Tuesday, November 8, 2016

Analyzing your current vs retirement living costs

An Exacting Life took a look at what annual/monthly/daily costs were for her and her husband when there was no daily random spending. Of course she is Canadian so the big elephant in the room for those of us in the US - medical costs - is quite different.

What a thought provoking way of looking at our annual expenses especially if planning a change in housing, location and lifestyle as we are doing.

I decided to do the same analysis for our current location and lifestyle and then consider the parts that will change when we move to different housing. I am only including fixed and unavoidable costs.

House - maintenance, utilities, insurance, property taxes - not one time costs for preparing to sell
$12,271 a year
Medical/Health - medical insurance, medical/dental fees, prescriptions, over the counter meds
$10, 915
Grocery - food, wine/beer, toiletries, paper goods, cleaning products
Dog - vet, medications, food - she has been ill this year
Cars - maintenance, insurance, gasoline, licenses for 2 cars
Communications - cable including landline & internet, cellphone but not newspaper, printer ink
Life and Liability Insurance - life insurance for DH while he is still working and excess liability

$41,337 a year; $3445 a month; $113.25 a day!

What I haven't listed is clothing, haircuts, makeup, travel, eating out, movies and other recreation, books, gym, gifts, donations, newspaper, printer ink and lots of other random expenses that are variable and discretionary.

So what do I know will change with our planned location, housing and lifestyle changes.

Housing: We will pay an HOA fee of about $500/month that will cover exterior maintenance, structure insurance, water, garbage pickup, and provide 50% off the cable bill, access to a pool, gym, etc. We will still be responsible for other utilities, property taxes, insurance on our possessions, and interior maintenance. I sense that will come out to about the same.
Medical/Health: We will continue our same insurance and I will start paying for Medicare but will have low or no copays as a result.
Grocery: No change.
Dog: This is uncontrollable.
Cars: We are going to try having one car but our insurance will be higher and we will buy more gas at higher prices. Minimal if any savings.
Communications: Cable a bit less? 2 cellphones instead of one.
Life and Liability Insurance: At last a savings. We will drop life insurance once DH retires as then I would have a % of his pension guaranteed if he dies first.

Bottom Line: Pretty much a wash but that is actually good news. We are moving to a much more expensive housing market and if we are able to buy where we intend, we can keep our costs from going up.


  1. Hi Juhli, Thanks for the link! Almost $11,000 for medical, wow! Here we both have top-up coverage free from work. It will end when we retire, so we'll need to pay for prescriptions then. But otherwise no health costs. Will you have a mortgage on your new place, or own outright?

    1. Shocking isn't it what health care costs in the US. $6,000 of that is our share of medical insurance premiums and that goes up quite a bit each year. Adding Medicare will add $2,923 per year at this year's rates but if I understand the complicated details correctly our copays will go down a lot so it may be a wash.

      We do plan to own outright our next home but I think yesterday's election will change the housing market quickly and possibly drastically so who knows.


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