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| Wow, very mature Stealthy Wealth, very mature... |
So how do you determine what your cost of living will be in retirement? Well I proceeded as follows... I started off with our household's current monthly expenses. From there I tried to determine which of the expenses would still be relevant if we were to retire. Then, from there I did my best to think of any additional expenses which would come into effect once we start retirement (maybe the missus and I join the bowls club or something like that :))
I am also hoping that I get some feedback from all of you - maybe I forget something obvious, or you think joining a bowls club is a total waste of money!
So here we go... First up our current monthly expenses.
A List Of Our Current Monthly Expenses
Below is a list of expenses that is on our current monthly budget. I have put some comments in, but sho, some of these warrant a blog post all on their own - which I will hopefully get to some day....
| Expense | Comments |
| Bond Repayment Stealthville | The run of the mill bond repayment for our primary residence |
| Stealthville Levies | Sectional title, so the usual. Also covers insurance of the building. |
| Stealthville Rates | Tshwane wants their cut too |
| Bond Repayment Sandton Apartment | This is the bond payment we have for our apartment in Sandton which we are currently renting out |
| Sandton Apartment Levies | We do seem to like our sectional titles |
| Sandton Apartment Rates | City of Joburg, not to be outdone by City of Tshwane |
| Petrol | For when the Stealthmobile and my scooter get thirsty |
| Bank Fees | All accounts have them - maybe one day.... |
| Medical Aid | Unfortunately this is kind of a must in South Africa |
| Medical Savings | We on a hospital only plan, so we generally run our own Medical Savings Account (meaning we don't pay anyone a fee for the same thing!). This one deserves a post on it's own. |
| Electricity | Keeping the PC on and the coffee brewing, allowing me to type this! |
| Groceries | Yummy |
| Toiletries | Mrs Stealthy Wealth is in charge of this department... |
| Schooling | This is to cover Nursery School. Not relevant yet, but will be pretty soon. After nursery school, primary school and then high school - deserves a post on it's own. |
| Gautrain | A world class service enabling 0 traffic for my missus and allowing her to do something productive to and from work. |
| Entertainment | We do spoil ourselves on occasion |
| Miscellaneous | Stuff breaks, hair needs to be cut, car guards need to be tipped, and other random shit. |
| Cellphones | Yak yak (maybe my wife talks more than me, maybe she doesn't.... I will leave it there) |
| Internet | Allowing me to get these words to all of you! |
| Domestic Worker | Used to have one weekly, but after we moved to Centurion we went without one for 7 months due to all the extra time I had. However with Stealthy Junior imminent we have settled on getting someone once every two weeks which I think is a decent compromise. |
| Short Term Insurance | Deserves a post on it's own. Investigating and working toward becoming "self insured" |
| Life Insurance | Our imminent child bumps this priority up! |
| Clothing | I refer you to the wardrobe picture in this blog post. Enough said :) |
| Investments | Extra into Home Loan, ETF's, Shares etc. |
| Stealthy Junior Savings | I plan on putting money away every month for my son. A post on this will come out soon. |
| TFSA Contributions | Man I love these! A post on this is on my Todo list |
| Car Savings | We plan on running the Stealthmobile for a very long time. But I know that at some point it will also want to retire - although I haven't told him yet that early retirement for him is out of the question :) So we are putting a little money away each month so that one day, when it is time, we can welcome Stealthmobile Mark II without incurring any debt. Also used towards maintenance. |
| Household Maintenance | To keep Stealthville running smoothly |
Relevant Expenses
Ok so that was a list of all our current expenses. Next I worked through each of them one by one, and then made a call if the expense would still be relevant in our retirement in 2030.It is difficult to predict what things will be like in 2030....
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| Centurion in 2030 or just a bad movie? |
Anyways here we go:
| Expense | Still Relevant? Comments |
| Bond Repayment Stealthville | No - Woohoo. plan to have this paid off by the time 2030 comes around |
| Stealthville Levies | Yes - This one is not going anywhere |
| Stealthville Rates | Yes - Whatever Tshwane's name has changed to by then, I am sure they will still want their money |
| Bond Repayment Sandton Apartment | No - This bond will be paid off by 2030 |
| Sandton Apartment Levies | N/A We will possibly sell this apartment at some point, depending on tenant behavior and how much time, effort and maintenance it requires. However if we still have the apartment, any costs will be covered many times over by rental by the time 2030 rolls around. So I am not factoring this cost in. |
| Sandton Apartment Rates | N/A Same as above. If we still have the apartment, any costs will be covered many times over by rental |
| Petrol | Yes - We will still need to get around - maybe by then cars are electric.....who knows. Either way I am budgeting for petrol, or whatever the futuristic equivalent may be... |
| Bank Fees | Yes - I guess this one is not going anywhere. |
| Medical Aid | Yes - More than likely still required... |
| Medical Savings | Yes - We will still be doing our own savings. Although if all goes well and over the years we manage to grow these savings large enough, we may no longer require this expense. But I will leave it in for now. |
| Electricity | Yes - Maybe we all solar by then... |
| Groceries | Yes - Still yummy! |
| Toiletries | Yes - Still the wife's department |
| Schooling | Yes - By 2030 Stealthy Junior will be 14 and |
| Gautrain | No - Done and dusted with the work commuting |
| Entertainment | Yes - Tickets for the annual early retirement conference? |
| Miscellaneous | Yes - Stuff will still be breaking, hair will still need cutting, car guards.....you think they will still be around? |
| Cellphones | Yes - I am sure there will be a monthly fee for the cellphone wrist implant that people now use to communicate. Need one for myself, Mrs Stealthy Wealth and Stealthy Junior |
| Internet | Yes - It will be so awesome if this blog is still going in 2030! |
| Domestic Worker | No - Definitely will have more than enough time to do the housework, and a 14 year old son who will be big enough to wash the dishes. And the car. And mow the lawn. May as well vacuum the carpets, mop the floors, do the washing, cook dinner and service the car. Awesome! |
| Short Term Insurance | Yes - By 2030 I hope to be self insured but will possibly keep 3rd party insurance for the car. Will possibly also keep household contents, or maybe not.... But leaving it on in case. |
| Life Insurance | No - The point of life insurance is basically to protect and look after the family in the event you are no longer around to earn an income. But if we make it to early retirement then we should have enough money to last us. So if I were to keel over whilst ascending Polly Shortts on my 10th uprun, I know that the family is sorted. |
| Clothing | Yes - Mostly running gear and PJs :) I guess Stealthy Junior will also be hitting his growth spurt round about now and outgrowing his stuff pretty quickly! |
| Investments | No - Don't see myself contributing anything extra as our pot should be large enough. |
| Stealthy Junior Savings | Yes - We will probably continue putting money away for a possible University education or similar. |
| TFSA | No - Done contributing to these. |
| Car Savings | Yes - Will continue with this as Stealthy Mobile Mark III may be required and maintenance will still be required. |
| Household Maintenance | Yes - Still needed. |
Additional Retirement Expenses
Ok so now I know which of the current expenses will still be relevant in our early retirement. But we also need to think about any additional expenses there might be which we do not currently have.Immediately I am thinking we would probably want to holiday now and then. Now I am not talking a 3 months in Paris, London and Rome type holiday, but a 7 day trip to the coast is always very lekker, or a few days in Stellenbosch doing some wine
I said the bowling club thing at the start of this post as a joke, but maybe we will want to join some sort club/community/society to keep us out of trouble. So I will add an item for any possible membership expenses.
Hmmmm, I really thought there would be more in this section, but I think it's just those two...
Final Budget
Okay, so now I have what I think is a complete list of early retirement expenses. Next up is to try put some figures to the expenses. For this I will use current expenses, some guesswork, a bit of common sense and some good old thumb sucking. Without further ado, I present to you, the Stealthy Wealth Early Retirement Budget!
This gives a grand total of R21 621/month required for the three of us to live during retirement. Yuck, what a horrible number! I will rather call it R22k/month. This works out to R264k per annum.
This is of course what it would cost us if we were to retire today. These values will obviously be significantly more by the time 2030 rolls around, and I will need to adjust them for inflation. I will be effectively chasing a moving target - but that is a calculation for another article...
Also worth mentioning, the above budget includes some nice to have items such as holidays. memberships, new clothes every month and the like. If times were to get tough we could easily cut out R800 for holidays, R300 from memberships, R500 off the grocery bill, around R200 from clothing and probably another R200 from miscellaneous items - this gives about a R2000/month saving. I reckon we could live pretty comfortably off under R20k/month if the need arose. It gives me some comfort knowing that we have a little wriggle room.
So that was a useful exercise! Although I think I have been quite thorough, it is of course entirely possible that I overlooked something, or I am cooked in the head with regards to some of the figures that I came up with? If you spot something ridiculous please be so kind as to let me know...| Expense | Amount |
| Stealthville Levies | R1646 |
| Stealthville Rates | R410 |
| Petrol | R800 |
| Bank Fees | R100 |
| Medical Aid | R3365 |
| Medical Savings | R500 |
| Electricity | R500 |
| Groceries | R5000 |
| Toiletries | R200 |
| Schooling | R3000 |
| Entertainment | R1000 |
| Miscellaneous | R700 |
| Cellphones | R500 |
| Short Term insurance | R400 |
| Internet | R200 |
| Clothing | R400 |
| Stealthy Junior Savings | R600 |
| Car Savings | R800 |
| Household Maintenance | R400 |
| Memberships | R300 |
| Holiday Savings | R800 |
This gives a grand total of R21 621/month required for the three of us to live during retirement. Yuck, what a horrible number! I will rather call it R22k/month. This works out to R264k per annum.
This is of course what it would cost us if we were to retire today. These values will obviously be significantly more by the time 2030 rolls around, and I will need to adjust them for inflation. I will be effectively chasing a moving target - but that is a calculation for another article...
Also worth mentioning, the above budget includes some nice to have items such as holidays. memberships, new clothes every month and the like. If times were to get tough we could easily cut out R800 for holidays, R300 from memberships, R500 off the grocery bill, around R200 from clothing and probably another R200 from miscellaneous items - this gives about a R2000/month saving. I reckon we could live pretty comfortably off under R20k/month if the need arose. It gives me some comfort knowing that we have a little wriggle room.
Missing something obvious? Being stupid?
Also I would love to hear if anyone else has attempted estimating their cost of living in retirement. What sort of figure did you get to?
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Till next time, Stay Stealthy!
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