For those retired or FI, how much do you spend annually?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Wanderingwheelz
Posts: 903
Joined: Mon Mar 04, 2019 9:52 am

Re: For those retired or FI, how much do you spend annually?

Post by Wanderingwheelz »

:!: ion
JDCarpenter wrote: Tue Jan 12, 2021 10:13 am
Wanderingwheelz wrote: Tue Jan 12, 2021 9:54 am
JDCarpenter wrote: Mon Jan 04, 2021 11:47 am ....

FWIW, we spend about twice as much in retirement than when we were working (excluding taxes, which were our biggest expense when working). Our nontravel expenses are just slightly more than the cutoff; travel will easily double [ambiguity here--I should have said "easily equal," or "more than match"] that in most years. Although we slept in our own bed for 7 1/2 months in 2020, we strive for 6 months or less.

...
Does a bed in a second home or an RV still count as your bed?
Dunno? We don't have either of those, although we did rent an RV for 2 or 3 weeks in Alaska last summer. Sure didn't consider that to be our own bed.
The only reason I asked is because I live in a resort community and most of my neighbors are second home owners who consider the bulk of their travel to be their time spent here (in a home they own but likely are carrying a mortgage on). Since my wife and I already live where other people want to be when they’re not home we decided to buy an RV so we could have a second home too.
Lexx
Posts: 165
Joined: Mon Dec 21, 2020 6:21 pm

Re: For those retired or FI, how much do you spend annually?

Post by Lexx »

We actually were able to squeeze my AGI slightly under the limit for the supplement so we get a little bit. The problem is we're in that zone where when you make more, you get less supplement. So the whole thing is a wash so to speak. But it's also a disincentive to actually earn more. It's a crazy system! I'm anticipating that within the next 5 years my AGI will completely surpass the upper limit for the supplement. It's a good "problem" to have I guess but it goes to show that there are issues with the system as it is.
iamblessed wrote: Tue Jan 12, 2021 9:11 am
Lexx wrote: Mon Jan 11, 2021 4:36 am I'm in a rather unique situation because I retired at 56. I'm 59 right now with triplet 9 year old kids! Our biggest expense is healthcare premiums. Our total premium is $42k/yr for the family on a platinum Obamacare plan. That's a huge part of expenses - more than the total I'm paying for our small remaining mortgage, insurance and property taxes. We also live in a HCOL area so that doesn't help. Right now we spend just about all that we take in. But at least we're not touching our savings or retirement funds. I plan on drawing social security at 62, and with 3 kids, I should get a good chunk of change. At 65 I'll qualify for Medicare which will be another savings. I'm comfortable, probably considered HNW, but I'm nervous. It's impossible to predict the future. Lots of changes in tax laws are coming our way which will massively affect my inheritance and how I have to position our estate for our kids.
Wow I did not know it could be that high on the ACA. So you are still under the ACA cliff?
Lexx
Posts: 165
Joined: Mon Dec 21, 2020 6:21 pm

Re: For those retired or FI, how much do you spend annually?

Post by Lexx »

Well being a health care provider in VHCOL California with onerous regulations and a dwindling supply of employees, makes it VERY difficult to run a business here. The fees from insurance companies have not been materially raised in well over a decade while our overhead has gone up massively. My dad retired at 52. One week after his 70th birthday, I drove him to the hospital to have what was supposed to be routine surgery. That turned into a disaster resulting in him being wheelchair bound and developing dementia. He lived another 11 years but had no quality of life. So I looked at the whole situation. We have no guarantees of a healthy future. I've had friends drop dead or get cancer and die. With 3 young kids, I decided it was more important for me to be involved in their lives instead of being at the office. So I sold the practice and walked away. I do not regret it at all. I got out at the perfect time. I'd hate to have to run a practice now with this covid crisis hanging over everything.

The lessons are, be a saver, invest well, know when to walk away, and learn to smell the roses before it's too late.
Wanderingwheelz wrote: Tue Jan 12, 2021 11:48 am
Lexx wrote: Mon Jan 11, 2021 4:36 am I'm in a rather unique situation because I retired at 56. I'm 59 right now with triplet 9 year old kids! Our biggest expense is healthcare premiums. Our total premium is $42k/yr for the family on a platinum Obamacare plan. That's a huge part of expenses - more than the total I'm paying for our small remaining mortgage, insurance and property taxes. We also live in a HCOL area so that doesn't help. Right now we spend just about all that we take in. But at least we're not touching our savings or retirement funds. I plan on drawing social security at 62, and with 3 kids, I should get a good chunk of change. At 65 I'll qualify for Medicare which will be another savings. I'm comfortable, probably considered HNW, but I'm nervous. It's impossible to predict the future. Lots of changes in tax laws are coming our way which will massively affect my inheritance and how I have to position our estate for our kids.
What caused you to retire?
User avatar
goodenyou
Posts: 2579
Joined: Sun Jan 31, 2010 11:57 pm
Location: Skating to Where the Puck is Going to Be..or on the golf course

Re: For those retired or FI, how much do you spend annually?

Post by goodenyou »

Lexx wrote: Tue Jan 12, 2021 8:12 pm Well being a health care provider in VHCOL California with onerous regulations and a dwindling supply of employees, makes it VERY difficult to run a business here. The fees from insurance companies have not been materially raised in well over a decade while our overhead has gone up massively. My dad retired at 52. One week after his 70th birthday, I drove him to the hospital to have what was supposed to be routine surgery. That turned into a disaster resulting in him being wheelchair bound and developing dementia. He lived another 11 years but had no quality of life. So I looked at the whole situation. We have no guarantees of a healthy future. I've had friends drop dead or get cancer and die. With 3 young kids, I decided it was more important for me to be involved in their lives instead of being at the office. So I sold the practice and walked away. I do not regret it at all. I got out at the perfect time. I'd hate to have to run a practice now with this covid crisis hanging over everything.

The lessons are, be a saver, invest well, know when to walk away, and learn to smell the roses before it's too late.
Wanderingwheelz wrote: Tue Jan 12, 2021 11:48 am
Lexx wrote: Mon Jan 11, 2021 4:36 am I'm in a rather unique situation because I retired at 56. I'm 59 right now with triplet 9 year old kids! Our biggest expense is healthcare premiums. Our total premium is $42k/yr for the family on a platinum Obamacare plan. That's a huge part of expenses - more than the total I'm paying for our small remaining mortgage, insurance and property taxes. We also live in a HCOL area so that doesn't help. Right now we spend just about all that we take in. But at least we're not touching our savings or retirement funds. I plan on drawing social security at 62, and with 3 kids, I should get a good chunk of change. At 65 I'll qualify for Medicare which will be another savings. I'm comfortable, probably considered HNW, but I'm nervous. It's impossible to predict the future. Lots of changes in tax laws are coming our way which will massively affect my inheritance and how I have to position our estate for our kids.
What caused you to retire?
How old are/were you when you retired from the practice of medicine?
"Ignorance more frequently begets confidence than does knowledge" | “Do you know how to make a rain dance work? Dance until it rains”
Lexx
Posts: 165
Joined: Mon Dec 21, 2020 6:21 pm

Re: For those retired or FI, how much do you spend annually?

Post by Lexx »

Dentistry - retired at age 56
goodenyou wrote: Wed Jan 13, 2021 10:56 am
Lexx wrote: Tue Jan 12, 2021 8:12 pm Well being a health care provider in VHCOL California with onerous regulations and a dwindling supply of employees, makes it VERY difficult to run a business here. The fees from insurance companies have not been materially raised in well over a decade while our overhead has gone up massively. My dad retired at 52. One week after his 70th birthday, I drove him to the hospital to have what was supposed to be routine surgery. That turned into a disaster resulting in him being wheelchair bound and developing dementia. He lived another 11 years but had no quality of life. So I looked at the whole situation. We have no guarantees of a healthy future. I've had friends drop dead or get cancer and die. With 3 young kids, I decided it was more important for me to be involved in their lives instead of being at the office. So I sold the practice and walked away. I do not regret it at all. I got out at the perfect time. I'd hate to have to run a practice now with this covid crisis hanging over everything.

The lessons are, be a saver, invest well, know when to walk away, and learn to smell the roses before it's too late.
Wanderingwheelz wrote: Tue Jan 12, 2021 11:48 am
Lexx wrote: Mon Jan 11, 2021 4:36 am I'm in a rather unique situation because I retired at 56. I'm 59 right now with triplet 9 year old kids! Our biggest expense is healthcare premiums. Our total premium is $42k/yr for the family on a platinum Obamacare plan. That's a huge part of expenses - more than the total I'm paying for our small remaining mortgage, insurance and property taxes. We also live in a HCOL area so that doesn't help. Right now we spend just about all that we take in. But at least we're not touching our savings or retirement funds. I plan on drawing social security at 62, and with 3 kids, I should get a good chunk of change. At 65 I'll qualify for Medicare which will be another savings. I'm comfortable, probably considered HNW, but I'm nervous. It's impossible to predict the future. Lots of changes in tax laws are coming our way which will massively affect my inheritance and how I have to position our estate for our kids.
What caused you to retire?
How old are/were you when you retired from the practice of medicine?
retire57
Posts: 643
Joined: Fri Oct 28, 2016 3:03 pm

Re: For those retired or FI, how much do you spend annually?

Post by retire57 »

Retired couple in our 60s + no debt = 55K. Includes taxes and medical insurance.
User avatar
goodenyou
Posts: 2579
Joined: Sun Jan 31, 2010 11:57 pm
Location: Skating to Where the Puck is Going to Be..or on the golf course

Re: For those retired or FI, how much do you spend annually?

Post by goodenyou »

Lexx wrote: Wed Jan 13, 2021 4:12 pm Dentistry - retired at age 56
goodenyou wrote: Wed Jan 13, 2021 10:56 am
Lexx wrote: Tue Jan 12, 2021 8:12 pm Well being a health care provider in VHCOL California with onerous regulations and a dwindling supply of employees, makes it VERY difficult to run a business here. The fees from insurance companies have not been materially raised in well over a decade while our overhead has gone up massively. My dad retired at 52. One week after his 70th birthday, I drove him to the hospital to have what was supposed to be routine surgery. That turned into a disaster resulting in him being wheelchair bound and developing dementia. He lived another 11 years but had no quality of life. So I looked at the whole situation. We have no guarantees of a healthy future. I've had friends drop dead or get cancer and die. With 3 young kids, I decided it was more important for me to be involved in their lives instead of being at the office. So I sold the practice and walked away. I do not regret it at all. I got out at the perfect time. I'd hate to have to run a practice now with this covid crisis hanging over everything.

The lessons are, be a saver, invest well, know when to walk away, and learn to smell the roses before it's too late.
Wanderingwheelz wrote: Tue Jan 12, 2021 11:48 am
Lexx wrote: Mon Jan 11, 2021 4:36 am I'm in a rather unique situation because I retired at 56. I'm 59 right now with triplet 9 year old kids! Our biggest expense is healthcare premiums. Our total premium is $42k/yr for the family on a platinum Obamacare plan. That's a huge part of expenses - more than the total I'm paying for our small remaining mortgage, insurance and property taxes. We also live in a HCOL area so that doesn't help. Right now we spend just about all that we take in. But at least we're not touching our savings or retirement funds. I plan on drawing social security at 62, and with 3 kids, I should get a good chunk of change. At 65 I'll qualify for Medicare which will be another savings. I'm comfortable, probably considered HNW, but I'm nervous. It's impossible to predict the future. Lots of changes in tax laws are coming our way which will massively affect my inheritance and how I have to position our estate for our kids.
What caused you to retire?
How old are/were you when you retired from the practice of medicine?
Congratulations on your decision to do what would make you happy. Too many plug their noses and muscle thorough their misery in practice. You were wise to save and be prepared. Many of our colleagues are a product of their own bad planning and decision making.
"Ignorance more frequently begets confidence than does knowledge" | “Do you know how to make a rain dance work? Dance until it rains”
kilkoyne
Posts: 136
Joined: Thu Jul 20, 2017 10:38 am

Re: For those retired or FI, how much do you spend annually?

Post by kilkoyne »

This is a great topic.

I'm single and an ultra-saver. My calculations for 2020 would have me at $42K spending. I included budgeting for $7K house maintenance and $3K vacation and $2K healthcare. I still have a mortgage and live in a HCOL area. I believe my expenses may go up when I retire with more vacationing but not drastically.

I'm estimating on the high side $50k-$60K/year spending after taxes (in today's dollars) with a mortgage but the mortgage could be gone if I wanted that. I'm so used to saving and living on frugally that I doubt more money would make me any happier.
SpaceCowboy
Posts: 937
Joined: Sun Aug 12, 2012 12:35 am

Re: For those retired or FI, how much do you spend annually?

Post by SpaceCowboy »

When I read these threads, I just don’t understand how people live on such tight budgets. Granted I live in a HCOL area, SoCal, in a nice suburb, but if I just look at insurance costs (health, house, car, earthquake, umbrella) and property taxes, that adds up to over $40k annually. That’s without food. The biggest discretionary pieces of our budget are travel and restaurants. Taxes are the hardest items to predict, as I do get self-employment income some years. I also don’t include education expenses, which are separately funded from 529s. Our spending tends to be $180-200k annually since retiring 7 years ago. This past Covid year was cheaper, as we stopped eating out largely and only had one significant road trip vacation plus one international trip early in the year.
bampf
Posts: 687
Joined: Thu Aug 04, 2016 6:19 pm

Re: For those retired or FI, how much do you spend annually?

Post by bampf »

@SpaceCowboy It does matter where you live. I have a very nice house that runs about $6K a year in property tax. High end insurance runs about $5K (Car, umbrella and house but not including healthcare). Healthcare would be about $24K unless I qualified for ACA in which case it would be a lot less. But, if I spent $30K a year on food, utilities, gas, and discretionary that would work out to about $2500 a month. $85 a day or so. That's pretty reasonable if you are frugal and don't go out a lot. So, while it wouldn't be super fat, I could probably live on $40k to $50K a year based on where I live and anticipated expenses.
SpaceCowboy
Posts: 937
Joined: Sun Aug 12, 2012 12:35 am

Re: For those retired or FI, how much do you spend annually?

Post by SpaceCowboy »

bampf wrote: Sun Jan 17, 2021 1:24 am @SpaceCowboy It does matter where you live. I have a very nice house that runs about $6K a year in property tax. High end insurance runs about $5K (Car, umbrella and house but not including healthcare). Healthcare would be about $24K unless I qualified for ACA in which case it would be a lot less. But, if I spent $30K a year on food, utilities, gas, and discretionary that would work out to about $2500 a month. $85 a day or so. That's pretty reasonable if you are frugal and don't go out a lot. So, while it wouldn't be super fat, I could probably live on $40k to $50K a year based on where I live and anticipated expenses.
That looks like $65k pre-tax to me.
I’ve never managed to get an ACA subsidy and have to pay full freight.
I’m not claiming that we try to live frugally, but we also don’t spend just for the sake of spending. Neither of us is a clotheshorse for example. In our area, there are people who live on less, and plenty who spend more. I certainly feel fortunate that we are able to afford the lifestyle we have.
bampf
Posts: 687
Joined: Thu Aug 04, 2016 6:19 pm

Re: For those retired or FI, how much do you spend annually?

Post by bampf »

SpaceCowboy wrote: Sun Jan 17, 2021 1:40 am
bampf wrote: Sun Jan 17, 2021 1:24 am @SpaceCowboy It does matter where you live. I have a very nice house that runs about $6K a year in property tax. High end insurance runs about $5K (Car, umbrella and house but not including healthcare). Healthcare would be about $24K unless I qualified for ACA in which case it would be a lot less. But, if I spent $30K a year on food, utilities, gas, and discretionary that would work out to about $2500 a month. $85 a day or so. That's pretty reasonable if you are frugal and don't go out a lot. So, while it wouldn't be super fat, I could probably live on $40k to $50K a year based on where I live and anticipated expenses.
That looks like $65k pre-tax to me.
I’ve never managed to get an ACA subsidy and have to pay full freight.
I’m not claiming that we try to live frugally, but we also don’t spend just for the sake of spending. Neither of us is a clotheshorse for example. In our area, there are people who live on less, and plenty who spend more. I certainly feel fortunate that we are able to afford the lifestyle we have.
LTCG is 0% up to 80K.
You get a subsidy for ACA in Colorado if married filing jointly is under $68K.
So, largely tax free up to $65K.

I wasn't suggesting you weren't being frugal. Im pretty frugal and I spend a lot more than that supporting kids, paying for university, driving a fun car etc. My point was I probably could live on $40K to $50K. I don't want to, but, I probably could and I can see how it can be done.
User avatar
Sandi_k
Posts: 1578
Joined: Sat May 16, 2015 11:55 am
Location: SF Bay Area

Re: For those retired or FI, how much do you spend annually?

Post by Sandi_k »

SpaceCowboy wrote: Sun Jan 17, 2021 1:14 am When I read these threads, I just don’t understand how people live on such tight budgets. Granted I live in a HCOL area, SoCal, in a nice suburb, but if I just look at insurance costs (health, house, car, earthquake, umbrella) and property taxes, that adds up to over $40k annually. That’s without food. The biggest discretionary pieces of our budget are travel and restaurants. Taxes are the hardest items to predict, as I do get self-employment income some years. I also don’t include education expenses, which are separately funded from 529s. Our spending tends to be $180-200k annually since retiring 7 years ago. This past Covid year was cheaper, as we stopped eating out largely and only had one significant road trip vacation plus one international trip early in the year.
I noted we are planning $150k per year, and we're in NorCal. Once the house is paid off, that's still $12k per year in taxes and insurance. Medical premiums for retirees = $8k annually. Food: $10k annually. Car insurance - $4k annually. Taxes: $40k annually on the pension.

So we're at $75k annually, and we haven't even covered utilities, gas, or travel. :annoyed
Post Reply