Working isn’t free. It costs money. This is good news and bad news.
It’s bad news because usually the whole point of working is making money. So, any money you spend to work (to make money) is money you don’t have. Pretty simple, right?
But, this fact of spending-money-to-work also has an upside. The upside is that you don’t have to spend that money-you’re-spending-to-work when you’re not working. Less overall spending in retirement means you should be able to get to retirement faster.
This made me curious:
What expenses do we have now that we won’t have in retirement?
Let’s take a look at those numbers now.
When you’re not working, you don’t need to pay for LTD or life insurance.
- Taxes: $18,594.18
With no payroll taxes to pay, and a smart Roth conversion ladder strategy in place, that means a smaller retirement budget.
- Work: $8,668.47
- Automobile: $2,063.73
I’m going to assume 1/2 of our usual auto expenses in retirement.
This drops our outrageous spending figure of $84,762.97 for 2017 to $53,878.29 in retirement.
Yikes. That’s still relatively gigantic by FI standards (twice that of MMM.) It looks like we still have a while to go!