We retired at 62/63, not "early" by the standards of this forum, but "early" by the standards of our employer (a small-town small college), which entitled us to some financial benefits. The major categories of expenses that have changed for us are:
Medical: We went straight from employer health insurance to Medicare, skipping the ACA exchanges. One of our "early retirement" benefits was staying on employer health insurance for 2 or 3 years until age 65. Our premiums increased from about $2K total to about $7K at 65, and have gone up steadily since then, now about $9K at ages 70 and 75.
Taxes: Income taxes dropped sharply at first, as our salaries fell away and income came from our taxable accounts. Then they increased when my wife turned 70 and started Social Security and RMDs from her tax-deferred retirement account. This year, they'll increase again because I started SS at 70. They'll increase again when I start RMDs at 73. At that point, our taxable income and taxes will be in the general ballpark of where they were just before we retired, after adjusting for inflation. We may just barely escape having Aunt IRMAA move in with us.
Travel: We're not into cruises, luxury resorts, or globetrotting destination travel. I've increased my weekend and longer road trips to hobby-related events, and upgraded accommodations from Motel 6 / Super 8 / Days Inn level to Hampton Inn level. These are all in small to medium-sized cities. So far this year I've spent 28 nights on the road, plus one weeklong trip together. Total cost maybe $8K-$9K.
Other categories that have not changed, at least not significantly:
Housing: no change except for a couple of one-off major projects (new roof and bathroom remodeling), and of course inflation in utilities. Our house was paid off several years before we retired. We didn't move when we retired. We're still in the house that we bought when we got married 36 years ago. We do expect to move to a CCRC in 5-10 years, which will increase our housing costs. But we have enough assets and income to cover that (knock wood).
Transportation: no change outside of travel costs accounted for above. We worked and live in a small town, within walking distance of work in fact, so commuting costs were minimal.
Work-related expenses: Negligible. We were both small-college professors, so didn't need fancy clothes, and didn't need to spend money on commuting as noted above.
Food: No change except for general inflation. Most of our eating-out is during travel, accounted for above.
No kids, so no changes in associated expenses.
Our parents all passed away before we retired, were able to support themselves, and in fact left us both inheritances. Not huge, but enough to give us more flexibility in retirement finances.
And of course we no longer save for retirement or pay FICA taxes.
Medical: We went straight from employer health insurance to Medicare, skipping the ACA exchanges. One of our "early retirement" benefits was staying on employer health insurance for 2 or 3 years until age 65. Our premiums increased from about $2K total to about $7K at 65, and have gone up steadily since then, now about $9K at ages 70 and 75.
Taxes: Income taxes dropped sharply at first, as our salaries fell away and income came from our taxable accounts. Then they increased when my wife turned 70 and started Social Security and RMDs from her tax-deferred retirement account. This year, they'll increase again because I started SS at 70. They'll increase again when I start RMDs at 73. At that point, our taxable income and taxes will be in the general ballpark of where they were just before we retired, after adjusting for inflation. We may just barely escape having Aunt IRMAA move in with us.
Travel: We're not into cruises, luxury resorts, or globetrotting destination travel. I've increased my weekend and longer road trips to hobby-related events, and upgraded accommodations from Motel 6 / Super 8 / Days Inn level to Hampton Inn level. These are all in small to medium-sized cities. So far this year I've spent 28 nights on the road, plus one weeklong trip together. Total cost maybe $8K-$9K.
Other categories that have not changed, at least not significantly:
Housing: no change except for a couple of one-off major projects (new roof and bathroom remodeling), and of course inflation in utilities. Our house was paid off several years before we retired. We didn't move when we retired. We're still in the house that we bought when we got married 36 years ago. We do expect to move to a CCRC in 5-10 years, which will increase our housing costs. But we have enough assets and income to cover that (knock wood).
Transportation: no change outside of travel costs accounted for above. We worked and live in a small town, within walking distance of work in fact, so commuting costs were minimal.
Work-related expenses: Negligible. We were both small-college professors, so didn't need fancy clothes, and didn't need to spend money on commuting as noted above.
Food: No change except for general inflation. Most of our eating-out is during travel, accounted for above.
No kids, so no changes in associated expenses.
Our parents all passed away before we retired, were able to support themselves, and in fact left us both inheritances. Not huge, but enough to give us more flexibility in retirement finances.
And of course we no longer save for retirement or pay FICA taxes.
Statistics: Posted by 22twain — Mon Nov 04, 2024 12:36 am