Home Forums Hunting & Shooting Hunter's Campfire Closing in on retirement and setting a budget

For those that are already in retirement, did you try living on your anticipated retirement budget before you retired.

My wife and I are going to set a weekly budget equal to our anticipated retirement income and live on it for a year to see how it feels. Anyone ever done anything like that, and how did it turn out?

I applaud you for looking at it this early and having a plan.

Lived on well less than our anticipated income for many years. That's one thing that let me retire early, and I've still not started to milk any of my IRA's. Being completely debt free is also a wonderful benefit.

Will of course start in on those at the mandated 70.% yrs and simply view that as play money.

It really helps to enter retirement without a mortgage.

Going into retirement debt free is critical, as is having a budget that is realistic and allows you to set aside a portion of your monthly income for both anticipated and unanticipated expenses. A lot of people forget how expensive home and vehicle maintenance and vehicle replacement is today and will continue to be tomorrow.

EDIT: Another drain on retired folks are their children and grandchildren. A lot of retired folks spend a significant portion of their savings supporting their children, often paying for luxuries of the sort that they would never have bought for themselves. My 32 year old niece is a prime example of this. She and her husband earn about $400K, but manage to spend all of the net and then some. She is regularly asking her grandmother, my MIL, for a couple thousand here and a couple thousand there. Fortunately, my MIL can afford to give her the money, but I don't think that my MIL's enabling her to live beyond her means is helping her learn how to manage her money so that she can live within her means when her grandmother is gone.

That said, I do not agree that retiring debt free is best for all. Very dependent upon one's situation.

While every situation is different, I can't see how being debt free is ever a bad thing. Debt has to be serviced and the money to service the debt has to come from somewhere.

That is one view and one I do not share given my circumstances.

You must have special circumstances. Care to share?

Put away about 20% into a 457 plan while I worked and got a small raise when I retired! Was used to living on less so it was no adjustment. Had house free and clear and no xtra bills. Part of a 20 year plan!

I won't pretend to speak for EdM, but with some mortgages around 3%, and considering that You can get a quarter or a third of that back on your taxes, getting it near 2%, it almost makes sense to make use of such "cheap" money, to free yourself up to use the cash on other things, be they amusements/necessities/investments.

I won't argue the benefits of getting out of debts that are racking up 6-18% interest. You don't want that hanging over your head, but at 2-3% interest, I don't see much benefit to going all "Dave Ramsey" on certain debts...

My mortgage is just over 3%. I plan to pay extra principal, but at this point I'm more concerned with building more cash, 401, etc. In fact, I'd rather find the right investment property and invest in that, than pay down mortgage. As it stands, if monies increase as I plan, I can cover my mortgage into retirement.

Retired almost 10 months ago. Life is good so far!
I would definitely recommend preparing a budget based on your past actual expenditures for both essential and discretionary expenses. Then look at some free sites like Investopedia to see how your income streams will match up to expenses (4 box method). Found that useful to find any problems.

In addition to others comments I recommend consideration for "consequence of events". Or more simply because life happens, have a cash cushion for unplanned expenses or if your investments are in the [bleep] (like the stock market since I retired). I'm ok for a few more years but.....

Last year my biggest personal expense was on fuel for hunting and fishing adventures cause I have most of the toys I need. Might even need a new truck a little earlier than I had planned! (But not complaining cause it isn't work related anymore)

Agree with Ed. Retired 2 years ago. The only bill I have is a 15 year mortgage at 3%, sold my big house in a high tax area downsized to a low tax area away from the big city. Used the 50K in tax free equity put most in the bank, used some to upgrade the house. Still haven't touched any of my annuities or 401k's and shouldn't have to for another 10 years, but .gov is going to make me in 6 when I turn 70. I do work 15 to 20 hours a week out of my home shop to pay for health insurance until next year when I have to join Medicare.
All in all life in retirement is good, I get up in the morning drink coffe while watching the sunrise, and think about what I don't have to do today unless I want to.

With such low mortgage rates, I can see the financial sense in holding, or even taking a 2-3% mortgage, then investing that money and if you can make 5%+ you are actually in the positive.

The tradeoff is piece of mind that you have 0 debt.

Westernmassman makes s good point. Gather up your toys before retiring if possible. I have the toys to play with in retirement and as important, the ammo to feed them, especially the rimfire. I expect to do much more rimfire for myself, as well as kids and any grandkids. Between the wife and I, I figure on one car payment. I have a company car now, but will buy a truck and drive to my grave.

I figure my retirement expenses for the first 10 years will be the same as my expenses today, minus the monthly contributions to 401, savings, etc.

I retired 9 years ago at age 51, it was planned since I was 20. My monthly income when I retired was 20% more than when I was working.

Several unforeseeable things happened in the past 9 years. The economy crash one year after I retired killing interest earned on investments and still is. Our Governor Snyder saw it fit, several years ago that I pay state income tax on my pension, 4.6 % of my monthly income gone. With Obama Care my monthly insurance premium went up 150 %. Went from Blue Cross Blue Shield that payed 100% of everything, optical and dental. To 70-30% no optical or dental. Automobile insurance has increased 100%. Then add in inflation on everything else.

Next year I can collect Social Security that will add 30% to my monthly income. My wife can collect 3 years after that.



It costing more than I planned but has not costing enough to change my way of life. As long as we have are health.

Always plan to have enough on an annualized basis to handle unforeseen changes, usually due to government policy changes (i.e. assumed interest rates on savings, health care insurance costs, etc). Also, remember to include in your budget taxes that will need to be paid and how that will eventually intersect with Social Security. We always lived on one income, although we both worked. Allowed us to retire early and to have spending patterns that remained fairly constant.

Predictions are difficult because everything changes, sometimes often. A medical emergency can wipe out anyone. A CPA isn't a bad person to consult. We have been retired for 4 years, and our CPA warned us about paying off our present mortgage (we moved) too quickly because the interest deduction lowers our income taxes by about 5%.
I turn 70 next November, so I'm facing the need to reduce the principal of my 401K enough the IRS doesn't give me a required withdrawal.
As you age, you will be able to do less. Remember the aging process accelerates. There's a much bigger change in your abilities between age 50 and 70 than there was between the ages of 30 and 50. I won't be going on any strenuous hunts or rough-water fishing any more because of my bad back.
Barring medical expenses (unpredictable), you will spend less as you age. As my 401K is decreasing, I can stay home more and spend less.

Always Always play with other peoples money not your own. Wise Jewish guy I used to work with , words of wisdom.