Reply to How much do people have saved for retirement?

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[quote=Anonymous][quote=Anonymous]To all the high rollers I actually factored that in

Assumption I am making, house is paid off, kids/college done with.  Those are your 2 biggest expenses

[b]I struggle to imagine how typical living expenses are going to be over 5k a month. [/b] That leaves you 40k to live like a baller for 3 months a year or alternatively to bump up your living expenses per month.  Also remember once you hit say 80 living expenses really start taking a nose dive and you won't be doing that baller stuff anymore either.[/quote]

From an actual retired person: budget $10,000 a year on property tax and insurance  (double that if you live in NOVA). Increase that significantly for flood and wind insurance if you live anywhere near the coast.  Car insurance and taxes are another $3,000 (again, more than that if you live in NOVA).  $12,000 for electricity/gas/phones/water/sewer/wifi/etc.  Medical/dental insurance and copays are another $10,000 (more if you're not eligible for Medicare). Plus vet bills, boat insurance, house maintenance -- easily add another $5,000 (or more, if say, your HVAC unit conks out).  Budget $5,000 for groceries, and another $5,000 if you want to eat or order out twice a week.

We're at $50,000, and there are entire categories of stuff we haven't addressed -- We do all of our own yard work, but you could easily add another $5,000 a year for that (or, in the alternative, condo/homeowner's association fees). Pool maintenance?  House cleaning services?  Are you ever going to buy a new car, improve your house, buy new clothes, buy a new phone/computer, buy gifts for your family, make charitable contributions, put $$ in a 529 for your grandchildren? What are you going to do with your time?  How about greens fees/country club dues/boat slip fees, and, of course, the big ticket item, travel?

At 80, you're going to need to outsource more -- that yard maintenance becomes essential -- or go into a retirement/nursing home that is substantially more expensive.  Heaven forbid you get dementia and need incredibly expensive memory care facilities.

Sure, it is possible to spend less than this. If you already spend less than this when you're working, then it could work great.  However, do not fool yourself into thinking that you're going to drop your spending (not income, spending) dramatically in retirement and be happy.   Why would I want to quit a job that I enjoyed to sit around in a house and think about how I'd really love to go play golf, or go out to dinner, or send a nice gift to my grandchild, but I can't afford to?  Think carefully about how you were living during the COVID shut down, because that could be the rest of your life on a limited budget.  But it would be even worse, because it would all be out there and available, but just not for you.   [/quote]

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