How much annual budget do you need to feel comfortable in retirement?
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Anonymous
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I’ll be dead so it’s about providing for my wife. With just her my savings will outlive her. We’re in our early fifties and our home has been paid off for a while. All of our children will be grown and flown in a couple of years. Every year I can still work pads her retirement.
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Anonymous
I’m the poster you’re responding to. We don’t fly business but get upgraded frequently because of frequent flier status. We wouldn’t be comfortable paying for business and don’t think it’s worth it. It’s good enough to sit near the front in economy plus. |
Anonymous
In calendar year 2024 we spent 45k for maintenance, taxes and insurance for the two houses. This year it’s trending to be lower, somewhere in the mid 30s. So maybe 15 to 20 percent of total spend. Our second home is large and on 7 acres with a pool so that requires some upkeep. |
Anonymous
About 15M in investments and getting about $90K a year between the two of us in SS. |
Anonymous
dp col doesn't run like that. It's not 50/50 per person. You have shared costs. Our current monthly expenses is about $12K per month (including some travel), and that's with one child in college and one senior in HS at home. Once our youngest goes off to college, I'm going to retire. Our monthly budget won't change much because while we will stop contributing to the 529 ($13K per year), we will need ACA insurance which is going to be more like $20K for 4 of us. We plan on pulling out $120K from our retirement accounts, and $50K from our cash account, and increase it by 3% every year. We can do this for 10 years. But, my spouse can start getting medicare in 3 years, and also start collecting social security and a small pension after 5 years. |
Anonymous
| We have a 7 year age difference and Dh is aiming for $300k retirement while I continue to work for another 5 years or so. I bring in $250-300k a year so we’ll be below our typical HHI but it should be more than enough (one paid off house, one CC membership). I’ll retire sooner if I can figure out health insurance that doesn’t eat away at too much of our savings. We plan to stay in the DC area. Kids can sell our house if we need LTC. It’s worth $2.5 million now so should cover those costs. |
Anonymous
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Retired (early) at the end of ‘24 so I look at the numbers frequently to see if our expenses are where I thought they would be at…
Last year with both of us working, our income was around $520k. That put our top marginal rate at 32% and an average effective tax rate at 26%. I expected us to spend about $16k per month ($192k/ yr) in retirement pre-tax. So far that has tracked pretty closely. That includes $36k/ yr mortgage that will be paid off within a year, about $30k/ yr in travel and $4k/ yr for retiree healthcare premiums. Property taxes are $13k and another $2k for our cars. From what I have seen, our expenses have not changed much from our working years, but they have shifted. We do spend less on lunches at work and dry cleaning but spend more on golf and other recreation activities. Knowing your expense numbers and where future income will come and when is key. I used a couple of different planning tools to help validate. Also, tax planning is pretty critical. Post work, there are opportunities to pull some levers to do 401k conversions when your marginal rate drops. |
Anonymous
We don't count on SS (Different pOster). We will get ~$4-6K/month when we are 67 ( in 10-11 years, one of us has been SAHP for 25+ years) That hardly puts a dent into what we need/want monthly (~$40-45K) It will be nice if we get it, but we are assuming it might be diminished in the next 10 years |
Anonymous
Well people tend to live longer. I have 5+ elderly relatives who have been in Assisted/memory care/nursign care for over 2 years. One was in memory care for 7+ years, caught the flu and it them in. But otherwise had been looking at easily another 2-5 years. Another has been in nursing care for 3+ years now, still going strong relatively speaking. It's not that far fetched to need advanced care for more than a few years. |
Anonymous
You simply need to calculate what you have and find a way to live on what is available. For us, we can take $500K/year after taxes and probably only touch a little portion of our principle. For others they better not live past 80. |
Anonymous
DP: that will vary so much. For us in a HCOLA, we have a condo in an expensive city and a house nearby. Both paid off, taxes and maintenance (including HOA fees at the condo) will run us $60K+ per year (and both places were recently gutted/renovated so maintenance is minimal). But for many people that would be 50-75% of their total expenses for a year |
Anonymous
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I retired after a layoff at the beginning of the year and so far am on track for about $65K per year. I’m single with a young adult DC whom I no longer need to support. House will be paid off in a few months.
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Anonymous
| Single so no more than $80K a year in today's dollars with hopefully two fully owned houses. |
Anonymous
| We plan to go back and live in our home country. My DH will inherit a family home as he s the only child. So we will sell our primary residence here..therefore include it in our net worth. We d like to travel a lot. I think 200k a year we will live like a king. But I plan for 300k a year. We are at 5mil now. We r 45 and 48. Our social security maybe 60k yearly but we don’t count on it. |
Anonymous
Then start taking it early. I think it’s funny that you think you need that much money in retirement. |