If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

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lvrpl
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If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by lvrpl » Tue Feb 26, 2019 11:56 am

I've seen a few posts recently of people saying they're planning for a good amount of income in retirement (anywhere form $150k to $350k per year). Just curious for anyone in this camp what that spending looks like broken down by categories.

We've planned to have $10k per month (so $120k/year) as our target in retirement. I realize that this obviously comes down to a question of what one's spending is, but that's my point - how do you spend that much in retirement? I'm wondering what this person has in their budget for a number over $120k that I don't have in mine. Just wondering if I'm missing something big in my projections or if those $200k/year people are just planning to do a lot of very expensive travel/dining, have other commitments (e.g. children still in college or still have a mortgage), extra large healthcare costs, maids, or whatever.

This isn't meant to be a post saying "How on earth could someone spend $250k per year in retirement, that's ridiculous?!" judgmentally - rather to just see how some of those big budgets in retirement look at a more detailed level to understand what comprises that level of spending in retirement.
Last edited by lvrpl on Tue Feb 26, 2019 2:12 pm, edited 1 time in total.

SDLinguist
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Re: If you are currently or planning to spend over $120k/year in retirement, what is your projected budget?

Post by SDLinguist » Tue Feb 26, 2019 12:18 pm

Is that in today's dollars or in future dollars. I am thinking today's.

I can see people easily spending that. My parents live 5-6 months out of the year back in Germany now and the other half time in America. They fly back and forth 3-4 times a year. That means a house+cars in SoCal, a condo+cars in Munich both not cheap places to live.

They also take a lot of trips elsewhere internationally. It can add up quick. They are in their 60s now. It's not hostels and freeze dried food anymore when traveling. For example 2 years ago they took 9 of us (the 2 of them, me+wife, sister, brother +GF+2 kids) to Bora Bora for a week for their 40th wedding anniversary.

If someone grew up in the midwest and never has nor plans to travel much that's a very different lifestyle then someone who lives on two different continents. Neither is better than the other but one takes a lot more money to accomplish.

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LilyFleur
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Re: If you are currently or planning to spend over $120k/year in retirement, what is your projected budget?

Post by LilyFleur » Tue Feb 26, 2019 12:27 pm

  • Living in a high cost of living area. (maybe not wanting to move away because of lots of family and friends there.)
  • Helping children who are still in college.
  • House improvements and projects.
  • Traveling, and paying for your children to travel with you. Knowing that your years of being healthy enough to travel internationally are numbered, and wanting to make sure you get those experiences with your children before it is too late.
  • Eating out (especially if you are single, it is an important social activity to avoid being too isolated in retirement.)
  • Helping children with downpayments for houses (making sure the grandchildren will live close to you in a high cost-of-living area), or moving to where your children have moved, and helping them on a house there

jvini
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Re: If you are currently or planning to spend over $120k/year in retirement, what is your projected budget?

Post by jvini » Tue Feb 26, 2019 12:31 pm

I'd also like to know the retiring portfolio balance of someone planning on spending $120k/year in retirement. It would be interesting to see whether that's 2 million or 4 million (or more or less).

mak1277
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Re: If you are currently or planning to spend over $120k/year in retirement, what is your projected budget?

Post by mak1277 » Tue Feb 26, 2019 12:32 pm

Isn't this just a function of how much you spend pre-retirement? I'm sure there are plenty of people who spend $200k or more a year while working...why would those people want to cut back in retirement if they don't have to?

Specifically, I assume high monthly mortgage and property tax payments, high costs of utilities for large homes, vacation properties, luxury travel, fine dining, multiple vehicles...all these things would work towards pushing a number up over $150k per year.

HIinvestor
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Re: If you are currently or planning to spend over $120k/year in retirement, what is your projected budget?

Post by HIinvestor » Tue Feb 26, 2019 12:33 pm

Agree that travel and financially assisting loved ones can take up a huge chunk of money. Dining out often in a VHCOL area also takes up a lot of $$$$.

Everything in VHCOL just costs more as well. That’s what makes it VHCOL! When you have visitors, that also adds to costs.

Admiral
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Re: If you are currently or planning to spend over $120k/year in retirement, what is your projected budget?

Post by Admiral » Tue Feb 26, 2019 12:33 pm

Current dollars, $120-150k in 8-10 years

Per month, high estimates:
Housing (no mortgage, just T+I): $1000
Utils: $500
Groceries: $500
Restaurants/Entertainment: $1000
Clothing: $500
(Possible) car payment and insurance: $500
(Possible) assistance to kids: $1000
SUB-TOTAL: $5000
Travel and misc: $5000

TOTAL: $10k

Admiral
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Re: If you are currently or planning to spend over $120k/year in retirement, what is your projected budget?

Post by Admiral » Tue Feb 26, 2019 12:42 pm

jvini wrote:
Tue Feb 26, 2019 12:31 pm
I'd also like to know the retiring portfolio balance of someone planning on spending $120k/year in retirement. It would be interesting to see whether that's 2 million or 4 million (or more or less).
The portfolio balance is only somewhat material. 70-90% of our projected expenses will be covered by pension and dual SS payments at age 70. So, while our balance is likely to be high, our draw may be high for 10 years and then fall to 1-2%. It just depends on how things shake out and our comfort level in a SWR that is 5% for a period of years before SS. Or if one of us decides to take it early to lower the portfolio draw.

Theseus
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Re: If you are currently or planning to spend over $120k/year in retirement, what is your projected budget?

Post by Theseus » Tue Feb 26, 2019 12:49 pm

Annual

Auto & Transport (we like new cars) - $15,000
Utilities, Internet, Phone, Cable etc. - $6,000
Food (Groceries, Restaurants, Bars) - $24,000
Health and Fitness (Gym and trainer) - $6,000
Home upgrade, maintenance - $10,000
Health+Dental Insurance - $10,000
Other shopping, hobbies (for kids, family and us) - $20,000
Taxes (federal, state, property etc.) - $60,000
Travel and Vacation - $10,000 - $72,000
Last edited by Theseus on Tue Feb 26, 2019 1:01 pm, edited 1 time in total.

shawndoggy
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Re: If you are currently or planning to spend over $120k/year in retirement, what is your projected budget?

Post by shawndoggy » Tue Feb 26, 2019 12:55 pm

House (property taxes + utilities): $1000
Home repair / improvement: $500 (basically budgeting for reserve fund)
Groceries: $1000
Insurance: $500
Car payment: $500 (planning on starting with paid for cars... this is also a sinking fund)
Gas: $500 (current spend... may drop but then again we have short commutes)
Health insurance: $2000 (before Medicare kicks in)
Deductibles / dental / vision: $500
Phone / internet / TV: $400 (May fall if we get kids off our plan)
Gym Memberships: $300 (yeah, yeah that’s a lot... but we are fit!)
Misc Spending: $500 (haircuts, clothing, whatnot)
Boat: $500 (current budget, not sure we keep in retirement)
Vacation / Travel: $2000


I think that gets us to $10,200 without much effort. Lots of room to cut if we need to. Vacation and boat lop off a big hunk. Could also forego the sinking funds for car and home repair (though those are “there” either way I think). Could probably forego new lenses every year and push frames to every 3-4 years to drop that expense if necessary.

quantAndHold
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Re: If you are currently or planning to spend over $120k/year in retirement, what is your projected budget?

Post by quantAndHold » Tue Feb 26, 2019 12:56 pm

If we had the assets to spend $120k+ we probably would. Travel, eating out, vacation home, nice cars. It all adds up. As it is, our housing, car, and eating out costs are all low, but we’re spending $30k on a single trip this year. And it’s not our only trip.

I don’t know that we could spend $200k, since even when we had the income to support that spending level, we didn’t spend that much, but if we had it, we would probably do at least one more expensive trip every year.

J0721
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Re: If you are currently or planning to spend over $120k/year in retirement, what is your projected budget?

Post by J0721 » Tue Feb 26, 2019 1:10 pm

Good question I also am curious what others do.

We are looking to FIRE in about 5-8 years and can see how you get to 120,000/yr on "core" house. Our single home core hits around 110,000 the big hitters are 25k health insurance, 30k travel, 11k income taxes, 5k home taxes, 10k food/alch/ent, 6k new vehicle fund, 5k furnature fund, and a lot of smaller buckets for 1k-3k (utilities, kids sports, clothes, stuff like that). If you had to budget in 25-50k for an ongoing house payment I could see core hitting into the upper 100k range. Our stuff will be paid off so we should not have that piece.

We have a cabin and farms so ours expenses are a fair bit higher then maybe a typical single home core. Even so we woud be well under 200k/yr and that includes lots of property taxes and lots of toys at the lake to keep maintained or upgrade every so often. Boats, Pontoons, jet skis, docks, boat lifts, etc. Again the properties don't have mortgages though and that could easily change $25k-50k for other peoples budgets.

I plan to use a SWR of 3.25% based on a longer than normal retirement and taking a conservative approach. I see no fault in others that want a SWR higher or lower. Obviously we can trim a lot of fat if a bad sequence returns brutalize our portfolio. I don't have to do all the travel and buy new vehicles and lake toys, they can wait for the market to recover. We have significant rental income so our portfolio needs to contribute a relatively small amount to the pot. We are aiming for 3.5mm in non-real estate investments. This also assumes we have about 250k set aside to fund kids collage.

Shallowpockets
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Re: If you are currently or planning to spend over $120k/year in retirement, what is your projected budget?

Post by Shallowpockets » Tue Feb 26, 2019 1:30 pm

To,OP. How do you spend as much as 120k? I ask,you that. Tou are wondering how peole spend 250k.
What gets you up to such a high figure? 120k a year is almost 3x my expenses and I spend 1/3 of that on travel alone.

mattshwink
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Re: If you are currently or planning to spend over $120k/year in retirement, what is your projected budget?

Post by mattshwink » Tue Feb 26, 2019 1:32 pm

Here is mine (per month). Retirement is 11-25 years away (depends on returns):
Mortgage: $3,100
Vacation: $2,500 (thinking of upping this to $3,000)
Miscellaneous: $1,000
Food: $600 (thinking of upping this to $750)
Cleaning: $400
Electric Bill: $200
Cell Phone: $150
Gas: $200
Cable: $200
Car: $100
Water: $50
Health Insurance: $536
Dental: $50
HOA: $100
Charity: $918
Total: $10,096

The Wizard
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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by The Wizard » Tue Feb 26, 2019 2:28 pm

I'm single, retired six years thus far and have AGI a ways over the $120k you mention.
But a portion of that has been Roth conversions thus far, so I don't think I've been "spending" $120k each year thus far.
Starting next year however, Roth conversions go away, so more avails itself for spending.

I travel a lot, but no business class flights or excessive luxuries.
I don't budget or keep track of expenses much, but maybe I spend $20k per year on travel?
I leave in a few days for RoadTrip'19, a 31-day excursion of my own making.

I buy new vehicles every so often: a 2016 F-150 three years ago and a new Mustang in a couple years if Ford will please give their hybrid engineering details to me.

And I've had Red Sox weekend season tickets for several decades thus far, though I get reimbursed for a good share of those games.

So anyhow, it's good to have maybe 50% of your retirement income in the discretionary category...
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dcabler
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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by dcabler » Tue Feb 26, 2019 3:09 pm

Not retired yet, but my own planning assumes ~120K per year, more or less worst case. It starts with a tops/down calculation, removing things like 401K deposits, taxable deposits, SS withholdings, and then re-calculating taxes and adding back in health insurance, at least till Medicare kicks in. I say "worst case" because we will most likely downsize, eliminating our mortgage and greatly reducing property taxes.

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corn18
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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by corn18 » Tue Feb 26, 2019 3:20 pm

The detailed plan is below. Sorry for the formatting goofiness, I just copied and pasted from Excel. Summary:

$104,533 base budget (includes taxes, see below)
$50,000 discretionary (aka blow that dough = vacations, RV's, second homes, whatever)

We could get by on $104,533 just fine (that happens to be what our COLA pension and SS will be). But we want to live it up and we chose $50k to do that.

AUTO FUEL 150
CLOTHES 300
DOGS / CATS 225
FOOD 850
DINING 800
HEALTH / BEAUTY 250
HOUSE 300
ENTERTAINMENT 275
MISC 850

TOTAL DISCRETIONARY 4,000

LIFE INSURANCE 364
MEDICAL 579
CELL PHONE 126
CABLE 100
ELECTRIC / GAS 250
WATER 110
INTERNET 52
AUTO/HOME/LIABILITY INS 336

TOTAL NON-DISCRETIONARY 1,917

Total Monthly Budget $5,917 ($71,004)

Annual spending

CAR MAINT/REG/AAA 1,510
GIFTS 4,500
HOME TAXES / HOA 8,100
ANNUAL PET VET 800
NEW CAR X2 (EVERY 5 YEARS) 6,000
ANNUAL MAJOR HOUSE REPAIR 3,116
TAXES 9,503

TOTAL IRREGULAR 33,529

Total annual spend: $104,533
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Blueskies123
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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by Blueskies123 » Tue Feb 26, 2019 3:21 pm

When you live in a high cost of living area the fixed costs take 50% of your budget.
Homeowners + Ppty tax 12,219
car insurance 1,847
Home repairs and Maint 14,758
medical Ins 19,000
Auto & Transport + repairs 3,000
Bills & Utilities 2,873
Electric Utilities 3,600

So this comes to $57K and I have not spent a dime for food, vacation, clothes, Amazon, Costco, and entertainment.
Last edited by Blueskies123 on Tue Feb 26, 2019 3:22 pm, edited 1 time in total.

Gill
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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by Gill » Tue Feb 26, 2019 3:21 pm

My retirement budget has more than doubled since I retired to the point where we blow past $120k with just four categories, i.e., Residence, Entertainment & Travel including country club, income tax and auto (includes reserve for replacement). It goes on from there. Having fun and enjoying those much discussed SPIA's.
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delamer
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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by delamer » Tue Feb 26, 2019 3:40 pm

We are staying in our high income tax state for family reasons.

So federal and state income taxes will be our biggest expense in retirement, probably about 1/5 of income.

The price of being near our kids (and grandkids, eventually) are high taxes and the cost of a southern vacation in the winter. :happy

Our food expenses will be pretty high, as cooking isn’t an activity either of us enjoys.

Taxes, travel, and food are the 3 big items in our retirement budget, with healthcare close behind. We’ll have inexpensive premiums for current healthcare but will spend several thousand annually on LTC coverage.

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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by LarryAllen » Tue Feb 26, 2019 4:02 pm

Travel is a big one for us. We spent $65k last year on travel. That includes our kids. We plan to travel more in a few years when retired and kids are off at college. I could see spending $100k a year on travel for a while. Our total expected spend is between $350k-400k in retirement.

BanquetBeer
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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by BanquetBeer » Tue Feb 26, 2019 4:09 pm

Expect
housing ~$2,000
Cars $400
Expenses $4000 (food, purchases, utilities, all bills)
Health insurance $1000

That’s $7500

Travel/kids will take the other $2500

If I stay married, budget doubles, health insurance drops to $600 combined. I’d imagine housing increases slightly.

Would lead to some nice vacations. Planning on about 10% tax since most will come from LTCG target of $135k with $3.5-4mln

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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by Sandi_k » Tue Feb 26, 2019 4:14 pm

Our "sample retirement budget" assumes spending of $180k per year. I've added everything but the kitchen sink. ;)

Taxes
Federal Taxes - $2500
State taxes - $700

Insurance:
Medical Premiums, private coverage - $600
Medicare premium - $800
IRMAA/Med Pt B/Med Pt D premiums - $250
Car and Boat insurance - $280

Savings:
Car Account - Future Savings - $500
Car Expenses - Maintenance, Registration & Smogging - $300
Cash Flow Account: deposit to emergency fund for unexpected expenses - $500
Property Tax Escrow - $750
House Insurance Escrow - $170
House Repair Savings - $800
Vacation Savings - $1,500

Household
Mortgage - (first 3 years, then paid off) - $2350
Credit card bill: $1000
Cell phones: $150
Comcast: cable & internet: $150
PG&E - gas & electric - $250
Garbage: $50
Water: $30
Groceries: $450
Costco: $300
BevMo: $200
Entertaining: party food and gifts: $200
Eating Out: $300
Entertainment (movies, on-demand streaming): $75
Pet and Vet: $85
CVS/Drug: $100
Hardware: $150

Services
Cleaner - 1x monthly - $200
Gardener - 2x monthly - $80
Palm Trees topping, 2x per yr - $75
Haircare and Massage: from spending cash

Miscellaneous
Gasoline: $400
Cash for Month, for each: $300 x 2 = $600
Family assistance for parents: $500
Last edited by Sandi_k on Tue Feb 26, 2019 4:41 pm, edited 2 times in total.

randomguy
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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by randomguy » Tue Feb 26, 2019 4:19 pm

My budget goal is roughly that but I aim for another 20k just in case:) I break it down something like

25k health insurance/copays. Seriously health insurance in my state for 2 60 year olds is slightly over 1800/month
15k property tax
3k/year utilities
2k car insurance
2k property tax
6k grocery shopping
4k/year gas and tolls
3k/year car maintenance/repair
6k/year car depreciation
2k/year telecommunications/cellphones/tv/...
2k/year for things like clothes, hair cuts and the rest
gives a base spending of 70k.
~15k of income taxes at the state and fed level based on about 120k/year of income.It drops a bit when SS kicks in since that isn't taxed at the state level.

That is 85k. The other 35k is spend on things like vacations, eating out, clothes, hobbies, and so on. Obviously there is some flexibility in all those numbers but it is the rough level. Obviously there are a lot of assumptions being made about things about future utility costs, transportation (i.e. will be all evs in a 10 years. What will they cost), will health insurance bet the 20k is costs now or will it explode up to 40k, and so on. To cut the big expenses of the house (i.e downsize might slice 1/4 off at best) and health insurance (go to a state that doesn't allow age based pricing) would require moving. Same thing with cutting the state taxes. Would need to go to 1 car to save much on car expenses.

And that budget looks pretty much identical to the budget while working. I mean we are still taking 2 trips/year when working. We still have hobbies. We still go out to eat. We might drive a bit less when working (i.e. 0 mile commute versus driving 10 miles for a hobby) but I don't really expect it to change the numbers much.

If your living on 40k/year today, you probably aren't spending 120k/year in retirement. If your spending 300k/year now, you also probably aren't living on 120k/year in retirement.

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beyou
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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by beyou » Tue Feb 26, 2019 4:32 pm

I live in one of the HCOL areas of the US, and like it here. Hope to be able to stay for as long as we continue to enjoy living where we are. Prop taxes alone are 15k/yr. Utilities, food, insurance are also above avg here.

So in place, could not spend much less than 120k.
If I moved could reduce some fixed expenses, but not all of them. One of my arguments to stay in a HCOL area while working was that my higher income more than offset the high cost. Of course in retirement this needs consideration, but I am going to try and retire in place and “get by” on 120k $-)

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RickBoglehead
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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by RickBoglehead » Tue Feb 26, 2019 4:43 pm

For some, the cost of housing drives things.

I have a relative that lives in a golf community. They pay for one person:

- $22,000 a year for golfing membership
- $5,000 dining at the country club
- $10,000 HOA membership/dues
- $6,000 homeowner's insurance (Florida)
- $4,000 for utilities which includes a hefty water bill for mandatory watering of mandatory plants
- $6,000 property tax

That's over $50k a year plus groceries, clothes, travel, car and car insurance, dining out (on top of the country club), mortgage if you don't own the house outright ... In total, they hit the number in the OP's subject line.

We hope to spend the exact same as this person - for TWO people. We don't plan on living in a golf community though.
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seed4great
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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by seed4great » Tue Feb 26, 2019 5:22 pm

I'm single and live in the extremely high cost of living area but currently spend about $31K per year (health insurance is partially paid by employer). The most part of it is property tax which almost $13K. I have a nice but not that expensive car and also spend $2K to $3K per year for vacation in Europe, and buy food in Whole Foods and other expensive stores. It's really hard to understand how someone can spend $120K per year. I believe this is a life style, rather than the cost of living which is a main driving factor for spending.
After the retirement, I plan for ~$40K per year which would include individual health insurance. But it is hard to say right now, how far health insurance cost will rise in the future.
The greatest lesson in life is to know that even fools are right sometimes.

Stormbringer
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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by Stormbringer » Tue Feb 26, 2019 5:38 pm

Once you cover basic living expenses, there are a few categories that will really move the needle:
  1. A second home. Take all of those expenses (taxes, insurance, utilities, decorating, etc.) times two.
  2. Toys. Higher end cars can easily cost $1K a month or more. Boats will empty your wallet faster than you can imagine. And if you really want to quickly go broke in style, get yourself an airplane.
  3. Luxury travel. At $8K a ticket for first class seats to Europe, you can burn through quite a bit of cash with a few trips per year.
  4. Gambling. I used to be a dealer in a casino. It was sad to watch all the retirees who would come in three nights a week.
  5. Taxes on all that income.
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megabad
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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by megabad » Tue Feb 26, 2019 5:58 pm

I think you are probably correct in assuming that travel may make up the largest part of many estimates for retirement budgets.

In todays dollars, my biggest categories in early retirement planning are:

Pre-Medicare Health Insurance Costs: $30k/yr
Travel: $50k (gas, flights, hotels, guides, cruises, etc)
Charity: $1k-$40k (this varies a lot even now with tax complications and DAF and this is what will put me into your range of total expenses)

Everything else is pocket change in comparison.

In my late retirement planning, the health insurance cost goes down when entering Medicare but old age care comes into play later on to the tune of maybe $10k per month, but I don't show this until my last few years in my planning and honestly I expect I will die before I need it based on family history. Regardless, I plan on backloading some of my assets to allow for late in life expenses should I live that long (delay SS, small deferred lifetime fixed annuity, etc).

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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by basspond » Tue Feb 26, 2019 5:59 pm

$15k-Charity
$12k-Medical
$12k-Utilities house maintenance
$20k-Travel/Entertainment/Eating out
$10k-Food/Household
$10k-Auto + new car purchase
$20k-Gifts assuming 2 weddings in first 10 years
$10k-Misc
$ 6k-Clothing/personal/other
$ 5k-Home and other improvements

MikeG62
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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by MikeG62 » Tue Feb 26, 2019 6:42 pm

lvrpl wrote:
Tue Feb 26, 2019 11:56 am

I'm wondering what this person has in their budget for a number over $120k that I don't have in mine. Just wondering if I'm missing something big in my projections or if those $200k/year people are just planning to do a lot of very expensive travel/dining, have other commitments (e.g. children still in college or still have a mortgage), extra large healthcare costs, maids, or whatever.
I'd say that a large amount of those higher budgets you are hearing about is likely set aside for T&E - assume 25% to possibly 35% of their total spend. Also, at that spending level, they probably live in a HCOL area which means high property taxes, probably a large home with high heating and cooling costs as well as significant costs to maintain the outside of the home (landscape and lawn services). Could also have second home. Don't forget about health insurance costs. Also, lease for two higher-end cars could well be another $25K per year. The numbers add up fast.

It's not the traditional Booglehead frugal lifestyle, so the numbers will seem unthinkable to many on these forums.
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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by White Coat Investor » Tue Feb 26, 2019 6:50 pm

lvrpl wrote:
Tue Feb 26, 2019 11:56 am
I've seen a few posts recently of people saying they're planning for a good amount of income in retirement (anywhere form $150k to $350k per year). Just curious for anyone in this camp what that spending looks like broken down by categories.

We've planned to have $10k per month (so $120k/year) as our target in retirement. I realize that this obviously comes down to a question of what one's spending is, but that's my point - how do you spend that much in retirement? I'm wondering what this person has in their budget for a number over $120k that I don't have in mine. Just wondering if I'm missing something big in my projections or if those $200k/year people are just planning to do a lot of very expensive travel/dining, have other commitments (e.g. children still in college or still have a mortgage), extra large healthcare costs, maids, or whatever.

This isn't meant to be a post saying "How on earth could someone spend $250k per year in retirement, that's ridiculous?!" judgmentally - rather to just see how some of those big budgets in retirement look at a more detailed level to understand what comprises that level of spending in retirement.
We spend about $2500 on major purchases (cars, home renovations etc), $2500 on travel, $500 on utilities, $1600 on insurance, $306 on property taxes, and $8,000 on "other stuff" every month. Maybe it'll fall a little in retirement when these 4 rugrats disappear, but let's be honest it'll probably just be rearranged. That's something a little under $200K a year. That ignores charity and taxes.

Where's that other $8K going? I don't know and I don't care. Groceries, eating out, recreational activities, clothes, gasoline, road trips, ski passes, broadway tickets whatever. Depends on the month but it's pretty consistent.

Could we spend less and leave more for heirs and charities? Yes. We know how to live on much less. But we lived like no one else and now we get to live like no one else.
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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budge

Post by frugalecon » Tue Feb 26, 2019 7:18 pm

We currently have take home pay of approximately $12k/month, and it is all allocated, with dollops for mortgage, backdoor Roth, and some liquid savings in addition to all the other expenses. I am budgeting for the same in retirement, with increased allocations to travel, medical, and household help to offset the eventual declines in other areas. (All of this real, and not nominal, of course.) in other words, my planning is oriented around keeping real take-home pay constant, so that my retirement years give me the flexibility to do things I haven’t had time to do while working.

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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by CascadiaSoonish » Tue Feb 26, 2019 7:52 pm

Assuming the mortgage is paid off, we will still have plenty of expenses that will put us in the six digit / year category.

Property taxes + home insurance: $1K / mo
Utilities $500 / mo
Insurance (including health) $1K / mo
Food + restaurants $2K / mo (we cook and eat well)
Club + fitness $500 / mo
Daily activities, shopping, coffee shops $1K / mo
Travel $2K / mo (2-3 major trips annually)
Home improvements and maintenance $500 / mo minimum
Taxes $1K / mo
Transport $500 / mo

And that's without accounting for one offs like helping out kids on house down payments, college tuition, more expensive activities like motorcycle touring or skiing, charitable donations, clothes...

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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budge

Post by The Wizard » Tue Feb 26, 2019 8:39 pm

frugalecon wrote:
Tue Feb 26, 2019 7:18 pm
...in other words, my planning is oriented around keeping real take-home pay constant, so that my retirement years give me the flexibility to do things I haven’t had time to do while working.
Excellent idea.
This was approximately my idea prior to retiring in 2013, keeping take-home pay about the same or a bit more. And I've pretty much succeeded.

How this correlates to "expenses" is a bit fuzzy, but the important thing is to consider your (reasonable) Desired Income in retirement, rather than just covering your basic expenses while working full-time...
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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by randomguy » Tue Feb 26, 2019 8:42 pm

MikeG62 wrote:
Tue Feb 26, 2019 6:42 pm

It's not the traditional Booglehead frugal lifestyle, so the numbers will seem unthinkable to many on these forums.
The traditional boglehead lifestyle isnt a frugal lifestyle. It is "live below your means".

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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by SevenBridgesRoad » Tue Feb 26, 2019 8:44 pm

White Coat Investor wrote:
Tue Feb 26, 2019 6:50 pm
lvrpl wrote:
Tue Feb 26, 2019 11:56 am
I've seen a few posts recently of people saying they're planning for a good amount of income in retirement (anywhere form $150k to $350k per year). Just curious for anyone in this camp what that spending looks like broken down by categories.

...We've planned to have $10k per month (so $120k/year) as our target in retirement. I realize that this obviously comes down to a question of what one's spending is, but that's my point - how do you spend that much in retirement?...
We spend about $2500 on major purchases (cars, home renovations etc), $2500 on travel, $500 on utilities, $1600 on insurance, $306 on property taxes, and $8,000 on "other stuff" every month....That's something a little under $200K a year...

Where's that other $8K going? I don't know and I don't care. Groceries, eating out, recreational activities, clothes, gasoline, road trips, ski passes, broadway tickets whatever...

...We know how to live on much less. But we lived like no one else and now we get to live like no one else.
We're not spending quite that much (at about 140K a year), but the WCI's concept is the same as ours: We don't know and pretty much don't care.

Spending what we want doesn't translate into wild parties and private jets. This level has become steady state for us over the years, even as high earners. Could we do with spending less? Of course. We aren't reckless (think the movie The Jerk: no fur-lined sinks), but we pretty much do what we want each month. For example, we rented a house on the coast and flew in the kids and grandkids for a week. Wow, talk about memories forever. I have a really nice garage hobby brewery and don't think twice about a new piece of stainless steel equipment. Friends love coming over for a beer or two. We're getting ready for a big remodel of the master bath. And so on. But, no mortgage for the last twenty years. We don't golf or go to expensive restaurants (I love cooking). We snow shoe...nice winter storm right now. We don't have a huge house. Married forty years. Saved like crazy from a high income for years. We are very comfortable and having a great time at this spending level.
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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by The Wizard » Tue Feb 26, 2019 9:25 pm

SevenBridgesRoad wrote:
Tue Feb 26, 2019 8:44 pm
...We're not spending quite that much (at about 140K a year), but the WCI's concept is the same as ours: We don't know and pretty much don't care...
The above quip resembles the humorous answer to the question: What's the difference between Ignorance and Apathy?
:)
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Re: If you are currently or planning to spend over $120k/year in retirement, what is your projected budget?

Post by AlphaLess » Tue Feb 26, 2019 9:33 pm

SDLinguist wrote:
Tue Feb 26, 2019 12:18 pm
Is that in today's dollars or in future dollars. I am thinking today's.

I can see people easily spending that. My parents live 5-6 months out of the year back in Germany now and the other half time in America. They fly back and forth 3-4 times a year. That means a house+cars in SoCal, a condo+cars in Munich both not cheap places to live.

They also take a lot of trips elsewhere internationally. It can add up quick. They are in their 60s now. It's not hostels and freeze dried food anymore when traveling. For example 2 years ago they took 9 of us (the 2 of them, me+wife, sister, brother +GF+2 kids) to Bora Bora for a week for their 40th wedding anniversary.

If someone grew up in the midwest and never has nor plans to travel much that's a very different lifestyle then someone who lives on two different continents. Neither is better than the other but one takes a lot more money to accomplish.
Nice! Do you know how much average annual spend they have? Just curious.
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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by bhsince87 » Tue Feb 26, 2019 9:58 pm

Here's our projected budget for 2. About $115,000 +/-. We don't plan to travel much, but I could see it going higher if we did. Or bump up charity a bit. No kids, average cost of living area.

Edit to add: oops, I missed income taxes! About 8,000 for the early years, so we're over $120k.

Property Tax 7200
Electric 3000
Oil 2000
Cable/internet 1800
Phone 1440
Groceries, etc. 6000
House Maintenance 6000
Garbage 700
Water/Sewer 200
Medicines 1200
Subscriptions 500
Home insurance 1100
Health insurance 30000
DR deductible 4000
Cars 5000
Gas 1200
Car Insurance 1500
Glasses/eye exam 600
Car Maintenance 500
Dentist 1000
Gifts 2000
Pets 1200
Charity 10000
Football Tix 2200
Clothes 400
Hobby 6000
Entertainment 3000
Vacation 12000
Misc 2400
Last edited by bhsince87 on Tue Feb 26, 2019 10:09 pm, edited 1 time in total.
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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by SevenBridgesRoad » Tue Feb 26, 2019 10:00 pm

The Wizard wrote:
Tue Feb 26, 2019 9:25 pm
SevenBridgesRoad wrote:
Tue Feb 26, 2019 8:44 pm
...We're not spending quite that much (at about 140K a year), but the WCI's concept is the same as ours: We don't know and pretty much don't care...
The above quip resembles the humorous answer to the question: What's the difference between Ignorance and Apathy?
:)
Yep!
https://www.goodbadjokes.com/jokes/what ... and-apathy

Not sure I like the ignorance part though...
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Re: If you are currently or planning to spend over $120k/year in retirement, what is your projected budget?

Post by Hmwannabe » Tue Feb 26, 2019 10:10 pm

quantAndHold wrote:
Tue Feb 26, 2019 12:56 pm
If we had the assets to spend $120k+ we probably would. Travel, eating out, vacation home, nice cars. It all adds up. As it is, our housing, car, and eating out costs are all low, but we’re spending $30k on a single trip this year. And it’s not our only trip.

I don’t know that we could spend $200k, since even when we had the income to support that spending level, we didn’t spend that much, but if we had it, we would probably do at least one more expensive trip every year.
Where are you going ? :)

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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by JDCarpenter » Tue Feb 26, 2019 10:13 pm

Retired mid-2017 (ages 57/56) to travel. As others have noted, that is an easy way to spend however much you are willing to let go.

Last year's travel expenditures came in at $149,000--we were home for 12 weeks total, and among our international trips was 3 months diving the south pacific.

The other major expenditure is our income tax bill for large roth conversions to fully capture the 24% tax bracket. (I only include 50% of that expenditure in current year "budget." Figure that it is 100% for the benefit of one or both or our future selves. Nonetheless, for the foreseeable future, it will remain our second biggest expenditure.) Basically, other than travel and taxes, the amounts we spent in the five years before retirement have stayed about the same.

We had some deferred income coming in that allowed us to exceed our withdrawal rate for 2018. This year, we'll be spending closer to 100K on travel.

We spend 4.5% of our portfolio as of the close of the preceding year--which so far comes out to twice as much (excluding income and payroll taxes) as we spent pre-retirement. Thus, when the portfolio gets hit, we can easily tighten the belts.

(My first post in quite a while. :happy )
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Re: If you are currently or planning to spend over $120k/year in retirement, what is your projected budget?

Post by The Wizard » Tue Feb 26, 2019 10:18 pm

Hmwannabe wrote:
Tue Feb 26, 2019 10:10 pm
quantAndHold wrote:
Tue Feb 26, 2019 12:56 pm
If we had the assets to spend $120k+ we probably would. Travel, eating out, vacation home, nice cars. It all adds up. As it is, our housing, car, and eating out costs are all low, but we’re spending $30k on a single trip this year. And it’s not our only trip.

I don’t know that we could spend $200k, since even when we had the income to support that spending level, we didn’t spend that much, but if we had it, we would probably do at least one more expensive trip every year.
Where are you going ? :)
I'd like to know also.
$30,000 is a LOT to spend on a trip for two people.
I travel a goodly amount and that's way beyond my payscale...
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Re: If you are currently or planning to spend over $120k/year in retirement, what is your projected budget?

Post by schachtw » Tue Feb 26, 2019 10:24 pm

jvini wrote:
Tue Feb 26, 2019 12:31 pm
I'd also like to know the retiring portfolio balance of someone planning on spending $120k/year in retirement. It would be interesting to see whether that's 2 million or 4 million (or more or less).
We are budgeting +/- $150K per year. Net worth (excluding SS and pension) is slightly over 5MM.

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Re: If you are currently or planning to spend over $120k/year in retirement, what is your projected budget?

Post by JDCarpenter » Tue Feb 26, 2019 10:31 pm

The Wizard wrote:
Tue Feb 26, 2019 10:18 pm
Hmwannabe wrote:
Tue Feb 26, 2019 10:10 pm
quantAndHold wrote:
Tue Feb 26, 2019 12:56 pm
If we had the assets to spend $120k+ we probably would. Travel, eating out, vacation home, nice cars. It all adds up. As it is, our housing, car, and eating out costs are all low, but we’re spending $30k on a single trip this year. And it’s not our only trip.

I don’t know that we could spend $200k, since even when we had the income to support that spending level, we didn’t spend that much, but if we had it, we would probably do at least one more expensive trip every year.
Where are you going ? :)
I'd like to know also.
$30,000 is a LOT to spend on a trip for two people.
I travel a goodly amount and that's way beyond my payscale...
30K is not hard to do, if you have the time and inclination to take long trips. Traveling as a couple makes it "easier" too. So, three months of South Pacific diving, even if we hadn't done the long leg in business class, easily did that (Fiji liveaboard, Solomons, New Guinea, Vanuatu, Fiji, Tonga). So does going on a small cruise ship (less than 100 people) hitting the falklands, south georgia, and Antarctica--even ignoring the south american weeks before and after the cruise and the airfares.... Two months in Peru came in close to that--and that was with miles paying for the international flights. OTOH, month long car trips in the US are much more affordable and no less (but differently) enjoyable.
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Re: If you are currently or planning to spend over $120k/year in retirement, what is your projected budget?

Post by SDLinguist » Wed Feb 27, 2019 12:16 am

AlphaLess wrote:
Tue Feb 26, 2019 9:33 pm
SDLinguist wrote:
Tue Feb 26, 2019 12:18 pm
Is that in today's dollars or in future dollars. I am thinking today's.

I can see people easily spending that. My parents live 5-6 months out of the year back in Germany now and the other half time in America. They fly back and forth 3-4 times a year. That means a house+cars in SoCal, a condo+cars in Munich both not cheap places to live.

They also take a lot of trips elsewhere internationally. It can add up quick. They are in their 60s now. It's not hostels and freeze dried food anymore when traveling. For example 2 years ago they took 9 of us (the 2 of them, me+wife, sister, brother +GF+2 kids) to Bora Bora for a week for their 40th wedding anniversary.

If someone grew up in the midwest and never has nor plans to travel much that's a very different lifestyle then someone who lives on two different continents. Neither is better than the other but one takes a lot more money to accomplish.
Nice! Do you know how much average annual spend they have? Just curious.
I would guesstimate around ~200k but that's wild speculation more than anything.

Only thing I do know that my dad was able to move almost everything to Roth space with minimal taxation in 08 and 09 after the crash. So one of the largest expenses most people have with such high spend, taxes, is much less of an issue.

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Re: If you are currently or planning to spend over $120k/year in retirement, what is your projected budget?

Post by randomguy » Wed Feb 27, 2019 12:30 am

The Wizard wrote:
Tue Feb 26, 2019 10:18 pm
Hmwannabe wrote:
Tue Feb 26, 2019 10:10 pm
quantAndHold wrote:
Tue Feb 26, 2019 12:56 pm
If we had the assets to spend $120k+ we probably would. Travel, eating out, vacation home, nice cars. It all adds up. As it is, our housing, car, and eating out costs are all low, but we’re spending $30k on a single trip this year. And it’s not our only trip.

I don’t know that we could spend $200k, since even when we had the income to support that spending level, we didn’t spend that much, but if we had it, we would probably do at least one more expensive trip every year.
Where are you going ? :)
I'd like to know also.
$30,000 is a LOT to spend on a trip for two people.
I travel a goodly amount and that's way beyond my payscale...
Antarctica is something like 10-15k/person. Climbing everest is something like 40k/person. Or it could be 2 weeks in a 1500/night resort. Or maybe 4 of months of quasi budget traveling europe. Heck a number of people here say they will only fly first or business class.At 8k/ticket to get to australia, you can eat through your budget in a hurry. If you have the money to spend, doing it is pretty darn easy:)

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Re: If you currently or are planning to spend over $120k/year in retirement, what is your projected budget?

Post by AlohaJoe » Wed Feb 27, 2019 12:45 am

My budget is, coincidentally, split into four roughly equal-size parts.

$30,000 for all the general day to day living stuff
$30,000 for family assistance, helping to pay off my brother's mortgage, etc
$30,000 for private school for a child
$30,000 for travel/entertainment

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Re: If you are currently or planning to spend over $120k/year in retirement, what is your projected budget?

Post by corn18 » Wed Feb 27, 2019 2:44 am

The Wizard wrote:
Tue Feb 26, 2019 10:18 pm
Hmwannabe wrote:
Tue Feb 26, 2019 10:10 pm
quantAndHold wrote:
Tue Feb 26, 2019 12:56 pm
If we had the assets to spend $120k+ we probably would. Travel, eating out, vacation home, nice cars. It all adds up. As it is, our housing, car, and eating out costs are all low, but we’re spending $30k on a single trip this year. And it’s not our only trip.

I don’t know that we could spend $200k, since even when we had the income to support that spending level, we didn’t spend that much, but if we had it, we would probably do at least one more expensive trip every year.
Where are you going ? :)

I'd like to know also.
$30,000 is a LOT to spend on a trip for two people.
I travel a goodly amount and that's way beyond my payscale...
For our 30th anniversary this year we decided to do a 10 day African safari followed by 4 days inn Cape Town. Budget was set at $25k maybe stretch to $30k. We are now at $60k and haven’t left yet.
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