Author Topic: Review my Retirement Budget  (Read 5602 times)

little_owl

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Review my Retirement Budget
« on: May 20, 2013, 06:44:51 AM »
Hi Mustachians!  I am a long-time reader but a noob to the forums.  I was wondering if some of you might be able to help me evaluate my retirement budget.

I'm happy to provide any other details that might be helpful, but I tried to be pretty comprehensive!

We have been working on this budget for a while, with the understanding that we need to know what we can get our monthly expenses down to, so we can then figure out exactly how much we need.  We are DINKs with no kids (no plans to have kids).

Based on some feedback, I just posted an updated budget a few posts down.  Curious if you guys think this is better??

Monthly Expenses
Home Insurance: 83.33
Taxes: 442.17
House Maintenance: 83.33
Cell Phones (Virgin Mobile Plans): 74.20
Propane: 37.78
Electric: 219 (everything in our house, except for a fireplace, is electric)
Comcast: 78.44
Health Insurance: 300 (rough estimate, we have not looked into this extensively)
Auto Insurance: 150
Valuables Insurance: 15 (engagement rings, etc.)
Groceries: 480
Bar / Wine: 30
Dining Out: 60
Dry Cleaning: 10
Personal Care: 30
Car Maintenance: 30
Gifts: 10
Household: 40 (to cover other household issues / needs that arise)

Total: 2173.25 / Month

Any other ideas or recommendations, or feedback?  We live in an HCOL, not-very-bikeable area, but we do expect to be able to bike a bit more, as we'd be able to do so one off-peak times, like mid-morning on a Tuesday, which would be safer than today, when we can really only ride on the weekends.  We have two cars and two motorcycles as well.
« Last Edit: May 20, 2013, 04:55:17 PM by little_owl »

little_owl

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Re: Review my Retirement Budget
« Reply #1 on: May 20, 2013, 11:51:36 AM »
Guess traffic is pretty low on Mondays - I'll check back in later, but if anyone has ideas, we would love to get feedback.  I just don't know if we are being realistic enough or not aggressive enough - we don't know any Mustachians in real life. :)

Use it up, wear it out...

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Re: Review my Retirement Budget
« Reply #2 on: May 20, 2013, 12:03:23 PM »
How old are you and your partner?

The big thing that sticks out - there's nothing here for serious maintenance repair, or replacement of anything! I guess you do show "house maintenance" of $83, but that, to me, sounds more like puttering around the house, and nowhere near enough to cover a new roof, water heater, or whatnot. What about when you need to buy a replacement car?

Travel / vacations?

Also, think about how to estimate how these will increase over time.

If you wanted to cut costs to retire earlier or to find funds for some of the items I mention above, there seem to be plenty of the usual suspects: cell phones, cable bills, dry cleaning, groceries...


twinge

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Re: Review my Retirement Budget
« Reply #3 on: May 20, 2013, 01:06:38 PM »
I had a hard time figuring out if this was your "retirement budget" meaning how much you aimed to spend in retirement or your current budget to enable early retirement.  Dry cleaning doesn't seem to be a typical line item in the former, so I'm assuming the latter.

+1 on use it up's point on needing to budget for repair/replacement through some kind of sinking fund system.

A couple of other points>

1.
Quote
not-very-bikeable area

DC area is pretty bikeable, with a fairly sizeable bike commuting population.  Don't assume it's impossible until you've really researched it.

2. Your groceries seem high to me.  We live in the DC area and spend 400 for a family of four and spend a less on dining out too.



little_owl

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Re: Review my Retirement Budget
« Reply #4 on: May 20, 2013, 02:16:54 PM »
How old are you and your partner?

The big thing that sticks out - there's nothing here for serious maintenance repair, or replacement of anything! I guess you do show "house maintenance" of $83, but that, to me, sounds more like puttering around the house, and nowhere near enough to cover a new roof, water heater, or whatnot. What about when you need to buy a replacement car?

Travel / vacations?

Also, think about how to estimate how these will increase over time.

If you wanted to cut costs to retire earlier or to find funds for some of the items I mention above, there seem to be plenty of the usual suspects: cell phones, cable bills, dry cleaning, groceries...

Thank you for that - good things for us to think about!  I like the idea of us having a "serious repair" fund.  We are in our early 30s - 32 and 33.  How do folks tend to think about stuff like that - just budget it in as something they'd save for over time?

Thank you for the reply!!!

little_owl

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Re: Review my Retirement Budget
« Reply #5 on: May 20, 2013, 02:18:47 PM »
I had a hard time figuring out if this was your "retirement budget" meaning how much you aimed to spend in retirement or your current budget to enable early retirement.  Dry cleaning doesn't seem to be a typical line item in the former, so I'm assuming the latter.

+1 on use it up's point on needing to budget for repair/replacement through some kind of sinking fund system.

A couple of other points>

1.
Quote
not-very-bikeable area

DC area is pretty bikeable, with a fairly sizeable bike commuting population.  Don't assume it's impossible until you've really researched it.

2. Your groceries seem high to me.  We live in the DC area and spend 400 for a family of four and spend a less on dining out too.

Thank you!  We are in the DC metro...pretty far away from actual DC.  On zillow, our walkable score is a big fat zero.  We are definitely up for learning, and are trying right now to bike to get our groceries, which would be huge, but that is 7 miles away (not too far) but on hilly roads with no shoulder at all - we're going to try it on a random day we take off so we have low traffic.

I'd assume I'd have at least one item to dry clean per month in retirement - right now, this budget is what we'd expect to spend when retired.

little_owl

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Re: Review my Retirement Budget
« Reply #6 on: May 20, 2013, 04:58:51 PM »
Thank you for the feedback!!!  Here are some updates.

Monthly Expenses
Home Insurance: 83.33
Taxes: 442.17
House Maintenance / Repair Savings: 416.67 Added this to account for 5k / year saved up for big maintenance issues or vehicle replacement.
Cell Phones (Virgin Mobile Plans): 74.20
Propane: 37.78
Electric: 219 (everything in our house, except for a fireplace, is electric)
Comcast: 78.44 Note: Every now and then, we are able to get internet down to $65, but when the promotion runs out, it jumps to nearly $80.  We do not have cable TV, just basic, as it is bundled in with the internet.
Health Insurance: 300 (rough estimate, we have not looked into this extensively)
Auto Insurance: 150
Valuables Insurance: 15 (engagement rings, etc.)
Groceries: 440 [Reduced to $110 / week across 4 weeks - we're usually right around there now.]
Bar / Wine: 30
Dining Out: 50 Reduced this by $10, assumes one nice dinner out or two ok dinners out.
Dry Cleaning: 10
Personal Care: 30
Car Maintenance: 30
Gifts: 10
Household: 60 (to cover other household issues / needs that arise) [Upped this by a little bit.

Total: 2476 / Month [Up from 2173.25 / Month]

pbkmaine

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Re: Review my Retirement Budget
« Reply #7 on: May 20, 2013, 05:40:50 PM »
Get the cost of health insurance hammered down, and add a line item for non-insurance health costs: co-pays, drugs, vitamins, and everything else health related you can think of.

SimpleMama

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Re: Review my Retirement Budget
« Reply #8 on: May 20, 2013, 08:41:52 PM »
A few thoughts...

I'm wondering if $10/ month is realistic for gifts for Christmas/Birthdays/Weddings/ etc. Even though you have no children will you have nieces/nephews/siblings/parents etc. besides each other that you may wish to buy the odd gift for.

Will you have a water bill? I didn't notice that on there. We spend  about $70 per month for our water bill. Goes up in summer when lawn watering is a must or we get notices from the HOA.

What about dental copays/deductibles or new glasses, prescription copays etc.

Do you have an allowance for clothing?

Does your car maintenance include gas, car registrations, car taxes etc. I mean $30 for gas per month plus the other items you may need to maintain it,  since you say it's not a very walkable area doesn't seem entirely realistic.

Do you have hobbies/entertainment. Do you plan to take any vacations?
« Last Edit: May 20, 2013, 08:43:42 PM by SimpleMama »

little_owl

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Re: Review my Retirement Budget
« Reply #9 on: May 21, 2013, 06:58:38 PM »
Get the cost of health insurance hammered down, and add a line item for non-insurance health costs: co-pays, drugs, vitamins, and everything else health related you can think of.

You got it!!  Great add.  Crud, my budget is going up....

little_owl

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Re: Review my Retirement Budget
« Reply #10 on: May 21, 2013, 07:01:24 PM »
A few thoughts...

I'm wondering if $10/ month is realistic for gifts for Christmas/Birthdays/Weddings/ etc. Even though you have no children will you have nieces/nephews/siblings/parents etc. besides each other that you may wish to buy the odd gift for.

Will you have a water bill? I didn't notice that on there. We spend  about $70 per month for our water bill. Goes up in summer when lawn watering is a must or we get notices from the HOA.

What about dental copays/deductibles or new glasses, prescription copays etc.

Do you have an allowance for clothing?

Does your car maintenance include gas, car registrations, car taxes etc. I mean $30 for gas per month plus the other items you may need to maintain it,  since you say it's not a very walkable area doesn't seem entirely realistic.

Do you have hobbies/entertainment. Do you plan to take any vacations?

Thank you!  We already do not do gifts as much as the "typical" family - we make items, cook for people, etc.

The adds for clothing and entertainment are great, will add that in.  We do expect to do some traveling, so I will need to account for that as well!

We do not have a water bill, luckily!

Back to work on refining the budget!!!