Post-retirement spending

[Anonymous]

Anonymous wrote:I've been pondering the same question as OP and currently using a 70% estimate in my planning. Concerned about SS and Medicare being reduced by politicians though. Are you all relying on SS in your projections?

I am not but I am 39 and HHI is $250k (a common cutoff).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The biggest thing most people forget is that once you're IN retirement you stop SAVING for retirement.

Chances are, you're already living on less than 100% of your actual income, because you're socking a chunk of it away.

Start with your actual take home pay, subtract expenses you won't have in retirement and add/increase expenses that could rise. You'll eat out more, travel more, take up hobbies, your cars may need work/replacing, house will be older/need work. Etc.

Better to be conservative, but I agree most retirees with few major expenses don't need 80% of their income to live well.

You also stop paying social security and medicare taxes.

dp.. really? They don't take out ss and medicare taxes on retirement distributions?

They are payroll taxes so you don't pay them if you are not receiving wages.

This explains it in more detail: https://www.realized1031.com/blog/do-you-pay-fica-on-retirement-income

PP here. Thanks. I didn't know that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The biggest thing most people forget is that once you're IN retirement you stop SAVING for retirement.

Chances are, you're already living on less than 100% of your actual income, because you're socking a chunk of it away.

Start with your actual take home pay, subtract expenses you won't have in retirement and add/increase expenses that could rise. You'll eat out more, travel more, take up hobbies, your cars may need work/replacing, house will be older/need work. Etc.

Better to be conservative, but I agree most retirees with few major expenses don't need 80% of their income to live well.

You also stop paying social security and medicare taxes.

dp.. really? They don't take out ss and medicare taxes on retirement distributions?

They are payroll taxes so you don't pay them if you are not receiving wages.

This explains it in more detail: https://www.realized1031.com/blog/do-you-pay-fica-on-retirement-income

PP here. Thanks. I didn't know that.

DP: This is a source of complaint of tax inequality bc people with low income pay a high percentage of their income in payroll taxes, while there's a cap on how much income you pay payroll taxes and there are no payroll taxes on capital gains, retirement income etc.