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Cutting expenses to know your retirement needs

10,176 Views | 74 Replies | Last: 3 mo ago by infinity ag
jamey
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9:54p, 7/10/24
AG
Anyone here tried cutting expenses to see how much they really need to live on in retirement yet?

Wife went crazy on a CC so we changed the budget around. We knew we were wasting money, mostly just being lazy and ordering food and eating out a lot but just how much was a wakeup call. I knew we were burning thru about $600 a week for no good reason but how easy it was to cut those cost down from about 600 to about $150 was a surprise. I also happened to lose about 10 lbs.

To offset the grocery budget we started going to costco for deals on anything we could use a lot of, plus we make the 1.50 hotdog a family outing.

Were doing some smaller things, and cleanup like canceling recuring charges like myfitnesspal, which I don't need if I just stop eating out

In total its around 20 to 25K in unnecessary spending we've identified. It may be more because the vacation budget moved into my half of the $600.

What have you found? It sounds obvious in hindsight but evrry one of those weekly family outings to a restaurant for $100, amounts to 5K a year. For us I think covid got us in a bad habit that got out of control. Now we're shoving that money into a taxable account
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BenTheGoodAg
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10:59p, 7/10/24
AG
There are some clear ways to cut spending as it relates to retirement - No more 401k contributions, less cost commuting to work, cheaper clothes, etc.

That said - I think your question isn't limited to retirement spending, but more about things you do to understand your basic needs and keep your expenses in check. I think you're on to some big ones. Eating out, new vehicles, vacations are easy targets where you can spend a lot of money with lower return. There is nothing wrong with any of those things, but pound for pound, they'll burn through your budget quickly. I'd add - look for things you pay people for that you can do yourself - ie lawncare, or basic handyman work, or cleaning your house, etc. I think people pay for a lot of services that they can do themselves.

But I'll offer two 'non-spending' things to consider
- Make it a regularly thing to budget and track expenses. When you understand what you're spending, you're more likely to find opportunities to save, or areas where you are overspending. Most people are just on autopilot.
- Work on your contentment. I like the metaphor someone gave me that contentment is a muscle. It takes time and practice to strengthen it. It's a conscious decision you have to make regularly, but it gets easier and you get better at it. When you're content, you naturally spend less on things. Comparison is the thief of joy.
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jamey
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In reply to BenTheGoodAg • 11:09p, 7/10/24
AG
Those are some great points and I suspect contentment is a large factor in any individuals cost of living

I've made it past contentment level 1, a nice truck. I'll buy a new one every 10 to 15 years.
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Ribeye-Rare
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In reply to jamey • 11:12p, 7/10/24
AG
jamey said:
Wife went crazy on a CC
Ah, if I had a nickel for every husband (including myself) who has ever uttered that phrase.

I feel your pain.

Good luck, and I hope you don't get anything thrown at you other than the standard verbal and emotional abuse.
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jamey
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In reply to Ribeye-Rare • 11:19p, 7/10/24
AG
Ribeye-Rare said:
jamey said:
Wife went crazy on a CC
Ah, if I had a nickel for every husband (including myself) who has ever uttered that phrase.

I feel your pain.

Good luck, and I hope you don't get anything thrown at you other than the standard verbal and emotional abuse.


It was a 10K surprise. I wasn't mad but I spend a lot of time on our retirement game plan and that wasn't part of it. We just had to redirect the budget to a 0% CC to get rid of it, just in time for the 2024 kickoff
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AgOutsideAustin
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In reply to jamey • 8:14a, 7/11/24
AG
10K surprise and not mad?

Better man than me.
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Red Pear Luke (BCS)
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In reply to AgOutsideAustin • 8:26a, 7/11/24
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AG
AgOutsideAustin said:
10K surprise and not mad?

Better man than me.


Yep. I forced us to move to a debit card only based spending system and threatened that if we don't start getting in the same boat on these things, I'm going to force us to solely go to cash and no debit cards. It's just too easy to "I door dashed lunch….it only costs $32 with tip!" And my response was "you door dashed lunch for the 4th time this week…."

I despise door dash.
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htxag09
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9:07a, 7/11/24
AG
This seems more like a budgeting thread vs a retirement calculation thread?
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LMCane
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10:54a, 7/11/24
you are leaving out how much your health care for two will cost once you are retired

versus not buying a cup of mocha joe
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jja79
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11:18a, 7/11/24
AG
As a very recent retiree I test drove retirement and living on my expected budget for 8 months last year. I purged any redundant auto charges, eliminated others, became a sandwich making wizard and only treat myself to lunch out on the weekend. Where I live all I need is golf clothes so I took my clothing budget to nearly nothing. I do most of my commuting by golf cart so the gas station seldom sees me. I'm single so I don't have to deal with or train someone else to go minimal with me.

Long story short - when I was making the income I made I seldom had to think about spending. Now that I have a set target income each month I found a way to live within that budget and even have money left over. It wasn't that hard when you really look at the wasteful spending most of us do.
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AgOutsideAustin
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In reply to jja79 • 11:51a, 7/11/24
AG
You're the man JJ ! I know everyone has their own situation but for other retirees here I wonder what percentage of pre retirement income they live on now? 70%, 80% ?? Do they travel/hobbies and spend near the same as before?
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Aust Ag
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1:32p, 7/11/24
AG
Mid-level Regional Sales Mgr at my company recently basically asked to be demoted to an Account Rep, so he could spend the last working years relatively stress free. Got to keep most of his old salary (little less now on commissions) , vacation time and most importantly, his insurance . No more overnights.

Checked his ego at the door, and really likes his decision. I'm thinking I might do the same in next few years. "Downsize yourself at work".
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jamey
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In reply to htxag09 • 1:50p, 7/11/24
AG
htxag09 said:
This seems more like a budgeting thread vs a retirement calculation thread?


Knowing what you really need to live on in retirement is a budgeting exercise I bet not many have really dug into

It's both imo
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jamey
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In reply to LMCane • 1:50p, 7/11/24
AG
LMCane said:
you are leaving out how much your health care for two will cost once you are retired

versus not buying a cup of mocha joe


The mortgage being paid off effectively makes up for Healthcare costs


The cup of Joe could be an issue
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htxag09
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In reply to jamey • 1:55p, 7/11/24
AG
jamey said:
htxag09 said:
This seems more like a budgeting thread vs a retirement calculation thread?


Knowing what you really need to live on in retirement is a budgeting exercise I bet not many have really dug into

It's both imo

For sure. But seems 90+% of what the op was about were things every person should be doing or be aware of, whether they're 20 or 60.

Realizing you spend $1k a month on Uber eats and don't want to isn't a retirement exercise, it's a general lifestyle and budgeting exercise.

Also, just saying well when I retire I'll need to cut back so that's $1k less a month I don't need to account for is dangerous (not at all saying this is the OP). It's hard to make those changes, that's something that would need to change now. Not like it just becomes easier to eat in because you're retired. If anything you may get more stir crazy and want to eat out just for a change of scenery.

IMO, retirement line item planning is more like no more 401k, HSA, commuting for work, mortgage paid off in x years, etc so removing or reducing those line items. But adding things like health costs and insurance, potentially travel with the free time, costs for hobbies, etc.
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double aught
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2:05p, 7/11/24
AG
People regularly using Uber Eats/Door Dash when they are able bodied and have a functioning vehicle blow my mind. Don't get it at all.
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htxag09
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In reply to double aught • 2:13p, 7/11/24
AG
double aught said:
People regularly using Uber Eats/Door Dash when they are able bodied and have a functioning vehicle blow my mind. Don't get it at all.

I use Uber eats once a month because we get a monthly credit, but even then I just use it to order and go pick it up. Sometimes I'll wait to order until I'm at the restaurant so I can enjoy 10 minutes at the bar in peace
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Caliber
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In reply to Aust Ag • 2:13p, 7/11/24
AG
Aust Ag said:
Mid-level Regional Sales Mgr at my company recently basically asked to be demoted to an Account Rep, so he could spend the last working years relatively stress free. Got to keep most of his old salary (little less now on commissions) , vacation time and most importantly, his insurance . No more overnights.

Checked his ego at the door, and really likes his decision. I'm thinking I might do the same in next few years. "Downsize yourself at work".
My plan in 5 years or so is ask to go part time, 30-32 hours a week with benefits.
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double aught
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In reply to htxag09 • 2:25p, 7/11/24
AG
Quote:
Sometimes I'll wait to order until I'm at the restaurant so I can enjoy 10 minutes at the bar in peace
Love this move. I've used it ever since we first had kids ten years ago. "Kitchen was really backed up. Sorry it took so long"
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infinity ag
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In reply to Ribeye-Rare • 4:26p, 7/11/24
Ribeye-Rare said:
jamey said:
Wife went crazy on a CC
Ah, if I had a nickel for every husband (including myself) who has ever uttered that phrase.

I feel your pain.

Good luck, and I hope you don't get anything thrown at you other than the standard verbal and emotional abuse.

My wife goes crazy on buying clothes. Years ago, she used to waste money on all kinds of junk for the house and I would quietly go and return them and she wouldn't even know.

After observing women over decades,I believe that women are terrible with money and no amount of woke brainwashing can change this fact.

These days though, she spends money on organic food. Yes it is expensive but we hardly ever fall sick and have practically no health bills. She also cooks at home and good healthy stuff too. We order takeout just once a week on Fridays.

I never do Grubhub/UberEats for us. Never have. Only time I have used it is to order food for my son who is either in college or in some city doing an internship. It's a good welcome change for him.
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jamey
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In reply to Aust Ag • 5:50p, 7/11/24
AG
Aust Ag said:
Mid-level Regional Sales Mgr at my company recently basically asked to be demoted to an Account Rep, so he could spend the last working years relatively stress free. Got to keep most of his old salary (little less now on commissions) , vacation time and most importantly, his insurance . No more overnights.

Checked his ego at the door, and really likes his decision. I'm thinking I might do the same in next few years. "Downsize yourself at work".


I plan to do similar, but I don't think I'll be able to do so within the same company and salary.

I'm basically looking at working longer for less, probably a lot less and into my 70s without much stress and may start it as early as late 50s. I'll find something that's enough to keep the mind and body active

I've seen so many people burn though it all the way up to 65 or 68, fully retire and not last much longer after that
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jamey
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In reply to infinity ag • 5:53p, 7/11/24
AG
infinity ag said:
Ribeye-Rare said:
jamey said:
Wife went crazy on a CC
Ah, if I had a nickel for every husband (including myself) who has ever uttered that phrase.

I feel your pain.

Good luck, and I hope you don't get anything thrown at you other than the standard verbal and emotional abuse.

My wife goes crazy on buying clothes. Years ago, she used to waste money on all kinds of junk for the house and I would quietly go and return them and she wouldn't even know.

After observing women over decades,I believe that women are terrible with money and no amount of woke brainwashing can change this fact.

These days though, she spends money on organic food. Yes it is expensive but we hardly ever fall sick and have practically no health bills. She also cooks at home and good healthy stuff too. We order takeout just once a week on Fridays.

I never do Grubhub/UberEats for us. Never have. Only time I have used it is to order food for my son who is either in college or in some city doing an internship. It's a good welcome change for him.



We hunt, they gather. I think its in our DNA

Drive thru any city and keep track of each business and whether it's for men vs women, ignoring stuff that's for both like a restaurant


Women drive a chunk of the economy
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jamey
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In reply to htxag09 • 5:57p, 7/11/24
AG
For us it's not a when we retire exercise though. We're changing the budget and how we live as a result now so it's enduring or at worst, a conscious change back to bad habits in retirement. A side effect on the food will be better health and Healthcare costs, whatever that number is. I've already lost 10 lbs.

I consider this exercise a correction as much as check sum on retirement life.
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Toros23
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In reply to double aught • 6:11p, 7/11/24
AG
double aught said:
Quote:
Sometimes I'll wait to order until I'm at the restaurant so I can enjoy 10 minutes at the bar in peace
Love this move. I've used it ever since we first had kids ten years ago. "Kitchen was really backed up. Sorry it took so long"


Currently doing this as I texag. Cheers boys
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jja79
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In reply to jamey • 7:19p, 7/11/24
AG
I hope you're wrong about a guy going hard until 67, retiring and not lasting much longer.
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Hoyt Ag
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In reply to jamey • 9:41p, 7/11/24
AG
jamey said:
Aust Ag said:
Mid-level Regional Sales Mgr at my company recently basically asked to be demoted to an Account Rep, so he could spend the last working years relatively stress free. Got to keep most of his old salary (little less now on commissions) , vacation time and most importantly, his insurance . No more overnights.

Checked his ego at the door, and really likes his decision. I'm thinking I might do the same in next few years. "Downsize yourself at work".


I plan to do similar, but I don't think I'll be able to do so within the same company and salary.

I'm basically looking at working longer for less, probably a lot less and into my 70s without much stress and may start it as early as late 50s. I'll find something that's enough to keep the mind and body active

I've seen so many people burn though it all the way up to 65 or 68, fully retire and not last much longer after that
I have passed up 2 promotions in a year to keep the life I have at home. Single, no kids. I like to travel, fly fish and hunt in that order. There is not enough money to make me deviate from that. Probably a career limiting move but I am good where I am at. I cannot imagine taking on any more professional responsibility. Vps at our company are run ragged and last about 3 or 4 years. I just do not see any upside.
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one safe place
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In reply to double aught • 10:15p, 7/11/24
double aught said:
People regularly using Uber Eats/Door Dash when they are able bodied and have a functioning vehicle blow my mind. Don't get it at all.
Major waste of money as is eating out a lot. And it has only gotten worse as prices have skyrocketed over the past couple of years.
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EliteZags
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In reply to double aught • 11:03p, 7/11/24
AG
double aught said:
Quote:
Sometimes I'll wait to order until I'm at the restaurant so I can enjoy 10 minutes at the bar in peace
Love this move. I've used it ever since we first had kids ten years ago. "Kitchen was really backed up. Sorry it took so long"

"honey, this is the third time you've picked up wings from Twin Peaks this week"

"ok I'll get steaks from Spearmint Rhino tomorrow"
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infinity ag
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In reply to jamey • 8:06a, 7/12/24
jamey said:
infinity ag said:
Ribeye-Rare said:
jamey said:
Wife went crazy on a CC
Ah, if I had a nickel for every husband (including myself) who has ever uttered that phrase.

I feel your pain.

Good luck, and I hope you don't get anything thrown at you other than the standard verbal and emotional abuse.

My wife goes crazy on buying clothes. Years ago, she used to waste money on all kinds of junk for the house and I would quietly go and return them and she wouldn't even know.

After observing women over decades,I believe that women are terrible with money and no amount of woke brainwashing can change this fact.

These days though, she spends money on organic food. Yes it is expensive but we hardly ever fall sick and have practically no health bills. She also cooks at home and good healthy stuff too. We order takeout just once a week on Fridays.

I never do Grubhub/UberEats for us. Never have. Only time I have used it is to order food for my son who is either in college or in some city doing an internship. It's a good welcome change for him.



We hunt, they gather. I think its in our DNA

Drive thru any city and keep track of each business and whether it's for men vs women, ignoring stuff that's for both like a restaurant


Women drive a chunk of the economy

You are right. Women are also more FOMO (Fear of Missing Out) driven than men. Vastly different. I don't really care if a friend has a fancy Mercedes. It used to bother my wife a lot. How come she has one and we don't? She is better now but 20 years ago it used to cause a lot of stress and I am not the type who does things because someone else did so (unless it makes sense to me). But women are not that way, they are constantly competing among themselves. Even sisters compete, men get along and help each other succeed. That is why there are so many "influencers" targeting women on instagram.
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infinity ag
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In reply to one safe place • 8:07a, 7/12/24
one safe place said:
double aught said:
People regularly using Uber Eats/Door Dash when they are able bodied and have a functioning vehicle blow my mind. Don't get it at all.
Major waste of money as is eating out a lot. And it has only gotten worse as prices have skyrocketed over the past couple of years.

Not just waste of money, the food is geared to taste good, not be healthy. So people eat oil and butter and sugar filled food that tastes good but gives them health problems down the road.
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MyNameIsJeff
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8:48a, 7/12/24
AG
We've worked on this quite a bit over the last two years. The main driver was my wife getting laid off (not unexpectedly), and this turning into her staying at home with our young son and now a second. We went from grossing about $200k at 30 with no kids to half that and two kids in a pretty short time frame. New F250 gone. New Expedition gone. I have manually tracked every single transaction we have made since 1/1/2023 in my budgeting excel file. We've reduced our monthly spending on average by over $3,000. The largest part of this was getting out of two high vehicle payments. The rest has been shopping for things like auto insurance, conscious spending in other categories, limited eating out, keeping my wife out of Target, etc. The crazy thing is, I don't feel like our quality of life has decreased.

Tying this into retirement, I use the 25x rule as a loose rule of thumb to project when we can call it quits. My goal amount is directly based off my average monthly spending, so I see my finish line being attacked from both sides as we continue to invest (although a much smaller amount than when my wife was working) and the total amount required drops as we shave expenses.
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jamey
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In reply to infinity ag • 9:13a, 7/12/24
AG
infinity ag said:
jamey said:
infinity ag said:
Ribeye-Rare said:
jamey said:
Wife went crazy on a CC
Ah, if I had a nickel for every husband (including myself) who has ever uttered that phrase.

I feel your pain.

Good luck, and I hope you don't get anything thrown at you other than the standard verbal and emotional abuse.

My wife goes crazy on buying clothes. Years ago, she used to waste money on all kinds of junk for the house and I would quietly go and return them and she wouldn't even know.

After observing women over decades,I believe that women are terrible with money and no amount of woke brainwashing can change this fact.

These days though, she spends money on organic food. Yes it is expensive but we hardly ever fall sick and have practically no health bills. She also cooks at home and good healthy stuff too. We order takeout just once a week on Fridays.

I never do Grubhub/UberEats for us. Never have. Only time I have used it is to order food for my son who is either in college or in some city doing an internship. It's a good welcome change for him.



We hunt, they gather. I think its in our DNA

Drive thru any city and keep track of each business and whether it's for men vs women, ignoring stuff that's for both like a restaurant


Women drive a chunk of the economy

You are right. Women are also more FOMO (Fear of Missing Out) driven than men. Vastly different. I don't really care if a friend has a fancy Mercedes. It used to bother my wife a lot. How come she has one and we don't? She is better now but 20 years ago it used to cause a lot of stress and I am not the type who does things because someone else did so (unless it makes sense to me). But women are not that way, they are constantly competing among themselves. Even sisters compete, men get along and help each other succeed. That is why there are so many "influencers" targeting women on instagram.


I think its fundamental gather vs hunt

First to make it to the bush of berries wins!

We must work together to take down this Mammoth
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Diggity
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9:16a, 7/12/24
AG
the clear answer to this "retirement thread" is to knock off the wife.
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MyNameIsJeff
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In reply to Diggity • 9:26a, 7/12/24
AG
Diggity said:
the clear answer to this "retirement thread" is to knock off the wife.
Nah... When (if?) mine goes back to work when the kids get into school, our plan is to shovel 100% of her income into stock market or real estate investment to bring our retirement up sooner.

Hoping to retire the day my youngest starts college.
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I bleed maroon
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In reply to MyNameIsJeff • 9:50a, 7/12/24
AG
MyNameIsJeff said:
Diggity said:
the clear answer to this "retirement thread" is to knock off the wife.
Nah... When (if?) mine goes back to work when the kids get into school, our plan is to shovel 100% of her income into stock market or real estate investment to bring our retirement up sooner.

Hoping to retire the day my youngest starts college.
As your unpaid, unprofessional advisor, I'd say work 4 more years and wait till they finish college, if you are satisfied with your job.

By the way, my deal on college was:
  • Get into the best university you can for your chosen degree
  • Take as long as you want to finish
  • First 4 years are paid for
  • After that, you're on your own
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