From the above link…
A friend was able to lower his premiums because his income dropped.
@profparent, you might have some idea of how much you’ll be spending in retirement, but I didn’t and found Quicken to be very helpful. I use Quicken to track my investments, but a few years ago I started characterizing our spending. I load the categories into Excel, and have 3 columns of retirement change: subsistence, comfortable, and “living large.”
So, for example, we might spend 30% of our pre-retirement level on groceries after the kids are gone, 75% after the kids are gone but we’re cooking more fancy meals, and 200% if a personal chef is doing the shopping.
Tuition goes to zero. Travel goes up appropriately. Medical probably goes up.
At the end, I have 3 annual amounts of expected spend, and can decide which track I’m on. It’s all an approximation, but IMO makes much more sense than basing it on % of income.
Ps. I don’t obsess over the budget categories. I use credit cards for almost everything (>$2500 in rebates), and I just use the categories the CC assign. Close enough for me.
@IxnayBob, I just have to tell you that after reading this entire thread I decided you just might be my financial soulmate: pay off mortgage, keep investments simple, bribe your kids (if possible) not to have big weddings, etc. Now I can add credit card philosophy to that list. We too pay everything by credit card to get the rebates and/or frequent flier miles (paying the full balance at the end of each month, of course), and I was kind of counting on that helping me to sort out our spending habits for the retirement budget. But I really like your “three columns” strategy (and DH will too) as it takes into account some possible variables in the different tracks (like DH loving to travel in Europe, and my loving to go out to restaurants). So many things will be a bit different in retirement than in our currently very busy working lives that it makes sense to plan for different tracks (and some years we might be on one track, other years on a different one). I like the idea of planning for some flexibility (and man, would I love a personal chef!).
@dstark, Many thanks for the Medicare link. I’ll study it carefully. It isn’t a big issue (we could end up being perched between the basic payment and the one just above it), but it feels like it would be foolish not to strategize about the timing of enrolling in Medicare B if it would make a difference.
We should have started on the same a long time ago but keep postponing it.
We have created an account at Fidelity (and made an appointment and talked to a financial advisor there once) and started to move some retirement money there with the help of the advisor. Somehow I like the look and feel of the online account at this discount broker better than my bank’s online account. And they are not as “pushy” and we like this a lot.
I think I will try to read this whole thread again this year.
One of our tentative plan is to transfer the money gradually into various investments over a period of, say, year and a half, one transfer every 3 months, until we have a certain percentage in stock and a certain percentage in fixed income, etc., I subscribed to Money Magazine and there was a article about how to invest your retirement account in a simple way. I may follow the simple strategy there.
All 8000+ replies? Wow.
Our retirement account balances at Fidelity are high enough that they are very anxious to provide me with personalized investment services, which would basically tell me what MFs and ETFs to invest in, for which service they would would charge me a mere 1.5% per year (in addition to whatever fees the funds charge).
I don’t return their phone calls.
@profparent, we might be financial soulmates, but I differ to a small extent on credit cards. My wife doesn’t mind “points” or “miles” cards, but I’m not a fan. Show me the money :). Your post reminded me that I should look up how much I got in rebates during 2015. I might try to talk my wife out of her silly Amex points credit card.
Props to you on reading this entire thread.
The premium for Medicare B will be adjusted as you income and status changes. If it doesn’t adjust automatically, you can ask Medicare to adjust. The difference between the minimum premium and the one just above it is about $100/month per beneficiary, so for us, not worth losing sleep over. To us, the important thing was to be sure for H to sign up and get enrolled within 8 months after he retired, so he wouldn’t have to pay a penalty on his part B premium for the rest of his life.
We didn’t have H enrolled until after he retired because there was no penalty for waiting and we saved having to pay any Medicare premium for all the years after he turned 65 until 8 months after he retired. We figured it made evonomic sense for us.
We opted to keep his insurance with his former employer, as a retired annuitant as the coverage is excellent and premiums are reasonable. It provides extra protection and covers different things in addition to Medicare A and B.
“@profparent, we might be financial soulmates, but I differ to a small extent on credit cards. My wife doesn’t mind “points” or “miles” cards, but I’m not a fan. Show me the money . Your post reminded me that I should look up how much I got in rebates during 2015. I might try to talk my wife out of her silly Amex points credit card”
I’m not a big fan of points, unless I get a big bonus for the card, but airline mileage cards can be very valuable. We rack up many thousands of miles on the Delta Amex (which also qualifies us for diamond status and free club privileges). If you and your wife are a frequent flyer on a particular carrier, the associated card may be well worth it. We rarely pay for airline tickets, have the ability to cancel or change mileage tickets with no fee, and usually get upgraded. Plus a free companion ticket.
I’m hoping to rack up many miles before we retire, however, we use the miles, it seems, as we get them. I’ve talked to many people who have that in their retirement travel plan. However, they become less valuable over time.
Maybe your wife isn’t silly about her cards after all.
We like having cash rebates we can use for anything. S and D also like ULtimate Reward points, that are from Chase and can be used for airlines or whatever you like.
You’re in the business @busdriver11, but we find it almost impossible to use the points because of blackouts, limited number of tickets, etc. It’s just too much hassle for us. My wife used to travel internationally a lot, business or first class, but most of those miles weren’t of much use to us. It’s too much like work for me; cash is simple and so am I.
" “three columns” strategy" - That’s a good idea. I have actually toyed with the idea of separate credit cards for “needs” and “wants”. So far we’ve stuck with mostly using the United Visa since it stacks up points (on top of those earned for DH’s business travel).
For about 5 years I’ve tracked our expenses (checks + w/d incl Visa + cash). But in retirement we will need to cut back on some things… but ideally we would like to do more traveling. Decisions Decisions.
I never really understood the whole “75% of pre-retirement income” thing. I get reduced expenses when the kids move out and finish college - no more tuition, reduced food bills, ability to downsize if one chooses, etc. But none of those are retirement related. I don’t really get much savings from stopping work, unless you ate out all the time due to time constraints and then had time to cook, and less taxes, I guess? To me, 8-10 hours of extra time in your day to want to do things, more time to travel, etc. 
Yes, the 75% thing is pretty bogus, and is a creation of the financial services industry, I believe, to scare people into investing more money with them.
Not contributing to a retirement account and not having to pay FICA taxes any more can be 25% on its own.
Add in a lower marginal rate, no tuition, no mortgage, lower living expenses if you downsize, savings from stopping work (commuting costs, food, clothes if you have that kind of job), lower health insurance because you go on Medicare, etc, it’s not hard to get that number under 50%. And for most people, social security will replace around 25-30% of your income. So you really only need your retirement savings to replace around 20-25% of your income or so.
Of course, DW’s travel plans for us will likely add a bit back in. 
We are working diligently to get Mr. B to a Million Miler status on Alaska, so we can continue to enjoy their upgrades when Mr. stops traveling for business. Given the short distance between SEA and SFO, that has been one heck of trips so far! I am now supplementing those shorties with flights to Hawaii.
I too use our Costco Amex for every single dang purchase and payment! Cell phone service, tuition bills (only where there is no service charge), garbage bill… Mr. has to travel - yup, there travels the Amex, Lol. The cash back is a good feature to have. Sadly, we will have to switch to the Visa Costco will be switching to soon… I like Amex’s categorization system, but the Costco cashback is nothing to sneeze at.
I never counted tuition, or my kids costs after they reached 18 in my budget because I knew those expenses were one offs. I also looked at my expenses after tax so I never counted ss taxes, medicare taxes, income taxes in my budget. I do count property taxes. I never counted investing extra money as costs.
Because I never counted these things, I don’t see my costs dropping much. 
I am not counting on medicare savings. I am not counting on a full ss payout and one reason is because the inflation indicator is too low for seniors.
I am also not counting on having a professsional shopper and chef. My wife is a fantastic cook.
I’m a little more concerned about getting inflation and future returns accurate.
If you play with the retirement calculators, you can see a big change in future needs based on inflation and future needs. I was playing around on firecalc and my future assets can change 500 percent based on future unknowns. I can probably construct a portfolio with even larger possibilities. That could be good or bad.
I think with the use of the 4 percent rule, with the returns of today, the financial industry may be a little light on their numbers. Of course, it is dangerous to use recent past history to project the future.
Because I am normal, what I do is normal and what everybody else does is abnonrmal.
"I am also not counting on having a professsional shopper and chef. My wife is a fantastic cook. "
dstark, please keep telling her that. For us chefs a compliment is the best reward!
@BunsenBurner, I will take your advice and I will…
I joke once in awhile but I am not joking about my wife’s cooking.
If your husband ever posts here with my knowledge, I will tell him to compliment your cooking.
Thanks, dstark! He just polished off his grilled steak and said thanks.
I think home cooking not only saves $$, but it is much healthier in the long run. The restaurant food sometimes tastes too good because (shock!) there is a lot of extra butter and salt in it.
@BunsenBurner, and sugar too.
You’re right.
My wife is so freaking healthy. If I just ate her cooking and followed her diet, I would be in incredible shape.
I am happy to read your husband thanked you. Us men aren’t always good at thanking. I think I am pretty good at thanking… I finally matured. Men mature later than women. I think I have been good since I turned 53. To keep on topic, I think age 53 is when a person’s financial acumen peaks. I think that might be accurate for me.
@notrichenough,
If this is indeed the case for me, it is music to my ear.
Suppose that SS will replace 27% of my income, my meager pension will replace 13% of my income. So 40% has been taken care of. To get to 50% of my income, I only need to come up with 10% of my income. I can retire today!
Can anyone here confirm the quoted paragraph is really true? Is it too good to be true?