A New Retirement Budget for a New Year - Sort Of

 

Sooo, at the moment I am not interacting with my family. The combined long term care/rehab center that is one of two facilities my daughter travels to has seven positive Covid cases.  She is only treating two, but because of this we will not be visiting and she will not be stopping by.

At some point she has offered to come by and pick up my clothes and bring them back if I leave them outside, and we will probably be able to talk then from twelve feet apart with me on my patio and she in the parking lot, but our every ten day get togethers and her occasional stop-by visits are on hold. Not sure how they decide safety issues but I assume it is probably fourteen days after the last positive test. So for now, I am incommunicado with pretty much everyone except the nice folks who load my groceries and the people I see on my walks that I wave to and briefly chat with. And zoom pals. A washing machine is one of my February goals. I see lots on FB marketplace, but they would have to be trucked in and installed, so I need to compare that with a basic model at the new appliance store.

Anyhoo, to the topic at hand. The budget, or my halfway version of a retirement budget. I rarely share annual budgets, not because I object to sharing numbers that are specific (I've done that more than often enough) but because I don't do a budget as such. Generally I do an end of the year summary recap of where everything has gone,  both for the readers and myself-this year between Covid, moving and who knows what else, I'm ignoring that step. I have shared new budget numbers each time I've moved and went in to depth when I arrived in Denver. Since I am in a new place, with a couple large number differences, I figured this is the year I would "plan" rather than "adjust after reviewing", or at least plan as much as a seat by her pants retiree can do, if you will.

I've been here in the Lone Star State long enough that I have a fair idea of what everything will cost. I've done online shopping, gotten groceries and delivery, received my first and my second bills in almost every area, changed over insurances, adjusted medical coverages for the new year, and all that other good jazz.  So here we are.

I suppose this is not an actual budget, but a guideline if you wills (and I expect the percentages will not exactly add up to that just under 3000 money total:

1.  Because I get my secondary insurances through my husband's employer, ALL of my medical coverage is gone before my bank deposit. This includes Part B, my retiree health insurance, and added this year, a high option dental package with no waiting period and no maximum benefit amount-of course, I'm unsure when I will be comfortable in using said dental coverage and treatments. This  is approximately ten percent of my income in total. Yes, I am aware of what these numbers seem like to many of my readers. There are both advantages and disadvantages to working for the feds and they are pretty equal. This one is an advantage.

2.  My monthly, regular/stable bills average around forty five percent right  now. These include rent, electricity (heat is electric), internet (no cable), my unlimited data cell phone, car insurance, renters insurance, the few subscriptions I have (Prime, Netflix, and so on), and church/charity commitments.  Some of these are optional and are not what others would consider generally as "bills" or "commitments", but I've included everything that is regular each month, and these are all auto debited.

 At the end of the year, and when I do my monthly and annual Quicken updates, I do break these down more (housing, utlities, subscriptions, auto costs). But for budgeting purposes, these fall under "monthly commitments" for my general planning.  I do expect some minor adjustments here. The temps have not been much below fifty degrees for heat purposes,  and even though I have ceiling fans in every single room I see the electric possibly jumping a bit mid summer (I prefer to pay the amount each month rather than average). And my car insurance is at liability and I may wish to add collision/comprehensive. We'll see. I also at some point, may break down and actually add minimal cable......it depends on how much I miss sports as sports returns to more normality.

3. This leaves approximately 45 percent for the rest (I can see the above jumping to fifty and the what's left to forty percent, which is peach however it works out). Now, truth be told, in normal years, this would simply be a lump and I would transfer what was left at the end to savings. This is how it has been the last few years.  But I rely on pension and social security, rather than pulling extra out of investment accounts for emergency or other large payment. 

So this year, I am going to try, try mind you, to put if not half of this then a third into the first two categories which probably really should be combined into one. I have been lucky enough since I sold my house (and because of my health care choices) to have no large unexpected expenses (we won't discuss the moving thing for now). But have some possibly looming categories (see below). While I generally don't feel hampered with my two legged stool being SS and pension, there are occasions like this when I look ahead, as it's not just a case of taking out an extra couple percentages from my retirement in the next year.

• Savings/Emergencies: Mainly to be used for unexpected and emergency expenses including those of my kids and to be put away to help kids by either buying into home or adding on a mil area when time comes (my monthly income is enough that if kids have access to it all, with some savings and my medical insurance they should be able to do whatever they need for me). My health insurance covers anything that Medicare does not cover, so while I may have occasional out of pocket costs, I am not worried at this time about a giant scary bill. I do however need to plan for those in home care expenses  that often are not covered right now by insurance.
• Savings/Sinking fund: For any long term plans, including travel and vacations when we can get back to it properly, car expenses (never again will I finance a car, ever), annual contributions to kid's IRA funds, and anything else undefined that is a want and not a real emergency.
• Groceries/Household Supplies and Needs:  Food, household necessities and small household items as needed (like a drying rack for my kitchen), basically anything that I can order via the grocery section of Walmart or Kroger. In reality I do NOT get personal products or paper products from the grocery but from Subscribe and Save or Target (I really like their Everspring brand). I suspect this amount is VERY generous, but that's okay. Anything not used will be carried over to the next month (I use a kind of virtual or written only money envelope system). This also includes four prescriptions gotten monthly, all generic. If I were to add a medical category it would be about 25.00.
• Spending:  Everything else that I might spend on on a weekly or monthly basis.  Stuff for the house, crafting stuff, clothing and shoes, entertainment when we can entertain ourselves again, kindle books.  Right now, that spending includes mainly take-out, additional entertainment subscriptions for at home sanity, stuff for the apartment, and an awful lot of crafting/creating/general self entertainment supplies.  I think (hope) that by the last third of the year that spending will be directed more in areas of clothing, dining out, day trip expenses and other such things (of course, I could be dreaming, who knows). Again, anything not used one month is simply added to the virtual money envelope.

Not included in this general plan:  My insurance company reimburses me for part B, so I'll receive that monthly deposit of $140 or so (I have not even looked yet to see what  the new part B cost actually is), and any pension COL increase if we get one (not usually decided until well after the first of the year and started in March or April). Also not included are gift cards earned or doing things like volunteering for research panels or in person consumer surveys, or occasional income done by doing online research on a contract basis-rare but fairly well paying for someone who can read and scan quickly.

All of these secondary sources are used as spending. Common wisdom would say to automatically add these to savings and in a pre-retirement world, obviously i would. In my current retirement life, knowing my long term plans, I prefer to spend this money on my current quality of life, and direct money from any of the areas above into savings or sinking funds as needed.

So there you have it. My budget plan/spending plan whatever we shall call it for a new year, in a new place under new and unusual (for now at least) circumstances).  It's as much of a plan as I can put together and as always a moving target. Now I can put the planning aside and go back to my spur of the moment life. If only Covid would allow me to do so in full!!!

And so ends the annual budget post.

Note: In Texas at least, we are at 1B vaccination wise, to include those 65 and above and those with chronic contributing conditions. Since I am 69 and have at least one of those, I qualify. Some people managed to get one of the few that our county health department had at a drive up vaccine site. I'm keeping my eyes open and my phone alert but it could be next week or it could be February. My daughter cannot get one yet, and I'm ambivalent about that. On the one hand I understand that "medical people" can include everyone from hospital workers to the guy or gal who checks your eyes and that's a wide net. And I do think that it helps the overall case load if those of us who are at risk are vaccinated sooner rather than later. On the other hand, if you work in a facility with at risk, occasionally positive patients.........