Having trouble projecting my yearly budget in retirement, anyone willing to post there’s so I can get inspiration for buckets and magnitudes I’m missing?

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Ok gotcha. I've been making my own retirement forecast sheets since I was about 30 (50 yo now). So I understand!

I humbly suggest your retirement spending level isn't the key variable right now. You'll earn more as you grow. You may have a family. You'll marry. Spouse may be rich, spouse may have loads of student loans. Maybe we'll have a 50% pull back, maybe you'll win the lottery. Maybe you'll decide you wanna live in the country and sell used furniture. may this or may that.

It's good to have a plan! I'm suggesting that if you focus on the big things the small things are easy. (Forecasting retirement spending 30 to 40 years from now will take care of itself if you follow the second item below)

1. If you're saving aggressively and investing now that is the number one item. We saved and saved without really being sure what our target was; and then we found a lake house which has since doubled in value.

2. The second is to be deliberate when you escalate your spending on lifestyle, comfort or fun. Do it, but don't let it just happen.

I saved 100% of a couple of large raises for the first year and it was a huge jump for us.

Our friends have maids and newer cars. We have two homes and a retirement ready portfolio.


You're doing great. Save, invest, keep your fund fees low and just hold on.

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A McDonald’s hamburger will be $20

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Great, now I'm depressed

Start tracking your current expenses using apps like Mint or personal capital. That will give you an idea what you are spending currently and the categories of spend. Go from there on to figuring it out.

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My plan is to retire in 12 yrs with a paid-off home, so my housing expenses will just be maintenance & property taxes. I don’t have an itemized budget per se, but I think that withdrawals of $150k-$180k/yr in current dollars would allow a similar lifestyle to what my wife & I have now (summer & winter vacations, replacement cars every 6 yrs, etc), so that would be $200k-$240k/yr in future dollars 12 yrs from now. So using a 3%-4% withdrawal rate, I will need to build an investments nest egg of approx $7M.

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Try Guyton, blanchett, Pfau and of course Bengen for withdrawal rate info.

Look up dynamic withdrawal rate.

Some very interesting reading.

You might look up David Blanchett who has been published on this.

There are two big dynamics;

Retirees just spend less in general. Retirees start with go-go move to slow go and then to no go. (Early retirees will have more go-go.)

Health care costs might go up a lot but are hard to predict.

Personally I'm 50 and my expenses are already slowing. We have a lake house now and we really enjoy the time there. Dinner on the grill, days on the lake, mornings on the trail.

My plan however is largely predicated on my current expenses level continuing as is plus inflation. I figure reduced vacation and fun spending can offset increased health care spending.



Please let me know what you think. I'm interested in other ideas.

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This is going to be very person dependent - your spending habits, preferences, your COL, etc . Personally, we plan to spend more or at least equivalent in retirement to what we spend now. I agree with the other person that said to track what you are spending now as you should know what your current outflow is. Then use the 4% or if you are conservative the 3% rule on your liquid net worth to see if you have enough to retire. If you are younger, then you might consider using 3% - if you are older then 4% is probably fine.

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Appreciate all the feedback! What’s tough for me is I’m 24 rn with about ~40-45K in yearly expenses (18 of that is rent). But I’m trying to figure out how that might change 30 years from now. I.e. I’m trying to quantify “lifestyle creep” can’t decide if that’s 2.5% year over year or if my % of expenses relative to salary should always stay the same etc. etc.

In my experience, expenses do not really follow percentage of income but are more lumpy with stage of life.

FWIW, I am 25 years older than you and we make a shit ton of money now. My biggest expense is my 3 kids college tuition, followed by our home remodel - house is long since paid for (never made financial sense to pay it off but I prefer being debt free).

My total cash outlay for all expenses (outside of income taxes which eat us alive) in the year is about 24% of what we earn so the rest gets dumped into the stock market. (For reference in 2019 & 2020 this was 15% & 18%). We could easily retire but fear, uncertainty, and greed get in the way.

Looking back, I would have under predicted how much money we take in as a family. That could have just as easily gone the other way, I suppose. I was raised middle class and never thought this was even possible. Now that I've been around, my perspective is that I am underpaid compared to some of my peers so its all relative. I also under-predicted stock market performance. These two in combination are why we are wealthy now.

I would have also under predicted the cost of having children. They are fucking expensive and it is so hard to say "no" because we love them more than we love ourselves really.

Anyway, I looked back 15 years ago at my budget spreadsheet and I was really, really off on what I thought my NW would be at 50. Fortunately, I was off in the right direction because I made what I thought were "slightly conservative" estimates for things like stock market growth, inflation, lifestyle creep. Over 15 years of being off by a little all aligned in the right direction means we are very well off.

My advice is to do your best but be on top of your actual expenses while you are incurring them. Use whatever method you prefer but watch where your money goes so you can make those value decisions along the way to determine whether or not it is worth a purchase and, of course, pick the conservative estimates so you err on the side of slightly over-saving rather than slightly under-saving.

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