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Gordon:"The first thing a person planing or asking about money in retirement needs to know is something only they can answer. That is "Where do you spend money now?" If Quicken is too complex, get out a legal pad and keep track of every thing you spend. Maybe you can't account for every cent, but if you have even 1% of your spending as Unaccounted, Unknown or Misc - you aren't doing it right. And to get more specific, you really can't answer the question properly with less than a couple of years worth of data. A whole lot of things only happen once a year - income taxes, home owners (or tenants) insurance and Christmas being non-trivial expenses for most people."

A lot of boomers are going to discover quarterly income tax payments as well. Without fed with holding from their paychecks, it's hard to get much taken out of your SS check....and if you have a fair amount of income from your IRA/401K or other investments, you'll be paying estimated tax payments

In addition, even if you 'track' your expenses, you had better be setting money aside each year for:

1) car replacement. If your car is 'paid for', and you don't want to take out a big loan, you had better be setting aside at least $1000/yr to replace it. You'll also find that some years you get hit with $600 in new tires, or $600 for a repair job - or $1500...and other years it is near zero other than routine oil changes.

2) Major house need to have a set aside each year. some years it might be near zero. Other years, you'll be replacing a furnace or A/C unit, or need a new roof, or a house painting inside or out, or replace some carpets or appliances. Some years it's zero, other years, the fridge or washer dies, and something else goes kaput

Therefore, each year in your budget, you need to allocate money to a fund and have it 'set aside' as it grows..for major expenses.

Then, when you need to buy a new car, your budget that year isn't toast....or when that refrig dies or washer/dryer or a/c unit goes kaput, you don't sweat where the money is coming from.

If you wind up spending all your money each year and have none set aside for things like are living beyond your means.

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