How much will you need to spend in 2024 for a comfortable retirement?

[Digger1000]

If you have Direct TV that means you have electricity. So you have a Direct TV bill, an electric bill and some sort of rent payment, as a renter and you seem to have Internet access (is that free somehow?). Do you eat?

My electric bill is under $30 a month 10 out of 12 months, thats the only utility I pay. I've never paid more than $35 a month for internet with att bundled with dtv. I actually had free internet this past year as I finally figured out how to get it. That rolled off, now I will pay $15 a month for 6 months then it will be $30 a month after that.

My smart phone bill is $10 a month with tello.

Eating, I posted this March in a thread titled monthly grocery expenditures on the off topic form:

I havent had food from a restaurant since 2019. I eat all my meals at home and I get all my groceries from Aldi and I always get them delivered. My groceries have always been way under $200 a month my whole life. I get all my paper products from Aldi.

I get my Aldi delivery every 2 weeks, the only thing that I consume that I dont get from Aldi is coffee and I get that shipped from Walmart(free shipping and not a member) every 3 months.

Here is the total cost of each grocery delivery from Aldi this year including delivery fee and tip. My next delivery will be between Apr 3-5. The below does not include the $99 a year membership fee which would add $25 to the below amount in the 1st Qt of 2024.

72.51
51.96
87.53
81.96
70.62
93.34

Total for 3 months 457.92

Add on $25 membership fee for 3 months and total is 482.57 for 3 months.

 

[Still Learning]

We live in Mid-Hudson Valley of New York State. No debt and annual bills are $43,800 for everything after 5 years of retirement. Pension/SS still pays all the bills plus $8K excess. Discretionary spending is paid from interest from bank CDs which allowed us to reduce annual withdrawals on investment accounts to .004%.

 

[ShokWaveRider]

Some folks here seem to have large requirements, at least by my standards. I have trouble spending what I allocate. One thing to note is that in a previous thread the question was how much we spend on general living expenses all in, excluding discretionary expenses. This question is a lot different as I allocate 300% of that number. IOW 2 x our general living expenses for discretionary. It is nice to be able to do that.

 

[skyking1]

Ours will be more like 1X. That will be a hard push with the LBYM attitudes.

 

[ShokWaveRider]

Ours will be more like 1X. That will be a hard push with the LBYM attitudes.

Ha Ha ... I hear ya! Allocating and actually spending it is another story.

 

[TheWizard]

Interesting thread.
I'm single in my 12th year of retirement and have something over $150k of annual income.
But I don't spend it all.
I typically have been investing $40-50k per year of excess income since I started SS at age 70 four years ago.

So $100k per year might be my comfortable number...

 

[Milkman]

We have been retired since September, 2014. I ran my expenses for the last 12 months and compared it to our first 12 months of retirement. At first I almost had heart failure because the total for the last 12 months was $113,000 more that the first year! After looking closer at the figures, I realized that our three biggest categories were charitable contributions, home repair, and savings. After taking those totals out of both years, it turns out that we spent $500 more in our first year of retirement.

To summarize we are spending about 6500 per month excluding the 3 previously mentioned categories.

 

[RetiredHappy]

I am surprise that a couple of the posts counted savings as "spendings". Savings are the opposite of spendings.

 

[wmc1000]

We always create a base necessity budget just for info. We can live comfortably and cover all necessary expenditures at just under $36K. Our actual spending tends to be $60K+.

 

[Dtail]

I am surprise that a couple of the posts counted savings as "spendings". Savings are the opposite of spendings.

Yeah I thought so too at first.
So for example, let's say one has 1m and they take 40k at the start of the year, plus they have 60k in SS for a total spending budget of 100k.
Actual spending for the year is 90k and the 10k goes into a savings account.
My calculation is that I still had a 4%WR for the year. Some might say that they had a 3%WR for the year and 10k savings would defacto be one of their "spending" accounts.

 

[medved]

Seems to me that annual spending as a percentage of available assets might be more relevant (to others) than annual spending in absolute terms.

 

[TheWizard]

I am surprise that a couple of the posts counted savings as "spendings". Savings are the opposite of spendings.

Sort of. When I took $45,000 from my taxable account to buy the new Mustang last fall, the money was was essentially from excess retirement income put into "savings" over the past few years.
Call it as you please...

 

[TheWizard]

Seems to me that annual spending as a percentage of available assets might be more relevant (to others) than annual spending in absolute terms.

Some of us have Secure Income from pensions, annuities, and SS which exceeds our needs most years, so a 0% withdrawal rate.
Or maybe a negative withdrawal rate if you account for excess income added to existing investments.

But then you have the complications of RMDs, Roth conversions, and occasional large withdrawals to buy new vehicles.
So I don't really compute my withdrawal rate anymore...

 

[erkevin]

Retired for 8 years (wife for 4). No debt. $57,000 a year to keep the lights on, tummies filled, insurance paid, etc. This is exclusive of all taxes. It also does not include travel or extravagant 1x purchases.

 

[medved]

Some of us have Secure Income from pensions, annuities, and SS which exceeds our needs most years, so a 0% withdrawal rate.
Or maybe a negative withdrawal rate if you account for excess income added to existing investments.

Yeah, I guess I did not think about that since I have no pension or annuities.... So I am stuck with some w/d rate that is more than zero...

 

[teej1985]

Retired for 8 years (wife for 4). No debt. $57,000 a year to keep the lights on, tummies filled, insurance paid, etc. This is exclusive of all taxes. It also does not include travel or extravagant 1x purchases.

Did you by chance live in Tucson prior to retirement? I thought about moving there! Not as hot as Phoenix and a bit cheaper... I only spent a little bit of time in Tucson for work though.

 

[Winemaker]

Unofficially retired 10 years in July, (that was my shift) then had rotator cuff surgery and never went back in October. We have spent $120-150k/year, and started Roth conversions over 100k about 5 years ago. We still have a mortgage at 3.375% and a few more years on it, and a 22 Tacoma at 2.49%. No longer have the rentals, so no lumpy expenses there.

 

[erkevin]

Teej- No, moved to Tucson 7 months ago as our final retirement resting place (I hope). I retired up in Kingman, AZ but we had to make an emergency move to TN for several years to care for an ailing relative. After our commitments there ended, we debated a lot of places; Florida, the Carolinas, staying in TN, moving back to AZ, Texas...... Our son had graduated from the UofA and planned on moving back to Tucson after graduate school. We like AZ, we like college towns, our son will be here, IT IS NOT PHOENIX, the hiking and wide-open spaces are amazing, and we visit Mexico several times a year. So far, we really like it (even though it was 108 F yesterday!)

 

[Milkman]

I am surprise that a couple of the posts counted savings as "spendings". Savings are the opposite of spendings.

I send my "savings" from my checking account to one of two separate brokerage accounts. There they either get allocated to money market, T-bill ladders, or other investments. When I run a recap of spending on Quicken; it gets listed as an expense or "spendings."

On the other hand, I do take that into account when I calculate my withdrawal rate.

 

[RetiredHappy]

I send my "savings" from my checking account to one of two separate brokerage accounts. There they either get allocated to money market, T-bill ladders, or other investments. When I run a recap of spending on Quicken; it gets listed as an expense or "spendings."

On the other hand, I do take that into account when I calculate my withdrawal rate.

Ah... now I understand. I use Excel workbook spreadsheet to manage cash flow, investments, withdrawals etc. I hate that I set aside about $10K in my budget for house projects and it has been running $20K in a "cheap" year to as much as $100K in an expensive year.

 

[TickTock]

Quite a few around here are using the ACA and paying less than when they were employed.

We're on ACA as well, but it's the opposite for us. After PTC, premiums are just under $1,200 / month for DW and I. High deductible plan, so any health spending comes out of our pocket unless something catastrophic happens. I expect healthcare to be the single largest spending category, federal taxes the next highest for 2024 and 2025.

 

[RetiredHappy]

Health insurance is one of our largest expenses as I get no ACA subsidies a year after we retired. So from my age of 55 to 65 until Medicare age, we pay through our nose. I have 3.5 years left of expensive health care costs. Our income is high enough that we need to pay full freight. We have been filing for itemized deductions instead of standard deductions due to our high medical/health care costs. For the past 2 years, our medical expenses are about $40K each year between the 2 of us. My husband is on Medicare and he is the cheap one.

 

[Tazman]

We are retiring in the next couple of years - that will put us in our mid to late 50s.

I have tracked our budget vs actual spend for at least the last decade. What is interesting, if you back out the stuff that we wouldn't have to spend in retirement (extra investments, kids college, etc) and the "lumpy spending", our normal run rate after taxes has been pretty consistent at $75 to $80 each year for the last 10 years. That includes normal vacations etc but doesn't include any major expenses like car purchases or renovations or house repairs.

 

[2029FIREaway]

Following as I try to understand my current vs. projected expenses in 5 years. Not retired yet.
My best guess is between $150-$200k based on todays spend.

I’d like to know if any folks here saw a significant drop in expenses once kids went to college? Let’s assume 529s cover the bulk of tuition and expenses for in state kids.

I would like to get back to the $100k to $150k expenses range to be really comfortable financially. We were there 10 years ago!

Prop tax: $13k
Other household bills utilities etc: $10k
Insurance costs: $5k
Health insurance: $10k-$20k?
Food n Drink: $10-$20k
Car costs: $10k
Pet costs: $2k
Travel costs: $30k

Basically around $100k spend with no kid costs!

Add in $10-20k per kid, outside of 529s. Back up to $150k. And I haven’t factored taxes!

 

[Joseph]

We live in Mid-Hudson Valley of New York State. No debt and annual bills are $43,800 for everything after 5 years of retirement. Pension/SS still pays all the bills plus $8K excess. Discretionary spending is paid from interest from bank CDs which allowed us to reduce annual withdrawals on investment accounts to .004%.

Was just in the Hudson valley, lived there first 48 yrs of my life. In California the last 12. Beautiful area, looking forward to spending more time there whenever we retire( 77 months both who is counting)