Poll: What is your biggest expense in retirement

A couple of questions –

Is that $100K per person of per family?

Does the $100K include Social Security and any pensions?

The numbers are for the tax return filed for the family.

We have a law that says reassessments have to be revenue neutral. If the average assessed value increases by 20% as in your example, the property tax is adjusted downward from the current 1% to 0.83% to maintain the same tax revenue.

PSU

We have the same law, but the upper middle class neighborhoods always get clobbered as the property values rise much more than in the lower income neighborhoods. And they increase the milage to get around the “revenue neutral” thing.

We have a law that says reassessments have to be revenue neutral. If the average assessed value increases by 20% as in your example, the property tax is adjusted downward from the current 1% to 0.83% to maintain the same tax revenue.

PSU


Good program. In Texas, all the politicians pound their chest about holding the taxes rates the same as last year or their generosity in reducing the tax rate a few tenths of a percent.

Unsaid of course is that appraisal creep provides a reliable built in, and significant, increase in tax revenue year over year. Weasels, all.

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I responded other. I use Quicken for all of our finances so running a report on the past 12 months spend is easy. Of course, everyone probably categorizes their income and expenses a little differently, but here are the past 12 months Top 10 for us:

Dining Out = 11,745
Vacations = 9,800
Household (new furniture and other small expenses) = 9,400
Real Estate Tax (MA) = 9,300
Utilities (Oil, Electricity, Cable, Mobile Phone) = 9,140
Wife’s Payroll Taxes = 5,844
Groceries = 5,615
Misc Expenses (Largest Expense = Liquor) = 3,650
Home/Auto/Umbrella Insurance = 3,198
Medical (Insurance Premiums and Deductibles) = 2,119

I guess I need to cut down on the dining out and drinking at home with friends :wink:

'38Packard

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'38Packard: Real Estate Tax (MA) = 9,300, … Wife’s Payroll Taxes = 5,844

Apparently Big Hairy Mike’s taxes in Texas are much higher than yours in MA. When I was in Massachusetts, we called it, “Taxachusetts”.

Texas has no income tax so the state is financed by sales taxes and real estate taxes. Both are high. But they don’t hit the precious billionaires very hard,compared to the lower income folks.

CNC

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Apparently Big Hairy Mike’s taxes in Texas are much higher than yours in MA. When I was in Massachusetts, we called it, “Taxachusetts”.

Texas has no income tax so the state is financed by sales taxes and real estate taxes. Both are high. But they don’t hit the precious billionaires very hard,compared to the lower income folks.

CNC


Missing from 38P’s expense list was federal taxes. Maybe his are really zero but that is the major difference between his taxes and mine.

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When I was in Massachusetts, we called it, “Taxachusetts”.

Ohh, it’s still called Taxachusetts! It’s just that I’m now retired and DW brings home the “bacon bits and benefits” - she works for a local college and makes hardly anything in pay. But at least she can get employer sponsored health insurance and 401K match up to 8%. She has another year before she hits 65 and can join me in retirement.

But to answer your question, our tax liability for 2021 was:

Federal = 1,859
State = 1,405
TOTAL = 3,264

That puts total taxes just between Miscellaneous Expenses and Home/Auto/Umbrella Insurance.

'38Packard

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Define “rich”

Not having to worry about money.

My hippie brother doesn’t worry and his net worth is maybe $400k all tied up in his house. I don’t worry and my net worth is into 8 figures (not counting the decimal point). We are both rich.

JLC

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Taxes was are highest expense by far when working and remains our highest expense now that we are retired. During our working years, since we were both self employed (and paid both sides of FICA, etc.) and had high incomes plus state income tax, income taxes alone took roughly 50%. We are now down in the 25% range on income taxes. I won’t mention gross numbers but they were/are higher than numbers currently being tossed around here. Yes, a good problem to have.

Outside of that, probably entertainment is our biggest expense. Season sports tickets, concerts, etc., and you won’t find us in the nose bleed section. When Darius Rucker threw his guitar pick into the crowd a few years ago I caught it. DW and SIL wound up in the Twitter feed of The Goo Goo Dolls when they did a from behind performer shot showing the front row.

But not all self centered spending, our #2 expense until last year was each of us endowing a scholarship at our Alma Maters.

JLC

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Define “rich”

Not having to worry about money.

This can cut both ways, depending on the person. My first job was at a property management firm that had some wealthy clients. I grew to divide them into two categories: those who used their wealth to worry less about money, and those who used it to worry even more (“Now I have $100,000 worries instead of $1,000 worries”).

I got a close look at that at an early age, which allowed me to make a conscious decision which group I wanted to fall in, should I be fortunate enough to get there.

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Good point. But Casa Poorfamily isn’t a mansion, or even a McMansion. It’s a decent size to be comfortable, but the taxes are only a few grand per year. We’re actually the smallest house in our upscale neighborhood, as near as I can tell. A few of the others are almost manors, but a lot are similar to ours, just bigger. RV garages are popular here.

Property taxes have been almost invisible to me because that’s part of the mortgage. A year from now I’ll be more aware because the mortgage will go away.

1poorguy

Taxes

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As has been point out in this thread, you are a lucky dog.

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Golfing expenses.

JimA

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For the win!

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Food and Food and then there’s something to eat.

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I was including property taxes into “housing” and therefore indicated “housing” as our biggest expense. Ex-taxes, it’s not. Taxes of all kinds–property, income (state and federal), sales–clearly is. Our plan was for travel to be our biggest expense in retirement, but the coronavirus has had a different idea about that.

“I was including property taxes into “housing” and therefore indicated “housing” as our biggest expense. Ex-taxes, it’s not. Taxes of all kinds–property, income (state and federal), sales”

Clearly it depends on how granularly you categorize. My golf expenses are the costs of equipment and the rounds of golf and the entry fees to tournaments. If I also included travel expenses such as gas and hotels and food on the road, then ‘golf expenses’ are considerably more than taxes, food, housing or other category you might dream up.

Life is good!

JimA

Golfing expenses.

Golf is actually one of my lowest expenses and I play three times a week. It helps to be a marshal one morning a week. Saved me a boatload of green fees since 2004.

Regards,

ImAGolfer (retired '03)

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"Golf is actually one of my lowest expenses and I play three times a week. It helps to be a marshal one morning a week. Saved me a boatload of green fees since 2004.
Regards,
ImAGolfer (retired '03)"

I understand - but I play some 30 plus tournament rounds a year all over the US. My registration fees alone are over $5,000/yr. Additionally, I don’t belong to a club as I don’t want to feel obligated to play the same course day after day. I aim for 50 new courses every year; one year it was 85 new courses.

JimA

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