Expenses in retirement?

[G-String]

I see a lot of retirees spend easily $60-70k per year in retirement. My current expenses are below and assuming my mortgage will be paid off and I won't be contributing to my retirement investments, my expenses in retirement will easily be under $25k per year. I live in Canada so no health care costs and my prescription drugs are covered 80%. Here my current expenses:

$365 property tax
$100 Car insurance
$300 New vehicle fund & maintenance
$100 vacation fund
$1415 mortgage
$1200 invest (TFSA & RRSP)
$130 TV & Internet
$130 Hydro
$60 Cell phone
$200 gas & groceries & food
$50 water
$50 bus tickets
$75 home insurance
Total: $4175

So current expenses of $4175 minus my mortgage, bus tickets (only use to get to work) and retirement investments is $1525 per month expenses in retirement. Let's say I increase my travel fund from $100 per month to $500 per month since I'll want to increase my travel in retirement, that's still $1925 expenses per month. Over the year that's $23,100 per year expenses in retirement.

Am I missing something here?  Even if I add say $100/month for miscellaneous spending I'm still under $25k per year.   

[iris lily]

I spend $65,000+ annually because I want to. If you don’t want to, you don’t have to.

[G-String]

I spend $65,000+ annually because I want to. If you don’t want to, you don’t have to.

Ya I get that. I'm just trying to plan for my retirement and am wondering if I'm missing anything?

[ender]

The more you save, the more of a change you will see from your working career income to retirement epenses.

[G-String]

The more you save, the more of a change you will see from your working career income to retirement epenses.

I think I know what you're saying but could you please clarify this statement?

[Frankies Girl]

I think what ender means is that if you're in save mode, once you FIRE, things you had locked down/highly structured are no longer so.

You may not be able to add to retirement accounts (I'm not familiar with Canada's rules, but in the U.S. requires earned/working income to add to retirement accts) so that bucket may be good to repurpose for the buckets that go up. If you plan to have zero mortgage payments, the only other thing I think you're missing is home repairs/maintenance (home/yard upkeep will need a category as you'll likely need to repair/replace/maintain your house, things like the water heater dies, air filters, mowing/snow clearing, or roof type stuff)



Based on my own FIRE:
 
vacation expenses may go up since you'll have more time/freedom to go more often and stay longer
 
food expenses - both at home or eating out - as you may enjoy cooking more meals/trying new recipes, or dining out more often (we have breakfast/brunch, lunch and dinner as possible depending on what we're doing and if anything strikes our fancy while doing things out and about)

entertainment may go up - ability to go to weekday events, concerts, movies, theater, etc... last minute fun things that cost $ aren't really an issue unless you just don't feel like going. Hobbies may add to expenses depending on what you're into.

utilities may go up if you're a homebody - using more water/flushing the toilet, lights and heat/AC on more, watching tv, etc....





Retirement expenses can get lumpy since there isn't as much structure and you don't have to do anything really other than basic bills to live. You may have no problems moving your mortgage/work commuting bucket to cover the new/lumpy expenses tho.

[American GenX]

It's very possible, especially for a single person.  My bare bones expenses also include a car fund, plus I have a home maintenance fund as well to cover those expensive home repairs, and my yearly bare bones budget is estimated at $22,000 (after taxes, which aren't included in that figure).

However, due to entertainment, travel, optional home improvements, and other discretionary spending such as dining out, I expect to spend $60,000 to $70,000 per year.

[GoCubsGo]

Kids? Spouse?  If those things happen $25K a year won't happen most likely.  Also, home repairs can be large and lumpy, don't see that accounted for.  Is healthcare totally free?  No prescriptions, co-pays, deductibles?  Old age care?

[pecunia]

Reference the latest post from MMM himself for this discussion.  I guess it doesn't have to go up.

https://www.mrmoneymustache.com/2020/01/27/mmm-2019-spending/

[G-String]

Kids? Spouse?  If those things happen $25K a year won't happen most likely.  Also, home repairs can be large and lumpy, don't see that accounted for.  Is healthcare totally free?  No prescriptions, co-pays, deductibles?  Old age care?

Yes healthcare is 100% free. Prescriptions I need to pay 20% deductible, but drugs are so cheap here in Canada. I also forgot dental, but that I only pay 10%, and often my dentist doesn't charge me anything.

But good point everyone who recommended the home maintenance fund. I'll add $100/month to my budget for that, which still keeps me in the $25,000 per year range. Which I'd say on a spectrum of lean-fire, full-fire and fat-fire, I'm probably in the full-fire range.

[G-String]

Weren't you planning on having a child or two? Maybe marrying long term GF? That would likely change your finances for FIRE - maybe for the better if GF works or is FI and contributes equally to expenses.

Possibly a child. But GF makes same as I do and has similar assets/pension/benefits, so that could change the budget, but not significantly.

[Capsu78]

I'm guessing the "$130 Hydro" refers to your electricity bill? I only casually follow the politics "up north", but I would put that number in eraseable pencil on your budget sheet, if your current leaders  get the "global citizen energy awards" JT seems to be competing for.

I would also add a budget line for unplanned "international healthcare" provisions, in the case that you can't wait 9 months to get that "torn rotator cuff" surgery onto the scheduling docket.
Not being snarky... I have "Canadian" in my family tree and an uncle who arrived in Normandy on Juno beach. 

[ltt]

I see a lot of retirees spend easily $60-70k per year in retirement. My current expenses are below and assuming my mortgage will be paid off and I won't be contributing to my retirement investments, my expenses in retirement will easily be under $25k per year. I live in Canada so no health care costs and my prescription drugs are covered 80%. Here my current expenses:

$365 property tax
$100 Car insurance
$300 New vehicle fund & maintenance
$100 vacation fund
$1415 mortgage
$1200 invest (TFSA & RRSP)
$130 TV & Internet
$130 Hydro
$60 Cell phone
$200 gas & groceries & food
$50 water
$50 bus tickets
$75 home insurance
Total: $4175

So current expenses of $4175 minus my mortgage, bus tickets (only use to get to work) and retirement investments is $1525 per month expenses in retirement. Let's say I increase my travel fund from $100 per month to $500 per month since I'll want to increase my travel in retirement, that's still $1925 expenses per month. Over the year that's $23,100 per year expenses in retirement.

Am I missing something here?  Even if I add say $100/month for miscellaneous spending I'm still under $25k per year.

Home repairs, upgrades, and maintenance, lawn care, trash removal, entertainment/eating out, gifts, miscellaneous stuff comes up all the time.

[G-String]

I'm guessing the "$130 Hydro" refers to your electricity bill? I only casually follow the politics "up north", but I would put that number in eraseable pencil on your budget sheet, if your current leaders  get the "global citizen energy awards" JT seems to be competing for.

I would also add a budget line for unplanned "international healthcare" provisions, in the case that you can't wait 9 months to get that "torn rotator cuff" surgery onto the scheduling docket.
Not being snarky... I have "Canadian" in my family tree and an uncle who arrived in Normandy on Juno beach.

Sorry, Hydro refers to electricity, and gas heating. It's all under the same "Hydro" company.

[G-String]

I see a lot of retirees spend easily $60-70k per year in retirement. My current expenses are below and assuming my mortgage will be paid off and I won't be contributing to my retirement investments, my expenses in retirement will easily be under $25k per year. I live in Canada so no health care costs and my prescription drugs are covered 80%. Here my current expenses:

$365 property tax
$100 Car insurance
$300 New vehicle fund & maintenance
$100 vacation fund
$1415 mortgage
$1200 invest (TFSA & RRSP)
$130 TV & Internet
$130 Hydro
$60 Cell phone
$200 gas & groceries & food
$50 water
$50 bus tickets
$75 home insurance
Total: $4175

So current expenses of $4175 minus my mortgage, bus tickets (only use to get to work) and retirement investments is $1525 per month expenses in retirement. Let's say I increase my travel fund from $100 per month to $500 per month since I'll want to increase my travel in retirement, that's still $1925 expenses per month. Over the year that's $23,100 per year expenses in retirement.

Am I missing something here?  Even if I add say $100/month for miscellaneous spending I'm still under $25k per year.

Home repairs, upgrades, and maintenance, lawn care, trash removal, entertainment/eating out, gifts, miscellaneous stuff comes up all the time.

Yes since my initial post I added $100/month for home maintenance.  And I did include $100/month under miscellaneous. Trash removal is included in property taxes.