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How Much More Will You Spend in Retirement Than Expected? My Rule: $400 a Month

You should tell readers about your “$400 rule.” Maybe they have some rules of their own.

That’s my brother Stephen speaking. Yes, I have a “rule” about retirement and nest eggs. I don’t pretend that it’s anything as consequential as, say, the “4% rule.” (That’s the one tied to annual withdrawals from savings.) And my research, admittedly, involves a small sample. (Just me.)

Still, I think it’s interesting how this “guideline” (a better word) has worked in my retirement. What follows, then, is a brief explanation—and a request.

Actually, my guideline is borrowed. Several years ago, as I was approaching retirement from full-time work, a person—and I’m afraid I can’t recall who it was, but I’m happy to give credit if you’re reading this—told me: “You will spend about $400 each month in retirement above and beyond what you think you’ll spend.”

I remember thinking: This sounds silly. Surely, I can craft an annual budget for retirement that doesn’t miss the mark by almost $5,000.

And yet…more months than not, my wife and I find ourselves with a bill, or combination of bills, that total about $400.

Changes in Spending

Asked to anticipate how their spending might change in retirement—and whether spending actually changed—surveyed preretirees and retirees said:

These are bills outside what we normally would expect: the garage-door spring and cable that snapped and had to be replaced; the family member who asked for financial help; the X-rays and dentist’s fee for a sudden toothache (my wife and I don’t have dental insurance); the small tree in our yard that, as it turned out, was dying and needed to be removed; the storm that damaged the screens on our porch; the stone that hit and cracked our windshield; the request from a charity that we felt we needed to honour. The list goes on.

Yes, surprises are part of life, and budgets always need to wiggle room. But in preparing for retirement, I had never seen or heard a specific figure about just how much wiggle room my particular budget might need. Hence, my retirement “rule”: When you have finished estimating your annual expenses in later life—add about $5,000. That total should be closer to what you’ll actually need.

(Of course, my rule is based on expenses where my wife and I live, in the Southeast; I imagine the figure could be a bit bigger, or smaller, elsewhere.)

As for the request: My brother might be right. If I have a retirement rule based on my experiences, I’m betting other retirees do, as well. So, if you have developed a rule or guideline for later life, we would like to hear from you. Ideally, we’ll include some of your ideas in a future column.

My wife and I are recently retired, and our adult children are urging us to get a dog to help us stay active, physically and socially. My question is about pet insurance. Can you point us to an impartial guide about this type of coverage?

Interesting question. Pet insurance is increasingly popular, and getting more expensive, according to the North American Pet Health Insurance Association.

In 2020, 3.1 million pets in the US were insured, according to the association. (Of the total, 83% were dogs and 17% were cats.) That’s almost double the number of insured pets in 2016. In 2020, the average annual premium for a dog for “accident and illness” protection, as opposed to “accident only,” was $594, up from $518 in 2016.


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(Cats, by comparison, are something of a bargain: The average annual premium for accident and illness coverage was $342 in 2020, up from $321 four years earlier.)

To learn more about this insurance, check out the National Association of Insurance Commissioners. Here, among other resources, you will find “A Regulator’s Guide to Pet Insurance.” While this report is designed primarily for insurance officials, it offers consumers a good, even handed overview of this product: how it works and what to look for.

And…your children could be on to something. A number of retirees, through the years, have told us that getting a pet has helped them meet people and make new friends.

I will be 62 years old this year, and I would like to apply for Social Security as soon as possible. What’s the earliest date I can do so?

We need, first, to make a distinction: when you become eligible for benefits, and when you can apply for benefits.

According to the Social Security Administration, you must be age 62 for the entire month to be eligible to receive benefits. The agency considers you to be 62 for an entire month if you were born on the first or second day of the month; otherwise, you don’t meet this requirement until the following month.

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As for applying for benefits, you can do so up to four months before you want your retirement benefits to start. The Social Security Administration offers a good example about how all this works on its website, as follows:

Let’s say you turn 62 on Dec. 2. That means you meet the “entire month” requirement, and you can start your benefits as early as December. Using the four-month rule, if you want your benefits to start in December, you can apply in August.

Still, let’s say you were born on Dec. 3 or later in the month. In this case, you don’t meet the “entire month” requirement. Which means you can start your benefits in January 2023. In other words, in January 2023—again, in the eyes of the Social Security Administration—you will be 62 for the entire month. And, to finish the example, if you want your benefits to start in January 2023, you can apply in September 2022.

Mr. Ruffenach is a former reporter and editor for The Wall Street Journal. Ask Encore examines finance issues for those thinking about, planning and living their retirement. Send questions and comments to

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