar
          AtlasShrugged?
          Posts: 608
          Joined: Wed Jul 15, 2015 6:08 pm

          Re: Retirees: When you cut spending, what do you cut?

          Post by AtlasShrugged? » Sun Jun 24, 2018 6:35 pm

          Bogleheads....Fascinating replies. The overwhelming majority (in fact, I think every one) would look at 'large, but temporary' cuts instead of 'small, but permanent' cuts. I would be interested in hearing any Boglehead who actually went the 'small, but permanent' cut route.

          I am also interested in hearing how the nature of cuts might differ from a 'youngish' retiree versus someone more, ah how shall I say, seasoned past age 80. :)
          “If you don't know, the thing to do is not to get scared, but to learn.”

          User avatar
          dodecahedron
          Posts: 3727
          Joined: Tue Nov 12, 2013 12:28 pm

          Re: Retirees: When you cut spending, what do you cut?

          Post by dodecahedron » Sun Jun 24, 2018 6:50 pm

          togb wrote:
          Sun Jun 24, 2018 6:25 pm
          things to cut when things are tight:
          • housekeeper, help with yard-- stop hiring people to do things to make life easier
              trim the grocery budget and supplement with a bigger garden.
                dramatically trim, as in pretty much eliminate expenses for eating out.

                Then, along with cutting spending, increase earnings
                  rent out that extra room
                    get a part time job or even just casual/seasonal work

                    But more importantly, before retirement built in something "extra". Don't count every single account, every single asset when you're doing your plan. Keep a reserve account, something that's not in the plan for the way you think things are going so that it's there when something goes awry. You don't always know WHAT will go wrong, but honestly, isn't it always something?
                  I would note that spending cuts may not just be the result of something going wrong but also of something going right!

                  You might find that you discover a new passionate interest after retirement (a hobby, a charitable nonprofit you'd like to support, etc.) and decide that you want to cut your previously planned spending in other areas in order to accommodate increased spending on a new and more satisfying priority you did not previously envision.

                  Or maybe you have long had a disability and some unexpected new invention comes along in the future and creates a new technology that allows you to function at a level you could not previously anticipated. Again, you may find yourself cutting previously planned expenditures in other areas in order to make room for a new priority because something went unexpectedly right.

                  Yet another reason you might cut previously planned spending is that your tastes change in favor of simplicity and less materialism/consumption/lower carbon footprint. Or you unexpectedly discover that you actually enjoy do-it-yourself activities (cooking, household chores, making/mending/recycling your own clothes, etc.) that you had expected to outsource.

                  basspond
                  Posts: 1085
                  Joined: Wed Nov 27, 2013 4:01 am

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by basspond » Sun Jun 24, 2018 6:55 pm

                  Permanent cuts phone/Mobil phone/internet/cable bundled with lower rates was about $75 monthly, life insurance over $200 monthly.

                  But most are non permanent, avoid getting drinks when eating out, that is anywhere from $5- $30 a meal, have more time so avoid toll roads $10-$20 monthly, cook more at home and use food before it spoils about $100 monthly, volunteer instead of entertainment is about another $100 monthly.

                  Grt2bOutdoors
                  Posts: 19301
                  Joined: Thu Apr 05, 2007 8:20 pm
                  Location: New York

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by Grt2bOutdoors » Sun Jun 24, 2018 7:20 pm

                  Earl Lemongrab wrote:
                  Sun Jun 24, 2018 1:17 pm
                  delamer wrote:
                  Sun Jun 24, 2018 1:14 pm
                  I do not know how old you are, but you are very fortunate to have become an adult and never have been kicked in the teeth by life.
                  61. I don't understand the point. If you don't have a substantial part of your retirement savings that is available for the unexpected then you failed to plan properly. It sounds like you're the one who thinks nothing will go wrong. I think things might well.
                  No one has an unlimited amount of savings except perhaps for the richest 1% of the population. The rest of us, no matter how much you’ve saved, allocated, invested properly are immune from costs that far exceed resources. To say one has failed due to circumstances beyond ones control is nonsense. Should life ever kick you in the teeth, remember your own words - it’s because you failed.
                  "One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

                  Grt2bOutdoors
                  Posts: 19301
                  Joined: Thu Apr 05, 2007 8:20 pm
                  Location: New York

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by Grt2bOutdoors » Sun Jun 24, 2018 7:29 pm

                  What goes - Netflix, Amazon prime, gym membership, newspaper subscription, charitable contributions (can’t give what you don’t have), travel vacations, dental visits - read the book, The Great Depression A Diary for an idea just how many professionals who many would think are immune from economic instability really are not, haircuts (buy an electric buzzer instead). Yeah add it all up could easily save $3-5k, if I moved to a lcol area, could chop another $10k from taxes. Ironically property taxes are my biggest annual expenditure after healthcare.
                  "One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

                  Larry2623
                  Posts: 51
                  Joined: Sat Jul 15, 2017 9:23 pm

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by Larry2623 » Sun Jun 24, 2018 9:42 pm

                  Dottie57 wrote:
                  Sat Jun 23, 2018 1:15 pm
                  I don’t anticipate needing to cut, but the market may not be kind.

                  I would cut food budget.
                  Let house cleaners go.
                  Stop buying books and magazines - library instead.
                  No movies in theatre.
                  See bike to do errands in summer.
                  Cut Netflix- though this is relatively cheap.
                  Lower a.c. Use in summer - although this is a health issue for me - asthma with outside allergies.
                  If you get down to cutting netflix you are in trouble :shock:

                  Gnirk
                  Posts: 856
                  Joined: Sun Sep 09, 2012 3:11 am
                  Location: Western Washington

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by Gnirk » Sun Jun 24, 2018 10:21 pm

                  mouses wrote:
                  Sun Jun 24, 2018 1:12 pm
                  Earl Lemongrab wrote:
                  Sun Jun 24, 2018 12:55 pm
                  I'm of the opinion that if you have to cut your chosen lifestyle, then you failed. You didn't save enough or you didn't handle the investments properly.
                  The country and world is full of people who live in poverty through no fault of their own. I worry about money, but I also realize I am incredibly lucky.
                  +1

                  Dottie57
                  Posts: 4644
                  Joined: Thu May 19, 2016 5:43 pm

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by Dottie57 » Sun Jun 24, 2018 11:18 pm

                  Gnirk wrote:
                  Sun Jun 24, 2018 10:21 pm
                  mouses wrote:
                  Sun Jun 24, 2018 1:12 pm
                  Earl Lemongrab wrote:
                  Sun Jun 24, 2018 12:55 pm
                  I'm of the opinion that if you have to cut your chosen lifestyle, then you failed. You didn't save enough or you didn't handle the investments properly.
                  The country and world is full of people who live in poverty through no fault of their own. I worry about money, but I also realize I am incredibly lucky.
                  +1
                  +1

                  scottinmet
                  Posts: 70
                  Joined: Fri Dec 25, 2015 11:27 am

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by scottinmet » Mon Jun 25, 2018 6:40 am

                  delamer wrote:
                  Sun Jun 24, 2018 5:52 pm
                  munemaker wrote:
                  Sun Jun 24, 2018 5:42 pm
                  delamer wrote:
                  Sun Jun 24, 2018 11:09 am
                  munemaker wrote:
                  Sun Jun 24, 2018 10:06 am
                  scottinmet wrote:
                  Sun Jun 24, 2018 7:53 am

                  I looked on the ACA exchange and it looks like I could get a silver plan for less than what I pay for my current health insurance. Granted, it's not as good as the plan I currently have, but beggars can't be choosers.
                  Pretty sure going to the exchange is not an option if you are offered health insurance at work.

                  That is incorrect. Anyone can buy through the exchange, if they are under 65. The issue is whether you are entitled to any premium subsidy if you do.
                  I'll take your word that anyone can buy on the exchange, but if you are on an employer-subsidized plan, it is very unlikely you would save any money by paying full fare on the exchange; that is the point I was challenging.
                  The key is “employer-subsidized.” There are employers who provide access to health insurance, but don’t subsidize the premium. Or subsidize the single coverage premium, but do not provide a subsidy for family coverage (above that provided for single).

                  So in those cases, it could be that there is a premium that would be cheaper through the exchange. Not saying that the coverage is equivalent, of course.
                  Hmmm, I looked on the ACA website again and it appears I have to caveat the cheaper coverage.

                  I currently pay $7k per year for health coverage and my employer picks up the rest.

                  The first time I was on the ACA website I put a request for coverage for myself and 2 dependents. For some reason that didn't get carried over to the actual plans page and it defaulted to self only. For self only the silver plan coverage was $6k per year. Cheaper but of course it is only for self.

                  The silver plans with dependents cost quite a bit more, $13k - $19k annually. But that's supposing I am still earning $100k plus, which wouldn't be the case if I lost my job. When the premium credits are taken into account, the plan would be cheaper than what I currently have, significantly so if my gross income was below $50k. If I had to pay 13-19k per year for health coverage and I didn't have a job, I would do without health coverage.

                  Health insurance can be quite cheap if you are in the right ACA category. That is something to factor in if you lose your job, have significant assets already built up, and must work for significantly less than what you made previously.

                  I don't want to hijack this thread, but I thought I should explain a little more about what I was trying to say.

                  dknightd
                  Posts: 940
                  Joined: Wed Mar 07, 2018 11:57 am

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by dknightd » Mon Jun 25, 2018 4:51 pm

                  Earl Lemongrab wrote:
                  Sun Jun 24, 2018 12:55 pm
                  I'm of the opinion that if you have to cut your chosen lifestyle, then you failed. You didn't save enough or you didn't handle the investments properly.
                  That is an interesting definition of "failed".
                  Some would argue if you had a bunch of money left at the end you "failed".
                  My wife and I agreed, before we got married, we both wanted a comfortable lifestyle.
                  We would both be more comfortable if we could spend as much money as we do now, without having to work for it.
                  We are are approaching the time when we might be able to do this.
                  I could die at my desk if I wanted to, but that is not my chosen lifestyle. I have no interest in working or saving more than I think we need to stay comfortable. Yes "comfortable" is open to definition. And how we define it might change with time. I'm OK with that.

                  This thread is about how to cut spending. I have not yet retired yet. Our plan is two pronged. Always have enough money to live on. Hopefully have enough to do whatever we want. We'll probably end up somewhere in the middle. Enough to be comfortable, with perhaps occasional extravagances, and times of cutting back. Pretty much the same as now.

                  I would turn your idea around. If you can not adapt your lifestyle to the resources you have available, then you failed.
                  I would happily give up my extravagances if needed.

                  When I was a student, and then working, I always wanted, and usually got an A. I think when I retire I think I'll be comfortable with a C+
                  YMMV

                  Gnirk
                  Posts: 856
                  Joined: Sun Sep 09, 2012 3:11 am
                  Location: Western Washington

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by Gnirk » Tue Jun 26, 2018 12:18 am

                  The question is what expenses would I cut if I needed to:
                  Season tickets to live theatre.
                  Travel.
                  Meals out.
                  Twice-monthly housecleaner, though this would worsen my back problems.
                  Landline.
                  If those cuts didn’t do the trick, I would sell the house and and most of the furnishings and rent a small apartment.

                  Fortunately, the only spending we have cut is because we are retired: No more purchasing business attire, and our transportation costs are much less now that we are no longer working. Although our travel expenses have increased.

                  FireProof
                  Posts: 583
                  Joined: Thu May 05, 2011 12:15 pm

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by FireProof » Tue Jun 26, 2018 6:46 am

                  Main thing I could cut would be rent, either by moving somewhere cheaper, or buying a house (total remaining in my SWR after downpayment and mortgage would be less). Beyond that, I have few expenses that aren't pretty necessary.

                  FireProof
                  Posts: 583
                  Joined: Thu May 05, 2011 12:15 pm

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by FireProof » Tue Jun 26, 2018 7:10 am

                  Earl Lemongrab wrote:
                  Sun Jun 24, 2018 12:55 pm
                  Edit: I have decided that discussion of this was causing too many problems and derailing the thread. I will not be replying to any posts regarding this.

                  I'm of the opinion that if you have to cut your chosen lifestyle, then you failed. You didn't save enough or you didn't handle the investments properly.
                  Without any moral component, this is simply not true.

                  Given the same initial net worth, a plan involving variable spending is MUCH more robust than one with fixed spending (because spending when your net worth is low is much more costly long-term than the same amount of spending when your net worth is high). Because of this, it allows ON AVERAGE, higher lifetime spending. Obviously is some cases, you will have to reduce, and with some unfortunate sequences of returns, your lifetime spending may end up lower, but that is PART of the plan. On the other hand, you can start out spending considerably more (or you could have retired earlier).

                  So following a plan which leads to higher average lifetime spending and utility can't be considered a failure.

                  sschullo
                  Posts: 2429
                  Joined: Sun Apr 01, 2007 8:25 am
                  Location: Rancho Mirage, CA
                  Contact:

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by sschullo » Tue Jun 26, 2018 7:19 am

                  Invested in solar panels and 100% electric cars and I not only cut back on electric power bill but get refunds back from my power company.
                  Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

                  SQRT
                  Posts: 909
                  Joined: Sat Feb 05, 2011 9:44 am

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by SQRT » Tue Jun 26, 2018 7:51 am

                  FireProof wrote:
                  Tue Jun 26, 2018 7:10 am

                  Given the same initial net worth, a plan involving variable spending is MUCH more robust than one with fixed spending (because spending when your net worth is low is much more costly long-term than the same amount of spending when your net worth is high). Because of this, it allows ON AVERAGE, higher lifetime spending. Obviously is some cases, you will have to reduce, and with some unfortunate sequences of returns, your lifetime spending may end up lower, but that is PART of the plan. On the other hand, you can start out spending considerably more (or you could have retired earlier).

                  So following a plan which leads to higher average lifetime spending and utility can't be considered a failure.
                  So obviously true it hardly needs to be said,but thanks for saying it.
                  Last edited by SQRT on Tue Jun 26, 2018 4:51 pm, edited 1 time in total.

                  ncbill
                  Posts: 359
                  Joined: Sun Jul 06, 2008 4:03 pm

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by ncbill » Tue Jun 26, 2018 9:30 am

                  FireProof wrote:
                  Tue Jun 26, 2018 6:46 am
                  Main thing I could cut would be rent, either by moving somewhere cheaper, or buying a house (total remaining in my SWR after downpayment and mortgage would be less). Beyond that, I have few expenses that aren't pretty necessary.
                  Move in with family.

                  DW's grandmother, who only had SS spousal benefit as income, moved in with her youngest child's family into their basement (setup as an apartment w/ kitchenette, etc.) once her husband had to move into skilled nursing care.
                  Last edited by ncbill on Tue Jun 26, 2018 1:22 pm, edited 1 time in total.

                  User avatar
                  friar1610
                  Posts: 1291
                  Joined: Sat Nov 29, 2008 9:52 pm
                  Location: MA South Shore

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by friar1610 » Tue Jun 26, 2018 10:09 am

                  Pretty much what others have mentioned:

                  Tier 1:
                  - no big vacations/cruises
                  - reduce/eliminate eating out

                  Tier 2:
                  - eliminate gym membership and work out at home
                  - be smarter about combining trips for less fuel usage
                  - consider elimating cable
                  - eliminate going to plays, movies, etc.

                  Tier 3 (very radical)
                  - sell condo and move to apartment OR
                  - sell condo and move to lower COL location
                  - look for PT job (which, given so many years out of the work force, would likely be very low wage)

                  Fortunately, with federal pension and SS, don't anticipate the need to cut back but realistic enough to know that one never knows.
                  Friar1610

                  rj49
                  Posts: 445
                  Joined: Wed Feb 23, 2011 12:22 am

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by rj49 » Tue Jun 26, 2018 2:09 pm

                  Some I cut include home internet (it encourages too much sitting in front of a computer), cable/satellite tv (I use Netflix DVD service and go to movie theatres now), dining out daily (I get good variety and healthy options at Trader Joe's), and expensive cell phone plans (Mintsim gives me 10GB a month of data for $24 or so and the ability to tether my phone when i need home internet). I also kept an $18k car for 10 years and then switched to a $180/month Corolla lease--you really will survive without buying an SUV. I found giving up a Costco membership and Amazon Prime saved me thousands in unnecessary purchases.

                  The big one was moving from Seattle and buying a house with cash in a cheaper city that's smaller and better for a retiree. I still have property taxes and repair/maintenance costs, but it removes the cost of rent or a mortgage/interest from my spending needs.

                  Another big one is to eat and live a healthy lifestyle and thus potentially minimize health care costs over a lifetime, which ties in to finding things that will keep you happy and engaged, which after 13 years of retirement I'd say is much more important than investments or budgets.

                  Finally, instead of cutting purchases, another way to go is to pick up a little extra income without the drawbacks of work, so I drive Uber and Lyft for 10-20 hours a week, paying for my car, winter cruises, and several European trips a year, and it allows me to meet people and feel useful.

                  Old Guy
                  Posts: 270
                  Joined: Mon Mar 19, 2012 7:20 am

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by Old Guy » Wed Jun 27, 2018 8:52 am

                  Dry cleaning.
                  Second home, but our current place is worth almost as much as the previous two combined.

                  We have not cut back much that I can see. We worked hard and long and are now spending the money with much enthusiasm. With a combined four pensions, two social security payments, four RMD and living in a low cost state, we have plenty of money. No need to be Scrooge McDuck.

                  User avatar
                  CyclingDuo
                  Posts: 1779
                  Joined: Fri Jan 06, 2017 9:07 am

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by CyclingDuo » Wed Jun 27, 2018 11:02 am

                  AtlasShrugged? wrote:
                  Sun Jun 24, 2018 6:35 pm
                  Bogleheads....Fascinating replies. The overwhelming majority (in fact, I think every one) would look at 'large, but temporary' cuts instead of 'small, but permanent' cuts. I would be interested in hearing any Boglehead who actually went the 'small, but permanent' cut route.

                  I am also interested in hearing how the nature of cuts might differ from a 'youngish' retiree versus someone more, ah how shall I say, seasoned past age 80. :)
                  I'm going to categorize us in the Youngish retiree camp - in our minds anyway - at ages 56/60 as we begin looking at ways to trim while moving into the retirement phaseout years.

                  Rather than wait for full retirement, now that we are empty nesters, it seems a good time to take on trimming the fat. I actually have been spending time looking at expenses from the point of view of needs, wants, and variables to see if there are cuts in the area of small & permanent we could make right now and be just fine doing without. Or if we wait until retirement to make the actual cuts on some of the items. All of them are in the wants/variables category of expenses and many could be considered money leaks to begin with in the first place. :beer

                  Small areas that jump off the budget page to me that we could permanently cut and do without...

                  Netflix - $11 a month and we hardly ever use it (could save $132 a year))
                  Charitable Donations - could cut from our usual 4-5% of income (save $4-6K per year by giving less)
                  Religious Tithing - $175 per month (could save $2100 per year)
                  Insect Control - $75 a month (could do the spraying myself and save $660+ per year depending on what I purchase to spray)
                  Cycling License/Training Plan - $14.25 per month (getting too old to race, $171 annual expense to be dropped soon)
                  Lunch Expenditures - Already cut from $9-11 per day eating out at work and now spend .50 cents to $1 per day depending on what I pack (saves $1200 - $1400 per year already)
                  XM Radio - $18.21 per month (could save $218 per year)
                  Metropolitan Opera On Demand Subscription - $14.99 per month (could save $180 per year)

                  Without really doing much at all to our current lifestyle, that would be a $8661 - $10861 permanent cut of things that I could live without and have no qualms. My spouse, on the other hand, wants to do battle with me when it comes to the religious tithing. I'll check back in with that to share the results of the debate.

                  Other areas ripe for small cuts that wouldn't alter our lifestyle/enjoyment at all...

                  Eating Out (could be more selective with where and how frequent we do this since we prefer our own cooking)
                  Pet Expenses (could trim the dogs nails ourselves, find alternative/cheaper boarding when we are gone, cut back on all the treats and toys they get)
                  Cable/Internet Package - (could trim back to a more basic cable package as it appears we have tons of channels we never utilize)

                  I'll look into these other three areas ripe for a small cut without impacting our lifestyle/enjoyment that much.

                  There you have it, Summertime means it's trim the fat time. Since I started this post, I have made a few calls and clicks on the internet...

                  Netflix moved to my youngest daughter paying for it (since she signed us up in the first place). :beer
                  Metropolitan Opera On Demand Subscription canceled. :shock:
                  Insect Control Service canceled. :beer
                  Charitable Donations Cut way back for the remainder of the year. :|

                  Next up, check with our cable provider to see what packages are currently available and fit our needs as we are currently paying $199 per month for cable/internet.
                  Last edited by CyclingDuo on Wed Jun 27, 2018 12:43 pm, edited 1 time in total.
                  "Everywhere is within walking distance if you have the time." ~ Steven Wright

                  User avatar
                  VictoriaF
                  Posts: 18600
                  Joined: Tue Feb 27, 2007 7:27 am
                  Location: Black Swan Lake

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by VictoriaF » Wed Jun 27, 2018 11:20 am

                  When I decided to retire early, I was retiring "to" (not "from"), and it was important for me to enjoy this "to." Thus, I have sufficient cash reserves to satisfy most of my desires until I start collecting Social Security at the age of 70. At the age of 70, I will create a new spending plan based on my income and assets at that time.

                  I have a good retiree insurance and when the time comes, I will additionally get Medicare Part B to have as much coverage as I can. If I acquire a serious disease, I will reallocate my travel and entertainment expenses to healthcare expenses.

                  The area I don't want to sacrifice is living in an expensive metropolitan area in close proximity to public transportation. I will continue renting and if I have to move out from this apartment I expect to pay much more to stay in this area. I should be able to pay much more, but if "much more" is too much, I'll consider moving to Central or Eastern Europe, e.g., Prague.

                  Victoria
                  WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

                  User avatar
                  munemaker
                  Posts: 3517
                  Joined: Sat Jan 18, 2014 6:14 pm

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by munemaker » Wed Jun 27, 2018 4:53 pm

                  delamer wrote:
                  Sun Jun 24, 2018 5:52 pm
                  There are employers who provide access to health insurance, but don’t subsidize the premium. Or subsidize the single coverage premium, but do not provide a subsidy for family coverage (above that provided for single).
                  I am familiar with employers who do not cover spouse (or do not provide subsidized coverage for the spouse), or sometimes do not cover the spouse if the spouse is offered insurance through his/her own employer.

                  I am not familiar with employers offering unsubsidized coverage for the employee. It was my understanding that for an employer to escape ObamaCare penalties, the employer had to provide coverage that was affordable and met minimum actuarial value criteria.

                  delamer
                  Posts: 6267
                  Joined: Tue Feb 08, 2011 6:13 pm

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by delamer » Wed Jun 27, 2018 5:01 pm

                  munemaker wrote:
                  Wed Jun 27, 2018 4:53 pm
                  delamer wrote:
                  Sun Jun 24, 2018 5:52 pm
                  There are employers who provide access to health insurance, but don’t subsidize the premium. Or subsidize the single coverage premium, but do not provide a subsidy for family coverage (above that provided for single).
                  I am familiar with employers who do not cover spouse (or do not provide subsidized coverage for the spouse), or sometimes do not cover the spouse if the spouse is offered insurance through his/her own employer.

                  I am not familiar with employers offering unsubsidized coverage for the employee. It was my understanding that for an employer to escape ObamaCare penalties, the employer had to provide coverage that was affordable and met minimum actuarial value criteria.
                  I believe you are correct about the ObamaCare requirements.

                  Employer’s can meet those requirements, in some cases, without providing a premium subsidy.

                  It is more common for an employer to not subsidize the family premium though.

                  deikel
                  Posts: 569
                  Joined: Sat Jan 25, 2014 7:13 pm

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by deikel » Wed Jun 27, 2018 7:47 pm

                  What strikes me as strange in this thread is that NO ONE actually made the (not so?) obvious comment that a recession like the 2008/09 was a great time to spend MORE money for items that became cheaper and take advantage of the opportunity to invest presently and safe in the near future (different housing, new car, cheaper labor, cheap vacation)....

                  Should one not prepare for such an event by having an extra cash cushion to 'invest' in such times rather than immediately think of cutting back expenditures ? It seems that retired folks are 'cutting it so close' that they would have to cut back vs spend more (not trying to revive Earl Lemongrab's comment, but somewhat going in that direction)
                  Everything you read in this post is my personal opinion. If you disagree with this disclaimer, please un-read the text immediately and destroy any copy or remembrance of it.

                  randomguy
                  Posts: 6489
                  Joined: Wed Sep 17, 2014 9:00 am

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by randomguy » Wed Jun 27, 2018 7:57 pm

                  deikel wrote:
                  Wed Jun 27, 2018 7:47 pm
                  What strikes me as strange in this thread is that NO ONE actually made the (not so?) obvious comment that a recession like the 2008/09 was a great time to spend MORE money for items that became cheaper and take advantage of the opportunity to invest presently and safe in the near future (different housing, new car, cheaper labor, cheap vacation)....

                  Should one not prepare for such an event by having an extra cash cushion to 'invest' in such times rather than immediately think of cutting back expenditures ? It seems that retired folks are 'cutting it so close' that they would have to cut back vs spend more (not trying to revive Earl Lemongrab's comment, but somewhat going in that direction)
                  And what is the cost of that cash cushion? If I keep 50k in cash for the big day and the market goes up 4x before dropping in half, I just "lost" 50k. This is a variation on the why don't I wait for market drops to buy stocks strategy.

                  bltn
                  Posts: 209
                  Joined: Mon Feb 20, 2017 9:32 pm

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by bltn » Wed Jun 27, 2018 9:58 pm

                  Bacchus01 wrote:
                  Sat Jun 23, 2018 8:55 am
                  I’m not retired, but just looking at our own spending today:

                  - we have $1400/mo in two car payments. Get two cheaper cars and also drop our insurance rates proabably easily saves us $1000+/mo
                  - dining out - we don’t do a lot of big meals out, but for our family of five there are a lot of Starbucks stops, Q’doba lunches, Subway....we could probably cut, no kidding, $500/mo here
                  - I could turn off the irrigation in summer, but water here is cheap and it probably would save $300/year
                  - Does the dog really need to eat $25 worth of Bully Sticks a week? That’s $600/year

                  There. I just cut nearly $20k/year and didn’t even try all that hard.
                  If you had to make those cuts, everybody in the family would understand except the dog.

                  flyingaway
                  Posts: 1915
                  Joined: Fri Jan 17, 2014 10:19 am

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by flyingaway » Thu Jun 28, 2018 12:07 am

                  I could cut $10~20k annually from the travel and entertainment budget. But if that cut is needed, why bother to retire?

                  SQRT
                  Posts: 909
                  Joined: Sat Feb 05, 2011 9:44 am

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by SQRT » Thu Jun 28, 2018 6:23 am

                  flyingaway wrote:
                  Thu Jun 28, 2018 12:07 am
                  I could cut $10~20k annually from the travel and entertainment budget. But if that cut is needed, why bother to retire?
                  I suspect the OP assumed you were already retired and subsequently needed to cut back. Some people have said they would go back to work rather than cut back but not everyone is in a position to do so.

                  Obviously, the question of cutting back depends on “how much of a cut is required?” Most people can cut back 10-20% by simply reducing travel, eating out, clothing, donations, etc.

                  But what would you do if you had to permanently cut back by 50-70%? Much tougher. In our case we would sell some “vacation”properties, stop driving luxury cars, drastically reduce travel, maybe drop a club or two, stop redecorating, buying non essentials like art, etc. I’m pretty sure we could do it. Let’s hope we never have to find out.

                  Bacchus01
                  Posts: 1920
                  Joined: Mon Dec 24, 2012 9:35 pm

                  Re: Retirees: When you cut spending, what do you cut?

                  Post by Bacchus01 » Thu Jun 28, 2018 6:57 am

                  bltn wrote:
                  Wed Jun 27, 2018 9:58 pm
                  Bacchus01 wrote:
                  Sat Jun 23, 2018 8:55 am
                  I’m not retired, but just looking at our own spending today:

                  - we have $1400/mo in two car payments. Get two cheaper cars and also drop our insurance rates proabably easily saves us $1000+/mo
                  - dining out - we don’t do a lot of big meals out, but for our family of five there are a lot of Starbucks stops, Q’doba lunches, Subway....we could probably cut, no kidding, $500/mo here
                  - I could turn off the irrigation in summer, but water here is cheap and it probably would save $300/year
                  - Does the dog really need to eat $25 worth of Bully Sticks a week? That’s $600/year

                  There. I just cut nearly $20k/year and didn’t even try all that hard.
                  If you had to make those cuts, everybody in the family would understand except the dog.
                  Yep. He’s only a pup yet, so the alternative is eating our shoes, furniture, carpet, doors, etc. the bully sticks are cheap insurance.

                  Post Reply