Although I'm in europe which means different mix of expenses I also had some thoughts that this might be simply too high.
1. The food budget at $850 a month equates to just under $40 per day. Thinking about retirement I realistically expect that in "normal" conditions we would spend around 10 a day on food which equates to around $13.50. I would then probably splurge occasionally on a meal out but I see that he has that in another category. In any event I imagine that 30-40 one or twice a month would be realistic.
So overall that gives me around 4,650 per annum or around $6,277
2. Health insurance is a bit of a black box for me at the moment. Once we move to our retirement home in Austria we will join the public health system paying voluntary contributions. What I don't yet know is whether there are deductibles we will need to factor in or additional insurance for things like dentistry etc. anyway the voluntary public insurance costs around 475 per month ($620) but I am going to day that the max deductible will be around 500 per annum which is typical for Europe and extra costs like prescriptions etc say max another 300.
So overall my total annual cost is around 6,500 or around $8,775
3. I will come back to recreation
4. Transport, we expect to continue to have two cars at least in the short term and once we retire we will buy a new or relatively new small car which should then last us for around 10 years. I expect the car to cost around 25,000 but I do not count depreciation as I will buy another our of cash when a policy I have matures after 10 years. So running costs will be around 200 per month for petrol and 50 each for insurance and maintenance.
That gives me a total annual cost of around 3,600 or $4,860
5. Home office / Phone / Internet
I am going to cheat a little here as this is where I would include my house running costs including property taxes, satellite TV, Phone, Light & heat etc. I want to say that all in I expect that to cost around 500 per month but at the moment I don't know (as I have not yet fully researched the costs in the area where we have bought our new home - I know, shoot me!). So we will leave that one a little soft for now.
Total cost therefore around 6000 or $8,100
6. Personal contributions and gifts
This is a tricky one. I have the buzz cut so hair cutting cost me nothing. I imagine my wife spends around 60-70 every two months and gifts for the family would be around 1,500 per annum. I don't think there is much else I would put in here.
Total cost around 2,000 or $2,700
7. So coming back to entertainment / recreation
I can imagine the following costs:
Ski pass (for the season) - 2 x 550 = 1,100
Other life passes during the rest of the year - 2 x 150 = 300
New ski's / ski servicing - 2 x 250 = 500
Flights short haul - 2 x 500 = 1,000
Flights long haul - 2 x 1,000 = 2,000
Hotels = 2,000
New equipment (Other) = 1,200
All very rough but makes a total of 8,100 or $10,935
I think there must be something missing from my budget so I will drop in an estimate 500 per month to cover miscellaneous costs as well as the replacement of household fixtures and appliances
Gives me again a very rough total of 6,000 per annum or $8,100
So that's my retirement budget on the back of an envelope so to speak and gives me a annual spend of 36,850 or $49,747 (2 people). To be honest that feels quite comfortable to me and is broadly in line with the blog author (although the mix is different). Its actually quite difficult to compare with our current spending as we expect our lifestyle to change quite significantly.
We are quite active and I can see that we could easily spend more money in the recreation section but then I have included quite a substantial "buffer" in the misc category.
Comments welcome!