2020 Base Monthly Budget (Retired)

I have seen quite a few monthly budgets posted by college students, singles and families. I have not seen any posted budgets for retired adults whose needs are significantly different than those needs of young or middle-aged adults. Hence, I thought it may be helpful to those older adults in or near retirement if I posted my budget as an older adult. That being said, I need to provide you with some information to help you understand my base monthly budget.

You’ll notice that I use a base monthly budget because there are a few times throughout the year in which a particular month will include an expense that will occur only in that particular month and I will make an adjustment to that specific month’s budget to include that special or infrequent expense.

Notes

  • I am an expat from the United States living in Ecuador, South America. Ecuador is about the size of the state of Colorado in the United States.
  • I own my home and there is not a mortgage. Hence, you will not see any entries for housing. (Mortgage or Rent) I do not carry insurance on my house as the cost for the coverage here in Ecuador is not even close to being reasonable. Furthermore, I am fortunate to have the financial resources to rebuild my house in the event of a total loss.
  • Though I am retired in 2012, I am not receiving Social Security Retirement income from the United States. I am not eligible to receive full retirement benefits until I am 66 years and 4 months old.
  • You will notice that my medical expenses are high. I have a chronic medical condition in which my health insurance will not cover for another 14 months. I must pay all medical care and medications out-of-pocket until I have met the pre-existing waiting period for coverage. Fortunately, health insurance, medical care and hospitalization in Ecuador is about one-third (or less) the cost less as compared to the United States.
  • Groceries and Household expenses far exceed the costs in the United States. While labor is inexpensive in Ecuador, the cost of products are quite high … especially imported goods. This expense includes 2 small dogs and 1 cat.
  • My wife and I do not eat out. My medical condition requires a very limited diet. My diet is restricted to about 20 foods (not categories of food) and requires special preparation and I am limited to only 12 grams of fat daily.
  • For entertainment, we invite friends to our house to play cards, board games, video games or to watch a movie.
  • Even though all of my current income (interest on savings) is generated in Ecuador, I am required to pay federal income tax to the United States. The United States is one of two countries in the world in which all income (wages, interest, etc.) earned in a foreign country is taxable to the home country.

Monthly Budget

Monthly Income
$4,037 (Interest on Savings)

Expenses

Electricity: $60
LP Gas: $25
Water & Sewer: $58
Cell phone and land line: $40
Cable TV: $91
Internet: $27
Lawn & Garden: $116
House maintenance: $50
Maid: $80
Auto Insurance: $83
Gasoline: $60
Auto Repairs & Maintenance: $50
Registration & License: $50
Health Insurance: $453
Doctor / Dentist: $50
Prescription Drugs: $450
Subscriptions: $5
Grocery & Household: $700
Personal: $50
U.S. Federal Income Tax: $352
ATM Fees: $15
Misc: $20

Total Monthly Expenses: $2,885 (71.5% of income)

Transfer to Savings: $1,152 (28.5% of income)

Saving money is as important to me in retirement as it was when I was working. Unexpected emergencies and expenses seem to be more frequent as I age … especially those related to health. In 2019, I paid $14,600 out-of-pocket for health care not covered by insurance. Having money set aside for such expenses provides peace of mind rather than covering the expenses with debt.

Since everyone’s needs and lifestyles are different, it would be unreasonable for me to believe that my budget will meet the needs of anyone else. However, I encourage everyone to have a monthly budget if for no other reason than to track their expenses.

The whole idea of a budget is for you to manage your money instead of your money managing you.

Published by W. M. Brown

I am a retired U.S. expat living in Ecuador. I was a business owner for 32 years before retiring in 2012.

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