II. 42 more years of rising expenses (it's not a pretty sight)
This graph is Fidelity's projection for my annual income and expenses. My comments follow the graph. [View first post in this series.]
My annual income / expenses
My comments
- Expenses start at $61,331 / year -- not including State or Federal income taxes (assumptions at bottom of this post).
- Fidelity projects my total outlay -- including taxes -- to top out in 2044 at $319,970 / year.
- At age 65 (for me, year 2020), Fidelity's recommendation of $523 / month (per person) has been used for medical / Medicare costs.
- With Fidelity's numbers, medical / Medicare expenses represent 33% of my non-tax budget at age 65 (year 2020).
- Because health care costs are expected to increase more rapidly than other areas, by 2044, Fidelity projects medical / Medicare will consume 61% of my non-tax budget.
- Projections based on Fidelity's inflation numbers -- which I fear may be optimistic. (assumptions at bottom of this post).
Fidelity projects average medical / Medicare costs for a couple my age will run $167,717 / year by 2044. [Fidelity's planning tool uses 7% inflation for medical -- well under the double-digit increases I've experienced the past couple of years.]
I. Can my retirement plan stand the test of time?
II. 42 more years of rising expenses (it's not a pretty sight)
III. My current plan passes by a wide margin
IV. Whats the max I can safely spend each year?
V. What happens if I assume more market risk?
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Financial experts tell us: Withdraw no more than four percent of savings a year; allocate investments in a balanced mix of stocks and bonds, etc." This advice, while good, is generic - and does not take into account the many peculiarities of my financial situation ... Read
With my total outlay projected to grow to an eye popping $319,970 / year, how well does Fidelity think my current retirement plan will weather the test of time? To come up with the results below, Fidelity's retirement program ran my current financial plan through ... Read
I also wanted to know how much more I could "safely" spend. So I played with expenses to determine what point I become exposed to a 10% chance of running out of money at age 92. The results below assume expenses begin at $6,444 ... Read
