I decided to scrutinize my projected expenses in retirement once again.
Because I was very conservative when I estimated health insurance premiums under Obamacare (at a time when the website was down), I later determined I overestimated monthly costs.
On a Silver plan, my costs this year will be $318/month.
The bottom line
Even after readjusting my heating oil and electricity expenses upward by 33% (accounting for the additional 8 hours at home, or one-third of a 24-hour day), my total estimated monthly expenses will be lower than I first projected, at $2,577 a month, or $30,924 a year. In theory, anyway. Unanticipated expenses will always come along.
Still, this is very nice to see since I've been saying I needed an income of between $40,000 and $45,000 in all of my retirement scenarios using various online calculators and Dido's and MonekyMama's expertise.
I found it helpful, this time around, to lump my ranked expenses into 4 "tiers," so I can more quickly see how they line up. I simply homed in on my ranked ANNUAL expenses and created individual tiers for those expenses that were clustered closely to one another.
Here they are:
Tier 1
Property taxes: $492 monthly/$5904 annually
(Senior tax credit at age 65: Max $2,525 refund with income up to $45k)
Major home improvements: $417/$5,000 annually
(Allowing $5,000 annually for discretionary home improvements) To do:Attic insulation, back hall shelves, upstairs bath vanity, mouseproofing basement, garage door, LR/DR walls.
Health insurance: $318/$3816 annually
Access Health silver plan with subsidy
Food: $273 mthly/$3,276 annually
Tier 2
Household expenses: $115 mthly/$1380 annually
Electricity: $93/mthly/$1116 annually
Adjusted up by 33%
Heating oil (inc tuneups): $87 mthly/$1044 annually
Adjusted up by 33% due to more time at home
Vacations/trips: $83 mthly/$1,000 annually
Phone/Internet: $78 mthly/$936 annually
Lawn mowings/gardening: $73 mthly/about $800?Mowings every other week
Tier 3
Homeowners insurance: $57 mthly/$684 annually
Cat: $50 mthly/$600 annually
Clothing: $50 mthly/$595 annually
Adjusted down by 33%
Entertainment: $49 mthly/$591 annually Adjusted up by 25% due to more free time
Out of pocket medical: $45/mthly/$540 annually
Car maintenance: $45 mthly/$540 annually
2018: new battery
Car insurance: $45 mthly/$540 annually
(Dropped collision last year)
Gas for car: $41 mthly/$492 annually
Adjusted down by 25% due to less daily driving
Tier 4
Car tax, license, reg: $32 mthly/$384 annually
Home maintenance: $28 mthly/$336 annually
Gifts: $20 mthly/$240 annually
Water: $18 mthly/$216 annually
Dining out: $17 mthly/$200 annually
Dentist: $16 mthly/2 cleanings at $254 on Dr. S’s plan
Borough taxes: $13 mthly/$156 annually
Sewer: $9 mthly/$108 annually
Dump sticker: $8 mthly/$95 annually
$85 for seniors renewing online at age 65
Haircuts: $5 mthly/4 haircuts at Great Clips at sale price
Total: $2,577 monthly/$30,924 annually
I enjoy squeezing my budget wherever I can to save a few dollars. So looking at the 4 tiers, it just helps reinforce that more effort spent on the top 2 tiers will result in greater benefits than getting distracted by stuff in tier 4, for instance.
So being sure to take full advantage of the senior property tax credit once I become eligible, and wrapping up my major home improvements in a few years time will really free up a lot of cash down the road, although health insurance costs could continue to be a big question mark, depending on what, if anything happens, to Obamacare.
It will be well worth my efforts to continue placing an emphasis on shopping at Aldi's whenever possible.
Looking at my Tier 2 expenses, I'll continue to keep a close eye on electricity offers here in deregulated Connecticut (they change all the time) and carefully timing my heating oil purchases. It has occurred to me in the past it could be helpful to either replace my current tank with a larger one, or buy a second tank. This would make it easier to take advantage of low prices when they occur; I can't always do this now because many suppliers require a 150-gallon minimum purchase.
That phone/Internet expense of $78 monthly includes both my landline and TracPhone cell phone. I am still wanting to ditch AT&T.
And, believe it or not, I don't like seeing such a relatively unimportant thing like lawn mowings in Tier 2; I've been toying with doing maybe some of the mowings myself (?), perhaps by having him start later in the year and end earlier, with myself doing a few mowings during the cooler part of the summer season, since I'll be home? It just seems like a lot of money, for what it is, when you look at the annual cost. He charges $45 a visit. I have a big lawn, but they finish in about 10 minutes time. It takes me 2 mowings to finish both front and back, and probably over an hour, but it would be good exercise and I enjoy being out in my yard.
Scrutinizing expenses once again
February 7th, 2018 at 03:29 pm
February 7th, 2018 at 05:40 pm 1518025230
February 7th, 2018 at 05:45 pm 1518025529
It's not the work I disliked, it was the unpredictable and often long work hours, of not knowing when I would be leaving at day's end. I always envisioned some kind of p/t work as an important part of being "semi-retired," because it would add structure to my weeks and minimize any impact an early retirement could have on my financial picture.
February 7th, 2018 at 11:53 pm 1518047635
February 8th, 2018 at 02:12 am 1518055946