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Author: Margaret120 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 77391  
Subject: Retirement Spending Date: 10/17/2007 10:02 AM
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Hi:
I am at the point in the RYR seminar where I have to decide where my post retirement income is going to be spent. I am slightly bewildered by this exercise, because there are so many unknowable circumstances that can arise. Can anyone give me some kind of starting point? I have looked at housing costs for certain areas of the country, and can find out approximately what insurance cost, etc. I will have. Any ideas? Thanks for your help.
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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 59746 of 77391
Subject: Re: Retirement Spending Date: 10/17/2007 12:18 PM
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I have a written budget for our estimated retirement expenses. To put it together, I started with our current expenditures, and then made some assumptions. There will be no more college savings, but we'll want money to travel to see the kids, so I reallocated that. There will be no more mortgage, but we will need to provide medical insurance, so I reallocated that. Our grocery bill will go down with the kids gone, but we'll be eating out more, so I made that adjustment.

I think if you start with your current expenditures, you can make similar assumptions based on what you want to do in retirement, and reallocate your money accordingly. I do like to make a note of my assumptions right in the spreadsheet so that I can make adjustments later as my assumptions change or I get more data.

This might be a reasonable place to start.

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Author: TwoCybers Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 59757 of 77391
Subject: Re: Retirement Spending Date: 10/17/2007 7:38 PM
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I found one of the most important exercises in determining a budget is to buy Quicken and track your spending. Now I don't feel life ends if I can't account for every dollar -- but I do not left that category "Cash Unaccounted" grow to 10% of my funds either. The categories in Quicken are a nice starting place, but I have my own I add.

Then after a year or two you can really see how you spend.

Gordon
Atlanta

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Author: iamdb Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 59758 of 77391
Subject: Re: Retirement Spending Date: 10/18/2007 5:30 AM
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I tracked with Quicken for several years as TwoCybers suggests, then made assumptions about income and spending changes as 2gifts suggests, although I didn't annotate the basis for those assumptions. Early on, I found I was using miscelleaneous too often, and needed to make more classifications and use them. In Quicken, I set up accounts for checking, credit cards, real estate, and investments. It takes a little time, but really provides cash flow insight. Now, more than 15 years into retirement, I continue to use the Quicken accounts, as well as an Excel spreadsheet to predict and track monthly cash flow.

db

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Author: hockeypop Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 59759 of 77391
Subject: Re: Retirement Spending Date: 10/18/2007 6:11 AM
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I tracked with Quicken for several years as TwoCybers suggests, then made assumptions about income and spending changes as 2gifts suggests, although I didn't annotate the basis for those assumptions. Early on, I found I was using miscelleaneous too often, and needed to make more classifications and use them. In Quicken, I set up accounts for checking, credit cards, real estate, and investments. It takes a little time, but really provides cash flow insight. Now, more than 15 years into retirement, I continue to use the Quicken accounts, as well as an Excel spreadsheet to predict and track monthly cash flow.

db


Me three with Quicken. The other things it allows you to do for retirement are show the future impact of paying off your home, or downsizing, and more using your real-life numbers in their retirement planner, often in "What If" scenarios.

You can also use your checks, a piece of paper, and/or a spreadsheet to figure out your expenses, but after three months, or certainly after a year, you'll wonder how you got along without Quicken (or one of the other products).

Hockeypop

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Author: canonian Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 59760 of 77391
Subject: Re: Retirement Spending Date: 10/18/2007 8:57 AM
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I use Quickens credit card for almost all purchases and it can be downloaded with 80% automatic categorization of purchases. It not only simplifies life it also has a decent points reward program.

If you are good about paying off your balance I highly suggest this for trackling purposes. I could not stand entering everything manually into Quicken.

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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 59761 of 77391
Subject: Re: Retirement Spending Date: 10/18/2007 9:03 AM
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I use Quickens credit card for almost all purchases and it can be downloaded with 80% automatic categorization of purchases. It not only simplifies life it also has a decent points reward program.

If you are good about paying off your balance I highly suggest this for trackling purposes. I could not stand entering everything manually into Quicken.


I think you can do this with most credit cards, so don't necessarily need to be tied to Quickens card to be able to use this feature. I believe you can also automatically download transactions from most banks and brokerages.

I actually prefer to enter the transactions by hand because I pay more attention to them that way, and that tends to be how I find errors that I need to have fixed.

I think this is a preference thing, though, and I find that the vast majority prefer the automatic downloading feature, so I think I'm more unusual in that I prefer the manual method. Either way works, as long as you're using the way that works best for you.

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Author: Hawkwin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 59763 of 77391
Subject: Re: Retirement Spending Date: 10/18/2007 10:50 AM
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Depending on how indepth you want to go, you might consider a fee-only advisor to assist you with this.

There are a few here that can recommend such a service.

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Author: iamdb Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 59766 of 77391
Subject: Re: Retirement Spending Date: 10/18/2007 3:16 PM
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As you continue using Quicken, you'll discover that the auto-fill feature memorizes a past transaction with a given payee, so entering transactions becomes quick and easy. Often you just type one or two letters and Quicken fills in the rest.

db

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Author: Bhoys88 CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 59769 of 77391
Subject: Re: Retirement Spending Date: 10/19/2007 11:06 AM
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Sorry to stray a bit off the thread topic, but curious on everyone take on Quicken v. Money? I have used Quicken the last few years, but I haven't used it to the fullest potential yet. I want to get more involved in the details, but was curious which program people would recommend more? I see that Money now comes with a free subscription to TMF Green Light. I tried to read reviews on the newest version of both programs, but both get trashed by consumers for different reasons. Should I stick with Quicken or go through the hassle of entering all my information again and buy Money?

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Author: badinvestor11 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 59770 of 77391
Subject: Re: Retirement Spending Date: 10/19/2007 1:30 PM
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I'm not sure where you bank, but if you want a quick and simple breakdown of the basic categories of spending, you might see if your bank provides this capability through their on-line banking. I used Quicken for years and it is a great product and very flexible. However, I found that I needed to spend too much time inserting and manipulating data. I have recently discovered that Bank of America offers a free portfolio manager to their on-line banking customers. I'm able to link all my internal and external accounts to get up-to-date balances. It captures my 401k assets (down to the individual mutual fund balances), credit cards, pension, loans, insurance and even my travel rewards balances!! It allows you to categorize all the transactions in all your accounts. There isn't the flexibility to create categories like Quicken, but I find that there are enough to do what I want. BofA plugs most of the transactions into categories automatically, but you can set category rules to categorize or re-categorize the ones it misses. It also has the very important feature to run reports on the categories to see how much of your money goes where. You can also set up budgets.

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