My Retirement Budget Revealed

Almost all of the financial guru/wizards who tout their budget prowess never post their actual budget numbers. Oh, they’ll say things like housing is 25% of their income but never mention the income number nor state whether their income is net or gross. These little points of revelations DO matter when it comes to discussing budgets. In other words, unless a person reveals their actual budget numbers, their actual income vs expenses, they’re mostly blowing smoke up your butt IMHO.

Also, realistically, most people wouldn’t know how to handle or write-up a budget if it was handed down to them on a silver platter. Most people don’t truly understand what constitutes income nor do they fully understand what an expense is. Case in point, if you give a friend of yours $500 and that friend gives you back $500 next week, that $500 is NOT considered income. Duh! It zeros out in to nothingness.

I’ve been a Budget Administrator for most of my life. I’ve been long-term employed by top legal partnerships (i.e. attorney law firms) and at minimum, had to oversee annual budgets worth at least $25 million (amount updated for 2018 value) in revenue. It was my job to oversee income vs. expenditures and make sure the corporate conglomerates were running profitably. In other words, I ran the complete office, which at times had over 44 employees. Oh, yeah, I also did payroll.

I listened to a lot of heart wrenching sob stories over my working years. I met lots of my fellow employees who really struggled with money issues. I’ve helped most of them by simply showing them a few tricks I’ve learned over the years to streamline their expenditures in order to meet their income. I was also a BIG proponent on saving money. Not so much in the stock market because I lived through two horrific Wall Street downfalls (1985 and 2001 and the housing crisis of 2008) and I saw too many people wiped out because of it. I’m a careful (probably too careful) saver and believe much too much in FDIC investments.

I also witnessed the rise and downfall of many, many top-earning attorneys who whittled away their money by either spending it foolishly on their stupid wives, spoiled kids or by trying to impress their fellow partners. I laughed when senior partners paid upwards of $175,000 for a new kitchen only to eat out most every day. Or buy a $45,000 dining room table and yes, they also ate out most every day. Stooopid!

I’ve also been born into a wealthy family that prized money and all its glories over the common man. I watched my ruthless mother, slowly die in bed with a rare cancer, while noting all her money in this world could not give her one more day of life on this earth.

People think if they could just earn MORE money their lives would be brighter, happier, joyful. I’ve been rich (millionairess) and I’ve been poor (not knowing where my next meal was coming from poor). I’ve discovered that there comes a point in a person’s life when ‘ENOUGH’ will do them just fine. Once you find your ‘enough’ point, the happiness and joy just flows.

I also learned over my lifetime that carrying debt, even a mortgage can lead a person down a treacherous, endless rabbit hole. I do believe that debt, however, if handled correctly and affordably can improve your life (such as a reasonable student loan NOT IVY LEAGUE, an affordable mortgage NOT A McMANSION, a low cost car loan NOT A BMW) As long as you know, that should you lose your job or suffer any kind of loss, if you have a good Plan A, B or C in place and can handle that debt, then do it!

So, my lifelong journey to date has shown me that earning a lot of money is futile, carrying large amounts of debt is ridiculous. I set up my life goals very early in my life. The Number One thing I wanted to accomplish was to quit working for the ‘man’ as soon and as early in my life as possible. I also learned that money is a tool. I don’t work for money. I have my money work for me. Since I come from a wealthy family, I still wanted to live a luxurious lifestyle BUT (and it’s a very big ‘but) I wanted to accomplish my luxurious lifestyle on as little money as possible. It became a very enjoyable ‘game’ for me to always find a different route through the very expensive maze of life, for less.

And that, my dears, is the whole premise of my entire lifebeing: Live the best that I can for a lot less money AND laugh all the way to the bank!

So, here is our retirement budget. Now that Nick and I are finally 100% fully retired and all our hanky panky is over and done with, we are very happy to finally settle down. We’ve narrowed our living location down to one home vs two. We still have our RV which can take us to any other place we’d like. Since we both have heart conditions (Nick is worse than mine) it was imperative for us to retire and claim our social security benefits and pension way ahead of schedule. We both claimed our SS at age 62 and Nick claimed his pension at 55 vs 65. Yes, this means we will be getting a lot less money over our retirement years than many financial advisors (and I) would recommend. At 65, Medicare automatically deducts Part B medical coverage right out of our Social Security checks, so I have taken into account that income reduction. I only work with reality here. It is what it is. In retirement, your numbers are your numbers.

Now, that our second vacation home is sold, our investment income has gone up substantially. We won’t, however, be using our interest income ($7,625 a year which comes out to $635.42 a month). That money will only be used as travel money, emergency money and hopefully, as it accumulates, newish car buying money. Right now, we are still using (and paying) for two paid-off, newish vehicles. If I see in our future, us coming into rocky financial weather, one of the vehicles will be sold.

Also, we are still carrying two credit card debts: Lowe’s & Apple Computer. These are at zero percent and due in full October 2018. I could easily pay these off, but why should we use our money, which is earning us more money? We needed new appliances. I needed a new computer. In the future, however, now that we are 100% retired, I won’t be taking out any more zero interest loans. They really are a pain in the butt and hinder our monthly budget. Strike a point for Dave Ramsey!

Lastly, our RV loan. I gave paying this off in full at this time ($14,000 current value) a no-go. Why? Two reasons. First off, the value of the loan @4% vs the value of the interest I am earning off that money now invested @3% means that I am only paying @1% on my RV loan. Over 12 years, the life of the loan, I am only paying $1,680 in interest on the RV. Second reason, being that the RV was technically worth $20,000 and I only paid $15,000 wholesale, I am way ahead of this curve. Right now, the RV loan is slightly upside down BUT that will even out in a few years…….just in time for me to sell it and pay off the balance of the loan, in full, off the proceeds of that sale. As I said, money works for me. Not the other way around.

Our total net monthly income is $2,662.30. Our total monthly expenditures are $2,624.79 which gives us a slight fudge of $38 a month. After October 2018 we’ll have an additional $321.50 in our monthly fudge coffers. We’ll probably just put those funds back in our liquid savings account or use it towards RV traveling instead of touching our interest. In our retirement, Nick and I are quite content to be living on $32,000 a year. This is without taking into account the additional interest income of $7,625 we earn.  And any financial advisor who tells you you must have at least $4,000,000.00 (four million dollars) in a savings account before you retire, should be your first indicator to keep on walking past their office.

And laugh all the way to the bank.

Live well and prosper, my friend. Live well and prosper.

our monthly budget

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15 comments

  1. Your expenses are quite low. It really helps not to have a mortgage, for sure. I *wish* I could get a hair cut for $8.00. LOL I do cut hubby’s hair, so it’s just mine. Just out of curiosity, why do you carry life insurance?
    We are saving enough to live on what we live on today. And, we are almost there. I hope to pay off our mortgage at the same time my husband retires. We may very well be able to live on only $3000 a month, but I know in the beginning of retirement, (when we are still young-ish) I want to travel, and buy clothes, and go out to eat, and perhaps have a cleaning lady…
    Anyway, thanks for sharing. It’s nice to see ‘real’ numbers. 🙂

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    • Hi Sharon, the $8 a month hair cut is what I pay yearly for a few hair cuts ($96) divided by 12 months. I go to Super Cuts and with the Senior discount, I get a nice hair cut for around $12 plus tip every few months or so. Nick buzzes his own hair. I spend around $300 a year on clothes, which comes to $25 a month set aside. I carry life insurance so Nick doesn’t have to worry about anything. He can afford my funeral expenses PLUS the income is tax free. Ditto for Nick. I’m going to need his life insurance proceeds when he kicks the bucket to pay for his funeral expenses AND in case I have to pay any left over medical costs. And again, life insurance proceeds are passed onto the surviving spouse or children, tax free!! YAY!
      Thanks for the compliment. Real numbers help others. 🙂

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  2. It looks like having you both retired with this budget is very doable. I would say you have gone beyond Enough to Abundance. Sincerely Lara

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    • Thanks Lara. Coming from you, that’s a real compliment. It took a whole lifetime for me to get here. Experience is the only true teacher!

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  3. Thanks for sharing. I stopped doing a formal written budget five years ago. After going through three lean years of receiving only 25% of my DH pension and then getting my full widow pension, I recognized I was beyond enough and was at The Abundance stage and didn’t have to do one. My health insurance premiums double with reaching Medicare age because I went from a high deductible plan to Medicare Plan N, vision and dental, and prescription plans. I planned for this maxing HSA account to pay for the premiums and having no co pays to,worry about. Reality is the older you are the more health services you are going to need. Food, clothing, gas, heating is probably going to go up if we get in trade wars too. Hopefully we will get more interest on our savings to offset the increase cost. All is good until it is Not, or as I see it, as long as your net worth increases each year to cover this inflation. NO worries. Lara

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    • Lara, I’m a budget nut. These past three weeks in Florida, I let my guard down and Nick and I did whatever it is we wanted to do AND we spent whatever it is we wanted to spend. It was a lot of fun but now that we are back to reality, I won’t even calculate what we spent in the month of March. Our new life starts now, in April. And we’re sticking to it! LOL.

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  4. I am a creature of habit, my personal inflation rate increase has always been under 2% annually when I tracked it, I used the same categories as you plus:
    1.First paid myself off the top- Investment and savings (came into my marriage with an emergency fund!)
    2. Charity- passing my blessings forward,
    3. Total taxes.
    4. tuition and college fund when I had these,
    5. gifts,
    6, Fun fund for hobbies and entertainment including eating out.
    7. vacation but since retirement called it Travel,
    8. and a long time rainy day fund added daily chain to a pitcher.
    It worked- retired twenty years ago at 45, when my parents needed help I left corporate America.
    Now I do it differently.
    First my basic living expenses and full charge card balances I pay beginning of the month out of pension checks. Every bill is done at the same time.
    Transfer free cash flow to savings.
    Then charge all most all things throughout the Current month to rewards cards. Discretionary spending shows up on the credit cards so this is my record of where the Fun money is being used. Very seldom tap the savings because My math mind seems to curb going over next month pension check without having to rectify the spending.
    Any major expenditure including home and auto maintenance, I just mentally say “How long will it take to replace this money back into savings? Is this worth it?”
    Do a review in early October for net worth change and allocation to charity, and Christmas budget.
    March since this is when my full pension started I Calculate my net worth again and rate of return on investments. 2000 was the worst negative return in my life, too much exposure to the tech wreck! and this Along with double college tuition bills. Brutal!
    I have been ultra conservative since. And I look at anything in the market as gambling so I limit my exposure and diversify that, so didn’t see much impact of the drastic downturn of 2007 through 2009. Because I knew to hold on to the stocks I owned and they came back. Also Stayed in my home and it’s Phantom loss came back. Experience is definitely a great teacher but also sometimes painful. Lara

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  5. Your spending spree in Marth was definitely a well deserved celebration after all the hard conversations and decision making you two went through as a couple to come to an agreement of your new direction of total retirement and how to make it work. Marriage is hard and compromise even harder because over time each of you change and new things become important to each spouse. No need to fret about the money spent . Sincerely, Lara

    Liked by 1 person

    • Lara, you speak the truth! I actually felt as if we deserved it. We ate organic take-out almost every night. I got a massage, mani & pedi, plus got my hair cut. On the nights we stayed in (which were many) I made sure we watched as many Academy Award winning movies as possible on pay-per-view.
      It surely was a treat!
      The month of March is completely wiped clean in my brain. We started anew, and to our revised budget April 1st.

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  6. At last, a budget that makes sense. I see so many people push irregular expenses (like haircuts and taxes) into something they call “sinking funds” and count medical reimbursements as income (even though they’re just getting back money they already spent), it’s no wonder they are in trouble. Your way — putting aside money each month to meet the quarterly expense, for example. — simplifies the process and ensures the money will be there when you need it.

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    • Hi Bonnie. Thanks. I monitor my category spending on a spreadsheet. If I see me nearing my monthly total, I stop spending in that category. We do a lot of DIY. That helps a lot too! Thanks for your comment.

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  7. As always…you’re keeping it real! I have learned so much from you and Nick. Thank you for your honesty.

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  8. Dear Cindi, I am enjoying Sunday breakfast of chocolate chip oatmeal pancakes, kiwi, and coffee getting ready to get my finalize tax forms done and I thought of your budget. You are really a smart, smart lady. Most people don’t realize how well you have planned-
    using Roth’s,
    having a paid off mortgage and keeping your home and living expenses low allows this low budget to work and to get all of your Social Security tax free and the future interest too.
    Using 0% credit while your money earns three percent.
    Bargain hunting for luxurious splurges.
    Situating yourself in a state where Nick’s medical premiums on a state plan is so low is amazing and the subsidized property tax, too. Have you checked food stamps qualification? Kudos!
    FYI:The one thing we did when we were both retired is went down to one emergency cell phone, Verizon pay when you use it but I think Cingular through AARP May be cheaper and one IPhone since the only time we needed the second phone is when we were not together. Now by myself this Pay when you use it runs me about $212 annually and no added fees. I have an IPad for FaceTime, photos, text messages, games and emails. I do a triple play with Xfiniity and for now get their fastest internet, Starz, and crazy number of channels, unlimited free long distancefrom my landline, and love the on demand to catch up on the shows I watch when I miss them. Just like you I call and take advantage of their discounted bundle offers.
    I was wondering how your fake fireplace is working out for heating? Does it save you a lot on propane?
    Will you still use travel rewards cards for travel hacking?
    Are you going to boondock, park at Walmarts, or National Parks when you go RVing? Sincerely, Lara

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    • Hi Lara. I didn’t do anything special. I just figured out the laws. I did work for attorneys after all! LOL. People think NY is a high tax state BUT if they knew their laws they’d realize we New Yorkers have it really good here. Our gov put a 2% cap on all property taxes. Key is to live in a just-right smallish house and you won’t get taxed to kingdom come. Go easy on the remodeling upgrades also. Once you turn 65, property taxes get a nice reduction! NY does not tax social security up to a point. Our current governor as well as Pataki (Republican) have always provided good quality, affordable health care to the hard working good people in NY (small businesses etc.) Ditto for college funds, education fees, NY has the best consumer protection laws in the world IMHO. Tenants have rights. You just can’t be evicted and thrown out on the street. Nor have your electricity turned off so fast. NYC is a tough city, but it’s people can be very, very kind at times. And our current gov Cuomo has spent billions fixing up all the state parks, camping grounds, putting in new, updated hiking trails, modernized bathrooms, campsites etc. etc. PLUS WE ARE THE ONLY STATE THAT DOES NOT ALLOW FRACKING! That alone is a big enough reason to ‘love NY’. Much has been done to clean up our air, our rivers, our land, our food products……I can go on and on.
      There was one point in my life where I did not have enough money to buy food for me and my kids. My MIL was helping us out at the time. I did apply for food stamps but by the time they came to call on me, almost 30 days had passed and I found a job! Thank the lord. I passed on the food stamp help. I let it go to the next person in need. As long as I have Aldi, we’ll be AOK. LOL!
      Our ‘fake’ real fireplace is working out great. Electricity here is cheaper than propane. I have another heater in our bedroom and one in my office. I keep the main home heating propane system on 62 and the three supplemental heaters on low. We use very little propane, if at all, this way and the house stays at a cozy 65. At the end of the year, I usually get a refund from the electricity budget bills. Woolen socks and sweat outfits are a must. LOL. And I limit my baths to 1 or 2 a week.
      Nick and I are still racking up points on our travel cards. Nick already used some of his points in 2017 for one round trip ticket. We’re charging everything on his card to get those points back (and paying the card in full at the end of the month) I still have visions of taking a romantic vacation to the real Caribbean and our points will get us two free round trip air fares.
      Now that we are back to RVing, my iMac is useless to me. I’ll probably sell it within the year and buy a mac laptop. I tried doing my work on an iPad and it was tricky. We both need our cell phones so no getting rid of a phone any time soon. I upgrade every 3 years.
      We’ll probably WalMart & boondock on the destination routes but once we get to where we planned on going we want FULL HOOK UPS! including cable & wfi. I already booked & paid for us to be at a super luxury fancy smancy RV park in Arizona (near Phoenix) for next January, February & March! The place has 4 heated pools, hot tubs, massages and over 165 activities for the over 55 crowd per week! We’ll probably do a few side trips to the Grand Canyon (finally) and Sedonna. We’re a little nervous since we’ll be undertaking a whole new adventure. It’ll take up 6 to 7 days just to get there! 3 months in Arizona is the same price as one month in Florida. Who knew? And this RV park makes our condo community look like a ghetto out of the projects! LOL.
      Enjoy your breakfast. Thanks for your comment.

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