Income & Spending Report 2022........the January Report

Now that we are living on an annuity and 401K$ withdrawals(some months), I am still going to keep track of our monthly spending and income, and hopefully we'll still be able to live BELOW our means and I'll have some leftover monies each month to tuck aside.

I am trying to be as transparent as I can with how much is coming in and how much is going out.  8-)

On to the January report---

I had 2 goals for January.......
The 1st is to actually finish the month in the black and not the red.
The 2nd is to try to have a little cash leftover at the end of the previous month to tuck back into a slush fund.  This slush fun may be to apply toward unforeseen bills that are coming due in subsequent months, to spend on "extras/wants" during the year or to just sit there and grow until the end of 2021.

I can report that we finished up January in the black.
The amount we ended the month of January with?....$1,590.18

Income or Funds We Can Access

The "income" in January---

* Monthly annuity payment of $3,229.07(after tax withholding)
* Interest earned on non-retirement accounts of $204.10

* 1/3 of Quarterly 401K withdrawal of $2,051.69

* RMSA account to pay for health premiums totaling $2,226.13(yeah, they went up again!)

Total "Income" for January.....$7,710.99

Expenses in January---

* Irregular bills in January were $425.40

* Variable Expenses in January came to $5,695.41

Total Expenses....$6,120.81

$7,710.99-$6,120.81=$1,590.18

Slush into January of $37,456.18 in that Fund, add $1590.18 and we get $39,046.36 going into February 2022's Slush Fund.
The Slush Fund on it's Page(tab at the top of the blog)shows an addition of $1,590.18

Outgo

As for the variable expenses this January here are the good and the bad side of things....

HERE are the GOOD THINGS

*  The WAM was $150 lower than was taken last month.

*  The Amazon c/c was $309.79 less than in December.

HERE are the BAD THINGS

*  The internet bill went up by $3 per month this year.

*  The water bill went up $6.65 in January.

*  The electric bill was $77.07 higher than in December.(Winter, huh!)

*  The gas bill was up $38.54 from last month.

*  The cell phone bill is now $53.60 per month more(until this new phone is paid off).

*  The M/C bill was up $614.70 from December's bill.

*  We had Two Irregular bills in January-

  *  We paid the annual garbage bill in January.

  *  I had a dentist bill of $95.40 this month.

The Food Budget costs for January are in another post, which is located HERE.  Food costs are included in the credit card payment(mainly but sometimes our WAM cash too).

FINAL THOUGHTS on January 2022---Well we knew the cell bill, the internet costs and the healthcare premiums would be higher in 2022.  Internet was three whole dollars higher so no biggie.

We sat down and talked money after which we have decided to take quarterly regular draws from the 401K of $6K per quarter this year.  Between the real estate taxes in March, the school taxes coming up in September and paying for the Wedding rehearsal that's a lot of big irregular bills coming down the pike, two of which get paid with the firsst quarters withdrawal.  Things should loosen up financial once we get past March.

The RMSA which covers the healthcare premiums will run out mid-May but that's a whole other issue I'm not addressing today.

 

THOUGHTS going forward into February 2022---The wedding is a little over a week away.  Pray that there are no blizzards here in the Mid-Atlantic the weekend after Super Bowl!  Other than bleeding money for this wedding we will be all good financially until March.

So how was your January financially? 

Did you spend less than the income you had in January?
Did you stay within your budget or not?
What did you do with any money leftover at the end of the month?
Did you pay off any debts or put extra toward your mortgage principle or into savings, in an emergency fund or a retirement account?
Or did you blow it on a want?

If you posted your financial progress on your own blog, leave a link in the comments so we can go check out your progress too and celebrate or commiserate with you!

Sluggy 

Rejiggering the Budget & Spending in Retirement-2018

We had our budget meeting for 2018.  That's our discussion on how much money we'd have for 2018 and where we are going to spend that money.

Just to recap, our income is derived from an annuity payment each month, and once we access it, our 401K account.  We also have additional regular savings that I've socked away since 2009 which we can access if needed(but I hope we don't need it this year).
We have a RMSA to reimburse for healthcare premiums in 2018 and I'll be starting to use our HSA account starting in 2018 for medical co-pays/payments.
So this discussion is just about how/where to spend the annuity income and how much 401K cash we need to withdraw in 2018.

First thing was to figure out how much money we spent in 2017.  This will help us figure out what we'll need to spend in 2018.  Using that as a base we can add/subtract due to changes we want to make in 2018.
After tallying it all up I found that we actually spent just shy of $60K last year.  That's a lot of money!  Some of that spending won't be happening going forward, like College Boy's tuition and living expenses at the apartment up at college.  And hopefully all the expenses associated with the Louisiana house will be going away this year too.  Other expenses we stopped paying in 2017 once Hubs retired were commuting costs, dry cleaning costs, and other costs associated with him working.  If the stars all align I believe we'll have expenses about $10K less than what we spent in 2017.

Last year we had a foot in both the regular income world and the retired income world so it was a hard year to balance spending.  This year it's Retirement 24/7 at Chez Sluggy. ;-)

Going forward our annuity comes to just over $38K per year net.  I don't know with the new tax legislation if the tax withholding will change so I'll go with what we've been getting so far.

First order of business was to figure out how much we actually "need" to withdraw from the 401K to supplement the annuity income in 2018.  We were able to hold off withdrawing from the 401K the last Quarter of 2017 but that won't cut it going forward as Hubs wants to spend more on "fun" in 2018.

* Hubs' plan going into retirement was that he wanted to withdraw $36K a year from the 401K($9K per quarter).  Even at this rate, once we stop needing to withdraw the 401K $ to live on in 7+ years, when Hubs hits full Social Security age, we'll have over 75% of what we had when he retired in that account. So it's in no danger of being depleted withdrawing at that rate.
$36K after tax withholding would be $30,600 net.
$38K+$30,600 is $68,600 net income a year.

Now I know if we take out that much Hubs will set about spending that much! lol  I really don't think, at least for now, we need to withdraw $9K every quarter to supplement the annuity and live a comfortable life.
Call me the "stick in the mud" in this relationship but starting in 2019, for the following 4 years and 3 months(4 years and 11 months for me)we are on our own with regard to healthcare insurance and who even knows what health insurance will look like/cost after 2018.  Yes we have a medical savings account but there isn't enough in there to pay for almost 5 more years on insurance premiums out of pocket.  I am staying cautious when it comes to spending money on "fun".  I pointed out to Hubs that we already spent over $8K in discretionary or fun in 2017 so we really don't need to withdraw lots more $ for that purpose.   ;-)

Withdrawing $6K a quarter gives us $20,613.24 per year after tax withholding which bumps our income up to $58,690.80 net per year.
It's about $1500 less per year than what we spent in all of 2017.  I'd like to try to keep the withdrawals to this amount per quarter, at least for now.

* Next order of business was the "Walking Around Money" or WAM.
Since retiring we've been allotting $100 each per month for each of us.
In the last 6 months I've found I can stay under $100 per month easy.  Hubs?....not so much.
He doesn't feel comfortable getting down to his last dollar.  He had a "situation" where he went out for Chinese take-out at the other place in our town because our usual place decided to close on Mondays(and it was a Monday).  This other place only takes cash or local checks, no credit cards.  We didn't think about that when he went and of course, being the end of the month, he didn't have enough cash to pay.  Ever since that incident he's been antsy about running out of cash.

Now I don't think it's "fair" that he gets more WAM than me to throw about anyway he wants and he doesn't think it's "fair" that he can't spend what he wants on what he wants.  It's the old "I work hard so I deserve it" gambit, right?

I asked him to make a list of things he might want to buy in 2018 and we can set this much aside for him to blow.  But he refuses to be pinned down or give me any inkling on what he WANTS to spend on in 2018.  This makes me nervous since I am sure between buying coffee drinks, trips to McDonald's, books at retail price, alcohol, spending money on chess(software and entering tournaments)and on his new beer brewing hobby(the equipment can be pricey!)during all this free time he now has, he could blow through his WAM plus another $10K in short order and have no clue he's blown through that much.

We came to a compromise on the WAM--we still only get $100 per month each BUT he gets an extra $50 in January ONLY.  He's going to keep that $50 as an emergency WAM back-up amount so "if" he runs out of WAM before the month is over he won't "feel" broke. lolz  I just keeping wondering how long until he spends that extra $50 and wants it replaced?...Hmmm.....

* Then it was on to the Sinking Fund to pay irregular bills out of.  Hubs didn't like the idea of pulling $650(or more if costs go up on those bills)off the top of the annuity payment each month.  I went through the IBs(irregular bills)per quarter and showed him how much we need each quarter to pay those in full. 
1st Quarter-$2558.51(Garbage, Sewage, R/E Taxes, LTC(Long Term Care Policy))
2nd Quarter-$1383.24(Car Insurance, LTC)
3rd Quarter-$3220.29(House Insurance, School Taxes, LTC)
4th Quarter-$1383.24(Car Insurance, LTC)

So I am taking the corresponding amounts in Jan., Apr., Jul. and Oct. off the top of the 401K withdrawals in each of these months to cover the IBs and putting it into a designated account out of which the IBs will be paid.
I really don't see what difference it makes if I take it out of the 401K withdrawals or $650 out of the monthly annuity payment but if doing it this way makes Hubs happy, I'm good with it.  8-)

For the 1st quarter after deducting the $ for the IBs into the Sinking Fund, we have $2,594.80 left in the 401K withdrawal to add to our income this quarter, or $86493 each month to add to the annuity income for Jan., Feb. and Mar. 
For the 2nd and 4th Quarters we'll have $3770.07 left in the 401K withdrawals to add to our income, or $1256.69 each month as the IBs aren't so much in those quarters.
For the 3rd Quarter we'll only have $1933.02 left in the 401K withdrawal to add to our income, or $644.34 each month.

So after taking the IBs dedicated amounts off the top of the 401K withdrawals here is what our net "income" will look like per month--
Jan. $4038.06
Feb. $4038.06
Mar. $4038.06
Apr. $4429.82
May $4429.82
Jun. $4429.82
Jul.  $3817.47
Aug. $3817.47
Sep. $3817.47
Oct. $4429.82
Nov. $4429.82
Dec. $4429.82
$50,145.51 Total for 2018 to pay all the variable bills per year.
(Plus $8,545.29 tucked away to pay the IBs for the year.)

So this is the financial game plan heading into 2018.

Questions?
Comments?


Sluggy

The Money Going Into Retirement

If you've been reading here for awhile you may remember the post I did back in September 20115 about our big Retirement Meeting.

Since Hubs is leaving work on June 30th(7.5 weeks and counting!)I wanted to see/update what funds we will have to support us at that date into our "Golden Years".

Let me also preface this accounting by saying we have a paid for house and two paid for cars so none of this money needs to be spent on either in retirement(at least not for cars for awhile).


* Pension account--Approx. $443,240 will be in that account on June 30th.  We ares buying an annuity with this money which will give us an income of $41,004 per year.  If Hubs dies I get 75% of that amount, or $30,756 per year. Once we've passed the 10.8 year mark we'll be paid on the company's dime as that is how long that pile of money would have lasted if we had just drawn down on it at a rate of $41,004 per year(ok, maybe a little longer due to interest accumulating).

* Retirement Savings--$500,000.  We will drawn down monthly on this until we hit full Social Security.  At that point we will stop and still have $385,000 in this account.  Due to it still growing while drawing out of the account we'll still have 77% of what we started with in there at the retirement date when we stop drawing from that fund in 2024.

* Cash & Regular Savings--All together this comes to $368,000 now so will be a tad more by June 30th but a chunk will be used to pay College Boy's tuition next semester so we'll have about $360K.

* HSA account--When Hubs leaves June 30th there will be $12,923.83 in that account.

* RMSA account--This is the retiree medical savings account with which we can pay for retiree health insurance until we hit Medicare age.  It will have approx. $99,000 in it.

* Personal Day Payout-Hubs will have personal days he can cash out when he leaves.  At his pay rate that means another $4,500 in cash.

* Stock-Hubs has a moderate amount of company stock he earned when his firm went public in 2001.  He will cash it out which means about $9,000 more in our accounts.

* Add in to this mix that we still have a home and property in Louisiana we will be selling sometime this year(I hope).  We hope to clear a few dollars after that sale but at this point we don't know how much this sale will add to our coffers.



So the plan is that we'll have annuity income starting in July of $41K yr. and will tap some of our 401K$ until Hubs hits full SS age.
Between the annuity and 401K withdrawals or SS we'll have $70K yr. to live on pre-tax.
In addition to those income streams we will still have over $350K of regular savings + $385K left in retirement savings).
Once I hit full SS age the annuity/SS mix increases to $82,836 yr.(+ what's still in the nest egg accounts).

Last year we spent just under $46K total of our take-home income to "live".  That's paying for everything except-term life insurance payments, healthcare insurance payments and long term care insurance payments which all came out of the paycheck before we got it.

After figuring that last year we paid $8K OOP for healthcare co-pays + a $3K high deductible OOP before benefits kicked in, $11K of that $46K was medical spending. 8-(  We actually spent $35K for living expenses in 2016(outside of medical things).

Once retired the life insurance payments go away(unless we elect to keep life insurance on Hubs....doesn't make much sense though as it was kept on him as he was the breadwinner, but once he retires we aren't "protecting" potential income).

The health insurance payments/premiums once retired will come out of the RMSA account and it should just about cover that expense until we hit 65.(If it doesn't, and who can know right now with the ACA upheaval, we can always take some of our non-retirement account funds or some retirement account funds to cover the extra...plus we have the HSA with almost $13K in it as of June 30th.)

The only one of these three medical expenses we need to cover in retirement out of our two income streams is the long term care premiums.  Currently long term care premiums come to just under $1800 a year so this expense can be absorbed into our $70K year annuity/retirement account draw down income easily.  We know full well that long term care premiums will rise as we age though so we'll be sure to be cognizant of that expense rising over the years and make adjustments in how our financial resources are divided up so we can still cover this expense.

So add $1800 to the $46K we spent to live in 2016 and we are around $48K in yearly expenses that need to come out of our potential $70K retirement income starting July 1st.

Once we take out withholding/taxes on that $70K yearly income we will actually have $60K+/- a year net income to live off of.  Of course for 2017 this won't apply as we will have Hubs working income for half the year and living off of asset income the other half so our "income" and tax bracket will be much higher.  The first 6 months of retirement will be different financially from the rest of the years ahead when we are retired.

Once we get into 2018, if we keep our spending at where it is now, pre-retirement, we will have a nice cushion each year for any unforeseen expenses leftover from our income stream.  This doesn't count the Personal and Non-retirement Savings/Cash pot, the potential Stock Sale revenue, the cash out of Personal Days when Hubs leaves and the proceeds from the sale of the house in Louisiana which will mean additional infusions of cash into the non-retirement kitty.

I really don't see us reducing our living expenses short term due to College Boy still being on the "family payroll" for another year and Daughter living at home until she finishes her degree.  While Daughter's expense on us is not large(we feed her and she doesn't kick in for rent or utilities while in school)her being here still costs us a bit in higher electric and food bills.  She pays her own car insurance, car gas and maintenance, cell phone bill, dog expenses, clothing expenses, etc. and any extras she wants, she pays for(liquor, vape, nights out).
Come to think of it, outside of college expenses we really don't spend money on College Boy either.....maybe some clothes now and then but that's it.

Ok, this has become very long and tedious and I'll bring it to an end.

If you see anything I have missed do let me know but overall, I think we are going into retirement in a strong financial shape.  8-)
*Sluggy pats herself on the back.....


Sluggy