Rick Ferri wrote: ↑Mon Jan 04, 2021 3:59 pmAh-ha! You need to listen to my latest Bogleheads on Investing podcast with Frazer Rice.OffGridder wrote: ↑Mon Jan 04, 2021 12:56 pmRick,Rick Ferri wrote: ↑Mon Jan 04, 2021 9:58 amI 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.Does anybody spend significantly more than $90k/year in retirement?
Rick Ferri
Thank you for your data point and perspective based on actual experience. At what minimum dollar level do you consider an individual or couple to be High Net Worth (HNW)! The last data I saw for Americans over age 65, was a median net worth of $266K and an average net worth of 1.2M.
Dave
Rick Ferri
For those retired or FI, how much do you spend annually?
-
- Posts: 3
- Joined: Fri Jan 01, 2021 12:02 pm
Re: For those retired or FI, how much do you spend annually?
What is the typical cost for health insurance for a couple before they come of age to qualify for medicare benefits in California? Wouldn't this be a huge cost for FIRE retirees?
Re: For those retired or FI, how much do you spend annually?
Our expense is going to be the same as the year before retire.
Re: For those retired or FI, how much do you spend annually?
Nothing extravagant, we monitor for “good deals” and acted swiftly since time is what we have. We did however travel a lot and more than half of the time international - sometimes half way around the world e.g. Southeast Asia, Australia etc. We also like to rent cars and drive around so it could cost quite a bit, and also some cruises are more expensive than others.MyBrothersAdvisor wrote: ↑Mon Jan 04, 2021 4:38 pmAfter working out our current monthly expenses and what I'm *thinking* they'd be in the future, this seems like it would be similar to our situation. Are you traveling extravagantly to get to that $24k price point? I don't expect to fly business class, but I was hoping to be able to at least book a trip when we felt like a vacation. We've got some international travel on our bucket list and I'm wondering if $24k is a good baseline for that type of vacation??
Last edited by DSBH on Mon Jan 04, 2021 6:01 pm, edited 1 time in total.
John C. Bogle: "Never confuse genius with luck and a bull market".
Re: For those retired or FI, how much do you spend annually?
We don't have a long retirement track record, but it looks like we'll average about 110% of our pre-retirement spending. The biggest increases are travel and health care.
-
- Posts: 117
- Joined: Mon Dec 07, 2020 11:56 am
Re: For those retired or FI, how much do you spend annually?
I’m 60, so five years before Medicare kicks in. CA resident, no kids, no subsidy. 2021 is $1759 per month for silver plan (off exchange).firedreamer84 wrote: ↑Mon Jan 04, 2021 4:40 pm What is the typical cost for health insurance for a couple before they come of age to qualify for medicare benefits in California? Wouldn't this be a huge cost for FIRE retirees?
So yes, it’s a huge cost, FIRE or not.
Re: For those retired or FI, how much do you spend annually?
That is a mistake from a financial planning standpoint. If you want to be ultra conservative, you can project a 25% haircut for your expected benefits. Assuming 0% may cause you to both work longer and save more unnecessarily. SS is not going to disappear, despite the sky-is-falling headlines. (Of course, it may be that based on your earned income history, SS may not be significant for you; but it sounds like you have a spouse.)MyBrothersAdvisor wrote: ↑Mon Jan 04, 2021 4:32 pmI always leave SS benefits off any projection in the event it's gone once I retire. I don't want to toss any eggs in that basket in the (unlikely) event I can't count on it. That being said, whenever I do put in SS to get all my numbers, it ends up being just fine!Admiral wrote: ↑Mon Jan 04, 2021 1:34 pmThere are retired posters here who have $20m, and others who have much less than $1m. So, what others may do (or plan to do) should have no bearing on your plan. 15 years out, it's difficult to estimate your retirement expenses, though it's not impossible. The things you can foresee and make guesstimates for are 1) pension and SS cashflows; 2) mortgage or paid off house; 3)Medicare or some other form of heath insurance; 4) costs for food/entertainment/travel.MyBrothersAdvisor wrote: ↑Mon Jan 04, 2021 9:14 am Good morning! This is my first post, but I'm a long-time lurker. I'm working through my projections and always get hung up on how much to assume I'll spend annually once I'm done working. What does everybody spend annually in retired not including your mortgage. I always assume $30k in addition to my projected pension which should be about $60k. I'll have health insurance for me and my husband in retirement so that should save us a bit. And I've conservatively assumed we'll have $900k in our investments at age 55 when I retire. We're hoping to travel quite a bit and/or get a second home to enjoy when our kids have kids and pass down to them once we're gone.
I guess my main question is: Does anybody spend significantly more than $90k/year in retirement? OR, maybe you don't but you see some giant holes in my projections and how I'm hoping our retirement will play out. We've got a number of years (more than 15, but less than 20) to correct things if it isn't going to work. I'd love to get a jump on it now!
If you plan to fly business class 3x per year, well, you'll need more than if you go camping. Similarly, if you plan to buy a second home, you'll have that to pay for.
I am likely considered HNW, and have budgeted $60k/year spending, after taxes, at the low end (base expenses, minimal travel) and $130-140k at the high end. Likely we will be somewhere in between, depending on how much we help our kids out. $10k/month will provide a "do anything we want" (more or less) lifestyle. Note that, upon reaching SS, our pension and SS payments will pay for the vast majority of what we need and reduce our withdrawal rate to 2% or less. So, we may end up spending more early in retirement.
6-7 years from retirement now if all goes well.
If you will get 2/3 of your 90k from a pension, AND you are eligible for SS, then you should be able to make an educated guess about what you'll need to draw from your portfolio. That will tell you if 900k is enough, or if you need to A) save more or B) plan to spend less. But, again, a lot can happen in 15 years. But ballpark, 4% of 900k is 36k/year (before taxes) so you'd likely be fine, assuming some SS.
That said, you sound like you are quite a ways off (decades?) from claiming, so your PIA would have to include lots of assumptions about your future work record.
-
- Posts: 112
- Joined: Sun Oct 18, 2020 10:30 am
- Location: Savannah, GA
Re: For those retired or FI, how much do you spend annually?
The BLS data can be parsed for all of those things...
for example, avg spending in the 55-64 age bracket is $69,494 (2.2 people in CU, 32% w/o mortgage). 65-74 is $55,087 (48% w/o mortgage). Or by income... 8th decile income (gross of $105k) avg spending is $75,947.
I agree with previous posters who emphasized that an individual's actual spending patterns are the only one that matters (to that individual). But I also enjoy looking at & analyzing aggregate spending patterns.
Living The Dream
Re: For those retired or FI, how much do you spend annually?
1. I started with my take-home pay.
2. Then I deducted my mortgage (I paid it off the month I retired with my payout for unused vacation days).
3. I added in for health care.
4. Then added taxes, based on [take home minus mortgage plus health care], that was considerably less income than when working.
2. Then I deducted my mortgage (I paid it off the month I retired with my payout for unused vacation days).
3. I added in for health care.
4. Then added taxes, based on [take home minus mortgage plus health care], that was considerably less income than when working.
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
-
- Posts: 955
- Joined: Fri Jun 30, 2017 11:48 pm
Re: For those retired or FI, how much do you spend annually?
Can you tell us what most spend on healthcare, pre- and post-Medicare age?Rick Ferri wrote: ↑Mon Jan 04, 2021 9:58 amI 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.Does anybody spend significantly more than $90k/year in retirement?
Rick Ferri
Re: For those retired or FI, how much do you spend annually?
Rick, the podcast was quite informative regarding estate planning/trust. Thank you.Rick Ferri wrote: ↑Mon Jan 04, 2021 3:59 pmAh-ha! You need to listen to my latest Bogleheads on Investing podcast with Frazer Rice.OffGridder wrote: ↑Mon Jan 04, 2021 12:56 pmRick,Rick Ferri wrote: ↑Mon Jan 04, 2021 9:58 amI 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.Does anybody spend significantly more than $90k/year in retirement?
Rick Ferri
Thank you for your data point and perspective based on actual experience. At what minimum dollar level do you consider an individual or couple to be High Net Worth (HNW)! The last data I saw for Americans over age 65, was a median net worth of $266K and an average net worth of 1.2M.
Dave
Rick Ferri
-
- Posts: 1613
- Joined: Wed May 20, 2020 6:36 am
Re: For those retired or FI, how much do you spend annually?
I found this data interesting; from this report.
https://www.caniretireyet.com/storage/d ... eYet-1.pdf
As a baseline, I'll discuss here the living expenses of two real couples in their 50's, no children at home, living on opposite sides of the country. Both have what I would call a "restrained upper-middle-class lifestyle." Think smaller houses in upscale neighborhoods, gas-efficient vehicles, few big toys or fancy clothes, careful diets, but plenty of frugal fun: road trips, coffee bars, dining out, books and movies. In both cases, minimum monthly expenses sans mortgage (this assumes your house is paid for), come in at a bit over $4,000/month, or $48,000/year.
If you need more confirmation on the cost of a comfortable lifestyle, consider these data points: In his ground-breaking book Work Less, Live More on early retirement, Bob Clyatt writes that "average budgets for generally well-heeled early-retired couples are around $40,000 to $45,000 [a year]" -- about $3,750/month on the high end. And, according to bundle.com -- a web site created by a former banker using aggregated spending transactions to find out how people handle their money -- the average expenses (again not including mortgage or rent) for higher-income ($125K+) couples age 50-65, no kids, are about $4,675/month or about $56,000/year.
https://www.caniretireyet.com/storage/d ... eYet-1.pdf
As a baseline, I'll discuss here the living expenses of two real couples in their 50's, no children at home, living on opposite sides of the country. Both have what I would call a "restrained upper-middle-class lifestyle." Think smaller houses in upscale neighborhoods, gas-efficient vehicles, few big toys or fancy clothes, careful diets, but plenty of frugal fun: road trips, coffee bars, dining out, books and movies. In both cases, minimum monthly expenses sans mortgage (this assumes your house is paid for), come in at a bit over $4,000/month, or $48,000/year.
If you need more confirmation on the cost of a comfortable lifestyle, consider these data points: In his ground-breaking book Work Less, Live More on early retirement, Bob Clyatt writes that "average budgets for generally well-heeled early-retired couples are around $40,000 to $45,000 [a year]" -- about $3,750/month on the high end. And, according to bundle.com -- a web site created by a former banker using aggregated spending transactions to find out how people handle their money -- the average expenses (again not including mortgage or rent) for higher-income ($125K+) couples age 50-65, no kids, are about $4,675/month or about $56,000/year.
“Now shall I walk or shall I ride? |
'Ride,' Pleasure said; |
'Walk,' Joy replied.” |
|
― W.H. Davies
-
- Posts: 22
- Joined: Mon Jun 19, 2017 10:42 am
Re: For those retired or FI, how much do you spend annually?
This sounds like it’ll be a good jumping off point for us. We try to travel on the cheap (travelzoo, Groupon, etc) and I’m working on traveling with credit card points, which I’m not the best at but we did at least manage to get our southwest companion passes so if we combine all that, I think $24k will be great. Thanks again for your insight! It’s really helpful!DSBH wrote: ↑Mon Jan 04, 2021 5:45 pmNothing extravagant, we monitor for “good deals” and acted swiftly since time is what we have. We did however travel a lot and more than half of the time international - sometimes half way around the world e.g. Southeast Asia, Australia etc. We also like to rent cars and drive around so it could cost quite a bit, and also some cruises are more expensive than others.MyBrothersAdvisor wrote: ↑Mon Jan 04, 2021 4:38 pmAfter working out our current monthly expenses and what I'm *thinking* they'd be in the future, this seems like it would be similar to our situation. Are you traveling extravagantly to get to that $24k price point? I don't expect to fly business class, but I was hoping to be able to at least book a trip when we felt like a vacation. We've got some international travel on our bucket list and I'm wondering if $24k is a good baseline for that type of vacation??
-
- Posts: 22
- Joined: Mon Jun 19, 2017 10:42 am
Re: For those retired or FI, how much do you spend annually?
I’ll have to take this into consideration. I’ve always worried about relying on it but not having it be there. I need to work until 55 regardless as I can’t officially retire until then and I’m pretty sure I’ve missed the boat on being FI prior to that unfortunately. As I think about it more, excluding SS would only cause us to save more until age 55...so I’ll definitely start including it so I can be sure I’m getting the full picture. Thank you!Admiral wrote: ↑Mon Jan 04, 2021 6:18 pmThat is a mistake from a financial planning standpoint. If you want to be ultra conservative, you can project a 25% haircut for your expected benefits. Assuming 0% may cause you to both work longer and save more unnecessarily. SS is not going to disappear, despite the sky-is-falling headlines. (Of course, it may be that based on your earned income history, SS may not be significant for you; but it sounds like you have a spouse.)MyBrothersAdvisor wrote: ↑Mon Jan 04, 2021 4:32 pmI always leave SS benefits off any projection in the event it's gone once I retire. I don't want to toss any eggs in that basket in the (unlikely) event I can't count on it. That being said, whenever I do put in SS to get all my numbers, it ends up being just fine!Admiral wrote: ↑Mon Jan 04, 2021 1:34 pmThere are retired posters here who have $20m, and others who have much less than $1m. So, what others may do (or plan to do) should have no bearing on your plan. 15 years out, it's difficult to estimate your retirement expenses, though it's not impossible. The things you can foresee and make guesstimates for are 1) pension and SS cashflows; 2) mortgage or paid off house; 3)Medicare or some other form of heath insurance; 4) costs for food/entertainment/travel.MyBrothersAdvisor wrote: ↑Mon Jan 04, 2021 9:14 am Good morning! This is my first post, but I'm a long-time lurker. I'm working through my projections and always get hung up on how much to assume I'll spend annually once I'm done working. What does everybody spend annually in retired not including your mortgage. I always assume $30k in addition to my projected pension which should be about $60k. I'll have health insurance for me and my husband in retirement so that should save us a bit. And I've conservatively assumed we'll have $900k in our investments at age 55 when I retire. We're hoping to travel quite a bit and/or get a second home to enjoy when our kids have kids and pass down to them once we're gone.
I guess my main question is: Does anybody spend significantly more than $90k/year in retirement? OR, maybe you don't but you see some giant holes in my projections and how I'm hoping our retirement will play out. We've got a number of years (more than 15, but less than 20) to correct things if it isn't going to work. I'd love to get a jump on it now!
If you plan to fly business class 3x per year, well, you'll need more than if you go camping. Similarly, if you plan to buy a second home, you'll have that to pay for.
I am likely considered HNW, and have budgeted $60k/year spending, after taxes, at the low end (base expenses, minimal travel) and $130-140k at the high end. Likely we will be somewhere in between, depending on how much we help our kids out. $10k/month will provide a "do anything we want" (more or less) lifestyle. Note that, upon reaching SS, our pension and SS payments will pay for the vast majority of what we need and reduce our withdrawal rate to 2% or less. So, we may end up spending more early in retirement.
6-7 years from retirement now if all goes well.
If you will get 2/3 of your 90k from a pension, AND you are eligible for SS, then you should be able to make an educated guess about what you'll need to draw from your portfolio. That will tell you if 900k is enough, or if you need to A) save more or B) plan to spend less. But, again, a lot can happen in 15 years. But ballpark, 4% of 900k is 36k/year (before taxes) so you'd likely be fine, assuming some SS.
That said, you sound like you are quite a ways off (decades?) from claiming, so your PIA would have to include lots of assumptions about your future work record.
Re: For those retired or FI, how much do you spend annually?
$24k a year is plenty of money for traveling, in my experience. We usually do one big $10k-$12k trip a year (2 weeks on a Holy Land cruise for instance, or 2 weeks on a European river cruise), and then a couple of smaller 1-week $2-4k trips (like Caribbean cruises or Cabo or visit Washington D.C., etc.).MyBrothersAdvisor wrote: ↑Tue Jan 05, 2021 6:09 amThis sounds like it’ll be a good jumping off point for us. We try to travel on the cheap (travelzoo, Groupon, etc) and I’m working on traveling with credit card points, which I’m not the best at but we did at least manage to get our southwest companion passes so if we combine all that, I think $24k will be great. Thanks again for your insight! It’s really helpful!DSBH wrote: ↑Mon Jan 04, 2021 5:45 pmNothing extravagant, we monitor for “good deals” and acted swiftly since time is what we have. We did however travel a lot and more than half of the time international - sometimes half way around the world e.g. Southeast Asia, Australia etc. We also like to rent cars and drive around so it could cost quite a bit, and also some cruises are more expensive than others.MyBrothersAdvisor wrote: ↑Mon Jan 04, 2021 4:38 pmAfter working out our current monthly expenses and what I'm *thinking* they'd be in the future, this seems like it would be similar to our situation. Are you traveling extravagantly to get to that $24k price point? I don't expect to fly business class, but I was hoping to be able to at least book a trip when we felt like a vacation. We've got some international travel on our bucket list and I'm wondering if $24k is a good baseline for that type of vacation??
Budgeting 2k a month for travel is pretty solid. And it's something that can easily be cut back if needed.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
Re: For those retired or FI, how much do you spend annually?
Like everything else your mileage is going to vary. The cost to travel can vary massively (like many things) depending on what your interests and requirements are. Pre-covid my travel budget (I am not yet retired) was running about $15-20k a year for three international trips and that was even though I was using points pretty heavily. The cost for me was because I was going to places in part that weren't cheap for one reason or the other. Such as flying to the Norwegian Arctic Archipelago Svalbard, Easter Island, Egypt (due to logistical issues--wanted to cover a lot of ground in a short time and wanted an individualized tour just for me--I had very specific interests) and so on. I could probably spend a month or more in Italy using AirBnBs for the same amount of money I blew on just under two weeks in Norway and 10 days in Egypt. When the public toilets (train station in Oslo) takes credit cards you know you are in trouble cost-wise.MyBrothersAdvisor wrote: ↑Mon Jan 04, 2021 4:38 pm After working out our current monthly expenses and what I'm *thinking* they'd be in the future, this seems like it would be similar to our situation. Are you traveling extravagantly to get to that $24k price point? I don't expect to fly business class, but I was hoping to be able to at least book a trip when we felt like a vacation. We've got some international travel on our bucket list and I'm wondering if $24k is a good baseline for that type of vacation??
Right now I have zero interest in cruises (with rare exceptions like getting to Antarctica) or resorts. Nothing wrong with either but just not my interest.
-
- Posts: 51
- Joined: Mon Dec 14, 2020 8:40 pm
Re: For those retired or FI, how much do you spend annually?
Hmmm. Of course, absence of the credit card could lead to a case of severe desperation - hopefully it doesn't get declined when you need it most!THY4373 wrote: ↑Tue Jan 05, 2021 9:32 am I could probably spend a month or more in Italy using AirBnBs for the same amount of money I blew on just under two weeks in Norway and 10 days in Egypt. When the public toilets (train station in Oslo) takes credit cards you know you are in trouble cost-wise.
Re: For those retired or FI, how much do you spend annually?
I'm planning on:
Current expenses
+ $25k annually for healthcare
+ $15-20k over current expenses annually for traveling.
Current expenses
+ $25k annually for healthcare
+ $15-20k over current expenses annually for traveling.
Re: For those retired or FI, how much do you spend annually?
$24K is a healthy travel budget. But it can depend on what your bucket list is! A trip to Antarctica will cost that much, pretty easily. Our next bucket list trip is Galapagos and that will cost us about $10k-$12K. A safari will cost us that much.....so, YMMV.MyBrothersAdvisor wrote: ↑Mon Jan 04, 2021 4:38 pmAfter working out our current monthly expenses and what I'm *thinking* they'd be in the future, this seems like it would be similar to our situation. Are you traveling extravagantly to get to that $24k price point? I don't expect to fly business class, but I was hoping to be able to at least book a trip when we felt like a vacation. We've got some international travel on our bucket list and I'm wondering if $24k is a good baseline for that type of vacation??
-
- Posts: 22
- Joined: Mon Jun 19, 2017 10:42 am
Re: For those retired or FI, how much do you spend annually?
Certainly everybody's travel will differ when it comes to interests which will in turn change the overall price tag. I would think we'll continue to travel about the same as we do now, but I'm just hoping for more often. We've done a mix of Caribbean and overseas already, so my hope is that we can continue that at our current pace at a minimum. If you're spending $15k-$20k a year for trips (even though you're using points) and having experiences like you mentioned, I think the $24k budget might work well for usTHY4373 wrote: ↑Tue Jan 05, 2021 9:32 amLike everything else your mileage is going to vary. The cost to travel can vary massively (like many things) depending on what your interests and requirements are. Pre-covid my travel budget (I am not yet retired) was running about $15-20k a year for three international trips and that was even though I was using points pretty heavily. The cost for me was because I was going to places in part that weren't cheap for one reason or the other. Such as flying to the Norwegian Arctic Archipelago Svalbard, Easter Island, Egypt (due to logistical issues--wanted to cover a lot of ground in a short time and wanted an individualized tour just for me--I had very specific interests) and so on. I could probably spend a month or more in Italy using AirBnBs for the same amount of money I blew on just under two weeks in Norway and 10 days in Egypt. When the public toilets (train station in Oslo) takes credit cards you know you are in trouble cost-wise.MyBrothersAdvisor wrote: ↑Mon Jan 04, 2021 4:38 pm After working out our current monthly expenses and what I'm *thinking* they'd be in the future, this seems like it would be similar to our situation. Are you traveling extravagantly to get to that $24k price point? I don't expect to fly business class, but I was hoping to be able to at least book a trip when we felt like a vacation. We've got some international travel on our bucket list and I'm wondering if $24k is a good baseline for that type of vacation??
Right now I have zero interest in cruises (with rare exceptions like getting to Antarctica) or resorts. Nothing wrong with either but just not my interest.
Re: For those retired or FI, how much do you spend annually?
I never understand why anyone cares what someone else spends in retirement. Who cares what the median number is. All that matters is your own circumstances.
Joe can go wild on 75K while Mary feels impoverished at 100K. Some people do great and are happy at 30K.
Joe can go wild on 75K while Mary feels impoverished at 100K. Some people do great and are happy at 30K.
K.I.S.S........so easy to say so difficult to do.
-
- Posts: 22
- Joined: Mon Jun 19, 2017 10:42 am
Re: For those retired or FI, how much do you spend annually?
I'm with you! Our bucket list items have mostly standard things: New Zealand, Australia, Iceland...I'd love Sweden and/or Switzerland and/or Holland, Thailand, Italy...Greece! I could go on, but most of them could be booked for reasonable prices. Obviously, you could go all out on vacations to those places, but I think we'd be more apt to spend conservatively. I'd rather take more reasonably priced trips throughout the year than only one (or two) more expensive ones. I'd love a Safari, but I think I'd throw up spending that much money even if I had it!!kaudrey wrote: ↑Tue Jan 05, 2021 1:01 pm$24K is a healthy travel budget. But it can depend on what your bucket list is! A trip to Antarctica will cost that much, pretty easily. Our next bucket list trip is Galapagos and that will cost us about $10k-$12K. A safari will cost us that much.....so, YMMV.MyBrothersAdvisor wrote: ↑Mon Jan 04, 2021 4:38 pmAfter working out our current monthly expenses and what I'm *thinking* they'd be in the future, this seems like it would be similar to our situation. Are you traveling extravagantly to get to that $24k price point? I don't expect to fly business class, but I was hoping to be able to at least book a trip when we felt like a vacation. We've got some international travel on our bucket list and I'm wondering if $24k is a good baseline for that type of vacation??
-
- Posts: 22
- Joined: Mon Jun 19, 2017 10:42 am
Re: For those retired or FI, how much do you spend annually?
That's true, of course. But if I can figure out what everybody else is spending overall (with a decent enough sample size), I can figure out if my numbers are in line with the majority or if I'm at one end of the spectrum or the other. Hearing others experiences in retirement helps me get a better idea of how the majority are spending. If everybody wrote that they spend upwards of $150k and I was planning on $90k, I'd need to rethink some things. It's nice for me to see the bell curve that comes out of the responses because I like data.hoops777 wrote: ↑Tue Jan 05, 2021 1:21 pm I never understand why anyone cares what someone else spends in retirement. Who cares what the median number is. All that matters is your own circumstances.
Joe can go wild on 75K while Mary feels impoverished at 100K. Some people do great and are happy at 30K.
Re: For those retired or FI, how much do you spend annually?
My desired travel in retirement will consist of picking a spot and spending 4-6 weeks there. I want to slow travel, I don't want to be a tourist.THY4373 wrote: ↑Tue Jan 05, 2021 9:32 amLike everything else your mileage is going to vary. The cost to travel can vary massively (like many things) depending on what your interests and requirements are. Pre-covid my travel budget (I am not yet retired) was running about $15-20k a year for three international trips and that was even though I was using points pretty heavily. The cost for me was because I was going to places in part that weren't cheap for one reason or the other. Such as flying to the Norwegian Arctic Archipelago Svalbard, Easter Island, Egypt (due to logistical issues--wanted to cover a lot of ground in a short time and wanted an individualized tour just for me--I had very specific interests) and so on. I could probably spend a month or more in Italy using AirBnBs for the same amount of money I blew on just under two weeks in Norway and 10 days in Egypt. When the public toilets (train station in Oslo) takes credit cards you know you are in trouble cost-wise.MyBrothersAdvisor wrote: ↑Mon Jan 04, 2021 4:38 pm After working out our current monthly expenses and what I'm *thinking* they'd be in the future, this seems like it would be similar to our situation. Are you traveling extravagantly to get to that $24k price point? I don't expect to fly business class, but I was hoping to be able to at least book a trip when we felt like a vacation. We've got some international travel on our bucket list and I'm wondering if $24k is a good baseline for that type of vacation??
Right now I have zero interest in cruises (with rare exceptions like getting to Antarctica) or resorts. Nothing wrong with either but just not my interest.
Re: For those retired or FI, how much do you spend annually?
Not trying to be difficult, but all that matters is how much money YOU have and what YOUR expenses are. If you had it down to people your age,with your money, living in your town,with your health history and similar travel goals it would be helpful.MyBrothersAdvisor wrote: ↑Tue Jan 05, 2021 1:31 pmThat's true, of course. But if I can figure out what everybody else is spending overall (with a decent enough sample size), I can figure out if my numbers are in line with the majority or if I'm at one end of the spectrum or the other. Hearing others experiences in retirement helps me get a better idea of how the majority are spending. If everybody wrote that they spend upwards of $150k and I was planning on $90k, I'd need to rethink some things. It's nice for me to see the bell curve that comes out of the responses because I like data.hoops777 wrote: ↑Tue Jan 05, 2021 1:21 pm I never understand why anyone cares what someone else spends in retirement. Who cares what the median number is. All that matters is your own circumstances.
Joe can go wild on 75K while Mary feels impoverished at 100K. Some people do great and are happy at 30K.
The larger the sample size of people who are different from you, the less useful it is. Think about it. You can spend an hour going through your own stuff and come up with a good ball park number.
Spend a month going through everyone else’s numbers and you have a bunch of data from people who all have different circumstances than you.
What difference does it make if your data shows people spending 150K if you would run out of money in 5 years if you did. What difference does it make if most people spend 70K and you can easily spend 150K with zero fear.
Even how much people spend on travel. Huge differences between people. My wife and I might go to Hawaii for a week and spend 2000 total. You might go and spend 10,000.
Your numbers.Your circumstances. The other stuff is feel good like being labeled high net worth. Just my 2 cents and a pet peeve.
K.I.S.S........so easy to say so difficult to do.
- TheTimeLord
- Posts: 12130
- Joined: Fri Jul 26, 2013 2:05 pm
Re: For those retired or FI, how much do you spend annually?
Honestly while the total might have some value the truth is that how you spend your money is more important than how much. Lots of people spend approximately the same amount of money in thousands of different ways, but few of them maximize the life they get out of it. They are too busy doing what everyone else tells them is important to get around to what they think is important. Having a budget is great, but figuring out what you specifically want to spend that budget on is the real endgame.MyBrothersAdvisor wrote: ↑Tue Jan 05, 2021 1:31 pmThat's true, of course. But if I can figure out what everybody else is spending overall (with a decent enough sample size), I can figure out if my numbers are in line with the majority or if I'm at one end of the spectrum or the other. Hearing others experiences in retirement helps me get a better idea of how the majority are spending. If everybody wrote that they spend upwards of $150k and I was planning on $90k, I'd need to rethink some things. It's nice for me to see the bell curve that comes out of the responses because I like data.hoops777 wrote: ↑Tue Jan 05, 2021 1:21 pm I never understand why anyone cares what someone else spends in retirement. Who cares what the median number is. All that matters is your own circumstances.
Joe can go wild on 75K while Mary feels impoverished at 100K. Some people do great and are happy at 30K.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. |
Run, You Clever Boy! [9085]
-
- Posts: 637
- Joined: Wed Dec 19, 2012 6:38 am
Re: For those retired or FI, how much do you spend annually?
I set an annual budget, with plenty of flex to cover fixed costs and discretionary, and I stick to that budget no matter what.flyingaway wrote: ↑Mon Jan 04, 2021 12:31 pmHow do you balance spending with good and bad years?truenorth418 wrote: ↑Mon Jan 04, 2021 10:30 am 3% of year end portfolio value.
That means a different amount spent every year, as the portfolio value rises or falls (usually rises).
I am 57, and I have a small pension and SS awaiting me in a few years which I consider reinforcements in case the 3% plan doesn't work out so well.
-
- Posts: 79
- Joined: Fri Oct 30, 2020 12:04 pm
Re: For those retired or FI, how much do you spend annually?
We have tracked every penny spent since we got married. Using this data and applying it to our expected retirement expenses results in $120k, before taxes. This includes everything we could anticipate, including lawn service, gifts, travel, entertainment, dining out, and even a car payment for a high value car because that’s one our indulgences.
Re: For those retired or FI, how much do you spend annually?
I also like seeing the answers. I am contemplating retirement, and have an idea of what my expenses will be. But this is a big decision for me, and there are uncertainties. Once I walk out, I can’t go back. So if I’m planning on spending $X per month, and lots of others are successfully doing that now, it gives me great peace of mind. On the other hand, if nobody is making it work on $X per month, then I know I’ve got a problem and need to re-examine my assumptions.MyBrothersAdvisor wrote: ↑Tue Jan 05, 2021 1:31 pmThat's true, of course. But if I can figure out what everybody else is spending overall (with a decent enough sample size), I can figure out if my numbers are in line with the majority or if I'm at one end of the spectrum or the other. Hearing others experiences in retirement helps me get a better idea of how the majority are spending. If everybody wrote that they spend upwards of $150k and I was planning on $90k, I'd need to rethink some things. It's nice for me to see the bell curve that comes out of the responses because I like data.hoops777 wrote: ↑Tue Jan 05, 2021 1:21 pm I never understand why anyone cares what someone else spends in retirement. Who cares what the median number is. All that matters is your own circumstances.
Joe can go wild on 75K while Mary feels impoverished at 100K. Some people do great and are happy at 30K.
Re: For those retired or FI, how much do you spend annually?
According to Wes Moss, happy retirees spend $82,770 a year.
https://www.youtube.com/watch?v=wo3E34zQk_0
https://www.youtube.com/watch?v=wo3E34zQk_0
Re: For those retired or FI, how much do you spend annually?
Our plan is for $150k per year. Support from savings, Social Security, and a pension with retiree medical, based on 36 years of service. That's before taxes, premiums or copays.
Re: For those retired or FI, how much do you spend annually?
Visa: “It’s everywhere you want to be!”ForeverPunjabi wrote: ↑Tue Jan 05, 2021 9:43 amHmmm. Of course, absence of the credit card could lead to a case of severe desperation - hopefully it doesn't get declined when you need it most!THY4373 wrote: ↑Tue Jan 05, 2021 9:32 am I could probably spend a month or more in Italy using AirBnBs for the same amount of money I blew on just under two weeks in Norway and 10 days in Egypt. When the public toilets (train station in Oslo) takes credit cards you know you are in trouble cost-wise.
-
- Posts: 181
- Joined: Mon Aug 26, 2019 11:14 pm
Re: For those retired or FI, how much do you spend annually?
Thanks for the information. I was getting excited about where we fell in this grouping but then saw that the publication is from 2016. I wonder if the dollar amounts for the groupings has been adjusted for economic changes?formerlybroke wrote: ↑Mon Jan 04, 2021 2:00 pm From CFP Board whitepaper: Building a Wealth Management Practice: Measuring CFP® Professionals' Contribution https://tinyurl.com/y585cgyl
This study references four different segments of advisor clients based on investable assets:
Mass-market clients have less than US$100,000 in investable assets.
Mass-affluent clients have between US$100,000 and US$999,000.
HNW clients have between US$1 million and US$9.9 million.
UHNW clients have US$10 million or more.
Re: For those retired or FI, how much do you spend annually?
What is hnw equal toRick Ferri wrote: ↑Mon Jan 04, 2021 9:58 amI 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.Does anybody spend significantly more than $90k/year in retirement?
Rick Ferri
Re: For those retired or FI, how much do you spend annually?
A Google search for "hnw" shows varying definitions, which usually start at $1 million in invested assets. The most common upper limit seems to be $5 million; above that is "vhnw" (very high net worth) and "uhnw" (ultra high net worth).
Meet my pet, Peeve, who loves to convert non-acronyms into acronyms: FED, ROTH, CASH, IVY, ...
Re: For those retired or FI, how much do you spend annually?
I'm in a rather unique situation because I retired at 56. I'm 59 right now with triplet 9 year old kids! Our biggest expense is healthcare premiums. Our total premium is $42k/yr for the family on a platinum Obamacare plan. That's a huge part of expenses - more than the total I'm paying for our small remaining mortgage, insurance and property taxes. We also live in a HCOL area so that doesn't help. Right now we spend just about all that we take in. But at least we're not touching our savings or retirement funds. I plan on drawing social security at 62, and with 3 kids, I should get a good chunk of change. At 65 I'll qualify for Medicare which will be another savings. I'm comfortable, probably considered HNW, but I'm nervous. It's impossible to predict the future. Lots of changes in tax laws are coming our way which will massively affect my inheritance and how I have to position our estate for our kids.
Re: For those retired or FI, how much do you spend annually?
Our total healthcare spend (premiums + OOP's) pre-Medicare for two people (DW is 56 and I am 58) has been as follows:TheNightsToCome wrote: ↑Mon Jan 04, 2021 7:44 pmCan you tell us what most spend on healthcare, pre- and post-Medicare age?Rick Ferri wrote: ↑Mon Jan 04, 2021 9:58 amI 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.Does anybody spend significantly more than $90k/year in retirement?
Rick Ferri
2017 = $19.0K
2018 = $25.6K
2019 = $19.8K
2020 = $20.2K
Real Knowledge Comes Only From Experience
Re: For those retired or FI, how much do you spend annually?
Thats not what I was looking for. I was looking for his average roughly between 1 and 5 million.
Re: For those retired or FI, how much do you spend annually?
Very good observation, Homer. I pretty much agree with it all. Perhaps it might be a bit conservative.HomerJ wrote: ↑Mon Jan 04, 2021 2:04 pmRemember that includes people with mortgages and kids.mptfan wrote: ↑Mon Jan 04, 2021 1:17 pm As a reference point, the average American household spent $63,036 in 2019.
(The BLS refers to "consumer units" which is essentially the same as a household)
https://www.bls.gov/news.release/cesan.nr0.htm
In retirement, with no mortgage and no kids, $65,000 a year to spend is pretty similar to someone making $120,000+ with a mortgage and kids (and having to save!)
120,000
- 7000 payroll tax
- 24,000 mortgage
- 12,000 savings
- 12,000 kid(s)
= 65,000 for everything else... Exact same lifestyle in retirement with $65,000 income as you had working making $120,000.
Also, location is very important. $65k will go a lot farther in the midwest or southwest than in the Bay area.
Re: For those retired or FI, how much do you spend annually?
It's in the podcast Ferri linked to, give it a listen.jayk238 wrote: ↑Mon Jan 11, 2021 7:03 amThats not what I was looking for. I was looking for his average roughly between 1 and 5 million.
I don't remember the specific cut offs, a number were noted including $3M, 5M, 10M, 20M and maybe 50M.
-
- Posts: 955
- Joined: Fri Jun 30, 2017 11:48 pm
Re: For those retired or FI, how much do you spend annually?
Thanks. I presume that is ACA with no subsidy?MikeG62 wrote: ↑Mon Jan 11, 2021 6:09 amOur total healthcare spend (premiums + OOP's) pre-Medicare for two people (DW is 56 and I am 58) has been as follows:TheNightsToCome wrote: ↑Mon Jan 04, 2021 7:44 pmCan you tell us what most spend on healthcare, pre- and post-Medicare age?Rick Ferri wrote: ↑Mon Jan 04, 2021 9:58 amI 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.Does anybody spend significantly more than $90k/year in retirement?
Rick Ferri
2017 = $19.0K
2018 = $25.6K
2019 = $19.8K
2020 = $20.2K
-
- Posts: 295
- Joined: Sat Oct 25, 2014 6:46 pm
Re: For those retired or FI, how much do you spend annually?
Our average over the last 5 years for a couple is $56,000 per year. We did not make any vehicle purchases during this period. It does include property taxes and travel.
Re: For those retired or FI, how much do you spend annually?
Correct. It's BCBS's Bronze level plan in NJ (i.e., it's no great shakes).TheNightsToCome wrote: ↑Mon Jan 11, 2021 10:11 amThanks. I presume that is ACA with no subsidy?MikeG62 wrote: ↑Mon Jan 11, 2021 6:09 amOur total healthcare spend (premiums + OOP's) pre-Medicare for two people (DW is 56 and I am 58) has been as follows:TheNightsToCome wrote: ↑Mon Jan 04, 2021 7:44 pmCan you tell us what most spend on healthcare, pre- and post-Medicare age?Rick Ferri wrote: ↑Mon Jan 04, 2021 9:58 amI 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.Does anybody spend significantly more than $90k/year in retirement?
Rick Ferri
2017 = $19.0K
2018 = $25.6K
2019 = $19.8K
2020 = $20.2K
Real Knowledge Comes Only From Experience
-
- Posts: 22
- Joined: Mon Jun 19, 2017 10:42 am
Re: For those retired or FI, how much do you spend annually?
This sums up my point exactly! It just gives some piece of mind.Normchad wrote: ↑Sun Jan 10, 2021 4:30 pmI also like seeing the answers. I am contemplating retirement, and have an idea of what my expenses will be. But this is a big decision for me, and there are uncertainties. Once I walk out, I can’t go back. So if I’m planning on spending $X per month, and lots of others are successfully doing that now, it gives me great peace of mind. On the other hand, if nobody is making it work on $X per month, then I know I’ve got a problem and need to re-examine my assumptions.MyBrothersAdvisor wrote: ↑Tue Jan 05, 2021 1:31 pmThat's true, of course. But if I can figure out what everybody else is spending overall (with a decent enough sample size), I can figure out if my numbers are in line with the majority or if I'm at one end of the spectrum or the other. Hearing others experiences in retirement helps me get a better idea of how the majority are spending. If everybody wrote that they spend upwards of $150k and I was planning on $90k, I'd need to rethink some things. It's nice for me to see the bell curve that comes out of the responses because I like data.hoops777 wrote: ↑Tue Jan 05, 2021 1:21 pm I never understand why anyone cares what someone else spends in retirement. Who cares what the median number is. All that matters is your own circumstances.
Joe can go wild on 75K while Mary feels impoverished at 100K. Some people do great and are happy at 30K.
-
- Posts: 1808
- Joined: Sat Jun 09, 2018 11:52 am
- Location: St. Louis
Re: For those retired or FI, how much do you spend annually?
Wow I did not know it could be that high on the ACA. So you are still under the ACA cliff?Lexx wrote: ↑Mon Jan 11, 2021 3:36 am I'm in a rather unique situation because I retired at 56. I'm 59 right now with triplet 9 year old kids! Our biggest expense is healthcare premiums. Our total premium is $42k/yr for the family on a platinum Obamacare plan. That's a huge part of expenses - more than the total I'm paying for our small remaining mortgage, insurance and property taxes. We also live in a HCOL area so that doesn't help. Right now we spend just about all that we take in. But at least we're not touching our savings or retirement funds. I plan on drawing social security at 62, and with 3 kids, I should get a good chunk of change. At 65 I'll qualify for Medicare which will be another savings. I'm comfortable, probably considered HNW, but I'm nervous. It's impossible to predict the future. Lots of changes in tax laws are coming our way which will massively affect my inheritance and how I have to position our estate for our kids.
-
- Posts: 3145
- Joined: Mon Mar 04, 2019 8:52 am
Re: For those retired or FI, how much do you spend annually?
This is the type of information that so many here miss. I was a financial advisor for a number of years myself and almost all retirees that earned their nest egg are very careful spending more than their dividends and interest.Rick Ferri wrote: ↑Mon Jan 04, 2021 9:58 amI 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.Does anybody spend significantly more than $90k/year in retirement?
Rick Ferri
Being wrong compounds forever.
-
- Posts: 3145
- Joined: Mon Mar 04, 2019 8:52 am
Re: For those retired or FI, how much do you spend annually?
Does a bed in a second home or an RV still count as your bed?JDCarpenter wrote: ↑Mon Jan 04, 2021 10:47 amOP, Rick is the one with true knowledge here, given what he does. All the rest of us are anecdotal.Rick Ferri wrote: ↑Mon Jan 04, 2021 9:58 amI 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.Does anybody spend significantly more than $90k/year in retirement?
Rick Ferri
FWIW, we spend about twice as much in retirement than when we were working (excluding taxes, which were our biggest expense when working). Our nontravel expenses are just slightly more than the cutoff; travel will easily double that in most years. Although we slept in our own bed for 7 1/2 months in 2020, we strive for 6 months or less.
E.T.A.--of course, that depends on portfolio value. We also do fixed percentage withdrawal each year.
Being wrong compounds forever.
-
- Posts: 3145
- Joined: Mon Mar 04, 2019 8:52 am
Re: For those retired or FI, how much do you spend annually?
There are a lot of younger Bogleheads who should read that twice. You do not need as much in retirement than you think you’re going to.HomerJ wrote: ↑Mon Jan 04, 2021 2:04 pmRemember that includes people with mortgages and kids.mptfan wrote: ↑Mon Jan 04, 2021 1:17 pm As a reference point, the average American household spent $63,036 in 2019.
(The BLS refers to "consumer units" which is essentially the same as a household)
https://www.bls.gov/news.release/cesan.nr0.htm
In retirement, with no mortgage and no kids, $65,000 a year to spend is pretty similar to someone making $120,000+ with a mortgage and kids (and having to save!)
120,000
- 7000 payroll tax
- 24,000 mortgage
- 12,000 savings
- 12,000 kid(s)
= 65,000 for everything else... Exact same lifestyle in retirement with $65,000 income as you had working making $120,000.
Being wrong compounds forever.
- JDCarpenter
- Posts: 1800
- Joined: Tue Sep 09, 2014 2:42 pm
Re: For those retired or FI, how much do you spend annually?
Dunno? We don't have either of those, although we did rent an RV for 2 or 3 weeks in Alaska last summer. Sure didn't consider that to be our own bed.Wanderingwheelz wrote: ↑Tue Jan 12, 2021 8:54 amDoes a bed in a second home or an RV still count as your bed?JDCarpenter wrote: ↑Mon Jan 04, 2021 10:47 am ....
FWIW, we spend about twice as much in retirement than when we were working (excluding taxes, which were our biggest expense when working). Our nontravel expenses are just slightly more than the cutoff; travel will easily double [ambiguity here--I should have said "easily equal," or "more than match"] that in most years. Although we slept in our own bed for 7 1/2 months in 2020, we strive for 6 months or less.
...
Our personal blog (no ads) of why we saved/invested: https://www.lisajtravels.com/
-
- Posts: 544
- Joined: Thu Oct 13, 2016 4:04 pm
Re: For those retired or FI, how much do you spend annually?
That sounds about right for us.Rick Ferri wrote: ↑Mon Jan 04, 2021 9:58 amI 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.Does anybody spend significantly more than $90k/year in retirement?
Rick Ferri
$88,000 when I did a spreadsheet on it about four years ago.
-
- Posts: 3145
- Joined: Mon Mar 04, 2019 8:52 am
Re: For those retired or FI, how much do you spend annually?
What caused you to retire?Lexx wrote: ↑Mon Jan 11, 2021 3:36 am I'm in a rather unique situation because I retired at 56. I'm 59 right now with triplet 9 year old kids! Our biggest expense is healthcare premiums. Our total premium is $42k/yr for the family on a platinum Obamacare plan. That's a huge part of expenses - more than the total I'm paying for our small remaining mortgage, insurance and property taxes. We also live in a HCOL area so that doesn't help. Right now we spend just about all that we take in. But at least we're not touching our savings or retirement funds. I plan on drawing social security at 62, and with 3 kids, I should get a good chunk of change. At 65 I'll qualify for Medicare which will be another savings. I'm comfortable, probably considered HNW, but I'm nervous. It's impossible to predict the future. Lots of changes in tax laws are coming our way which will massively affect my inheritance and how I have to position our estate for our kids.
Being wrong compounds forever.