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Cost of living Calculator for retirement
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Understanding current expenses is the first step to getting a handle on the cost of living in the future. Exploring this should be a top priority. Utilizing a good cost of living calculator will have benefit for the current budgeting process now and for staying up to date during retirement.
Obviously, expenses don't stop when fulltime employment ends. Many experts say that 70% to 80% of your pre-retirement income is needed to make ends meet. In many cases, expenses will either stay the same or actually go up. People may still have a mortgage, still need to put kids through school, still need to pay taxes, and will now need to buy medical insurance.
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The spreadsheet below is useful for recording detailed expenses. In later steps, income will be added and then compared to expenses to determine gaps. You control the catagories and the amounts. Try to be as realistic as possible. Various versions can be created to compare different possible alternatives.
You can accomplish these same calculations yourself by creating an excel spreadsheet to list expenses. There are simple formulas involved that are explained as each section is described. Please send an email through "Contact Us" if you have any questions.
The cost of living calculator below shows expenses through time. An actual excel spreadsheet could run out to age 90 or beyond. Include every catagory of expense that could be incurred. By detailing out each expense, you can get a clearer picture of your retirement needs and document your goals at the same time. This will give you a better chance to have retirement costs hurdled or at least be made manageable. The total at the end of each row is a handy way to know how much you are spending over time.
Retirement costs
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Age/Years----------------------------------------> |
| |
|
(59) |
(60) |
(61) |
(62) |
... |
Catagory |
| Catagory |
Month |
(2007) |
(2008) |
(2009) |
(2010) |
... |
Totals |
| Contributions |
|
|
|
|
|
|
|
| Church |
80 |
960 |
960 |
960 |
960 |
|
3,840 |
| Other |
20 |
240 |
240 |
240 |
240 |
|
960 |
| |
|
|
|
|
|
|
|
| Primary Property |
|
|
|
|
|
|
|
| Mortgage |
800 |
9,600 |
9,600 |
9,600 |
9,600 |
|
38,400 |
| Real estate taxes |
300 |
3,600 |
3,600 |
3,600 |
3,600 |
|
14,400 |
| HOA |
70 |
840 |
840 |
840 |
840 |
|
3,360 |
| |
|
|
|
|
|
|
|
| Education |
1000 |
12,000 |
12,000 |
12,000 |
12,000 |
|
48,000 |
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|
|
|
|
|
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| Utilities |
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|
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|
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| PG&E |
150 |
1,800 |
1,800 |
1,800 |
1,800 |
|
7,200 |
| Water/Sewer |
100 |
1,200 |
1,200 |
1,200 |
1,200 |
|
4,800 |
| Charter Cable |
70 |
840 |
840 |
840 |
840 |
|
3,360 |
| Garbage |
20 |
240 |
240 |
240 |
240 |
|
960 |
| Telephone |
60 |
720 |
720 |
720 |
720 |
|
2,880 |
| Cell phone |
45 |
540 |
540 |
540 |
540 |
|
2,160 |
| Alarm System |
25 |
300 |
300 |
300 |
300 |
|
1,200 |
| |
|
|
|
|
|
|
|
| Gardener |
60 |
720 |
720 |
720 |
720 |
|
2,880 |
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|
|
|
|
|
|
|
| Food |
1000 |
12,000 |
12,000 |
12,000 |
12,000 |
|
48,000 |
| School lunches |
50 |
600 |
600 |
600 |
600 |
|
2,400 |
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|
|
|
|
|
|
|
| Clothing |
200 |
2,400 |
2,400 |
2,400 |
2,400 |
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9,600 |
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|
|
|
|
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| Gas |
180 |
2,160 |
2,160 |
2,160 |
2,160 |
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8,640 |
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| Insurance |
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|
|
|
|
|
|
| Fire Insurance |
60 |
720 |
720 |
720 |
720 |
|
2,880 |
| Earthquake |
70 |
840 |
840 |
840 |
840 |
|
3,360 |
| Auto |
70 |
840 |
840 |
840 |
840 |
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3,360 |
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| Rental Properties |
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|
|
|
|
|
|
| Fire Insurance |
100 |
1,200 |
1,200 |
1,200 |
1,200 |
|
4,800 |
| HOA |
130 |
1,560 |
1,560 |
1,560 |
1,560 |
|
6,240 |
| Property Mgr |
230 |
2,760 |
2,760 |
2,760 |
2,760 |
|
11,040 |
| Property Taxes |
380 |
4,560 |
4,560 |
4,560 |
4,560 |
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18,240 |
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|
|
|
|
|
|
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| Expense Subtotal |
5,270 |
63,240 |
63,240 |
63,240 |
63,240 |
|
252,960 |
If budgeting has not been a normal everyday practice, take the time to assess spending in every catagory. Mark items as they are recorded so that they can be grouped at the end of the month. Track each category for several months. This will give you reasonable numbers for a spreadsheet like the one above. Multiply monthly cost by 12 to get annual cost.
In addition, to suppliment your research, it is helpful to have a financial advisor. An experienced person can review your plans and make suggestions for investments, insurance, and retirement costs and planning in general. You want someone who has your best interests at heart. Make sure you know how they are getting paid and what their motivations are.
If using the above
cost of living calculator
is done properly, then conquering retirement hurdles can become a reality.
Other retirement cost resources...
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