The early retirement budget checklist: every line your spreadsheet forgot

By Tom, CPA · Updated October 25, 2026

TL;DR: A retirement budget isn't your current budget minus the commute. Check six categories: housing (including upkeep), health care until and after Medicare, taxes on withdrawals, irregular expenses like cars and roofs, guilt-free fun money and a contingency line. Price each from real data, then multiply by your withdrawal rate math.

Educational only, not tax, legal, or investment advice. Examples are illustrations, not predictions. Rules and limits change; verify current figures and talk to a qualified professional about your situation.

The classic early retirement budget is built in one evening: take current spending, cross out the commute, maybe add a vacation, done. Then retirement arrives with a new roof, a dental crown and a health insurance bill that looks like a typo.

This checklist goes category by category, so your budget reflects your future life, not your current one. Work through each item, price it from real bills or quotes, and note anything you're unsure about. Figures and rules are as of Oct 2026. Then use the totals with FIRE number by lifestyle.

CPA Warning Label: This checklist may cause your FIRE number to rise. Please do not shoot the messenger. The messenger is a list.

Housing

• Mortgage or rent. Will the mortgage be paid off at retirement or partway through? Note the year it ends.
• Property tax. Check your county's current bill and how assessments change. Some states have senior exemptions or caps, often with age or income rules.
• Homeowners or renters insurance. Get a current quote; premiums in some areas have risen sharply.
• HOA dues and special assessments.
• Utilities. Being home all day can raise heating, cooling and electricity costs.
• Maintenance and repairs. Set aside an annual amount based on the home's age and condition.
• Internet and phone.
• Future moves. Downsizing or relocating has costs: agent fees, moving trucks, new furniture.

Thinking of moving to cut taxes? See the no-income-tax states comparison.

Health care

• Premiums before 65. Price ACA marketplace plans for your expected retirement income. Premium tax credits depend on annual household income.
• COBRA as a bridge. Generally up to 18 months after leaving a job, at full cost plus up to 2%, per the U.S. Department of Labor.
• Deductibles and out-of-pocket maximums. Budget for a realistic share, not zero.
• Dental and vision, often separate policies or out of pocket.
• Prescriptions. Check each plan's formulary.
• Medicare at 65. Budget for Part B and Part D premiums, a Medigap or Medicare Advantage plan and out-of-pocket costs.
• Long-term care. Insurance, a hybrid policy or a self-funded reserve.
• HSA balance. Note any HSA money available for qualified medical costs.

More: the ACA subsidy cliff guide and health insurance budgeting.

Taxes

• Federal income tax on withdrawals, Roth conversions, dividends and capital gains. For 2026, the standard deduction is $16,100 single or $32,200 joint, and the 0% long-term capital gains bracket runs to $49,450 or $98,900 of taxable income, per the IRS.
• State income tax, which varies widely, including how states treat retirement income.
• Estimated tax payments if nothing is withheld; see estimated taxes for early retirees.
• Self-employment tax on any side income.
• Property and sales taxes (some already in housing).
• Tax prep software or professional fees.

Tip: taxes depend on where the money comes from. A budget funded by a taxable brokerage account usually has a smaller tax line than one funded by traditional IRA withdrawals.

Daily living and transportation

• Groceries. Use your last 12 months of actual spending, not a hopeful estimate. Retirees often cook more and eat out less, or the reverse.
• Household supplies and personal care: toiletries, haircuts, cleaning products.
• Clothing: usually lower without work clothes, but not zero.
• Car insurance, fuel and maintenance. Fewer commute miles may lower premiums; ask your insurer.
• Public transit, rideshares and parking.
• Debt payments: any car loans, student loans or credit lines still running at retirement. List the payoff date for each.
• Kids: activities, school costs, allowances and college savings. See FIRE with kids.
• Banking and investing fees: advisory fees and fund expense ratios reduce what you can withdraw. See the expense ratio fee calculator.

Pull a full year of bank and credit card statements and sort every transaction into a category. It's tedious, but it's the most accurate starting point you'll ever get, and it often turns up forgotten subscriptions to cancel on the spot.

Irregular expenses

These are the budget breakers because they don't show up every month:

• Vehicles: replacement every so many years, plus repairs, registration and insurance.
• Home systems: roof, HVAC, water heater, appliances.
• Electronics: phones and computers.
• Medical and dental surprises beyond insurance.
• Gifts and holidays, weddings and graduations.
• Pets: vet bills grow as pets age.
• Annual subscriptions and memberships.
• Family support: helping kids or aging parents. See caring for aging parents.

Method: list each item, estimate cost and how often it recurs, then divide cost by years between replacements. A $30,000 car every 10 years is $3,000 a year.

Fun money

• Travel: often heaviest in early retirement.
• Hobbies: gear, classes, club fees.
• Dining and entertainment.
• Personal spending money for each partner, no questions asked.
• Giving: charitable donations.
• Big dreams: a once-in-a-lifetime trip or a project you've postponed.

Don't skimp here. Early retirement is supposed to be enjoyable, and a budget without fun money tends to break. Plan what you'll do with your time too; see volunteering and purpose.

Contingency

• A contingency line of, for example, 5% to 10% of the budget for things you didn't think of.
• A cash buffer of one to two years of spending so you don't sell stocks in a crash.
• Inflation: budget in today's dollars and assume costs rise; some categories, like health care, may rise faster.
• Spending guardrails: decide in advance what you'd cut in a bad market. See the guardrails withdrawal calculator.
• Insurance review: umbrella liability, life insurance if others depend on you.

Illustration: Fran's checklist results

Illustration. Hypothetical: Frugal Fran's first draft budget was $34,000. After the checklist:

At a 4% rate, her target rose from $850,000 to $1,062,500. Unpleasant, but much better than learning it at 52 with a dead water heater. Lavish Larry's checklist added a line called "boats." It was already there.

Final steps

1. Add up the categories and compare with what you spend now.
2. Live on the total for six to twelve months; see the early retirement trial run.
3. Review the quitting your job checklist before you resign.
4. Update the budget every year.

Keep the checklist with your annual financial review. Each year, compare actual spending to each category, note what changed and adjust the next year's plan. Over time, your estimates turn into real data, and real data is what makes a withdrawal plan feel safe. A budget that is reviewed once a year beats a perfect one that is never opened again.