[USER]

I’m really struggling to estimate my retirement expenses, not from a math standpoint but more from a lifestyle/what I want to do standpoint, especially since I’m early 40’s and potentially looking at FI by mid 40s, with retirement TBD.

I realize expenses will likely be different in early, mid, and late retirement, with much more being spent up until around age 65 which is why I can’t understand how people come up with a single annual expense number.

For all of you that have already estimated or actually withdrawing retirement budget, what does your annual expenses look like and is the for single, couple, family, or married/separate finances/FI buckets?

Also, please note if you live in high cost/low cost area, and today’s dollar if possible.

It seems like its really hard to plan out what you are going to do until you are actually in retirement.

So many people plan on huge travel budgets, then never use it, especially in the later years. What about unplanned expenses?

Do you just add in a contingency for unplanned/higher than expected inflation? What about new hobbies that will likely evolve over time that you may not even envision today?

I understand the methodology to do this, meaning to start with current expenses and then add/deduct, but the challenging part is identifying what’s included in the post FI expenses.

Perhaps just looking for a sanity check that the annual expense number I have in mind in reasonable, and realizing that it will vary by year and in various stages of life.

[Cris]

I’ve been retired for 2 years, yet have been living abroad for 6 years. My annual expenses for the past 6 years have averaged to 45K USD.

When I lived in the U.S., I spending between 90K to 120K the last 4 years I lived in the country.

The dramatic reduction in expenses is really nice, since I’m living a larger life now too.

I mapped out 40 years of future expenses, spending more as I age, and then took the average of all of those years.

I feel that process allows ample wiggle room over the decades. Plus, having lived in so many countries now, I’m very comfortable with geoarbitrage and moving often, as I actually grew up nomadic since the age of 10.

I find geoarbitrage to be a very good contingency plan for myself.

And that’s what I love about FI, it’s very personalized and can be super flexible.

[Damaso]

I like your thought process. Lifestyle and contingency planning to me are the two most important things when planning for your future.

Lifestyle you have control over and can plan for that and contingency planning are all the other variables that you can’t.

I don’t have the patience for contingency planning each and every scenario, so I just contingency plan for the worst case scenario and I figure out a way for my finances in that situation to cover all the basics in life. After doing this I have a range I count on.

Living the retired life I have now, traveling the world with my wife about 7 months out of the year to living with a roof over my head, food on the table, bills paid, no debt and love in my home.

Both scenarios are great and ones I can live a happy life with.

I have been retired for 3.5 years now and am living a dream life. As time passes I can adjust my lifestyle up or down according to my financial state at the time.

Good luck in your journey!!!!!

[Lisa]

We are planning $200k a year, no bills. Whatever we don’t spend on ourselves, we’ll spend in our kids like family vacations, help them with big purchases, etc.

[Dara]

I agree with you. Everyone is different. Do they vent overseas or stay here in a paid off (or not) home? I seldom see mention of needing a new roof, hvac system or driveway paved etc.

It’s always live small (3-4%) or travel big (+) and an occasional new car. But few mention of large ten or so year purchases that hit you up every 2-3 years with homeownership. Same as HOAs.

They are 5-$20,000 plus assessments every year in addition to regular quarterly fees for new roof, siding, elevators, pools, redoing clubhouses etc as they age.

[Author]

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