The Money Mustache Community
General Discussion => Post-FIRE => Topic started by: Rdy2Fire on May 10, 2020, 08:33:38 AM
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My FIRE, or RE, was somewhat unplanned earlier/younger then I thought. I still not sure about future work as I know my numbers and believe I have enough. I am also still not sure what to do with time actually so not sure about future.
When I look at the numbers my thinking how much does one really need or use per year once FIRE'd. I was interested to the level of where people are but know some don't want to share details; a so I made it a poll. It's not one size fits all obviously but people can add detail in responses if they like..
I should note I live in a HCOL area am single, no kids, travel often (not now) and could cut my spend. Feel free to vote and add details or ask questions.
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Do you hate the profession you have chosen to be in? If you have no clue how you’d want to spend your time you’ll be miserable, and judging by your annual spending options in the poll, you’ll probably be constantly worried about finances over the next 2-3 years while we meander our was through a significant recession. Split the middle and find a gig that you enjoy even if it doesn’t pay much, work less hours, exercise, and develop some hobbies/interests. My spend target is $180k, but end up spending a lot less, closer to $120k, but I do believe you can be happy with any of the target above $40k/year if your interests don’t involve travel, or really expensive gear that needs replacing or maintained often. Those are currently the main drivers in my burn rate.
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Do you hate the profession you have chosen to be in? If you have no clue how you’d want to spend your time you’ll be miserable, and judging by your annual spending options in the poll, you’ll probably be constantly worried about finances over the next 2-3 years while we meander our was through a significant recession. Split the middle and find a gig that you enjoy even if it doesn’t pay much, work less hours, exercise, and develop some hobbies/interests. My spend target is $180k, but end up spending a lot less, closer to $120k, but I do believe you can be happy with any of the target above $40k/year if your interests don’t involve travel, or really expensive gear that needs replacing or maintained often. Those are currently the main drivers in my burn rate.
I am no longer in a profession so currently I've chosen not to be in one.
I chose the number range because of what i see here, there are folks saying they spend less then 25K which for me seems crazy but I live in a different place and do different things. As for my choice it was 55K. I'm not worried about money currently and based on my portfolio could spend more but that's what I have figured to be my spend (actually less).
Maybe it wasn't clear my question wasn't a target spend I could target to spend 300K. I could certainly change the options but my impression was that most people were in the under 100K range based on things I've read here; sounds like your spend is 120K
I went back to add a couple other options but based on those that voted (I am guessing you were the previous top vote) all were under 65K
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I voted in the poll based on my actual core spending, which excludes what I pay for child support (because it's ending this month) and what I pay for college (because I'm about 5/12 of the way through those expenses and I've got the money saved for them in a separate bucket).
What my number is shouldn't really matter. What should matter is what things tend to be FIRE cost drivers and how to determine what you actually spend.
The latter is easy, so I'll just address that first. Use Quicken and track every penny for three years, then consider sinking funds for large periodic expenses that didn't happen in those three years - new car, new roof, etc. Perhaps insure against big medical risks (LTC, health insurance) if appropriate.
The FIRE cost drivers that I see most often:
1. Living in an HCOL. Manhattan is way more expensive than Oklahoma city. If you want to live in a LCOL area, move 50 miles away from any large bodies of water.
2. Married vs. single. The cost multiplier here seems to be about 1.5 on average.
3. Children in college that you decide to pay for. Currently this is 43% of my spending over the past six months.
4. Travel. Can be expensive depending on how you do it.
5. Health insurance. If you don't qualify for ACA and are past 50, it'll probably be expensive.
6. Mortgage. Some people go for the mortgage arbitrage and get big, long mortgages, with their associated monthly payments. I understand the strategy and think it makes sense for many people, but have chosen not to follow it personally.
Occasionally people have expensive hobbies, like boats, planes, or horses, but that's not really that common to my knowledge. People either don't feel the need, or they scratch the itch, or it's too expensive to maintain.
The above items can mean the difference between ~$25K and ~$150K.
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Can you add a "Not FIREd, want to see poll results" option? :-)
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I voted for $25k since you didn't create an option for anything lower.
FIRE'd last October and annualized spend is currently ~$15-18k/yr thanks to geographical arbitrage. Over the past 5 years it averaged closer to $20-25k though. Since you are single, this is my individual spend.
As a couple, my wife and I are currently @ $28-30k/yr and averaged closer to $39-44k/yr whilst we were working.
We are 33 and 29 years old, and may return to work to beef up the portfolio a bit if our wants/needs change.
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Can you add a "Not FIREd, want to see poll results" option? :-)
DONE!!
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I voted for $25k since you didn't create an option for anything lower.
FIRE'd last October and annualized spend is currently ~$15-18k/yr thanks to geographical arbitrage. Over the past 5 years it averaged closer to $20-25k though. Since you are single, this is my individual spend.
As a couple, my wife and I are currently @ $28-30k/yr and averaged closer to $39-44k/yr whilst we were working.
We are 33 and 29 years old, and may return to work to beef up the portfolio a bit if our wants/needs change.
Sorry I didn't know where to start and end I figured there may be people under 25K and people MUCH higher then my original top (I added more options) of 65K+
I was really just trying to get an idea of peoples spend as it's something I think about and consider when I look at where to move eventually. I can afford where I am just think it makes sense to go to a LCOL (or lower) possibly even not own again
15-18K a year is amazing, and you're quite young as well, mind if I ask where you're located?
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I am FI, but not retired yet. I voted for $85K, but our target spending is probably between $90K and $100K. This is for a couple, with the intention to support children in the future if needed.
We like spending money on travel, casinos, food, etc. If we are in a really bad situation, we may be able to survive on $40K per year with a smaller house.
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I didn't vote - this is my first year FIREd, and my budget is $24k (single person). My final year of working, I spent $25.5k. Right now, I'm spending under target (thanks, pandemic!). My budget is based on everything going well, and does not include expenses like major car or home repair, or more than basic medical expenses - but I do have wiggle room in savings to cover those if they happen. I probably won't stay unemployed forever, though the numbers indicate I might be able to if my spending stays at this relative level.
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I didn't vote - this is my first year FIREd, and my budget is $24k (single person). My final year of working, I spent $25.5k. Right now, I'm spending under target (thanks, pandemic!). My budget is based on everything going well, and does not include expenses like major car or home repair, or more than basic medical expenses - but I do have wiggle room in savings to cover those if they happen. I probably won't stay unemployed forever, though the numbers indicate I might be able to if my spending stays at this relative level.
Same here on 1st year 24K is low and awesome; what area of the world or US are you in?
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I was really just trying to get an idea of peoples spend as it's something I think about and consider when I look at where to move eventually. I can afford where I am just think it makes sense to go to a LCOL (or lower) possibly even not own again
15-18K a year is amazing, and you're quite young as well, mind if I ask where you're located?
We have been in Portugal for the past two months, until June 7th. From June-Sept/Oct we will be staying in Poland where most of my family lives. Both are LCOL areas. Our current fully furnished/kitted out 1.5 bath apartment is $770/month ($385/each) through AirBnB, so all utilities included. In Poland we will do some AirBnB's, camping, and stay with family. In the fall we may do WOOFing or WorkAway.
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Consistently under 25k since 2012 ER. Targeting 18k this year as portfolio to a COVID-19 hit.
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Past 5 years around $16K.
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I didn't vote - this is my first year FIREd, and my budget is $24k (single person). My final year of working, I spent $25.5k. Right now, I'm spending under target (thanks, pandemic!). My budget is based on everything going well, and does not include expenses like major car or home repair, or more than basic medical expenses - but I do have wiggle room in savings to cover those if they happen. I probably won't stay unemployed forever, though the numbers indicate I might be able to if my spending stays at this relative level.
Same here on 1st year 24K is low and awesome; what area of the world or US are you in?
I'm in the Southeast US. With a paid-off house.
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I am 60, Annual spend = $135K, this is 3.25% of nest egg. I have zero debt, and own house, etc. I can live on less, but I can't take it with me.
My problem now is: I can't travel because of pandemic - so I probably can't even spend the $135K until traveling becomes safe.
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Fortunately we have learned that our happiness and wellness indices do not seem to be highly correlated with our annual spend. In some strange unexpected twist there could actually be a bit of a negative correlation, LOL.
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Past 5 years around $16K.
That's very impressive! Paid off home?
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Past 5 years around $16K.
That's very impressive! Paid off home?
AGREED!! that is impressive and my home is paid off but in a HCOL my real estate taxes are 3/4 of that yearly spend; crazy
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As has already been said, what other people spend is virtually irrelevant.
Some people keep a mortgage in retirement, some people pay for kid's education, some people have expensive chronic health issues, some people stay in VHCOL areas to be near grandkids, some people take up expensive hobbies.
There are so many things that can balloon an annual spend well beyond indicating the basic quality of life the person is living. So numbers are practically meaningless.
If someone has very low core expenses, then even a modest 30K spend could involve a lot of luxury. Meanwhile, if someone has high fixed costs, then even 60K might feel tight and constrained.
You need to figure out what you want your core expenses to look like, and then you need to figure out how much wiggle room you want on top of that. For us, we're all about the wiggle room. Our core expenses are pretty low, but our retirement budget is double that so that we have ample room for added luxury. However, our actual numbers are virtually meaningless to you unless you live the same basic lifestyle as we do.
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I answered with our family spending (last year it was just under 45K) Were you intending people to answer this with a per person figure?
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Past 5 years around $16K.
That's very impressive! Paid off home?
Condo and car owned outright.
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As has already been said, what other people spend is virtually irrelevant.
Some people keep a mortgage in retirement, some people pay for kid's education, some people have expensive chronic health issues, some people stay in VHCOL areas to be near grandkids, some people take up expensive hobbies.
There are so many things that can balloon an annual spend well beyond indicating the basic quality of life the person is living. So numbers are practically meaningless.
If someone has very low core expenses, then even a modest 30K spend could involve a lot of luxury. Meanwhile, if someone has high fixed costs, then even 60K might feel tight and constrained.
You need to figure out what you want your core expenses to look like, and then you need to figure out how much wiggle room you want on top of that. For us, we're all about the wiggle room. Our core expenses are pretty low, but our retirement budget is double that so that we have ample room for added luxury. However, our actual numbers are virtually meaningless to you unless you live the same basic lifestyle as we do.
Yes all accurate it was more curiosity as based on other threads this seems to be an ongoing question as to what people actually spend not necessarily the 3% or 4% rule. Hence why I was hoping people would add some commentary which they have.
I've stated what i spent my 1st year but I also plan to leave a HCOL area for a lower one or an international one, in the next few years.
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I answered 25k because it sounds like you are looking at single person expenses. DW and I are actually quite a bit under that on basic expenses, which look to come in at about 35k for both of us this year (so about 17.5k on an individual basis). We spent way more than that last year due to travel and a vehicle replacement. This year is low because we're staying put due to COVID. I'm guessing a "normal" year for us would be around 45k, so still under 25k per person.
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As has already been said, what other people spend is virtually irrelevant.
Some people keep a mortgage in retirement, some people pay for kid's education, some people have expensive chronic health issues, some people stay in VHCOL areas to be near grandkids, some people take up expensive hobbies.
There are so many things that can balloon an annual spend well beyond indicating the basic quality of life the person is living. So numbers are practically meaningless.
If someone has very low core expenses, then even a modest 30K spend could involve a lot of luxury. Meanwhile, if someone has high fixed costs, then even 60K might feel tight and constrained.
You need to figure out what you want your core expenses to look like, and then you need to figure out how much wiggle room you want on top of that. For us, we're all about the wiggle room. Our core expenses are pretty low, but our retirement budget is double that so that we have ample room for added luxury. However, our actual numbers are virtually meaningless to you unless you live the same basic lifestyle as we do.
Yes all accurate it was more curiosity as based on other threads this seems to be an ongoing question as to what people actually spend not necessarily the 3% or 4% rule. Hence why I was hoping people would add some commentary which they have.
I've stated what i spent my 1st year but I also plan to leave a HCOL area for a lower one or an international one, in the next few years.
I'm confused, what is the ongoing question you are seeing in other threads?
Yes, people are constantly wondering what other people spend, but that doesn't take away from that data being virtually useless on its own.
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As has already been said, what other people spend is virtually irrelevant.
Some people keep a mortgage in retirement, some people pay for kid's education, some people have expensive chronic health issues, some people stay in VHCOL areas to be near grandkids, some people take up expensive hobbies.
There are so many things that can balloon an annual spend well beyond indicating the basic quality of life the person is living. So numbers are practically meaningless.
If someone has very low core expenses, then even a modest 30K spend could involve a lot of luxury. Meanwhile, if someone has high fixed costs, then even 60K might feel tight and constrained.
You need to figure out what you want your core expenses to look like, and then you need to figure out how much wiggle room you want on top of that. For us, we're all about the wiggle room. Our core expenses are pretty low, but our retirement budget is double that so that we have ample room for added luxury. However, our actual numbers are virtually meaningless to you unless you live the same basic lifestyle as we do.
Yes all accurate it was more curiosity as based on other threads this seems to be an ongoing question as to what people actually spend not necessarily the 3% or 4% rule. Hence why I was hoping people would add some commentary which they have.
I've stated what i spent my 1st year but I also plan to leave a HCOL area for a lower one or an international one, in the next few years.
I'm confused, what is the ongoing question you are seeing in other threads?
Yes, people are constantly wondering what other people spend, but that doesn't take away from that data being virtually useless on its own.
The ongoing is people , myself included, seem to be interested in yearly spend. Tons of factors influence that spend obviously but polls don't allow for that hence the discussion. I spent my career or former career in the world of data and nothing, data wise, is useless unless you just don't care. Maybe you don't but I did and have seen others asking similar type questions so maybe they did. I've already learned some things from this maybe you, and others haven't.
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I care too, OP. I wager many others do too.
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As has already been said, what other people spend is virtually irrelevant.
Some people keep a mortgage in retirement, some people pay for kid's education, some people have expensive chronic health issues, some people stay in VHCOL areas to be near grandkids, some people take up expensive hobbies.
There are so many things that can balloon an annual spend well beyond indicating the basic quality of life the person is living. So numbers are practically meaningless.
If someone has very low core expenses, then even a modest 30K spend could involve a lot of luxury. Meanwhile, if someone has high fixed costs, then even 60K might feel tight and constrained.
You need to figure out what you want your core expenses to look like, and then you need to figure out how much wiggle room you want on top of that. For us, we're all about the wiggle room. Our core expenses are pretty low, but our retirement budget is double that so that we have ample room for added luxury. However, our actual numbers are virtually meaningless to you unless you live the same basic lifestyle as we do.
Yes all accurate it was more curiosity as based on other threads this seems to be an ongoing question as to what people actually spend not necessarily the 3% or 4% rule. Hence why I was hoping people would add some commentary which they have.
I've stated what i spent my 1st year but I also plan to leave a HCOL area for a lower one or an international one, in the next few years.
I'm confused, what is the ongoing question you are seeing in other threads?
Yes, people are constantly wondering what other people spend, but that doesn't take away from that data being virtually useless on its own.
The ongoing is people , myself included, seem to be interested in yearly spend. Tons of factors influence that spend obviously but polls don't allow for that hence the discussion. I spent my career or former career in the world of data and nothing, data wise, is useless unless you just don't care. Maybe you don't but I did and have seen others asking similar type questions so maybe they did. I've already learned some things from this maybe you, and others haven't.
Oh, I know people often ask this, but it always quickly becomes apparent that there are huge confounding factors at play. I think it might be interesting to ask "what is your annual spend, and what is the biggest factor in that spend?"
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I care too, OP. I wager many others do too.
Yeah as Malkynn points out there are, of course, other factors but I think it's still interesting to see/read peoples responses
Oh, I know people often ask this, but it always quickly becomes apparent that there are huge confounding factors at play. I think it might be interesting to ask "what is your annual spend, and what is the biggest factor in that spend?"
Exactly people ask. Yes there are tons of factors. I mean I'd like to know many thing, biggest factor which may also play into where they live, if they are married, have a SO, single, kids etc.
Lots of questions for sure but was just asking the basic in hopes it would spark form conversation(s). Maybe even give others, like myself, some more insight into what people spend and some of those other questions.
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We budgeted $36k for 2020, but will likely be closer to $30k, since our vacation plans have been impacted. Traveling accounts for around 1/3rd of our annual budget. Since this is the first year that both of us are retired, this will be the first time living without relying on traditional income. Therefore, our actual spending may vary a bit. We live in LCOL area and we are debt free. We own 2 cars and one motorcycle. Our home and vehicles are all insured. We don't eat out much (once or twice a week at most) and we do not participate in any high cost hobbies and/or sports. We live somewhat frugally and even our travel is value minded.
BJ
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Not FIRE'd (yet) but spend ~$80K annually.
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I can see how this can easily be all over the map.
Is this per family or per person or what?
How are you people including future college expenses for kids, if that's your situation? Yah, I know the Boglehead way is to say "let those useless kids pay their own way, I got retirement to pay for and nobody loans for retirement, get off my lawn". But for kids to have an even footing, they're going to need help paying for college. This isn't 1975, when community college was $200 a semester and a part time job easily cleared $100 a week (real numbers from when I paid my own way through community college). I know that college costs really screw up an average spending number, making it skyrocket during college years, then drop like a rock afterwards.
For some level setting, I spent about $300k for DS#1's college. He just finished his last course and should have a diploma any day now. Job is secured and start date imminent. DS#2 has lots in his "college fund" account from grandparents and gifts and can pay for at least one more full year and then some. Even then, there are certainly costs. A car for the 15 mile commute and food and books and such. Mouse turds compared to the private college, on campus cost for DS#1.
Anyways, I keep pretty good track. Ignoring college, our family spends right about $56k a year. Paid off everything long ago. 5 cars out there. Pretty much, they're all just sitting.
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That is NOT a normal distribution, LOL. Bimodal...LO and HI centroids?
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I can see how this can easily be all over the map.
Is this per family or per person or what?
How are you people including future college expenses for kids, if that's your situation? Yah, I know the Boglehead way is to say "let those useless kids pay their own way, I got retirement to pay for and nobody loans for retirement, get off my lawn". But for kids to have an even footing, they're going to need help paying for college. This isn't 1975, when community college was $200 a semester and a part time job easily cleared $100 a week (real numbers from when I paid my own way through community college). I know that college costs really screw up an average spending number, making it skyrocket during college years, then drop like a rock afterwards.
For some level setting, I spent about $300k for DS#1's college. He just finished his last course and should have a diploma any day now. Job is secured and start date imminent. DS#2 has lots in his "college fund" account from grandparents and gifts and can pay for at least one more full year and then some. Even then, there are certainly costs. A car for the 15 mile commute and food and books and such. Mouse turds compared to the private college, on campus cost for DS#1.
Anyways, I keep pretty good track. Ignoring college, our family spends right about $56k a year. Paid off everything long ago. 5 cars out there. Pretty much, they're all just sitting.
I solved the college problem by having my kid when I was young and then retiring after he had finished college. But of course people aiming to retire before their late 40s don't have that option.
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I answered 25k because it sounds like you are looking at single person expenses. DW and I are actually quite a bit under that on basic expenses, which look to come in at about 35k for both of us this year (so about 17.5k on an individual basis). We spent way more than that last year due to travel and a vehicle replacement. This year is low because we're staying put due to COVID. I'm guessing a "normal" year for us would be around 45k, so still under 25k per person.
Just to give a little more context: LCOL area, expenses include a mortgage payment (though not a huge one), ACA health insurance with premium tax credit pretty close to maxed out. No kids at home.
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My FIRE budget ends in a 0, so I had to choose between arbitrarily rounding up by 5k or down by 5k to answer the poll.
65% of my budget is for travel, charitable donations and (because I don't have a paid off home and live in a VHCOL area) housing. So those 3 variables, which truly are huge variables amongst us all (vs. say, groceries or whatever), make it hard to compare across situations.
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I just re-reviewed the results. I'm astounded that 13 people are over 100k a year in spend. I never even made 100k in a year. What would I conceivably spend that kind of money on?!?
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I just re-reviewed the results. I'm astounded that 13 people are over 100k a year in spend. I never even made 100k in a year. What would I conceivably spend that kind of money on?!?
I'm not FIREd yet, but my goal is to have at least $120k/year available to spend. I live in a LCOL area, and my house would be paid off, so it would be a stretch after a lifetime of saving and living fairly frugally, but I'm up for the challenge!
I figure this will more than cover all travel needs, I can hire any and all work out, I won't worry about a budget, or how much groceries cost. I'll pay for meals with family when we go out. I want to be able to take my son and any future grandchildren, or friends' grandchildren, to the theater multiple times a year and make a big outing out of it.
I also plan to make sure that I can cover live-in care if needed, or a very nice retirement/nursing home. Two grandparents lived into their 90s (one side of family has lived into the 90s for at least the last 11 generations), and one set lived into their 80s. I want to know I can be well taken care of without my son feeling any kind of financial burden, or worry of burden.
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We just finished a deep dive on our 2019 FIRE budget (https://www.tictoclife.com/fire-budget-spending-2019/). We're in an MCOL city with a mortgage. There's a couple of things I think are a little tricky with spending and budget reporting:
- Pay off your mortgage, boom your reported spending drops dramatically (we analyzed it'd be a 24% cut)
- We often "upgrade" (think of smartphones) annually, selling off the old item and subtracting the sale value from the cost of the replacement
For 1), it can make your spending appear a lot lower than some other comparative spending (or the reverse). Make sure to account for this if you're comparing to other FIRE'ers (like MMM or RootOfGood, or us!). For 2) I think there's room for debate on what's "proper". Certainly, it makes sense to adjust for upgrades in some fashion if you're simply swapping one item for another and accounting for the net difference. I think lots of folks often just report the old item's sale as "income" though. I added our result at just a little under $41k.
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We're at $45k but that includes expenses for 3 kids. I would guess we'd drop by $15k or so once they're all out of the house (maybe considerably more if we also downsize). But that's 17 years out, so I'll stick with the $45k number.
-W
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I’m not FIREd but wanted to see results and I’m gobsmacked that there are 13 people with decidedly un-mustachian FIRE budgets, but power to you if you’ve got the 25x expenses to pull off that! I thought aiming for $60k/yr as a safety net for a single person was extreme.
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We're at $45k but that includes expenses for 3 kids. I would guess we'd drop by $15k or so once they're all out of the house (maybe considerably more if we also downsize). But that's 17 years out, so I'll stick with the $45k number.
-W
That's pretty impressive for a family with 3 kids wow
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We're at $45k but that includes expenses for 3 kids. I would guess we'd drop by $15k or so once they're all out of the house (maybe considerably more if we also downsize). But that's 17 years out, so I'll stick with the $45k number.
-W
That's pretty impressive for a family with 3 kids wow
The oldest is only 8, so they will probably get somewhat more expensive (braces!) in a few years.
I mean, other than food, and occasional bike/ski gear, we just don't buy anything. It's not like, hard to do if you avoid the big obvious dumb stuff (ie cars, remodeling perfectly good kitchens/bathrooms, clothes, coffee/eating out constantly, etc).
-W
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By following the 4% SWR advice, I could spend 150k plus per year, but we’ll probably stick to our $600/week lifestyle. I imagine we will do one-off rentals that go over this (like a yacht, RV, and Air BnB’s if travel comes back eventually), but 40k/yr with a paid off home is the most accurate answer to the poll. But I’m not ER so I didn’t vote.
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@EscapeVelocity2020 you going to change your handle to EscapeVelocity2020+ if you don't ER by year end?? Haha. Best laid plans, right?
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I just re-reviewed the results. I'm astounded that 13 people are over 100k a year in spend. I never even made 100k in a year. What would I conceivably spend that kind of money on?!?
This wasn't my answer, but we live in a HCOL. If we plan to stay, property tax is over 1/3 of that. Factor in an expensive hobby (skiing, for us) & college expenses or a large family, & I can see it playing out.
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I just re-reviewed the results. I'm astounded that 13 people are over 100k a year in spend. I never even made 100k in a year. What would I conceivably spend that kind of money on?!?
I think this quote and Spartana's earlier post are great examples of why Malkynn didn't think that other peoples' numbers were likely to be relevant for the OP's question on whether he/she can fire. That said, they are also what makes this post interesting (at least to me). Nobody can tell OP "how much" he/she should/will spend in FIRE, but plenty of posters here regularly show us how little is necessary to FIRE. Plenty of posters here are covering all the necessities of life and enough luxuries (like travel) to make themselves happy on very small budgets. My own budget is larger (because it can be), but this thread has been a great reminder that it doesn't have to be. My spend is larger than some people here, but I doubt it generates a commensurately higher level of happiness.
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@EscapeVelocity2020 you going to change your handle to EscapeVelocity2020+ if you don't ER by year end?? Haha. Best laid plans, right?
@Financial.Velociraptor Indeed!
But Mousie, thou art no thy-lane,
In proving foresight may be vain:
The best laid schemes o’ Mice an’ Men
Gang aft agley,
An’ lea’e us nought but grief an’ pain,
For promis’d joy!
Good luck to you friend, the road ahead is not what was expected.
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By following the 4% SWR advice, I could spend 150k plus per year, but we’ll probably stick to our $600/week lifestyle. I imagine we will do one-off rentals that go over this (like a yacht, RV, and Air BnB’s if travel comes back eventually), but 40k/yr with a paid off home is the most accurate answer to the poll. But I’m not ER so I didn’t vote.
I am wondering how do you plan for the $90k you do not want to spend each year. I hope your job is really fun so that you can make money and have fun at the same time.
Although my job is not too boring (teaching), I still prefer to spend my time on a beach, not in a classroom, if I am absolutely sure that I can afford that kind of lifestyle without serious problems in the future.
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I just went through this exercise with my wife, my answer is $CDN30,000 now (exact calculated spending), and an estimated $CDN36,000 by the end of the year which will be the start of my "early" retirement phase, as in the meaning of active retirement, adventure, travel, not in the sense of "early retirement" which was never my goal in the first place. I am 62 and semi-retired since 2016. I kept a couple of very sweet part-time gigs that I love, she is 45 and just lost her job due to the coronavirus. Although I love my gigs, COVID-19 game me the opportunity to rethink some of my priorities, so I will be retiring completely at the end of the summer to pursue other interests. Spending during our pre-retirement life was $2,500 per month for the two of us, including vacation and travel. We own an inner-city condo in a biggish Canadian city and a vacation acreage on an island in the PSW (we are in Canada, so the PSW is what Americans call the PNW), both paid-off. We will eventually decide to sell one of these properties, both, or none. No rush. Our post-retirement monthly budget will increase to $3,000 to take into account extended medical coverage for my wife (I have full medical and dental coverage) and travel insurance for both when we travel. We were very thorough in our budgeting exercise, and realize our spending is on the lower end of the spectrum, but we could not think of anything we missed or any budget line we wanted to increase.
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I will be retiring this year but my wife has no plans of quitting her high-paying job so we won't be really drawing on savings in the immediate future. But I do find it useful to keep track of how much it costs to sustain our current lifestyle.
I updated my expense tracking spreadsheet and found that our basic on-going expenses are about $69k at the moment.
- This figure includes (a bit pricey) gym memberships, house cleaning and gardening.
- We live in an inner suburb of NY City in NJ so this is a HCOL area. We have no plans of moving from here in retirement.
- We have no mortgage (fully paid off house).
- We buy cars for cash and keep them for at least 15 years so no car payments. Neither of our cars is due for immediate replacement.
- This number does not include travel but neither my wife nor I are much into travel.We will undoubtedly travel a little in retirement but I don't see more than one big trip a year, and that too for a relatively short duration.
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We just finished a deep dive on our spending for 2019 (https://www.tictoclife.com/fire-budget-spending-2019/). We're in an MCOL city with a mortgage. There's a couple things I think are a little tricky with spending and budget reporting:
I found this very interesting - I was generally impressed by how low your expenses are except for the HOA amount. What do you get for that?
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By following the 4% SWR advice, I could spend 150k plus per year, but we’ll probably stick to our $600/week lifestyle. I imagine we will do one-off rentals that go over this (like a yacht, RV, and Air BnB’s if travel comes back eventually), but 40k/yr with a paid off home is the most accurate answer to the poll. But I’m not ER so I didn’t vote.
I am wondering how do you plan for the $90k you do not want to spend each year. I hope your job is really fun so that you can make money and have fun at the same time.
Although my job is not too boring (teaching), I still prefer to spend my time on a beach, not in a classroom, if I am absolutely sure that I can afford that kind of lifestyle without serious problems in the future.
That's exactly it - I can spend more, and maybe I'll spend more than 40k here and there, but I'm just living life. It is hard for us to spend more without feeling like weird, fake consumer people. I guess I could drive a nicer car than a Honda Fit, but it's so easy to work on and we love joking about paying 17k for it. I did buy the kids iPhone 11s because the camera helped them take better pictures, but that little frenzy of consumerism came and went.
I like the fact that I can spend more (and I just bought some basic $120 airpods so I can listen to the new Stephen King book I got through Audible while I walk, and also the EconTalk podcasts I used to enjoy during my commute), and I don't intentionally spend less or focus on frugality. I just don't spend that much - $600/week seems to be enough. We take care of our stuff and are mindful on spending I guess.
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I just re-reviewed the results. I'm astounded that 13 people are over 100k a year in spend. I never even made 100k in a year. What would I conceivably spend that kind of money on?!?
I think this quote and Spartana's earlier post are great examples of why Malkynn didn't think that other peoples' numbers were likely to be relevant for the OP's question on whether he/she can fire. That said, they are also what makes this post interesting (at least to me). Nobody can tell OP "how much" he/she should/will spend in FIRE, but plenty of posters here regularly show us how little is necessary to FIRE. Plenty of posters here are covering all the necessities of life and enough luxuries (like travel) to make themselves happy on very small budgets. My own budget is larger (because it can be), but this thread has been a great reminder that it doesn't have to be. My spend is larger than some people here, but I doubt it generates a commensurately higher level of happiness.
Actually, the OP AKA ME, posted it more as a curiosity to see where/what peoples numbers are and any information around that they wanted to provide, in the comments, around those numbers. Although there are many factors I've found some of the answers pretty interesting and in some cases impressive.
I did say my timing for not working was unplanned earlier/younger then I thought and not sure what I'll do, with my time but believe I have enough. I think later on I did clarify also saying I live in a HCOL area and I may or may not have said I spent months traveling (in expensive places) after I stopped working. I did spend a significant amount less the the 4% rule but all the money I have spent in the year was not taken from investments.
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I semi retired 8 years ago at 58. Our core budget is 48k. Our HI and medical expenses average about 10k year. This doesn’t include travel and we average anywhere between 5-14k/year. We had a month trip booked for August in Europe which was going to cost 10k but of course that’s not going to happen.
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We just finished a deep dive on our 2019 FIRE budget (https://www.tictoclife.com/fire-budget-spending-2019/). We're in an MCOL city with a mortgage. There's a couple of things I think are a little tricky with spending and budget reporting:
I found this very interesting - I was generally impressed by how low your expenses are except for the HOA amount. What do you get for that?
We broke out the HOA (in the housing section (https://www.tictoclife.com/fire-budget-spending-2019/#home)) specifically because it *is* high [$350/month], but we get a lot for it. Here's the section:
Our monthly HOA fee may seem exceptionally high at a glance, but it covers a lot of expenses that are often separate. In addition, our HOA is managed internally by fellow owners and management does not take any sort of compensation. All fees just flow back to owners, usually in a more efficient way, through combined billing. For example, a single commercial water boiler provides hot water for everyone. The fee includes our heating, water usage, landscaping, common area maintenance, garage maintenance, gutter cleaning, and a few other small benefits. Our neighborhood was originally set up as a cooperative in the 1920s. Fortunately, we continue to have a good relationship with our neighbors.
Happy to answer any additional questions you may have or offer insights, too! One day I'll convince Jenni to sign up for these forums :)
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This will be our second full year of retirement and I'm still getting a handle on what our spending is.
My working number is about $55k, However, so far our spending is going to be less than $21k for the first 6 months. If that holds for the last 6 months of the year, our spending will be under $45k. It could be that the Covid 19, "stay in place" may have reduced our spending a bit.
Gee, $55,000 divided by 2 = $27,500 - $21,000 = $6,500. Does that mean I need to find someplace to spend $6,500?
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Gee, $55,000 divided by 2 = $27,500 - $21,000 = $6,500. Does that mean I need to find someplace to spend $6,500?
It is a must spend item:
Tesla Model S Performance
Payment Estimates
Monthly Payment $649
Order Payment $100
Due at signing* $5,844
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It would also be helpful to break things down to.a basic level such as the mind of housing you would prefer - studio apt or mcmansions or something in between? Buy or rent? Areas you'd like to live? Ways you like to travel - grungy backpacker hostel dweller? dirt bag tent camper? Modest Airbnb rooms? Whole house vacation rentals? Fancy 5 star spa retreats? Are your hobbies and interests inexpensive or costly? Fine dining or brown bag grub? Etc.
It is really hard to compare your own situation to that of others when defining what you will do and how much you'll spend once FIREd. Even between people who seem to be in your same situation - single, no kids, HCOLA. Too many personal.choices and other variables.
ETA: It would be fun to see a poll that put everyone on equal footing and equal basic expenses at the start. Say we all lived in.Mustasheville and our benevolent Dear Leader MMM bought each of us a house there and we had the same prop taxes and baseline utilities and medical was covered. Then see what each person's discretionary spending would be ideal for them. A single person with no kids who didn't own a car or TV or costly entertainment and liked to bike tour/tent camp for travel might only need a thousand or less each month to live their dream life. Someone with multiple kids and SAHP spouse who was into new tech, luxury cars and luxury vacations might need thousands.
I thought we kind of hit on this previously... Agreed lots of personal choices but still interesting to learn that even with those personal choices someone might have a family of 5 (2 adults 3 children) and be able to do so on 45K annual spend or to see that there are many people that chose to go with over 100K as their spend.
That isn't to say that the person who's spending 45K couldn't spend over 100K he/she is just choosing not to. I mentioned my spend was 55K I could have spent more and afforded to spend more I just didn't. Again personal choice so I DO think that it's interesting to know what peoples spend is and a few others did as well.
As for your experimental poll idea, I like it but think it's basically a SIM game from years ago..
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I like to hear about personal spending choices too. It is a little voyueristic but I know I've learned a lot from other people's stories. Especially those who are more frugal then I was/am. For me, I just do what I like to do and those things don't cost much. Spending more on myself wouldn't enhance my life at all. But it took me awhile to realize that and other people around these types of forums helped me come to that realization.
Yep same here, we are all learning and like yourself spending more wouldn't enhance my life. I spent plenty this year and traveled for a most of it yet still way under many peoples spend. Also like yourself I just do what I like and I wasn't overly worried about the costs which is sort of what led me to the original post as I was just curious what people were spending in general
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I just re-reviewed the results. I'm astounded that 13 people are over 100k a year in spend. I never even made 100k in a year. What would I conceivably spend that kind of money on?!?
I think this quote and Spartana's earlier post are great examples of why Malkynn didn't think that other peoples' numbers were likely to be relevant for the OP's question on whether he/she can fire. That said, they are also what makes this post interesting (at least to me). Nobody can tell OP "how much" he/she should/will spend in FIRE, but plenty of posters here regularly show us how little is necessary to FIRE. Plenty of posters here are covering all the necessities of life and enough luxuries (like travel) to make themselves happy on very small budgets. My own budget is larger (because it can be), but this thread has been a great reminder that it doesn't have to be. My spend is larger than some people here, but I doubt it generates a commensurately higher level of happiness.
Actually, the OP AKA ME, posted it more as a curiosity to see where/what peoples numbers are and any information around that they wanted to provide, in the comments, around those numbers. Although there are many factors I've found some of the answers pretty interesting and in some cases impressive.
I did say my timing for not working was unplanned earlier/younger then I thought and not sure what I'll do, with my time but believe I have enough. I think later on I did clarify also saying I live in a HCOL area and I may or may not have said I spent months traveling (in expensive places) after I stopped working. I did spend a significant amount less the the 4% rule but all the money I have spent in the year was not taken from investments.
It would also be helpful to break things down to.a basic level such as the mind of housing you would prefer - studio apt or mcmansions or something in between? Buy or rent? Areas you'd like to live? Ways you like to travel - grungy backpacker hostel dweller? dirt bag tent camper? Modest Airbnb rooms? Whole house vacation rentals? Fancy 5 star spa retreats? Are your hobbies and interests inexpensive or costly? Fine dining or brown bag grub? Etc.
It is really hard to compare your own situation to that of others when defining what you will do and how much you'll spend once FIREd. Even between people who seem to be in your same situation - single, no kids, HCOLA. Too many personal.choices and other variables.
ETA: It would be fun to see a poll that put everyone on equal footing and equal basic expenses at the start. Say we all lived in.Mustasheville and our benevolent Dear Leader MMM bought each of us a house there and we had the same prop taxes and baseline utilities and medical was covered. Then see what each person's discretionary spending would be ideal for them. A single person with no kids who didn't own a car or TV or costly entertainment and liked to bike tour/tent camp for travel might only need a thousand or less each month to live their dream life. Someone with multiple kids and SAHP spouse who was into new tech, luxury cars and luxury vacations might need thousands.
I think the polls serve different purposes, but I have done a similar poll elsewhere. Because not everyone was retired, it asked monthly spend less housing and childcare since those seems to be the two largest expenses for most households that vary greatly depending on location.
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Just retired. We are budgeting 60K/yr which includes HI, taxes, vacationing, general living expenses
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It would also be helpful to break things down to.a basic level such as the mind of housing you would prefer - studio apt or mcmansions or something in between? Buy or rent? Areas you'd like to live? Ways you like to travel - grungy backpacker hostel dweller? dirt bag tent camper? Modest Airbnb rooms? Whole house vacation rentals? Fancy 5 star spa retreats? Are your hobbies and interests inexpensive or costly? Fine dining or brown bag grub? Etc.
It is really hard to compare your own situation to that of others when defining what you will do and how much you'll spend once FIREd. Even between people who seem to be in your same situation - single, no kids, HCOLA. Too many personal.choices and other variables.
ETA: It would be fun to see a poll that put everyone on equal footing and equal basic expenses at the start. Say we all lived in.Mustasheville and our benevolent Dear Leader MMM bought each of us a house there and we had the same prop taxes and baseline utilities and medical was covered. Then see what each person's discretionary spending would be ideal for them. A single person with no kids who didn't own a car or TV or costly entertainment and liked to bike tour/tent camp for travel might only need a thousand or less each month to live their dream life. Someone with multiple kids and SAHP spouse who was into new tech, luxury cars and luxury vacations might need thousands.
I thought we kind of hit on this previously... Agreed lots of personal choices but still interesting to learn that even with those personal choices someone might have a family of 5 (2 adults 3 children) and be able to do so on 45K annual spend or to see that there are many people that chose to go with over 100K as their spend.
That isn't to say that the person who's spending 45K couldn't spend over 100K he/she is just choosing not to. I mentioned my spend was 55K I could have spent more and afforded to spend more I just didn't. Again personal choice so I DO think that it's interesting to know what peoples spend is and a few others did as well.
As for your experimental poll idea, I like it but think it's basically a SIM game from years ago..
I like to hear about personal spending choices too. It is a little voyueristic but I know I've learned a lot from other people's stories. Especially those who are more frugal then I was/am. For me, I just do what I like to do and those things don't cost much. Spending more on myself wouldn't enhance my life at all. But it took me awhile to realize that and other people around these types of forums helped me come to that realization.
Color me voyueristic too. It's fun to see how people with the same spend might spend it quite differently, for example. And hearing from people who aren't spending much and really enjoying life never gets old.
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@Missy B --
And hearing from people who aren't spending much and really enjoying life never gets old.
Ha, I'm with you. We blew 41k last year, and around that the year before, and before..and so on. And we'll probably be around there this year.
Sometimes I wonder how we'd really spend much more.
- 2x Modern iPhones with plenty of data, the world at our fingertips
- Year-round travel to exotic places whenever our schedule allows
- Toy car in the garage that is a thorough waste of money, and a mind-boggling electric future car for day-to-day (Prius)
- A fancy brick historic house with landscaping and people that care for it in the city
- Parks, shops, museums, and all the fun things we could imagine within a short few blocks of walking
- This super-fast computer I'm clacking away on that also plays the latest games, not to mention two iPads and a laptop
- Endless hobbies like board games, LEGO, and crafting for the two of us
- Entirely unnecessary organic foods and a diet we get to be picky with
I sound like I'm bragging...almost feel bad! But, hey, life is pretty amazing!
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Color me voyueristic too. It's fun to see how people with the same spend might spend it quite differently, for example. And hearing from people who aren't spending much and really enjoying life never gets old.
SAME!! I find it pretty interesting which is what made me start the poll/discussion..
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If I were going to try to get a bead on what these numbers mean across life circumstances, I'd eliminate rent/ mortgage/ property tax, childcare, charity (beyond supporting your dependents), and (obligate) healthcare - RCCH. Once you rule those out you have a reasonable sense of discretionary impact - although COL is still a big factor, it can be revealing & motivating to know how cheap a happy lifestyle can be. I'm always on the lookout for someone living on less than I do in a way I'd still find fulfilling, because it calls me out & holds me accountable for my areas of opportunity to get more from less.
I don't ever expect to go full-Jacob (of ERE), but if you took RCCH out of the picture I'd be looking at a scant ~$8350 a year of spending, even considering that I way overspend on my data bill (largely due to work, I need redundant high speed data connections), & have a taste for tech toys and fancy imported groceries. Changes in discretionaries I'd expect in RE would be increased spending on groceries due to sufficient time to graze on low-calorie nutrient-rich fresh foods instead of bolting down 2/3 of my meals as mere fuel, and possibly some limited increases to hobby & outing spending; decreased spending on data, car insurance, gas, and work-induced clothing needs. I suspect that will come out slightly under $8k.
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I have a planned FIRE spend of ~$34K USD. That's in a HCOL area in Canada with a mortgage and lots of spendy hobbies. That's my personal budget as my GF is working another ~6 years. Her FIRE budget is similar.
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@Missy B & @spartana & @Rdy2Fire and the other financial voyeurs -
I just posted our May monthly balance sheet as a fancy Sankey diagram over on the Share Your Badassity (https://forum.mrmoneymustache.com/share-your-badassity/65-savings-rate-(sankey-diagram!)-for-may-due-to-covid/msg2637960/#msg2637960) subforum thought you all might enjoy!
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At this point I'd have a hard time separating out family/child expenses from my own, but I think if I was single/childless (excluding housing) I'd be under $10k/year.
-W
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That is NOT a normal distribution, LOL. Bimodal...LO and HI centroids?
Almost all demographic data is not normally distributed. Chi squared is closer. Most metrics can only go to zero, but the sky is the limit. Net worth is an exception.
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At this point I'd have a hard time separating out family/child expenses from my own, but I think if I was single/childless (excluding housing) I'd be under $10k/year.
-W
We actually separate out certain child expenses. With my daughter in competitive gymnastics and son in Boy Scouts it's a relatively large expense. We separate pet expenses as well. It gives us a better understanding for our expenses post pets and when the kids leave the nest. That's about when my spouse plans on calling it quits and joining me.