Poll: How much are you planning to spend yearly in retirement?

[VagabondMD]

I have a feeling that the further out you are from retirement, the more that you underestimate your annual spend in retirement (inflation-adjusted). It would be fun to revisit this thread in 5, 10, 15, and 20 years to prove that I am correct.

[Tim]

I have a feeling that the further out you are from retirement, the more that you underestimate your annual spend in retirement (inflation-adjusted). It would be fun to revisit this thread in 5, 10, 15, and 20 years to prove that I am correct.

I can speak to 5-10 years. The bottoms up approach is way off. However the big "essential expenses" are pretty close. The total spending is actually more accurate and appears to track. The discretionary spending is from a cash flow standpoint not smooth. Most of these are "family decisions" that Mama Bearis stressed for whatever reason and decides "We need to do this". I knew I had a new CRV, a trip to Italy, and a 30 day road trip. I didn't know that 10 years ago. With Covid, 2 out of 3 happened. And two other international vacation trips for four that were complete surprises. I think I need to add a line of $10-$15k for Moma Bear. That seems to be how its going. Tops down annual is pretty accurate. Each year is up and down. No way would I have forecast the line items. That is why much forecast has a 10-20% cushion.

The important thing is your averages over 5, 10, 15, and 20 years. Mama Bear is hard to forecast. My RMD's and SS will be about 150% of our annual spend. Not too worried.

[Lordosis]

I have a feeling that the further out you are from retirement, the more that you underestimate your annual spend in retirement (inflation-adjusted). It would be fun to revisit this thread in 5, 10, 15, and 20 years to prove that I am correct.

You are probably right. But the best marker for future spending is probably current spending. Some things will go up and others down.

[VagabondMD]

I can speak to 5-10 years. The bottoms up approach is way off. However the big "essential expenses" are pretty close. The total spending is actually more accurate and appears to track. The discretionary spending is from a cash flow standpoint not smooth. Most of these are "family decisions" that Mama Bearis stressed for whatever reason and decides "We need to do this". I knew I had a new CRV, a trip to Italy, and a 30 day road trip. I didn't know that 10 years ago. With Covid, 2 out of 3 happened. And two other international vacation trips for four that were complete surprises. I think I need to add a line of $10-$15k for Moma Bear. That seems to be how its going. Tops down annual is pretty accurate. Each year is up and down. No way would I have forecast the line items. That is why much forecast has a 10-20% cushion.

The important thing is your averages over 5, 10, 15, and 20 years. Mama Bear is hard to forecast. My RMD's and SS will be about 150% of our annual spend. Not too worried.

I am not speaking to the amount spent throughout retirement. That is pretty well established to be a U-shaped curve.

I think that folks who are far from retirement underestimate what their spending pattern will be as they age and reach retirement.

[StarTrekDoc]

I am not speaking to the amount spent throughout retirement. That is pretty well established to be a U-shaped curve.

I think that folks who are far from retirement underestimate what their spending pattern will be as they age and reach retirement.

Conventional wisdom says 75-85% of current spend. I expect ours to be close to what we currently spend. Mortgage being replaced by travel during the early years then family spoilage later then medical costs in the final stretch.

[Kamban]

I have a feeling that the further out you are from retirement, the more that you underestimate your annual spend in retirement (inflation-adjusted). It would be fun to revisit this thread in 5, 10, 15, and 20 years to prove that I am correct.

More healthcare costs?

[Antares]

sadly; house tax alone is 30k - Benefits of California San Diego living . Health insurance budgeting 17K. Rest of 'essential' beach bum living factored into LeanFI

Budget : Pretax dollars
Lean FI (beachbum with food): 120k
Reg FI (current lifestyle spend): 185k
Fat FI (taking ~10k monthly post retirement trips): 275k

--RMD: This is why the concentration on so much discussion in this forum (especially on my part). We oversave significantly for the poll reflecting most intend a <250k budget.

Mine too in NY. One of the reasons for relocating when I don’t need to live here for work.

[Tim]

I am not speaking to the amount spent throughout retirement. That is pretty well established to be a U-shaped curve.

I think that folks who are far from retirement underestimate what their spending pattern will be as they age and reach retirement.

U-shaped curve I think is based upon “averages”. The same pretty well established studies show “essential expenses” as a percentage of available retirement income are really high, something like 90%. Just look at SS as a % of retirement income. I think for this group, essential expenses have a downward slope for as a % retirement income regardless of the absolute amounts. The same as personal residence as a % of NW. That U shaped curve projection is not based on the top 5%-10%, “On average, retirement beneficiaries receive 40% of their pre-retirement income from Social Security.”
Your spending may be U Shaped, but it won’t be on essentials. Most of the increase is on healthcare. Medicare is NOT a concern or U Shaped for the top 5%-10%. Same for you as the average.

[8arclay]

This is a rather meaty article but I love these articles because I think it's going to be a real struggle to shift from saver to spender. Good ideas in here:

https://esimoney.com/what-comes-afte...phase-of-fire/

Excellent read, thanks for posting this

[Auric goldfinger]

My spending has been stagnant over my first 6 years of retirement. 180-210 K/ year on expenses ( 20-25K on medical care, despite my Medicare enrollment last year) 2 houses, 3 cars, adult child living home. Taxes were an additional 45-60 K/ year( munis, dividends, very few cap gains). Total 240-250K / year

[CM]

Conventional wisdom says 75-85% of current spend. I expect ours to be close to what we currently spend. Mortgage being replaced by travel during the early years then family spoilage later then medical costs in the final stretch.

I expect our retirement spend to be significantly greater than current spend. We have no mortgage or other debt, and I work a lot in a little town without a lot of places to spend money. In retirement, we plan to move and build a more expensive (albeit smaller) custom home, and we'll probably find plenty of new ways to spend money with the greater time and opportunity.