Retirement Budget and Income Tips (by real people)

When researching a retirement budget, one of the things people look for is real numbers about what it takes to have a comfortable retirement.

We like to compare our position to others to see how close we might be to reaching their goal of retirement.

But it is a private topic and real examples are hard to find.

This useful retirement income planning information was generously provided by real people, Deb and Jack.

They want others to know what can be accomplished with the right plan.

Generally people are very private about their financial details so real life information like this on retirement income and how much it takes to retire is hard to find.

Retiree Profile - Couple in their late 50’s

  • His: 401k and pension (rolled over to IRA), total $420,000.
  • Her: 401k account, a previous 401k and an IRA, total $320,000.
  • Total combined retirement portfolio balance: $740,000
  • Combined total net worth, just over $1 Million
  • Both retired at age 55 from Fortune 100 companies.

Retirement Income

In their retirement budget, they have each set aside $250,000 to cover their early retirement years before Social Security eligibility and from that they each take withdrawals of $2400 per month (before taxes) for living expenses.

Their financial advisor’s analysis of their portfolio and their early retirement plan, and budget shows that it should last beyond their Social Security retirement age.

But in case it doesn’t they are keeping it separate from their other savings.

That leaves $240,000 in savings for future expenses or splurges, which they keep invested. Once they reach 59 1/2, they can access this money for special projects, big vacations, or unexpected medical expenses.

Before they retired, they accumulated $35,000 in a savings account which would cover unexpected expenses that wouldn’t be covered by their monthly income and budget.

Retirement Budget

The couple have no debts, own a modest but spacious home, and they each have a car. Their monthly budget of $3800 includes categories for hobby expenses, clothes, gifts, and extra spending money. Their health and medical insurance is covered by their retiree benefits. Before retiring they both purchased long term care insurance.

During the next 5 to 10 years they plan to replace both cars. They also plan to replace old appliances as needed from their savings.

All of these items were considered when they built their retiree budget plan. For more on setting up a budget and how to retire, see this page.

Retirement Hobbies

Their hobbies include gun collecting, genealogy, art collecting, writing, and occasionally some travel.

They’ve already been to Caribbean getaways, a vacation trip to France, and a week long stay in New York City since they retired.

All of these expenses were included in their budget, so keep this in mind when you build yours.

See this page on 401k withdrawals, early retirement plans, budget,
and a less than a million dollar portfolio.

Tips From This Couple

Tops on their recommendations are to setup a budget before you retire to be sure you know your true expense needs.

Consult an independent and disinterested financial advisor ("disinterested" meaning with nothing to gain from your decisions.)

They also suggest setting aside a minimum of $10,000 per trip for international travel to make the most of your travels.

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