Anonymous wrote:

Anonymous wrote:

Anonymous wrote:What makes me antsy is health care costs. Those seem the most unpredictable and the most liable to be high vs low

If you have Medicare and a decent gap plan, health care costs nothing except your premiums.

I was getting ready to type the same thing! I've been retired for almost three years and had multiple doctor visits and procedures done and it never costs me anything other than the Medicare deductible of about $200 at the beginning of the year. I'm talking about surgery on my spine, several months of PT, varicose vein surgery, multiple checkups, labs, ultrasounds. Costs nothing.

You know that a certain subset of Republicans are planning on “sunsetting” Medicare.

Anonymous wrote:

Anonymous wrote:What makes me antsy is health care costs. Those seem the most unpredictable and the most liable to be high vs low

If you have Medicare and a decent gap plan, health care costs nothing except your premiums.

I was getting ready to type the same thing! I've been retired for almost three years and had multiple doctor visits and procedures done and it never costs me anything other than the Medicare deductible of about $200 at the beginning of the year. I'm talking about surgery on my spine, several months of PT, varicose vein surgery, multiple checkups, labs, ultrasounds. Costs nothing.

Anonymous wrote:What makes me antsy is health care costs. Those seem the most unpredictable and the most liable to be high vs low

If you have Medicare and a decent gap plan, health care costs nothing except your premiums.

Anonymous wrote:The retirement calculators suggest you’ll need about 80% of your income in retirement. Is this true?
We will have our mortgage paid off at that point so 80% seems high?

Asking retirees how much they spend relative to their working income

Our retirement income is about 77% of our pre-retirement income. We are - so far - spending about 50% of that, but we haven't had any really big expenses yet, such as painting the house or fixing the septic, or fixing my teeth (which is always a big expense for us - thanks to heredity (sigh...)) We save that we aren't spending for those big expenses.

Our mortgage is paid off.

We had to use Cobra for my first 6 months of retirement, and that was very expensive. Now we are able to access Medicare Advantage, which is really good where we are, so health expenses are low...so far...

I’m targeting 65%.

Right now 17% of my post tax income goes into my kids 529s. Then sports, clothes, sleepaway camp, insurance, vacations, etc. I pulled all kid related expenses out of my budget and landed at 55%. So I’m targeting 65%.

The thing about post-retirement spending is that it is dynamic--the early years people tend more than their income because they have a lot of energy to fill up their free time--they go out, they travel, they do home improvement projects. As you get older, you slow down a bit. Then as you get even older, medical bills/long term care needs often skyrocket.

Most of the people I know focus on their spending vs. their income and say they spend more in retirement in the first decade than they did when they were working. But they aren't counting money they didn't count as "spending" before (e.g., saving for retirement) in their calculation. Early retirees spend a lot in health insurance costs too--so that's a key factor for many to consider.

What makes me antsy is health care costs. Those seem the most unpredictable and the most liable to be high vs low

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.

OP, you can have any retirement you want. You can move anywhere you want. Spend whatever you want.

How do you think others get along on far less?

I agree the 80% is high. I think it really depends on your HHI. The lower the HHI the closer to the 80%.

Last month according to Quicken I spent $23K. But $8.5K of that was for college tuition, and $3.9K was for a one time expense related to a a family members estate. So net, I am really at $10.6K for last month.

You really need to have good data to forecast.

That 80 rule is really stupid. We all make different HHI, all have different spending habits and savings habits. I use my cc bill and checking account spending to estimate.

Op here- thanks. I know it’s a rule of thumb but I’m just trying to see some real life examples of how what people are doing in retirement so I can see if anything resonates with me so I can therefore make such an estimate.

I would base ig on your spending, mot your income. You will need approximately your current spending level, unless there are other factors like the mortgage being paid off. Travel msy be higher, clothes lower etc.

No one knows for you— that’s just a made up rule of thumb which may have no relevance. If you are saving for retirement or paying a mortgage you may need less. Or not if you are travelling a lot more etc.

Just try to estimate your expected costs in retirement.

The retirement calculators suggest you’ll need about 80% of your income in retirement. Is this true?
We will have our mortgage paid off at that point so 80% seems high?

Asking retirees how much they spend relative to their working income