Working and Reworking the Numbers
I know I should just wait until I have more answers from experts, but I just hate not feeling like I have control of understanding my budget and cash flow. The numbers I need both to bridge between July and December 2025 skew a bit differently with each new factor I add. In general, my aim is to figure out where to find the living expenses, sinking fund deposits (which include both required irregular expenses and optional ones), and health care for both my daughter and myself. In my latest iteration after learning and then calculating how severance works, I've landed on a goal figure and have 14 months to save.
My budgets tight on cash flow, but I think there might be some fat to trim, especially this time of year when heating can be off but not so hot air conditioning is needed. How taxes shake out next year will either align with my conservative, worst case scenario approach, or yield a positive win. How I balance things like credit card points, reward programs, and spend seasonally impacts what I can tuck away.
Another unknown is my daughter's employment after her fellowship ends and grad school options and decisions. Should she end up working full or even part time with health care benefits, even if they're expensive, chances are still less than keeping her with me until she's 26. I'm factoring in conservatively that she's tethered to my health insurance for planning. However, she could go the self insured route if coverage and rates are more cost effective.
I'd like to not touch my CD's or interest, though of course am well aware I'll have taxes to pay on that interest and have it in my calculations. I'm really focused on not paying a stupid or lazy tax, but research what I need, get the best price before buying, but not mistake cheap for value. I'm also reminded of Anne's great comment though about "buying time with family" when taking a convenient route such as a premade veggie or fruit tray.
I write this, knowing I don't want to live in austerity either. I want an occasional meal out with friends or my kids. I want the good craft beer and not always what's on sale and to have a few bottles of wine on hand for when my sister's or friends stop and maybe order a pizza to go along with the beverages. I want to feel I can support causes or organizations I believe in. I'll be laid up for 6-12 weeks, not feeling like traveling, but before and after recovery, I want little get aways. I also am focused on that UK trip, late fall 2025, delayed a year because of my knee, but still have a placeholder generally in my calendar. That's factored into the gap budgetary needs. It won't be a Ritz Carlton stay, but I want to enjoy it fully.
All this word mumbling is me thinking through the keyboard. Comment your thoughts, but know another month from now, I might have a new spread sheet after yet more information unfolds.
I often get some of my own answers by thinking through the keyboard. When you retire will you get any unused vacation/PTO payout to add to your savings? Also, have you thought about maybe doing some very minimal side job type of work. after retiring, to throw in a little extra for your entertainment and travel goals?
ReplyDeleteI'll have some but it goes in a HSA. I may do a few contract projects or substitute teach, but I really don't want to be tied to having to do work- my terms only.
DeleteAlthough I really struggle with getting motivated , I have found there are surprising financial gains in retirement -mostly bought about by time . When I worked ( silly hours ) I relied on take out food - expensive and not always that good for you - now I have time to cook and am finding I want to invite friends here again ( only a few , very special friends )- so making food to share and not going out to a restaurant all the time , is enjoyable - don’t get me wrong I still like eating out )
ReplyDeleteI often go to my lovely friends who live on the same street as me for “ gin “ afternoons - Jenny and I drink the gin that Nick so generously pours , and talk about everything and nothing - they both knew and loved Tony so it feels like a safe space and they understand that I might be ok one more and in tears the next
I do worry about money - but like you own my house outright which is an amazing gift - I will in time move to a less expensive property ( my cottage is 200+ years old , and is expensive to heat and repair ) and will buy a property that costs significantly less than this one sells for
So I am trying
But life is not the same , and will never be the same again . I would live in a hole in the ground if it meant having Tony back
Siobhan x
Good points. Since I work from home, I just no longer have the work expenses I used to. I rarely get take out, though so like to go out. That might increase too. I hear you. We got no say in what retirement now looks like so starting planning all over. I hate it but have no choice.
DeleteI find myself really needing the same reassurances, now that we are adjusting to 1) no salary for me 2) additional health care costs, as we moved myself + the kids onto M's insurance and 3) college costs. I feel like I'm regularly looking at the spreadsheets, poring over numbers, making tweaks, etc. In some ways, doing that makes me feel more confident in the plans. I really, really need the assurance that everything will be okay, even though, objectively, I know it will.
ReplyDeleteOne thing to factor in during your retirement is that you'll be home more. You will likely save on gas (unless you plan to do activities that take you further from home than work), but you will also need to heat the house while you're home during the day. Just a few other things to consider.
(Hawaii Planner)
I work from home other than one day a week and even not always that day. Fortunately, my house costs are reasonable. I feel I can't figure any life savings when I retire because it doesn't cost me much to work. There's always more to consider.
DeleteThis is an old adage but it really applies here: knowledge is power. Especially now. Google some topics like best books for personal finances (not a great line, but you know what I mean), check them out from your library, and that might give you some additional thoughts on budgets and your cash flow (including the different scenarios). Budgets are not set in stone; they have to be flexible because life happens, as you so well know. Hugs, Sam.
ReplyDeleteI'll know so much more after the seminar. I should just go pause from planning another few weeks.
DeleteI do not know the particulars of your finances, but I do know a sit down with a CPA might be well worth the investment, especially for both short and long term tax planning. Hopefully you have one somewhere in the extended family who will offer you the friends and family rate. There might be things or methods of conserving your finances that you have yet to think of.
ReplyDeleteMeanwhile plan as you can and be kind to yourself in the planning. When all is said and done there will no begrudging some self indulgences, which I think are critical to enjoying life.
I got really caught off guard with taxes so you're totally right. I need expert advice on tax planning. I want to enjoy my years too.
DeleteIt's a real leap to go from that paid job to retirement. We're in the latter stages of trying to prepare for retirement. My plan is to make sure there is no debt, so no extra payments. Shore up the savings a bit more. I'm not sure we'll ever be ready, but we're going to do it at 65.
ReplyDeleteFortunately I have no debt, so that should help. All the little things add up,; utilities, insurance, gas, groceries, travel, etc. It feels so iffy to give up paid work, yet I need to health wise sooner than I used to think.
DeleteWhen I divorced, I was always writing, thinking, and refiguring my financial state. It was agony, but I felt more secure doing so.
ReplyDeleteI'm sure there's similarities with any situation that makes a person now single and having to plan for ourselves.
DeleteI suppose many of us know how you feel about "making sure you've covered everything" before you retire. I was pretty sure I'd covered everything but was still driving myself mad. In the end I had to take that leap - and the stress lifted from my shoulders instantly! I know you'll make the right decision!
ReplyDeleteAnd if course on route I hear Social Security is set to run out in 10 years! Well, great for my planning. It'll always be something I guess.
DeleteThe comments about SS running out are not true. The current fund would pay 17% less of current benefits if nothing changed. However, Congress can pass a law to allow the shortfall to come from general tax revenue, as opposed to the specific fund, and that is the most likely scenario because political leaders don't want to make adjustments to tax payments or benefits. In fact, there was a story about this today in the WSJ.
DeleteYes, I know things can change. The forecast was if nothing changes, yes, the fund won't last the same as paying out now. I oversimplified. I just mentioned I heard that headline in my drive in.
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