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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I've been retired for a little under a decade and just turned 60.  My spouse stayed at home and our kids are long out of college and launched so she is retired as well.  We still have a mortgage because we have a very low interest rate so there's no reason to pay it off.  We live a very, very nice life in the DMV, with a home in a highly desirable part of the city and a second home in the country where we also spend a large amount of time.  I track my expenses with the personal cap app.

Removing mortgage payments from our expenses -- because I know others will insist on paying theirs off before retiring, for whatever (often irrational) reason -- here are our average yearly expenses for the last three years, from highest to lowest:

Taxes (federal and DC income and DC and second home property taxes):  35k

Healthcare (premiums, deductibles and all out of pockets): 28k

Home maintenance (for both the DC and second home, including cleaning services, lawn services, swimming pool maintenance in the second home, and all general maintenance on both houses):  26k

General merchandise (basically every "thing" we buy):  18k

Travel:  13k (average probably lower than the past because of covid)

Car (gas and maintenance, including buying a late model used one):  14k

Groceries:  12k

Restaurants:  8k

Utilities:  7k

Cable/internet:  5k

Gifts:  4k

Insurance (home & auto):  3.5k

Phones:  3.3k

Miscellaneous (assistance to elderly mother, entertainment, cash withdrawals from ATMs, gifts to charity, clothing):  6k

TOTAL per year average:  $183k

So, for $183k a year, we are paying our taxes, paying for health care, managing to high end homes, traveling, eating out, buying decent cars, helping out our mother, etc.  It's a very nice life, and it's affordable.

Some DCUM posters worry too much.[/quote]

How do you manage to pay so little federal and state tax on 150k in income
[/quote]

Careful planning and relying on capital gains rather than withdrawing from my retirement accounts as much as possible.  My tax bill really varies each year depending on how well I manage to do that.  For example, for the year that just ended my federal tax bill is less than $500.  The year before it was more like $40k.[/quote]

This will change when you hit RMDs.[/quote]

Tell me something I don’t know.  I’m also 15 years away.  [/quote]

You may know, but many people don’t take RMDs into account when saving. Too many posters on this board assume all of their retirement savings should be in qualified plans. [/quote]

Meant to add — & because most tend to save in qualified plans, they can’t do what you’re doing even before they hit RMDs. [/quote]
DP.. Yes, this is why to me it makes sense to take social security early if you have a lot in your retirement accounts.  If you have a lot in those accounts, and wait to take social security at 70 so you can claim more, it may bump up your tax bracket.

We are planning to take ss at 62, combined with pulling out money from our Roth and 401k to keep our taxes low.  SS is not taxed in our state, and I believe it's only taxed at 85% at the federal level.

When we hit 70+, I anticipate that we will slow down a lot, so we won't need as much to live on.[/quote]

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