How much do you spend annually in retirement?

[iris lily]

I will confess that we FIRED without me really knowing how much we spend annually. DH handles our financial transactions and had a better idea than I do.

Anyway, I've been tracking our spending and it's going to be close to $70,000 annually for us. This counts every outgoing dollar except for income taxes.

 That seems like a crapload of money. You all are going to beat me up because that's not very Mustachean. We have $0 debt, I mean no mortgage no nuttin' . We live in a low COL city. So give me face punches and all that, but  tell me how much y'all spend in retirement.

Let me declare this a Spartana-free zone, :)  I don't want to hear about any $25,000 living in one of the most expensive counties in the country.  :)   :) :)

[Fishindude]

I don't think that amount is absurd at all.
The real question is .... did you plan well enough to maintain spending at that rate or possibly a bit higher with inflation.

[Gunny]

70k, wholly crap.  Nice to be rich :-)  I have a retirement pension which nets 41k/year ($3425/month) it pays a 1k mortgage (our only debt) and finances our life style quit comfortably. We do travel some. (5-6k per year), but I have a substitute teacher job to augment that (roughly 4k/yr). We are actually going to Chile for two months this spring. I do have other retirement investments which I could tap, but don't, and a cash reserve which could finance three years of bare bones living expenses. 

[deborah]

So you want to hear how much I spend annually in retirement, but you don't. Which is it?

I live in Australia, which is more expensive than the US. Stuff costs more, services cost more and you should see our house prices!

I went on two 2 month international holidays this year (and getting from Australia to anywhere else in the world is not cheap, because we are just about the end of the line) to Turkey and South West USA/Ecuador.

I could live for three years on that amount.

[iris lily]

So you want to hear how much I spend annually in retirement, but you don't. Which is it?

I live in Australia, which is more expensive than the US. Stuff costs more, services cost more and you should see our house prices!

I went on two 2 month international holidays this year (and getting from Australia to anywhere else in the world is not cheap, because we are just about the end of the line) to Turkey and South West USA/Ecuador.

I could live for three years on that amount.

It's only Spartana, aka She-rah, who may not pop in this thread to gloat, haha. Just kidding.

[iris lily]

I don't think that amount is absurd at all.
The real question is .... did you plan well enough to maintain spending at that rate or possibly a bit higher with inflation.

Oh more or less. We are 61 years old and have choices in which incomes to turn on, and when.

Big Vacations and new cars will have to come out of the stash, the income streams of pensions and Social Security will not cover that stuff.

[iris lily]

70k, wholly crap.  Nice to be rich :-)  I have a retirement pension which nets 41k/year ($3425/month) it pays a 1k mortgage (our only debt) and finances our life style quit comfortably. We do travel some. (5-6k per year), but I have a substitute teacher job to augment that (roughly 4k/yr). We are actually going to Chile for two months this spring. I do have other retirement investments which I could tap, but don't, and a cash reserve which could finance three years of bare bones living expenses.

There are two of us generating the income. Your pension is very very healthy, ours don't come close to that amount, good for you!

[GuitarStv]

Holy crap.  70k is an awful lot of money, especially if you live in a low cost of living city.  We live in a high cost of area city, and are paying off our mortgage along with some very expensive daycare and manage pretty luxurious living for 40k a year.  What is your money going to?  Can you post a break down?

[iris lily]

Holy crap.  70k is an awful lot of money, especially if you live in a low cost of living city.  We live in a high cost of area city, and are paying off our mortgage along with some very expensive daycare and manage pretty luxurious living for 40k a year.  What is your money going to?  Can you post a break down?

Nah, I won't post a breakdown because I don't have one, but I know that our health insurance is 18%.

 Our idiosyncracies are vehicles, so our auto insurance might be higher than normal even though they are modest cars. We still carry collision on all of them.

We also have multiple houses and pay $6,000 total in property tax, although that seems pretty low. The houses are another idiosyncacy, they are vacant and do not generate income, they are all uninhabitable. Yes it is weird, I know.

[TheAnonOne]

Holy crap.  70k is an awful lot of money, especially if you live in a low cost of living city.  We live in a high cost of area city, and are paying off our mortgage along with some very expensive daycare and manage pretty luxurious living for 40k a year.  What is your money going to?  Can you post a break down?

Nah, I won't post a breakdown because I don't have one, but I know that our health insurance is 18%.

 Our idiosyncracies are vehicles, so our auto insurance might be higher than normal even though they are modest cars. We still carry collision on all of them.

We also have multiple houses and pay $6,000 total in property tax, although that seems pretty low. The houses are another idiosyncacy, they are vacant and do not generate income, they are all uninhabitable. Yes it is weird, I know.

It sounds like you could drop the expenses if you wanted to.

You could fix the places up and off-load them or rent them out. Your here for face-punches but the issues are so obvious it is hard to not take it as a joke.

[Aussiegirl]

So you want to hear how much I spend annually in retirement, but you don't. Which is it?

I live in Australia, which is more expensive than the US. Stuff costs more, services cost more and you should see our house prices!

I went on two 2 month international holidays this year (and getting from Australia to anywhere else in the world is not cheap, because we are just about the end of the line) to Turkey and South West USA/Ecuador.

I could live for three years on that amount.

Deborah - I'd love to see a breakdown of your spending / budget.    Would give me something to aim for.   Is it for one person?   If yes, how much do you think it would increase for 2?   I don't think I could leave hubby home if I took off for a 2 month international holiday ...... he'd get sad!

[Cassie]

IL: we are twins!  Same age, no mortgage & amount we spend. Our health insurance is $10,000/year but our property tax is $600/year.  Low services = low taxes.  We are enjoying ourselves with travel, dining out etc while we can. We have had some friends die or become severely disabled at this age "so we are making hay while the sun shines."

[deborah]

So you want to hear how much I spend annually in retirement, but you don't. Which is it?

I live in Australia, which is more expensive than the US. Stuff costs more, services cost more and you should see our house prices!

I went on two 2 month international holidays this year (and getting from Australia to anywhere else in the world is not cheap, because we are just about the end of the line) to Turkey and South West USA/Ecuador.

I could live for three years on that amount.

Deborah - I'd love to see a breakdown of your spending / budget.    Would give me something to aim for.   Is it for one person?   If yes, how much do you think it would increase for 2?   I don't think I could leave hubby home if I took off for a 2 month international holiday ...... he'd get sad!

Sorry, I don't really budget. Each fortnight I check how much I have spent in the preceding fortnight, and how that is tracking against what it should be. I have items like health insurance and car insurance and rates that are in a separate list of large ticket items, that are automatically removed from the fortnightly tracking (although they count in the yearly spend). SO doesn't travel with me as he spent too much time on planes when he was working.

[arebelspy]

Right now, around 20-25k.  Expect spending with baby and higher standard of living to be closer to 40-45k.

Could probably shave to under 20k if we settled in one place, instead of full time traveling. 

[iris lily]

IL: we are twins!  Same age, no mortgage & amount we spend. Our health insurance is $10,000/year but our property tax is $600/year.  Low services = low taxes.  We are enjoying ourselves with travel, dining out etc while we can. We have had some friends die or become severely disabled at this age "so we are making hay while the sun shines."

oh, thanks! I know where we could cut, but realistically we will dump only one of the tiny houses. And next year we could drop collision in one or more auto policies.

The real estate taxes on the house we inhabit are $3,500. That seems ok to me, not high, not low.

I appreciate your response. I was casting about to see how far off from some other FIRED people we are,  and yeah we know that we don't cut back in places that it matters to us. Our friends, a couple without children, spend about the same as us yet they make different, and interesting choices. Their travel budget is $18,000 and they use that much pretty regularly. They have two old Volvos and purposely buy ancient ones that they do not take on long road trips, they rent a car then.

They own two condos in the same building, a big one and a small one. Here the small one acts as the man's studio. They go out to eat often, I mean OFTEN.

It's always difficult to talk to friends about money, but I assume that it's a bit easier to talk about how much one spends rather than how much one earns.

[Cassie]

We eat out 1x/week but twice a month we do a spendy night with some friends and spend about a $100.00. WE spent $14,000 on 2 big trips this year but don't every year.  We drive our cars until they are junk so usually are about 14 years old.  We live in a small 1400 sq ft home that we remodeled ourselves.  Some of our friends upgrade their cars more often or have bigger, fancier homes but we are content with our lives and they are still working but younger then us.  Some of our friends are 10 years older and have downsized to apartments.  Financially speaking our friends really vary. I think at age 60 you really start to see health effect people and realize that you could live 30 years or die tomorrow so need to do those things that are important.

[One Noisy Cat]

$44,95 and that includes $12,000 in expensive trips that I avoided taking until I retired. Otherwise it would have been around $32,000....which is more than I'd have targeted. At least $0 of that was debt interest charges.

[david51]

     I spend 18k per year on rental property. 18k on myself. And 10k on daughter. So 46k per year in retirement living in southern California.

[jim555]

14K base expenses, 6k in upcoming dental work.

[Greystache]

My wife and I live in a high cost area, coastal SoCal. We have no debt. We just completed our first year of retirement. Our budget was $60k and we went over by $47.50.  We are not particularly frugal. We give over $2,500 to charity, I have have a rather expensive golf habit.  Our house is larger than necessary. We travel extensively.  We could easily trim our budget, but right now it is working for us.

[sol]

My family of five won't spend $70k net of income taxes in retirement even including our $26k/year mortgage.

Do you eat out for every meal and replace all of the furniture in your house every two years?  Do you take a couple of $10k vacations every year?  I'm trying to fathom how to spend that much money on just two people.

Can you post rough dollar amounts by budget category?  That $70k might be sort of reasonable if you're counting property taxes and health insurance and you had to replace your car and you have a really bad restaurant habit.

[Cassie]

Sol, Health insurance can be very expensive: we pay $10,000/year for 2 people. Also vacations can be expensive. WE took a 3 week and a 4 week vacation and spent $14,000 on that alone. Il & I are the same age and at this point if you want to do something you better do it while you can. Yes we might be healthy by 90 but could also be dead tomorrow.  YOu can easily spend $70,000/year without eating out everyday or replacing your furniture every 2 years.

[iris lily]

My family of five won't spend $70k net of income taxes in retirement even including our $26k/year mortgage.

Do you eat out for every meal and replace all of the furniture in your house every two years?  Do you take a couple of $10k vacations every year?  I'm trying to fathom how to spend that much money on just two people.

Can you post rough dollar amounts by budget category?  That $70k might be sort of reasonable if you're counting property taxes and health insurance and you had to replace your car and you have a really bad restaurant habit.

Dude, I'm not asking for ideas to cut spending, I really don't wanna. Don't make me cut!!!
And if I were going to do that I would likely start with Spartana's approach,separate the needs from the wants.

Read my OP--I tHink that $70,000 is a lot, I agree with you, but in making this post
I Wanted a sense of how many spend a similar amount.

Our health insurance and property taxes total close to $20,000. We don't have a restaurant habit. But we do have an expensive dog and all that goes with it. Today we laid out $2,100 to get the dog rescue group's vehicle out of the  repair garage. I suppose we will be paid back, but
It's not a big deal if we do not.  Examples, and etc.

 My Mustachean credentials are that we buy 90% of our clothes at Goodwill. For 20 years
I pulled in sofas from the alley, our upholstered furniture wasn't even thrift store, it was throw away. Our cars have been a mix of modest used cars and occasional modest new one until DH got his midlife crises car, a vintage Benz.

We are old and are releasing the tightwad grip.

[MidWestLove]

If that is what makes you happy - why change?

We are in late thirties , preparing to retire (me- SAHD , her - working part time), 2 kids under 5. Out total expenses with vacation (cruises usually), international travel, health insurance are ~38k for family of four as we have no debts. Our property taxes are 5k until we move across the border from Illinois to Indiana (then 2k). our financial portfolio could support twice our spending but why?

[soccerluvof4]

Family of 6 , two teenagers two younger in HCOL area . We are at 80k a year for the next 3 when the two oldest leave and then will drop well below to 50-60k. I know this already because i see where we are spending the money. This does include every dime spent, Health insurance taxes etc.. Alot of travel for Soccer but again will drop drastically in 3 years. We have downsized as much as we can in the last couple years, cut our grocery bills to a 1/3rd and haven't bought cars so have done what were willing. I always figure high as well as I like to beat numbers.

[iris lily]

  I'm not asking for ideas to cut spending, I really don't wanna. Don't make me cut!!!
 

Hey IL I know you don't want to cut spending, or even need to cut it, and with SS in 6 or 7 years you can probably spend even more!! Just don't forget the charitable contributions to such worthy causes such as the "Adopt-A-Spartana" fund where your gift donation goes to fund much needed gloating :-)! But I wonder if you are curious to know exactly what you do spend your money on (and how much per spending event) beyond your needs spending?  It would be interesting to see where it goes without having to do too much tracking.

We will likely take SS next year, a least I will. Probably. . There are several financials scenarios that wended to analyze to take advantage of The ACA and taxation.

I don't know that I am especially curious about where our money goes.

But donating to Gloating, hmmm. Ah, nope! Haha.

[Cassie]

Even though we spend about the same amount I know where it's going. Interesting that you don't but that's okay.   

[DollarBill]

For 2015 it was about $24,600, about $10K of it was fun money but it's just me and my old dog...and still held a hefty savings rate.

[jim555]

Thanks to the ACA and zero interest rate policy it is easy to qualify for free medical.  Control the MAGI!

[arebelspy]

Thanks to the ACA and zero interest rate policy it is easy to qualify for free medical.  Control the MAGI!

I think that for people with traditional pensions, like I believe the OP and her DH have, it's a bit harder to control the MAGI to get higher ACA subsidy benefits. Unless that pension is low enough (like mine is at around $1,000/month) and you have other things that are non-taxable, there's usually no way to reduce the taxable amount of the pension once retired. At least I don't think there is.

I have the same problem due to rental income.

[jim555]

Thanks to the ACA and zero interest rate policy it is easy to qualify for free medical.  Control the MAGI!

I think that for people with traditional pensions, like I believe the OP and her DH have, it's a bit harder to control the MAGI to get higher ACA subsidy benefits. Unless that pension is low enough (like mine is at around $1,000/month) and you have other things that are non-taxable, there's usually no way to reduce the taxable amount of the pension once retired. At least I don't think there is.

Since I am almost 51 I have 4 years before the pension COULD begin at 55.  But it makes sense to wait until 65, it goes up about 5% every year I wait.  If I take it early I loose control of the MAGI.

[use2betrix]

My total spending was over 70,000 last year for my wife and I. Our credit card had $58,000 (paid off in full multiple times monthly). That did include an engagement ring, wedding, week and a half of vacation/travel over the wedding, 1 week trip to Mexico last spring, $1500 dog surgery, $2000 in car repairs, amongst a ton of other things. Take all those out, and the card probably would've had closer to $35,000. That still doesn't include truck payment, 5th wheel payment (we live full time in 5th wheel, need truck to pull it) plus RV space, and insurance. All those items aren't paid on my credit card. Damn near everything else is.

We had a lot come up last year and I paid more than most here would for our wedding and engagement ring, which I don't regret one bit. We had a blast with all our closest friends and family.

The good news is we still saved around $60,000 or so on top of all our spending, which is solid considering my wife didn't work 7 months of the year, and only made $14/hr when she did.