Do you keep a budget? Do you stick to it?

[turkel]

We have always been thrifty, so don’t really budget. I buy very little that isn’t on sale, including groceries.
My daughter is coming down Saturday, with us it will be ten people. She has booked several rooms at Hyatt coconut resort. I do not want to know what that cost. All meals out for ten people for five days will get me upset at the cost since I live within five miles. Then she heads to Orlando where she paid someone $1700 for a week at Bonnet Creek. Then Disney tickets. Why is it bothering me, she wont be able to pay me rent for awhile.

Why do you allow her to skip her rent payments to you?

 

[AnnaS]

I should clarify that my husband’s pension was cut off at the knees years ago so not enough to live on- so he is taking a lump sum, which we call a “ limp” sum. I have a $29 per month pension I will get when I turn 65. Lol!

FA does not want us to take SS until age 70 due to tax torpedo that hits when people are required to take RMDs. So he actually wants us to draw down our money! We have quite a ways to go to age 70. I am 63 and hubby is 65.

The whole thing makes me sick.

Did you add up the amount he will collect from age 65 to 70? How long will it take for him to recuperate what he collected? So if he say collects $60,000 in those five years (just throwing a number 65 to 70) - how much is the difference at age 70 and how long before breaking even to that amount. Not sure if I am asking right. Will he be 75, 76? to recoup what he gave up.

Same for you - I would at least consider 65.......

I worked part=time the last 28 years and granted did not make much money. But I did take a huge cut and early pension/retirement 55 years of age and 25 years of work. I worked an additional three years while I was collecting (they readjusted when I stopped). I know I was not going to work until I reached 60, let alone 62 or 65 or 70.

I might be dead by then. My sister passed at 47, my brother in law at 47, my other brother in law as soon as he hit 60 and my best friend at 54.......

I don't know - I would really think about it especially if you are good with savings (and sounds like you are since you are willing to wait for 5 years). Just a thought/opinion.

My mom's pension was $33 a month. Yeah, she worked many years ago in a factory. She said, it's mine, I will take it.

I know I have a few years, but I am taking it at 62. Whatever the amount is and if anything happens to hubby - not sure if it's still 60 but I will take it if it happens and I am 60.

If anything happens to him before he reaches 65, I get half of his pension. When he turns 65 (5 more years) - we will have to decide if he wants to keep the whole pension (but then I get nothing) or what percent to take a cut on so I can get a percentage of it when he passes. We are definitely choosing where I get part of his pension. I know of two men who took a lump sum and unfortunately the husbands passed much earlier than expecting and the wives struggled with no pension.


I try to stress to my kids and anyone who will listen, you can never save enough. Tomorrow comes before you know it. Enjoy, but save for tomorrow. It's hard to think of these things when we are young and healthy. I watched my neighbor struggle with only a SS check and no savings. Her kids helped out as much as they could.

 

[AnnaS]

I was a Hospice Nurse for 20 years. I wish you and your husband good health. Can’t tell you how many people don’t make it to 65. With the way you present your current financial situation , reconsider holding off on SS payments. And then laugh about it at 70.

Yes, I agree. Many people I know literally retired and did not get to collect their first check.

One person comes to mind. She had a condo in Myrtle Beach for a few years. She sold and bought a house. Retired and was moving permanently down there. She had a fatal heart attack when moving furniture out of storage.

Bless you!!! We had my dad and sister in Hospice. I don't know how you do it. I ask my daughter-in-law all the time - she works at Sloan

 

[VacationForever]

Because of our age difference, my husband started to collect his SS at 70 and mine will be at 62. It is a no brainer for us. We skipped his RMD at 70.5 and took 2 the following year as I had a huge capital gains the first year of RMD and we made use of the law that allows deferring of the first RMD to the following year. It saved us about $7K in taxes and some stuff by doing so. My deferred income annuity will start when I am 60 and then our income stream by the time I am 62 will be sufficient to fund our expenses. We do plan to make periodic lump sum withdrawal from investments if we want additional fun money like buying that Ferrari, kidding...

 

[GrayFal]

Sorry off topic. As a nurse who doesn’t due dead I just want to say Grayfal there is a special place in heaven for you!!

And as a daughter who lost her father at 58 I 100% agree on not waiting to take SS.

Yup. “Don’t Wait” is my motto for a lot of stuff.

 

[Talent312]

I considered waiting until 70 and drawing down our IRA's instead.
Sure, we might have come out ahead, but only if I lived past 82.
I'd rather have SS to add to our budget now while still ambulatory.

Financial gurus don't grok that you want to live in the style to which
you're accustomed in the here+now than after the break-even point.
After age 82, I doubt very much that I'll even notice the difference.
'Course I could eat crow.

.

 

[klpca]

I considered waiting until 70 and drawing down our IRA's instead.
Sure, we might have come out ahead, but only if I lived past 82.
I'd rather have SS to add to our budget now while still ambulatory.

The financial gurus that don't grok that you want to live in the style
to which you're accustomed now than after that break-even point.
After age 82, I doubt very much that I'll even notice the difference.
'Course I could eat crow.

.

My FIL just turned 82 and lamented taking SSA at 62, as 82 was his break even point, I guess. But at this point he is legally blind, can't hear, and is fairly immobile. He can't drive and can't travel any more. I'm glad that he took his SSA earlier and had an opportunity to enjoy life.

 

[Krteczech]

We live thrifty lifestyle except for travel expenses. Downsizing from large house to very small townhouse in different state created a nice cushion and allowed for renovations and more travel. I keep a spreadsheet with monthly balances of each account, but don’t agonize about individual expenses. We pay off CC bills monthly and eat out only when traveling. I triggered my SS at FRA and my husband is collecting 1/2 of mine, awaiting to trigger his at 70.

 

[turkel]

We live thrifty lifestyle except for travel expenses. Downsizing from large house to very small townhouse in different state created a nice cushion and allowed for renovations and more travel. I keep a spreadsheet with monthly balances of each account, but don’t agonize about individual expenses. We pay off CC bills monthly and eat out only when traveling. I triggered my SS at FRA and my husband is collecting 1/2 of mine, awaiting to trigger his at 70.

I thought you couldn’t do that anymore?

 

[Krteczech]

I thought you couldn’t do that anymore?

We started SS in January 2018 and qualified.

 

[MULTIZ321]

Funny you should bring this up now. Have always had a budget- or spending plan if you will. Had it on EXCEL sheet- laying out all the expenses every month- right down to postage stamps. If the expense was annual would just divide by twelve and that money would go into designated savings accounts for specific items. Any excess money would go into a vacation fund, a home improvement fund and a new car fund. Kept a buffer of a couple of hundred bucks in case of overages.

It was pretty much set it and forget it since we are frugal to begin with, so we didn't worry about it.

Now- being in this rental house- I had done another budget and even though some small monthly expenses have been eliminated not owning a house, we are really tight because the rent is so outrageous.

So this led me this past weekend to do a NEW HOUSE budget- one including the expenses of this lease we are stuck with through May- and to do one pure one for the new house for when we are free of the lease. Imperative since this is my husband's last week of work and the paychecks stop in the new year- no SS (until age 70 for the 2 of us) and no pension payments- and the addition of health insurance for the two of us. Living strictly off savings account "cash" at least to start us off in 2020. UGH!....

Hi Mary Ann,

I thought you said that you negotiated a clause in the lease that allows you to break the lease early if your new home was ready early so you did not have to make lease payments until May, 2020.


Richard

 

[SmithOp]

I thought you couldn’t do that anymore?

as long as you were born before Jan 1, 1954. I just got in under the wire, FRA this week and I just signed up for restricted spousal benefit.

To add to this topic, all my bills are on autopay from checking account, including SW CC that I charge everything on for miles. I just monitor the balance and transfer funds as needed. I’ve been taking out about 4% annually so I’m prepared for RMA to start in 4 yrs.

The only loan balance I have is a car loan, it was 2% at credit union, not worth taking out 401 funds and paying the taxes to buy cash. My 401 increased over 16% this year, its been a good year for the market.

Sent from my iPad using Tapatalk Pro

 

[mbh]

We have used a budget of income and expenses for all 35 years of our marriage. We have about 15 categories, so we don't get obsessive about it. We like to see where we are all during the year, so we can adjust if needed. It has helped us put our daughter through college and pay for her wedding. All credit cards are paid off on time.

 

[WinniWoman]

Hi Mary Ann,

I thought you said that you negotiated a clause in the lease that allows you to break the lease early if your new home was ready early so you did not have to make lease payments until May, 2020.


Richard

It is a one year lease- as required by their bank. The "out" was that in 6 months- which would be March- we could give 2 months notice, effectively bringing it until May. But when we move, which will be sooner than March I think, I will tell the landlord and ask them if they can get someone in sooner rather than later to help us out.

 

[bogey21]

FA does not want us to take SS until age 70 due to tax torpedo that hits when people are required to take RMDs. So he actually wants us to draw down our money! We have quite a ways to go to age 70. I am 63 and hubby is 65.

This is a crap shoot based on your life expectancy. Hold off and die before age 72 or 73 and you lose. Take SS at age 65 and live to 84½ and lose (as I did)...

George

 

[GrayFal]

This is a crap shoot based on your life expectancy. Hold off and die before age 72 or 73 and you lose. Take SS at age 65 and live to 84½ and lose (as I did)...

George

I am happy you are a “loser” at 84.5+

 

[Talent312]

This is a crap shoot based on your life expectancy... Take SS at age 65 and live to 84½ and lose (as I did)...

So, you lost becuz you lived past 84.5 and won't get the extra $$,
or do you mean you failed to collect more becuz you died at 84.5?

As for me, if I am lucky enuff, I doubt I'll notice, either way.
.
.

 

[Rolltydr]

I should clarify that my husband’s pension was cut off at the knees years ago so not enough to live on- so he is taking a lump sum, which we call a “ limp” sum. I have a $29 per month pension I will get when I turn 65. Lol!

FA does not want us to take SS until age 70 due to tax torpedo that hits when people are required to take RMDs. So he actually wants us to draw down our money! We have quite a ways to go to age 70. I am 63 and hubby is 65.

The whole thing makes me sick.

I retired at 58 with a reduced pension but a pretty good 401k. My wife had retired 2 years earlier with a pension almost double mine, but her 401k was pretty small. When I started taking money out of my 401, she got worried that we were living beyond our means. I had to explain to her that I didn’t want to take my SS until age 70 so it would continue to grow at 8% annually between my FRA age 66-70. The way I can do that is to draw down the 401. Without any unforeseen home or medical expenses, I should still have 40-50% of my 401 left when I start taking SS. We’re not rich by any means but we are debt-free except for a home equity loan which we will pay off in 3 years at our current rate. No car payment, no mortgage payment and no credit card debt. The 401 allowed me to retire early and enjoy 7-8 years that I otherwise would have been working. I tried keeping a spreadsheet budget for a year or so after I retired. I found that it didn’t really matter what was on the budget, we pretty much did what we wanted and bought what we wanted anyway. We still were in good financial health and I thought I was wasting my time with the budget so I stopped. Besides, I figure if I’m stressing over staying on a budget, it isn’t good for my mental health which could increase my medical expenses and make it that much more difficult to stay on budget. Any excuse to take another relaxing timeshare vacation, right?


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[WinniWoman]

I was a Hospice Nurse for 20 years. I wish you and your husband good health. Can’t tell you how many people don’t make it to 65. With the way you present your current financial situation , reconsider holding off on SS payments. And then laugh about it at 70.

I get it. I worked most of my life in Home Health Care (management) and with Hospice nurses and have seen it all.

The thing is- we discussed everything at length with our financial planner- who is very holistic btw - and he felt it was better- considering our assets- for hubby to take his at age 70 so as for it to grow at 8 % per year. Can't get that kind of return on most"safe" investments. If/when he passes I would at least get the higher of the two SS checks (ok- IF I am alive). Also- for me to take it at age 70 as well, though ,of course, I could take it sooner if I want. Not as imperative as him taking it later.

This also allows us to avoid a bigger tax torpedo than we would have had by drawing down some of our assets and also doing some Roth conversions. Because one way or another- if we live past 70 we will have to give the government a lot more of our money in taxes. We needed this plan to help spread out our money for the long term and I have to trust we are paying this guy because he knows what he is doing with his recommendations.

I always tell people who think we are nuts about this- ok- so one of us dies tomorrow or in the next few years I will be dead, what do we care if we didn't collect a couple of years of SS? We are dead with no feelings about it.

But I can tell you- if I do live to 70 and beyond and getting those bigger checks- I will be happy I waited when looking at how expensive everything has gotten and the bills going up and up.

So you can look at it as- the risk is not in dying early and missing out on the SS checks. The risk is living longer than you thought with smaller checks.

We think of SS as our annuity. People buy annuities all the time and they don't worry about if they will die before they get all their money back. Same kind of thing.

 

[WinniWoman]

Did you add up the amount he will collect from age 65 to 70? How long will it take for him to recuperate what he collected? So if he say collects $60,000 in those five years (just throwing a number 65 to 70) - how much is the difference at age 70 and how long before breaking even to that amount. Not sure if I am asking right. Will he be 75, 76? to recoup what he gave up.

Same for you - I would at least consider 65.......

I worked part=time the last 28 years and granted did not make much money. But I did take a huge cut and early pension/retirement 55 years of age and 25 years of work. I worked an additional three years while I was collecting (they readjusted when I stopped). I know I was not going to work until I reached 60, let alone 62 or 65 or 70.

I might be dead by then. My sister passed at 47, my brother in law at 47, my other brother in law as soon as he hit 60 and my best friend at 54.......

I don't know - I would really think about it especially if you are good with savings (and sounds like you are since you are willing to wait for 5 years). Just a thought/opinion.

My mom's pension was $33 a month. Yeah, she worked many years ago in a factory. She said, it's mine, I will take it.

I know I have a few years, but I am taking it at 62. Whatever the amount is and if anything happens to hubby - not sure if it's still 60 but I will take it if it happens and I am 60.

If anything happens to him before he reaches 65, I get half of his pension. When he turns 65 (5 more years) - we will have to decide if he wants to keep the whole pension (but then I get nothing) or what percent to take a cut on so I can get a percentage of it when he passes. We are definitely choosing where I get part of his pension. I know of two men who took a lump sum and unfortunately the husbands passed much earlier than expecting and the wives struggled with no pension.


I try to stress to my kids and anyone who will listen, you can never save enough. Tomorrow comes before you know it. Enjoy, but save for tomorrow. It's hard to think of these things when we are young and healthy. I watched my neighbor struggle with only a SS check and no savings. Her kids helped out as much as they could.

See my post just above this one to explain. Thanks!

 

[WinniWoman]

as long as you were born before Jan 1, 1954. I just got in under the wire, FRA this week and I just signed up for restricted spousal benefit.

To add to this topic, all my bills are on autopay from checking account, including SW CC that I charge everything on for miles. I just monitor the balance and transfer funds as needed. I’ve been taking out about 4% annually so I’m prepared for RMA to start in 4 yrs.

The only loan balance I have is a car loan, it was 2% at credit union, not worth taking out 401 funds and paying the taxes to buy cash. My 401 increased over 16% this year, its been a good year for the market.

Sent from my iPad using Tapatalk Pro

We could never live on 4% withdrawal rate on our savings. Just would not cover it. And again- we have basic expenses.

 

[VacationForever]

The issue with the regularly quoted "8%" increase each year of delayed SS withdrawal is that the increase is only by COLA %, the rest is from the delay of SS benefits, which is your money if you have drawn early. Since you are delaying SS withdrawal, you have to tap into your own savings which means your savings get withdrawn and don't get to grow. The best way to look at look at SS benefits is that you get the same total amount whether you start your SS income at 62 or 70 when you turn about 80.

 

[WinniWoman]

The issue with the regularly quoted "8%" increase each year of delayed SS withdrawal is that the increase is only by COLA %, the rest is from the delay of SS benefits, which is your money if you have drawn early. Since you are delaying SS withdrawal, you have to tap into your own savings which means your savings get withdrawn and don't get to grow. The best way to look at look at SS benefits is that you get the same total amount whether you start your SS income at 62 or 70 when you turn about 80.

Yes- right. But your savings will most likely not continue grow in the same way - especially considering taxes on future withdrawals.

 

[bogey21]

So, you lost becuz you lived past 84.5 and won't get the extra $$,
or do you mean you failed to collect more becuz you died at 84.5?

I lost financially because the total $$ I have received to date by electing to start collecting SS at age 65 are less than the total $$ I would have received had I waited until age 70 to start collecting my benefits...

George

 

[bogey21]

We think of SS as our annuity. People buy annuities all the time and they don't worry about if they will die before they get all their money back. Same kind of thing.

I'm with you on this but I think there are some annuities that pay something to beneficiaries if one dies before some predetermined age...

 

[DaveNV]

I never kept a budget, per se, because my enlisted military income had to stretch far enough to cover expenses. In the early years there was rarely enough disposable income left each month to amount to much. So budgeting was very random. We spent what we had as we had it.

Now, at the other end of my working life, my upcoming retirement has me reconsidering things. Debts are all paid, and monthly expenses are pretty minimal. There is disposable income available, and it’s exciting to explore options of what to do with it.

Tracking has been, and will continue to be on an Excel spreadsheet, with money in and out weighed against payments due. Dates this or that payment is due, interest rates on any credit card that may be used is kept, as they change so much (tells me which card I may want to use, even though any spending is paid off before the billing statement.)

The one debt I budget for is timeshare maintenance fees. They are sent by allotment to a savings account monthly, so when it’s due, the money is waiting.

Life is pretty simple these days.

Dave