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Friday, January 13, 2012

How long should it last? Factoring replacement costs into retirement planning.

When planning for retirement we get lots of advice about setting a realistic budget and understanding how much health care and long term care might cost.  However it seems to me that little attention is paid to looking at the costs of replacing major things in our lives.  If you are renting, the list may be short but if you are a homeowner then there are potentially a lot of expenses in your future.

When we were working with a fee only financial planner a few years ago to estimate if we were on track for saving for retirement, one of the things I did was to estimate how many times in our remaining lifetime we would have to replace appliances, a roof, cars and electronics.  I made a table of every costly item that might need replacement, how old the current version was, the estimated life span of the item and projected replacement cost.  Some things might have to be replaced many times and others only once in my remaining lifetime.  The costs add up. 

Here's some estimates I found on the internet.  It could be helpful to use this information to consider your retirement plans.  I know I'm wishing I still lived in the stucco house with the clay tile roof!

Replacing a Roof

Material
Life Span (years)
Replacement cost per 100 sq. ft.
Asphalt shingles
12 - 20
$160
Clay tile
50+
$480 - $1,100
Concrete tile
50+
$300 - $375
Metal panels
25 – 40
$150 - $775
Slate
50+
$470 - $935
Wood shingles and shakes
10 - 40
$210 - $310
 
Other Household Basics


Material
Life span
(years)
Replacement cost
Aluminum siding
20-50
$2.50 per square foot
Carpeting
11
$1.60-$6.50 per square foot
Exterior deck
15
$8.50-$24 per square foot
Exterior paint
7-10
20-75 cents per square foot
Garage door
20-50
$425-$1,270
Garage door opener
10
$425-$1,270
Veneer (brick, stone)
100+
$9-$13 per square foot
Vinyl floor
20-30
$1.25-$5+ per square foot
Vinyl siding
50
$1.55-$3 per square foot
Wood floor
100+
$3.50-$10+ per square foot
Wood siding
10-100
$1.50-$4.80 per square foot

A 2009 article, (By the Numbers: How long will your appliances last? It depends) gave the following estimates for a variety of home appliances.

Appliances
Appliance
Life Expectancy (years)
Air Conditioners (room)
10
Air Conditioners (central)
15
Boilers (electric)
13
Boilers (gas)
21
Compactors
6
Dehumidifiers
8
Dishwashers
9
Dryers (electric and gas)
13
Freezers
11
Furnaces (electric warm air)
15
Furnaces (gas warm air)
18
Furnaces (oil warm air)
20
Garbage Disposers
12
Humidifiers
8
Microwave Ovens
9
Range/Oven Hoods
14
Ranges (electric)
13
Ranges (gas)
15
Refrigerators
13
Refrigerators (compact)
9
Thermostats
35
Washing Machines
10
Water Heaters (electric)
11
Water Heaters (gas)
10
Water Heaters (tankless)
20+

12 comments:

  1. Interesting charts... thankful that we have an EF! ;) lol!

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    Replies
    1. Carla - I agree, an EF becomes critical when you have to be responsible for these kind of costs.

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  2. Wow! Great list. Now to the figuring!

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    Replies
    1. Don't let the results overwhelm you. The costs listed could probably be lowered through shopping sales, buying used if possible, etc.

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  3. Great information! Thanks. ~~Bliss

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  4. Good information. In my case I bought a home only about five years old.......which means I ahve a much longer time frame than someone with an older house (one of the reasons I bought this house). Honestly I dont the EF is what I would use for these costs, rather a sinking fund for the house? Of course I am slowly putting money in my house anyway, lol.

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    Replies
    1. It must be lovely to have a newer house. It gives you time to save up and develop strategies for dealing with the inevitable replacement costs.

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  5. Everyone may wonder how long should it last factoring your appliances and properties. I think that we should be realistic about our plan. I think that you did a great job on indicating its lifespan to calculate your needs.

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    Replies
    1. Essie - I agree that being realistic is important. Its hard to know the actual lifespan of these things but having an idea of future costs really helps.

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  6. I also agree being realistic is very important. One thing I've noticed in recent years is the lifespan of everything has been shortened massively from what it once was (not that this info is easily available on the internet) - when I bought my house it had the original appliances which were already 12 years old, they lasted another good 5-6 years. Once I replaced them, they didn't last even 10, some are only a couple years old and already having problems or needed to be replaced soon. Things are made so cheaply these days!!

    Great things to think about when planning for retirement! I'm hoping my planning works out so I'm able to take an early retirement - only 10 years to go if I plan things the right way!

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    Replies
    1. Martha - How exciting to have a 10 year plan! It does seem that things need to be replaced more frequently and perhaps it is related to the computerization of many items. It is much more expensive to fix that than to fix a mechanical part.

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  7. Everyone may wonder how long should it last factoring your appliances and properties. I think that we should be realistic about our plan. I think that you did a great job on indicating its lifespan to calculate your needs.Factoring

    ReplyDelete