For those retired or FI, how much do you spend annually?

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ROIGuy
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Re: How much do you spend annually in retirement?

Post by ROIGuy »

UpperNwGuy wrote: Thu Apr 08, 2021 3:40 pm
bg5 wrote: Tue Apr 06, 2021 1:10 pm I know that there are alot of variables such as cost of living but I am curious what people spend annually in retirement.

My gut tells me that $50,000 annually would be living "high on the hog" assuming all debts are paid off.
That's crazy talk! $50,000 is nothing in a high cost of living area. I spend nearly double that amount (including taxes). You must live in a very low cost of living area.
+1
Marseille07
Posts: 16054
Joined: Fri Nov 06, 2020 12:41 pm

Re: How much do you spend annually in retirement?

Post by Marseille07 »

ResearchMed wrote: Thu Apr 08, 2021 4:49 pm
Marseille07 wrote: Thu Apr 08, 2021 4:29 pm I know it sounds silly, but how do I check what my employer offers? I've switched companies a handful of times, but I never checked what they would offer post-leaving, as I was always switching to the next gig w/ health insurance.

I briefly browsed around our internal benefits site but I didn't see anything along those lines (which is reasonable, why would they talk about health benefits after leaving to current employees).

Is this something I have to ping the HR / Payroll / Benefits type people and get a response?
Yes, you'd probably want to ask HR for their *current* retiree health benefits.

But keep in mind that the benefits could change.
Ours did, and significantly for some of the younger/newer employees. When they retire, their retiree health benefits will cover considerably less of costs that would be submitted than the plan does now, or what it will cover for the now-older employees when they retire, etc.
And who knows if there will be yet more changes looming in the future...

RM
I asked and the response was simply COBRA. Time to start interviewing I guess...
InvestInPasta
Posts: 213
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Location: Italy

Re: For those retired or FI, how much do you spend annually?

Post by InvestInPasta »

kilkoyne wrote: Thu Apr 08, 2021 5:11 pm This is showing 2019 numbers because 2020 was not normal with Covid. The $2k hospital bill in 2019 was not a normal occurrence either but I included it. Outside of medical insurance I probably only spend $100/year.

My health insurance is appr $60/PPD ($60 x 26 = $1,560/year). My coworker on the other hand spends 14K/year for family. I'm a nurse and take care of myself - Rarely ever go to primary care. If I have an issue I run it by the docs at work. My one medication, lab work, and care visits are all covered by insurance.

The only thing than is not included is heat. I have a wood stove with plenty of wood on my lot to last my lifetime. At some point I'll have to but oil though when I'm sick of burning wood.


Automotive Expenses $159.58 (Cheap Honda Civic and a used truck which are easy and cheap to fix)
 Bills & utilities $3,160.00 (Car/Home/Health Ins/Electric)
 Food & drink $261.66 (I don't go out to eat often, I prefer making my own meals)
 Gas $1,215.56
 Groceries $900.34
 Health & wellness $1,958.49 (Not a normal expenditure, I had a Hospital Admission in 2019)
 Home $7,564.58 (Allow 7K/year for home improvements -Bought kitchen cabinets and maple flooring which I installed myself)
 Shopping $1,112.50 (Everyday things and some tools and stuff that I like)
 Travel $3,106.12 (Allow myself 3K/year to travel)
"Rent"/Mortgage $18,000.00
Internet $1,650.00
Total $39,088.83
these numbers make more sense to me.
Do you live in US, don't you?
If you take off the rent/mortgage (let's say one day you'll own an house and no debt) you would spend 21K per year that about the same I spend per year in northern Italy.

Since I read here that most people are spending 60K to 90K per year, and they retire with 50x expenses which means 3-5 million $ I was just wondering if this one is the situation of the average American. :mrgreen:
When I study English I am lazier than my portfolio. Feel free to fix my English and investing mistakes.
smitcat
Posts: 13300
Joined: Mon Nov 07, 2016 9:51 am

Re: For those retired or FI, how much do you spend annually?

Post by smitcat »

InvestInPasta wrote: Fri Apr 09, 2021 1:02 pm
kilkoyne wrote: Thu Apr 08, 2021 5:11 pm This is showing 2019 numbers because 2020 was not normal with Covid. The $2k hospital bill in 2019 was not a normal occurrence either but I included it. Outside of medical insurance I probably only spend $100/year.

My health insurance is appr $60/PPD ($60 x 26 = $1,560/year). My coworker on the other hand spends 14K/year for family. I'm a nurse and take care of myself - Rarely ever go to primary care. If I have an issue I run it by the docs at work. My one medication, lab work, and care visits are all covered by insurance.

The only thing than is not included is heat. I have a wood stove with plenty of wood on my lot to last my lifetime. At some point I'll have to but oil though when I'm sick of burning wood.


Automotive Expenses $159.58 (Cheap Honda Civic and a used truck which are easy and cheap to fix)
 Bills & utilities $3,160.00 (Car/Home/Health Ins/Electric)
 Food & drink $261.66 (I don't go out to eat often, I prefer making my own meals)
 Gas $1,215.56
 Groceries $900.34
 Health & wellness $1,958.49 (Not a normal expenditure, I had a Hospital Admission in 2019)
 Home $7,564.58 (Allow 7K/year for home improvements -Bought kitchen cabinets and maple flooring which I installed myself)
 Shopping $1,112.50 (Everyday things and some tools and stuff that I like)
 Travel $3,106.12 (Allow myself 3K/year to travel)
"Rent"/Mortgage $18,000.00
Internet $1,650.00
Total $39,088.83
these numbers make more sense to me.
Do you live in US, don't you?
If you take off the rent/mortgage (let's say one day you'll own an house and no debt) you would spend 21K per year that about the same I spend per year in northern Italy.

Since I read here that most people are spending 60K to 90K per year, and they retire with 50x expenses which means 3-5 million $ I was just wondering if this one is the situation of the average American. :mrgreen:
"Since I read here that most people are spending 60K to 90K per year, and they retire with 50x expenses which means 3-5 million $ I was just wondering if this one is the situation of the average American."

A few stats based on 2020 data:
$43.8K - median household (HH) income in retirement
$67.2K - mean HH income in retirement
$34.8K - median HH income for 75+ year old
$54.4K - mean HH income for 75+ year old
The figures for average and median were incorrectly switched - they are now corrected above and below.
Last edited by smitcat on Fri Apr 09, 2021 8:26 pm, edited 1 time in total.
delamer
Posts: 17453
Joined: Tue Feb 08, 2011 5:13 pm

Re: For those retired or FI, how much do you spend annually?

Post by delamer »

InvestInPasta wrote: Fri Apr 09, 2021 1:02 pm
kilkoyne wrote: Thu Apr 08, 2021 5:11 pm This is showing 2019 numbers because 2020 was not normal with Covid. The $2k hospital bill in 2019 was not a normal occurrence either but I included it. Outside of medical insurance I probably only spend $100/year.

My health insurance is appr $60/PPD ($60 x 26 = $1,560/year). My coworker on the other hand spends 14K/year for family. I'm a nurse and take care of myself - Rarely ever go to primary care. If I have an issue I run it by the docs at work. My one medication, lab work, and care visits are all covered by insurance.

The only thing than is not included is heat. I have a wood stove with plenty of wood on my lot to last my lifetime. At some point I'll have to but oil though when I'm sick of burning wood.


Automotive Expenses $159.58 (Cheap Honda Civic and a used truck which are easy and cheap to fix)
 Bills & utilities $3,160.00 (Car/Home/Health Ins/Electric)
 Food & drink $261.66 (I don't go out to eat often, I prefer making my own meals)
 Gas $1,215.56
 Groceries $900.34
 Health & wellness $1,958.49 (Not a normal expenditure, I had a Hospital Admission in 2019)
 Home $7,564.58 (Allow 7K/year for home improvements -Bought kitchen cabinets and maple flooring which I installed myself)
 Shopping $1,112.50 (Everyday things and some tools and stuff that I like)
 Travel $3,106.12 (Allow myself 3K/year to travel)
"Rent"/Mortgage $18,000.00
Internet $1,650.00
Total $39,088.83
these numbers make more sense to me.
Do you live in US, don't you?
If you take off the rent/mortgage (let's say one day you'll own an house and no debt) you would spend 21K per year that about the same I spend per year in northern Italy.

Since I read here that most people are spending 60K to 90K per year, and they retire with 50x expenses which means 3-5 million $ I was just wondering if this one is the situation of the average American. :mrgreen:
Even though Bogleheads are an affluent bunch, assuming that most of us retire with 50X expenses is drawing the wrong conclusion.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
sycamore
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Re: For those retired or FI, how much do you spend annually?

Post by sycamore »

smitcat wrote: Fri Apr 09, 2021 2:48 pm ...
A few stats based on 2020 data:
$43.8K - average household (HH) income in retirement
$67.2K - mean HH income in retirement
$34.8K - average HH income for 75+ year old
$54.4K - mean HH income for 75+ year old
What's the difference between "average" and "mean" here? Should one of those be "median" ?
smitcat
Posts: 13300
Joined: Mon Nov 07, 2016 9:51 am

Re: For those retired or FI, how much do you spend annually?

Post by smitcat »

sycamore wrote: Fri Apr 09, 2021 4:57 pm
smitcat wrote: Fri Apr 09, 2021 2:48 pm ...
A few stats based on 2020 data:
$43.8K - average household (HH) income in retirement
$67.2K - mean HH income in retirement
$34.8K - average HH income for 75+ year old
$54.4K - mean HH income for 75+ year old
What's the difference between "average" and "mean" here? Should one of those be "median" ?
Corrected below...
Last edited by smitcat on Fri Apr 09, 2021 8:22 pm, edited 1 time in total.
sailaway
Posts: 8215
Joined: Fri May 12, 2017 1:11 pm

Re: For those retired or FI, how much do you spend annually?

Post by sailaway »

smitcat wrote: Fri Apr 09, 2021 8:09 pm
sycamore wrote: Fri Apr 09, 2021 4:57 pm
smitcat wrote: Fri Apr 09, 2021 2:48 pm ...
A few stats based on 2020 data:
$43.8K - average household (HH) income in retirement
$67.2K - mean HH income in retirement
$34.8K - average HH income for 75+ year old
$54.4K - mean HH income for 75+ year old
What's the difference between "average" and "mean" here? Should one of those be "median" ?
You are correct, mean is median.
Are you sure? Usually for these kinds of things, the mean is higher than the median.
smitcat
Posts: 13300
Joined: Mon Nov 07, 2016 9:51 am

Re: For those retired or FI, how much do you spend annually?

Post by smitcat »

sailaway wrote: Fri Apr 09, 2021 8:15 pm
smitcat wrote: Fri Apr 09, 2021 8:09 pm
sycamore wrote: Fri Apr 09, 2021 4:57 pm
smitcat wrote: Fri Apr 09, 2021 2:48 pm ...
A few stats based on 2020 data:
$43.8K - average household (HH) income in retirement
$67.2K - mean HH income in retirement
$34.8K - average HH income for 75+ year old
$54.4K - mean HH income for 75+ year old
What's the difference between "average" and "mean" here? Should one of those be "median" ?
You are correct, mean is median.
Are you sure? Usually for these kinds of things, the mean is higher than the median.
You are correct , here is one link but not the orginal one scratched some notes from above....
https://www.personalcapital.com/blog/re ... nt-income/
sailaway
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Joined: Fri May 12, 2017 1:11 pm

Re: For those retired or FI, how much do you spend annually?

Post by sailaway »

Irrespective of the numbers, seems like it is going to be more and more important to look at spending, rather than income, as fewer people have pensions and hopefully more have savings, in a mix of traditional, Roth and taxable accounts.
InvestInPasta
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Location: Italy

Re: For those retired or FI, how much do you spend annually?

Post by InvestInPasta »

smitcat wrote: Fri Apr 09, 2021 2:48 pm A few stats based on 2020 data:
$43.8K - median household (HH) income in retirement
$67.2K - mean HH income in retirement
$34.8K - median HH income for 75+ year old
$54.4K - mean HH income for 75+ year old
The figures for average and median were incorrectly switched - they are now corrected above and below.
Thank you, interesting.
Is the income gross? What's the average tax you pay on it?
In this way we can deduct the mean and median net income.

I have also read here "...the average monthly Social Security payment by only $20 to $1,543". If social security is 18K$ per year, I suppose most of the income in retirement comes from a portfolio/401k of savings (and maybe rental propreties).

It seems to be pretty expensive to retire in US nowadays. 8-)
When I study English I am lazier than my portfolio. Feel free to fix my English and investing mistakes.
Bbddl
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Re: For those retired or FI, how much do you spend annually?

Post by Bbddl »

Awesome thread...I'm going to take a much closer look at our current spending and projected spending in retirement. We would like to keep our income in retirement at the 12% tax bracket and hopefully not exceed it, roughly 80k. Im a state worker with both a pension and a 457 account. Spouse has a 401k. We have additional accounts as well. Retirement for both of us is within 1-2 years, I'm currently 60, wife is 51. We live in an HCOL area, that will change when retired. We do like travel, and are currently leaving tomorrow for Aruba. We have a few more trips already planned this year. Will post some figures later today and see how we compare with others.
smitcat
Posts: 13300
Joined: Mon Nov 07, 2016 9:51 am

Re: For those retired or FI, how much do you spend annually?

Post by smitcat »

InvestInPasta wrote: Sat Apr 10, 2021 3:13 am
smitcat wrote: Fri Apr 09, 2021 2:48 pm A few stats based on 2020 data:
$43.8K - median household (HH) income in retirement
$67.2K - mean HH income in retirement
$34.8K - median HH income for 75+ year old
$54.4K - mean HH income for 75+ year old
The figures for average and median were incorrectly switched - they are now corrected above and below.
Thank you, interesting.
Is the income gross? What's the average tax you pay on it?
In this way we can deduct the mean and median net income.

I have also read here "...the average monthly Social Security payment by only $20 to $1,543". If social security is 18K$ per year, I suppose most of the income in retirement comes from a portfolio/401k of savings (and maybe rental propreties).

It seems to be pretty expensive to retire in US nowadays. 8-)

It appears to be problematic to retire in Italy now, not too optimistic at all ....
"According to our survey, retirees in Italy are also the least happy when it comes to being
able to afford the lifestyle they want in retirement. Almost 50% of retired respondents
stated they are unhappy with this aspect of retirement, the highest out of the eight
countries we looked at."
Source of quote and data:
https://www.ssga.com/library-content/pd ... apshot.pdf
bltn
Posts: 1844
Joined: Mon Feb 20, 2017 8:32 pm

Re: For those retired or FI, how much do you spend annually?

Post by bltn »

Until the year before I retired, I had never paid any attention to my “retirement number”. I simply saved a significant portion of our income, and after 10 years of trying investments, like rental real estate, for which I was not temperamentally suited, I evolved into paassive stock market investing. 25 years of saving and indexing and ignoring market fluctuations worked out well.

When I looked at our retirement funds, I decided that a 3% withdrawal rate would be safe and allow us to enjoy some of the fruits of our savings. This amounted to 150% of what we were spending prior to retirement. And after a couple of years, I realized that of that 150%, I was still putting aside, or underspending,10%. Can t break old habits.

On Medicare, with IRMAA, our monthly medical insurance costs are about $1400 a month. About what I was paying through my business prior to retirement. And significantly more than I was paying prior to the enactment of ACA.

My wife has a tiny pension from her old employer, and we have Social Security.
kilkoyne
Posts: 209
Joined: Thu Jul 20, 2017 10:38 am

Re: For those retired or FI, how much do you spend annually?

Post by kilkoyne »

InvestInPasta wrote: Fri Apr 09, 2021 1:02 pm
kilkoyne wrote: Thu Apr 08, 2021 5:11 pm This is showing 2019 numbers because 2020 was not normal with Covid. The $2k hospital bill in 2019 was not a normal occurrence either but I included it. Outside of medical insurance I probably only spend $100/year.

My health insurance is appr $60/PPD ($60 x 26 = $1,560/year). My coworker on the other hand spends 14K/year for family. I'm a nurse and take care of myself - Rarely ever go to primary care. If I have an issue I run it by the docs at work. My one medication, lab work, and care visits are all covered by insurance.

The only thing than is not included is heat. I have a wood stove with plenty of wood on my lot to last my lifetime. At some point I'll have to but oil though when I'm sick of burning wood.


Automotive Expenses $159.58 (Cheap Honda Civic and a used truck which are easy and cheap to fix)
 Bills & utilities $3,160.00 (Car/Home/Health Ins/Electric)
 Food & drink $261.66 (I don't go out to eat often, I prefer making my own meals)
 Gas $1,215.56
 Groceries $900.34
 Health & wellness $1,958.49 (Not a normal expenditure, I had a Hospital Admission in 2019)
 Home $7,564.58 (Allow 7K/year for home improvements -Bought kitchen cabinets and maple flooring which I installed myself)
 Shopping $1,112.50 (Everyday things and some tools and stuff that I like)
 Travel $3,106.12 (Allow myself 3K/year to travel)
"Rent"/Mortgage $18,000.00
Internet $1,650.00
Total $39,088.83
these numbers make more sense to me.
Do you live in US, don't you?
If you take off the rent/mortgage (let's say one day you'll own an house and no debt) you would spend 21K per year that about the same I spend per year in northern Italy.

Since I read here that most people are spending 60K to 90K per year, and they retire with 50x expenses which means 3-5 million $ I was just wondering if this one is the situation of the average American. :mrgreen:
US here. When I retire I'll have more time to grow my own food and cut wood for heat, complete house projects, cook myself nice meals, play my guitar, etc. I could live on $20K/year with my house paid off until I wasn't able to take care for myself. I don't believe anyone "needs" 3-5 million to retire but some feel it's necessary.

To me life is about life experiences and spending time with family and friends. In many ways money would likely just get in the way of this. :happy
delamer
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Re: For those retired or FI, how much do you spend annually?

Post by delamer »

Bbddl wrote: Sat Apr 10, 2021 5:53 am Awesome thread...I'm going to take a much closer look at our current spending and projected spending in retirement. We would like to keep our income in retirement at the 12% tax bracket and hopefully not exceed it, roughly 80k. Im a state worker with both a pension and a 457 account. Spouse has a 401k. We have additional accounts as well. Retirement for both of us is within 1-2 years, I'm currently 60, wife is 51. We live in an HCOL area, that will change when retired. We do like travel, and are currently leaving tomorrow for Aruba. We have a few more trips already planned this year. Will post some figures later today and see how we compare with others.
Tax planning to minimize taxes is a good thing, like taking withdrawals to buy a new car over 2 years to avoid slipping into the next marginal bracket if you took everything out in one year.

But why would you have a goal of keeping your retirement income in the 12% bracket? I’d be thrilled if we were in the 37% bracket!
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
BigLaw Survivor
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Re: For those retired or FI, how much do you spend annually?

Post by BigLaw Survivor »

I'm 59 and have been retired for six years. I track my expenses through Personal Capital. We budget ourselves $17,500 a month, or $210,000 a year for everything -- including taxes, health insurance, etc. I

n 2020 we spent $217,978. In 2019 we spent $224,545. In 2018 we spent $167,857. Obviously we went a little over budget the last two years but 2018 was a very lean year so we allowed ourselves to do it. The bulk of the extra expenses in 2019 and 2020 were home improvement expenses (61k). Taking them out, our annual expenses have averaged:

Mortgage: $28k (we've elected not to pay if off because our interest rate is low)
Healhcare: 26k (includes premiums and out of pockets)
Travel: 20k (lower in 2020 than 2019 and 2018 obviously)
Taxes: 17k (income and property combined)
Home maintenance: 14k (including a one-off $8000 paintjob in 2020)
General merchandise: 12k
Restaurants: 9k
Automotive 9k
Groceries 8k
Spending on kids/grandkids: 6k
Utilities: 5k
Pet care: 4k
Cable/internet: 4k
Gifts: 4k
Cell phones: 3k (half reimbursed by kids on family plan)
Home/umbrella insurance: 1.6k

As you can see, there's a lot to think about.
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kelway
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Re: For those retired or FI, how much do you spend annually?

Post by kelway »

BigLaw Survivor wrote: Sat Apr 10, 2021 10:41 am
Cable/internet: 4k

As you can see, there's a lot to think about.
I'm thinking how can you spend 4k/year on cable/internet? YouTubeTV and unlimited 1Gbps internet costs me about 120/month.
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fishnskiguy
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Re: For those retired or FI, how much do you spend annually?

Post by fishnskiguy »

kelway wrote: Sat Apr 10, 2021 10:51 am
BigLaw Survivor wrote: Sat Apr 10, 2021 10:41 am
Cable/internet: 4k

As you can see, there's a lot to think about.
I'm thinking how can you spend 4k/year on cable/internet? YouTubeTV and unlimited 1Gbps internet costs me about 120/month.
For some of us, that's not unreasonable. Dish TV (no cable available) with Showtime and Stars bundled with internet at a paltry 7-8 MPS plus landline phone runs us $3500 per year.

Chris
Trident D-5 SLBM- "When you care enough to send the very best."
BigLaw Survivor
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Re: For those retired or FI, how much do you spend annually?

Post by BigLaw Survivor »

kelway wrote: Sat Apr 10, 2021 10:51 am
BigLaw Survivor wrote: Sat Apr 10, 2021 10:41 am
Cable/internet: 4k

As you can see, there's a lot to think about.
I'm thinking how can you spend 4k/year on cable/internet? YouTubeTV and unlimited 1Gbps internet costs me about 120/month.
I should clarify that we split our time between two houses . . .
InvestInPasta
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Location: Italy

Re: For those retired or FI, how much do you spend annually?

Post by InvestInPasta »

smitcat wrote: Sat Apr 10, 2021 6:51 amIt appears to be problematic to retire in Italy now, not too optimistic at all ....
"According to our survey, retirees in Italy are also the least happy when it comes to being
able to afford the lifestyle they want in retirement. Almost 50% of retired respondents
stated they are unhappy with this aspect of retirement, the highest out of the eight
countries we looked at."
Source of quote and data:
https://www.ssga.com/library-content/pd ... apshot.pdf
It won't be a problem because every 20 years in Italy we have a financial crisis caused by the huge Debt to GDP ratio, bad goverment management, corruption, 12 years decreasing GDP and 20 years decreasing GDP per capita. Since the biggest share of Government expenses are public pensions, on each crisis they cut the public pensions and push them further away in time.
My dad retired at 60. But I won't see a penny before being 67.5 years old. People younger than me won't see a penny before being in their 70s.
So basically retirement is not a problem anymore because we all be dead before we'll be able to retire.

I'm saving, and hopefully I'll retire early. :beer

Do you mind if I share the document you posted on an Italian board? It's a board somehow similar to Bogleheads.
When I study English I am lazier than my portfolio. Feel free to fix my English and investing mistakes.
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Sandi_k
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Re: For those retired or FI, how much do you spend annually?

Post by Sandi_k »

Escapevelocity wrote: Wed Apr 07, 2021 7:24 am
$40K tax on a pension???? How much is the pension $200k?
24% federal and 9.3% state = 33.3% - so $40k tax = $120k. Simplified, but close, given investment income, too.
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kelway
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Re: For those retired or FI, how much do you spend annually?

Post by kelway »

fishnskiguy wrote: Sat Apr 10, 2021 11:21 am
For some of us, that's not unreasonable. Dish TV (no cable available) with Showtime and Stars bundled with internet at a paltry 7-8 MPS plus landline phone runs us $3500 per year.

Chris
Keep your eye on https://www.starlink.com/ if you're not already... I assume you're rural. This will be a big deal for rural folks. YouTubeTV is really great according to me -- once you have the internet to support it.
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kelway
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Re: For those retired or FI, how much do you spend annually?

Post by kelway »

BigLaw Survivor wrote: Sat Apr 10, 2021 11:24 am I should clarify that we split our time between two houses . . .
OK OK clear...
smitcat
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Re: For those retired or FI, how much do you spend annually?

Post by smitcat »

InvestInPasta wrote: Sat Apr 10, 2021 4:13 pm
smitcat wrote: Sat Apr 10, 2021 6:51 amIt appears to be problematic to retire in Italy now, not too optimistic at all ....
"According to our survey, retirees in Italy are also the least happy when it comes to being
able to afford the lifestyle they want in retirement. Almost 50% of retired respondents
stated they are unhappy with this aspect of retirement, the highest out of the eight
countries we looked at."
Source of quote and data:
https://www.ssga.com/library-content/pd ... apshot.pdf
It won't be a problem because every 20 years in Italy we have a financial crisis caused by the huge Debt to GDP ratio, bad goverment management, corruption, 12 years decreasing GDP and 20 years decreasing GDP per capita. Since the biggest share of Government expenses are public pensions, on each crisis they cut the public pensions and push them further away in time.
My dad retired at 60. But I won't see a penny before being 67.5 years old. People younger than me won't see a penny before being in their 70s.
So basically retirement is not a problem anymore because we all be dead before we'll be able to retire.

I'm saving, and hopefully I'll retire early. :beer

Do you mind if I share the document you posted on an Italian board? It's a board somehow similar to Bogleheads.
"Do you mind if I share the document you posted on an Italian board? It's a board somehow similar to Bogleheads."
No problem - I found it with a simple search in a few seconds, there are plenty of articles about the issues with Italy's retirement approach.

"It won't be a problem because every 20 years in Italy we have a financial crisis caused by the huge Debt to GDP ratio"
The article basically says very few are happy with retirement, very few are prepared, very few think its their responsability and that it is getting worse.
IMHO - I prefer a more 'expensive' retirement where I am.
InvestInPasta
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Re: For those retired or FI, how much do you spend annually?

Post by InvestInPasta »

smitcat wrote: Sun Apr 11, 2021 6:29 amThe article basically says very few are happy with retirement, very few are prepared, very few think its their responsability and that it is getting worse.
IMHO - I prefer a more 'expensive' retirement where I am.
It's been only a few years since the Social Security in Italy made it easy for people to know the pension they will receive and when they will retire. Now we can login on Social Security website and see it straight away.
Before you had to do all sort of calculus on your own by reading hundreds of laws that explained how to calculate it, or you had fo pay a CPA 25 to 50 euro to do it for you. :oops:
I think more and more people in Italy are becoming aware they will retire with tiny pensions hence they are starting to realize they need a private pension. The problem is that private pension schemes started only recently, there are only few pension funds available, they are quite expensive and when you put money in these private pension scheme the tax deduction is still ridicolous.

Anyway I asked for details on expenses because in year 2000 I worked in CA for a couple of years, and I don't remember life to be so expensive there, besides the rent and the healthcare.
The salaries were higher than in Italy.
Would you say that now, 20 years later, is much more expensive to live in US than in year 2000?
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Re: For those retired or FI, how much do you spend annually?

Post by smitcat »

InvestInPasta wrote: Tue Apr 13, 2021 3:45 am
smitcat wrote: Sun Apr 11, 2021 6:29 amThe article basically says very few are happy with retirement, very few are prepared, very few think its their responsability and that it is getting worse.
IMHO - I prefer a more 'expensive' retirement where I am.
It's been only a few years since the Social Security in Italy made it easy for people to know the pension they will receive and when they will retire. Now we can login on Social Security website and see it straight away.
Before you had to do all sort of calculus on your own by reading hundreds of laws that explained how to calculate it, or you had fo pay a CPA 25 to 50 euro to do it for you. :oops:
I think more and more people in Italy are becoming aware they will retire with tiny pensions hence they are starting to realize they need a private pension. The problem is that private pension schemes started only recently, there are only few pension funds available, they are quite expensive and when you put money in these private pension scheme the tax deduction is still ridicolous.

Anyway I asked for details on expenses because in year 2000 I worked in CA for a couple of years, and I don't remember life to be so expensive there, besides the rent and the healthcare.
The salaries were higher than in Italy.
Would you say that now, 20 years later, is much more expensive to live in US than in year 2000?
"Would you say that now, 20 years later, is much more expensive to live in US than in year 2000?"
There are 10's of thousands of places to live and compare costs in the USA - some starting at a very LCOL and rising to a very HCOL, so you have huge choices to make which will determine many costs. As far as general costs (which may or may not apply) they have risen about 48% in the past 20 years or so, you can utilize calculators such as these to get general inflation numbers for costs over time
https://www.usinflationcalculator.com/
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Re: For those retired or FI, how much do you spend annually?

Post by tibbitts »

kelway wrote: Sat Apr 10, 2021 10:51 am
BigLaw Survivor wrote: Sat Apr 10, 2021 10:41 am
Cable/internet: 4k

As you can see, there's a lot to think about.
I'm thinking how can you spend 4k/year on cable/internet? YouTubeTV and unlimited 1Gbps internet costs me about 120/month.
Well, by most measures YouTubeTV isn't cable for one thing.
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Re: For those retired or FI, how much do you spend annually?

Post by dpusa »

This has been a great thread. I was thinking the following which is $111,400 per year but would love feedback.

$7,2000 Car gas/maintenance (a little more than what we spend now)
$6,240 Gardening/Home Cleaning (about what we spend now)
$2,160 Cellular Bills (about what we spend now)
$15,000 Vacation Fund (about what we spend now)
$3,600 Misc Monthly expenses/house maintenance (about what we spend now)
$19,200 Groceries/Eating Out (about 20-40% more than what we spend now)
$9,600 Car Fund (about what we spend now) assuming you own two cars and keep for a decade
$18,600 Daily ($50 per day fund) (about what we spend now)
$3,400 Yearly Costs Like Car Insurance/Termite & Pet Control (about what we spend now)
$9,600 Utilities/TV/Internet (more than what we spend now)
$16,800 Home Insurance/Property Taxes (about what we spend now)

Now thinking I have not included health insurance. Anything else - appears higher than most have quoted.
Thank you...
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Re: For those retired or FI, how much do you spend annually?

Post by sailaway »

dpusa wrote: Tue Apr 13, 2021 2:43 pm This has been a great thread. I was thinking the following which is $111,400 per year but would love feedback.

$7,2000 Car gas/maintenance (a little more than what we spend now)
$6,240 Gardening/Home Cleaning (about what we spend now)
$2,160 Cellular Bills (about what we spend now)
$15,000 Vacation Fund (about what we spend now)
$3,600 Misc Monthly expenses/house maintenance (about what we spend now)
$19,200 Groceries/Eating Out (about 20-40% more than what we spend now)
$9,600 Car Fund (about what we spend now) assuming you own two cars and keep for a decade
$18,600 Daily ($50 per day fund) (about what we spend now)
$3,400 Yearly Costs Like Car Insurance/Termite & Pet Control (about what we spend now)
$9,600 Utilities/TV/Internet (more than what we spend now)
$16,800 Home Insurance/Property Taxes (about what we spend now)

Now thinking I have not included health insurance. Anything else - appears higher than most have quoted.
Thank you...
You spend $50/day on top of eating out and transportation? What kind of thing does that include?

I was also curious as to what $180/month of cellular gets you. Does that include payments for the phones? A separate hotspot?

Yes, I am nosy.
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Re: For those retired or FI, how much do you spend annually?

Post by delamer »

dpusa wrote: Tue Apr 13, 2021 2:43 pm This has been a great thread. I was thinking the following which is $111,400 per year but would love feedback.

$7,2000 Car gas/maintenance (a little more than what we spend now)
$6,240 Gardening/Home Cleaning (about what we spend now)
$2,160 Cellular Bills (about what we spend now)
$15,000 Vacation Fund (about what we spend now)
$3,600 Misc Monthly expenses/house maintenance (about what we spend now)
$19,200 Groceries/Eating Out (about 20-40% more than what we spend now)
$9,600 Car Fund (about what we spend now) assuming you own two cars and keep for a decade
$18,600 Daily ($50 per day fund) (about what we spend now)
$3,400 Yearly Costs Like Car Insurance/Termite & Pet Control (about what we spend now)
$9,600 Utilities/TV/Internet (more than what we spend now)
$16,800 Home Insurance/Property Taxes (about what we spend now)

Now thinking I have not included health insurance. Anything else - appears higher than most have quoted.
Thank you...
There’s another current thread on budgeting.

We have a budget and one reason is that it would drive me nuts to be spending $50 per day — almost $20,000/year — that I couldn’t identify.

Although maybe you can. Clothes, jewelry?
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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Re: For those retired or FI, how much do you spend annually?

Post by kelway »

tibbitts wrote: Tue Apr 13, 2021 8:58 am
kelway wrote: Sat Apr 10, 2021 10:51 am I'm thinking how can you spend 4k/year on cable/internet? YouTubeTV and unlimited 1Gbps internet costs me about 120/month.
Well, by most measures YouTubeTV isn't cable for one thing.
It achieves the same goal and is, by most measures, a superior product. If you prefer to pay twice the price for coax, feel very free.
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Re: For those retired or FI, how much do you spend annually?

Post by Sandi_k »

dpusa wrote: Tue Apr 13, 2021 2:43 pm This has been a great thread. I was thinking the following which is $111,400 per year but would love feedback.

$7,2000 Car gas/maintenance (a little more than what we spend now)
$6,240 Gardening/Home Cleaning (about what we spend now)
$2,160 Cellular Bills (about what we spend now)
$15,000 Vacation Fund (about what we spend now)
$3,600 Misc Monthly expenses/house maintenance (about what we spend now)
$19,200 Groceries/Eating Out (about 20-40% more than what we spend now)
$9,600 Car Fund (about what we spend now) assuming you own two cars and keep for a decade
$18,600 Daily ($50 per day fund) (about what we spend now)
$3,400 Yearly Costs Like Car Insurance/Termite & Pet Control (about what we spend now)
$9,600 Utilities/TV/Internet (more than what we spend now)
$16,800 Home Insurance/Property Taxes (about what we spend now)

Now thinking I have not included health insurance. Anything else - appears higher than most have quoted.
Thank you...
My category list, compiled through the years:

House:
Mortgage
Property Taxes
Property Insurance
Condo/HOA fees
Home repairs & maintenance
Firewood delivery
Heating Oil
Lawn Care
Termite/Pest service
Tree trimming, 2x per year
Housekeeper

Utilities:
Heat, Water, Gas, Electric
Cable, internet
Cell phone
Security system

Food:
Food & toiletries, Grocery store
Food - restaurants
Health Food, vitamins, supplements

Automotive:
Auto insurance
Auto repair
Car registration
Smogging
Gasoline

Charitable giving

Taxes:
Tax prep fees
Income Tax, Fed
Income Tax, State

Medical:
Health Insurance
Medical Deductible
Medicare Co-Pays
Co-Pays & Prescriptions
Glasses
Chiropractor
Dental
Life Insurance
LTC Insurance

Media & Entertainment:
Books, CD's
Movies - theater
Movies - streaming services: Netflix, HULU, Prime, HBO, Disney +
Computer software/replacement fund

Personal Care:
Hair stylist
Mani/Pedis
Clothing
Dry Cleaning

Subscriptions:
Costco
AAA
Newspaper/NY Times online
Remote backup service - iDrive
Ring Doorbell

Miscellaneous:
Wine and alcohol
Family Gifts
Pet and Vet costs

Hobbies:
Travel
Camping
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Re: For those retired or FI, how much do you spend annually?

Post by 22twain »

Also note this thread, which started up while this one was dormant:

viewtopic.php?f=10&t=345321 [Link broken, see below --admin LadyGeek]

My responses are there, which is why I haven't posted here.

[added: now I see that I have posted here after all. :wink: ]
Last edited by 22twain on Thu Apr 15, 2021 9:20 am, edited 1 time in total.
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Re: For those retired or FI, how much do you spend annually?

Post by LadyGeek »

(^^^ The merge broke the link.)

I merged bg5's thread into the ongoing discussion. The combined thread is in the Personal Finance (Not Investing) forum (retirement spending).

(Thanks to the member who reported the post and provided the link to this thread.)
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Re: For those retired or FI, how much do you spend annually?

Post by ResearchMed »

LadyGeek wrote: Thu Apr 15, 2021 6:22 am (^^^ The merge broke the link.)

I merged bg5's thread into the ongoing discussion. The combined thread is in the Personal Finance (Not Investing) forum (retirement spending).

(Thanks to the member who reported the post and provided the link to this thread.)
Perhaps put a "LadyGeek Comment" in that post above, right next to the now-dead-end link, so we don't each separately click on that and each separately find out the link goes... nowhere... before reading your comment in the next post? :wink: [Done --admin LadyGeek :) ]
Thanks!

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Re: For those retired or FI, how much do you spend annually?

Post by heyyou »

TLDR
When our future pension and portfolio income equaled our current spending, we retired. Our current spending was calculated by subtracting our annual savings from our entire current income, knowing the remainder was spent somewhere.

Our retirement spending amount was chosen to be a slowing increasing % of each recent annual portfolio value, thus slightly variable income but those small annual income adjustments are insuring portfolio longevity. The percentage is longevity based using the IRS's RMD (Required Minimum Distribution) rate for my age, plus spending the dividends and interest easily seen on brokerage statements. There are RMD numbers for all ages due to inherited IRAs that the heirs are required to slowly withdraw for taxes.
Sun and Webb at Boston College's Center for Retirement Research developed the RMD % plus interest and dividend spending method.

As our portfolio value fluctuates, we can see in advance whether next year's income will be more or less than this year's number.
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Re: For those retired or FI, how much do you spend annually?

Post by HansT »

Sorry for the late bump of this thread, but I was looking for a place to post this recent summary of a 2015 UK research finding: https://monevator.com/spending-decline-in-retirement/. Here's an overall summary:
A big but oft-overlooked question for aspiring retirees is: “Will my spending decline in retirement?” If the answer is yes, then you could retire sooner than you think, or you could spend more money in the early years after your own freedom day.

As it happens, there’s a large stack of research that suggests people really do see their spending decline in retirement. At least on average.

And if this turns out to be you, then the amount you need to retire should be less daunting than previously advertised. You can even afford to decrease your ‘how much should I put in my pension’ target figure.
FYI, other references:
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Re: For those retired or FI, how much do you spend annually?

Post by wrongfunds »

Rick Ferri wrote: Mon Jan 04, 2021 9:58 am
Does anybody spend significantly more than $90k/year in retirement?
I speak with hundreds of retirees each year. Most are HNW individuals or couples. The median budget in retirement is about $70,000 - this includes travel but does not include income tax or gifts. Only about 10% of the retirees I speak with spend more than $100,000 per year, and that's usually because they have two homes or travel extensively.

Rick Ferri
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Re: For those retired or FI, how much do you spend annually?

Post by Parkinglotracer »

This is like asking - how long is a string? Well it depends.

We can afford about X and that is what we spend. If we could afford 2X we would take nicer vacations and buy nicer cars and houses. I don’t know what we would spend if we could afford 100X. I guess at some point one would stop buying stuff or stop giving away stuff although McKenzie Bezos seems to keep giving away stuff.
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Re: For those retired or FI, how much do you spend annually?

Post by delamer »

wrongfunds wrote: Tue Apr 19, 2022 4:05 pm
Rick Ferri wrote: Mon Jan 04, 2021 9:58 am
Does anybody spend significantly more than $90k/year in retirement?
I speak with hundreds of retirees each year. Most are HNW individuals or couples. The median budget in retirement is about $70,000 - this includes travel but does not include income tax or gifts. Only about 10% of the retirees I speak with spend more than $100,000 per year, and that's usually because they have two homes or travel extensively.

Rick Ferri
Mic Drop Moment Right Here! Why on earth do we have so much agony here on BH? How many of you who are prolific poster here anticipate or have trouble meeting that number when *all sources of income are included*?
Because median or average budgets for retirees as a whole — even affluent ones — have no meaning for individual BH retirees?

Individual retirees don’t care whether their income can cover the average budget; they worry about whether it can cover their own. And they worry about portfolio sustainability, of course.
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Re: For those retired or FI, how much do you spend annually?

Post by Cali4en »

Parkinglotracer wrote: Tue Apr 19, 2022 4:19 pm This is like asking - how long is a string? Well it depends.

We can afford about X and that is what we spend. If we could afford 2X we would take nicer vacations and buy nicer cars and houses. I don’t know what we would spend if we could afford 100X. I guess at some point one would stop buying stuff or stop giving away stuff although McKenzie Bezos seems to keep giving away stuff.
Agreed. The dollar figure itself also doesn't tell you all that much without getting into the line items details of household spending. Someone could spend $100K a year with a mortgage in one location and have a lower standard of living that someone else living off of $40K in another place debt-free.

Once you get past a certain point I think it makes more sense to focus on withdrawal rate rather than the dollar figures since it gives you a better idea of how much spending buffer (or portfolio crash buffer) you have. If you're drawing 2%, then you've got safe headroom to spend on whims and wants, but if you're pushing 4 or 5% then you've likely got more risk to consider.
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Re: For those retired or FI, how much do you spend annually?

Post by 22twain »

22twain wrote: Tue Apr 06, 2021 5:46 pm We're retired, late 60s / early 70s, in a small town in the South, with a paid-off house.

Last year [2020] we spent a total of about $53K, of which:

$8K income tax (fed + state)
$12K donations (charitable + political)
$7K Medicare premiums
$9K housing-related (utilities, property tax, insurance, maintenance)
$3K food (no eating out because of Covid)
$14K everything else (cars, new computers, hobbies, etc.)

If it hadn't been for Covid, we would have spent more for eating out and travel.

Only one of us is collecting Social Security and taking RMDs from tax-deferred accounts. After the other one starts in a few years, our tax bill will probably increase to about $30K.
Update: Our total last year [2021] was about $56K.

Compared to the previous year I can remember the following major changes:
  • $1K less in income tax because my wife stopped teaching part time after spring 2020
  • $4K less for "everything else" because of not buying new computers
  • $8K more because of putting a new roof on the house
Net change for those three items is +$3K which matches the change in the total, as calculated from the net outflow from our checking accounts. There were almost certainly other small changes which canceled out.

In both years we had no major travel. Last year I did some solo day trips to hobby shows in the region, which get lumped in under "everything else".
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Re: How much do you spend annually in retirement?

Post by JS-Elcano »

thursdaysd wrote: Wed Apr 07, 2021 9:38 am
Katietsu wrote: Wed Apr 07, 2021 8:31 am
22twain wrote: Tue Apr 06, 2021 5:46 pm We're retired, late 60s / early 70s, in a small town in the South, with a paid-off house.

Last year we spent a total of about $53K, of which:
$3K food (no eating out because of Covid)
This is remarkable. Even the USDA “thrifty plan” adds up to over $4500 a year for a married couple age 51-70. What are the key ways that you keep food costs this low?
Agreed. I spent nearly that much on "eating out" last year, and I'm single. "Eating out" being curb-side pickup from local restaurants, with higher-than-usual tips. My grocery bill was much higher, but that included more than food.

It really demonstrates that there is a huge variation, and the OP needs to start with his current expenditures and not worry too much about other people.
I think I have my own numbers worked out pretty well, yet to me this thread is very helpful. It shows me how other people, including some already in retirement, approaching this issue, what they are considering, how they are calculating, and it is a lot of food for thought and analysis. The actual numbers may indeed be irrelevant, but based on the experiences and thinking that I read about here I can play with my own numbers.
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Re: For those retired or FI, how much do you spend annually?

Post by LadyGeek »

I removed an off-topic post. As a reminder, see: General Etiquette
At all times we must conduct ourselves in a respectful manner to other posters. Attacks on individuals, insults, name calling, trolling, baiting or other attempts to sow dissension are not acceptable.
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Re: For those retired or FI, how much do you spend annually?

Post by corn18 »

Here is our budget after one year of retirement. Age 56 & 52. Add $20k for taxes and $25k for travel.

Image
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Re: For those retired or FI, how much do you spend annually?

Post by Parkinglotracer »

corn18 wrote: Tue Apr 19, 2022 7:28 pm Here is our budget after one year of retirement. Age 56 & 52. Add $20k for taxes and $25k for travel.

Image
Are these amounts per month or per year?
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Re: For those retired or FI, how much do you spend annually?

Post by corn18 »

Parkinglotracer wrote: Tue Apr 19, 2022 7:53 pm
corn18 wrote: Tue Apr 19, 2022 7:28 pm Here is our budget after one year of retirement. Age 56 & 52. Add $20k for taxes and $25k for travel.

Image
Are these amounts per month or per year?
/month
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Re: For those retired or FI, how much do you spend annually?

Post by tooluser »

One of the things I discovered early in a long career in math and physics, is that you usually must actually run the numbers for the applicable case to determine the correct answer. No amount of table-topping discussion will ever suffice. Everyone at the table is either ignorant or makes things up to get their way. In the case of your own spending you are everyone at the table.

For personal finance, this means creating a budget (spending model) from the top down (total all actual expenditures including savings and taxes) and from the bottom up (create spending categories and then assign savings, spending, and tax values to each). The numbers from both methods must be close, or you do not understood your own spending.
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Re: For those retired or FI, how much do you spend annually?

Post by FIRWYW »

Rick Ferri wrote: Mon Jan 04, 2021 9:58 am
Does anybody spend significantly more than $90k/year in retirement?
I speak with hundreds of retirees each year. Most are HNW individuals or couples. The median budget in retirement is about $70,000 - this includes travel but does not include income tax or gifts. Only about 10% of the retirees I speak with spend more than $100,000 per year, and that's usually because they have two homes or travel extensively.

Rick Ferri
Thanks very much for this input Rick. I very much value your books and opinions here. I have always heard 80% of your current spending but have 4 kids and a mortgage. and if I use that get 100k/yr. Has always seemed excessive to me and thought I was over saving especially when I hear what “physician on fire” is spending and heat what he is doing still. Good to know I am not crazy thinking $80k a year is more than plenty after taxes. Makes me think my wife is right and we can live more for today.
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