My FIRE Budget Didn’t Account for This

Are you worried about neglecting to budget for key expenses in early retirement? Even if you put good effort into creating your FIRE budget, it’s easy to miss some very important items. In this episode, Jason and Eric discuss these commonly forgotten or underestimated expenses, including healthcare costs, taxes, dealing with inflation, and more.

Show notes may be found below the video

Show Notes

Essential Background:

  • Have you seen our two prior episodes on healthcare? The first, “Healthcare is my Second Highest Cost in Early Retirement” captures our comprehensive conversation about retiree healthcare that we had with an HR benefits expert. The second, “Don’t Let the Cost of Healthcare Break Your Early Retirement Plan” picks up where the first episode left off, digging into ACA subsidies, selecting plans, and considering the total cost of care.
  • In today’s video we touch on the topic of supporting family members including adult children. This isn’t the first time we’ve touched on the topic of our kids. In fact, we put out a two-part series of episodes on issues relating to children in the past (part 1 and part 2).
  • Towards the end of today’s episode, we talk about the utility in consulting with fee-only financial advisors. if you missed our earlier video titled “We Each Hired a Flat Fee Financial Advisor. Was It Worth It?” you’ll definitely want to check that out. This link will take you to the show notes for the episode, which includes a link to the video as well a number of associated resources.

Budgeting for lumpy or future, unplanned but eventual expenses can be tricky but is also essential to do. This article on Fritz Gilbert’s (Retirement Manifesto) own approach is a great resource to get started. In this method, he budgets for large spending down the road (like a replacement roof for a home) via sinking funds. Have a look at this and see what you think about his approach.

XY Planning Network was mentioned in this episode as an option for finding a fee-only financial advisor. As described on the site, their member advisors ascribe to fiduciary and CFP® standards, earn no commissions, and require no minimum assets. They have convenient filters to allow searching by advisor specialities, including those with FIRE experience. Many work under multiple fee models, including advice-only, which can be a good source for one-time consults without any

Required Minimum Distributions (RMDs) are an IRS-mandated specific sum of money that you must withdraw from traditional IRAs or an employer-sponsored retirement account each year. This article from Fidelity provides a simple introduction to the topic. At the time we filmed this episode, RMDs were required to begin at age 72. However, the recently passed Secure Act 2.0 will raise the age to 75. This article from Kiplinger covers this change and other revisions to RMDs you’ll want to know about.

What are the longest US runways? Well, it turns out that Bangor Airport doesn’t make the list after all. However, according to Wikipedia it is “the first major American airport encountered by airliners approaching the United States from the east and the last for airliners heading towards Europe. It is more than two miles (3.2 km) long and an uncluttered airspace, it offers a place to land in case of bad weather at an airplane’s destination, bomb threats, or passengers who prove unruly or are discovered to be on the TSA No Fly List.” So the runway there is still really long and pretty important!

You can find information on the tools we mention in each episode along with additional information in the Resources section of this site.

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