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Intro and advice sought
Old 11-28-2011, 12:34 PM   #1
Confused about dryer sheets
 
Join Date: Nov 2011
Location: Zurich, switzerland
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Intro and advice sought

Hello everyone,

I am brand new to forums and wanted to introduce myself and get some advice for planning next steps.

I am a father of a 1.5 year old and I am 39 years old. I started a bit late in both parenting and saving for retirement. My wife is 38. I am an American and live/work in Switzerland. My wife is European and does not have much in retirement savings since they typically believe the government will take care of them

We both earn well enough with the company sponsored pension systems here. We are each saving 25,000 USD a year. in addition, I contribute to my Ira 5000 USD a year. Current savings are about 300,000 USD in taxable investment accounts, IRA, and vested benefit in company pensions. Zurich is incredibly expensive for living and I would like to retire in 15 years. It might be difficult as my son would only be 16 1/2, but I want to set the goal. We would not really think to retire here, but somewhere cheaper. Tennessee sounds appealing, but I am open and it is still far away. Likely we would try to keep a EU residence and a USA residence.

I feel we are behind the ball on saving enough to retire in 15 years. I see people posting about living on $36,000 a year during retirement. That is what my child's day care costs. So if I can find a place where I can live on that, I would be delighted.

I am seeking advice on:

1. To have a middle class retired life in the US, what amount of monthly income do I need to plan on?

2. Is there an index somewhere showing average annual income by state along with a indicator what that income would provide for (eg. 36k in Tennessee would certainly afford better life than 50k Ny city)?

I do not plan on SS so expect to use pension as lump sum withdrawal upon retiring combined with capital gains from selling home in Zurich (hope for estimated 300k) and additional savings to finance retirement.

Any other advice to help out this late starter?
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Old 11-28-2011, 01:47 PM   #2
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Roughly US$3000 per month would currently buy one healthy person a middle class lifestyle in a moderate-cost USA area. Add perhaps 30% to 50% for each additional family member.

As it seems you already realize, choosing an expensive area like New York City would not only increase the money needed to rent/buy, but also increase most other costs.

Some potentially high cost items not included above: health insurance, college tuition, inflation.
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Old 11-28-2011, 08:51 PM   #3
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Quote:
Originally Posted by Xraptox View Post
Hello everyone,

I am brand new to forums and wanted to introduce myself and get some advice for planning next steps.

I am a father of a 1.5 year old and I am 39 years old. I started a bit late in both parenting and saving for retirement. My wife is 38. I am an American and live/work in Switzerland. My wife is European and does not have much in retirement savings since they typically believe the government will take care of them

We both earn well enough with the company sponsored pension systems here. We are each saving 25,000 USD a year. in addition, I contribute to my Ira 5000 USD a year. Current savings are about 300,000 USD in taxable investment accounts, IRA, and vested benefit in company pensions. Zurich is incredibly expensive for living and I would like to retire in 15 years. It might be difficult as my son would only be 16 1/2, but I want to set the goal. We would not really think to retire here, but somewhere cheaper. Tennessee sounds appealing, but I am open and it is still far away. Likely we would try to keep a EU residence and a USA residence.

I feel we are behind the ball on saving enough to retire in 15 years. I see people posting about living on $36,000 a year during retirement. That is what my child's day care costs. So if I can find a place where I can live on that, I would be delighted.

I am seeking advice on:

1. To have a middle class retired life in the US, what amount of monthly income do I need to plan on?

2. Is there an index somewhere showing average annual income by state along with a indicator what that income would provide for (eg. 36k in Tennessee would certainly afford better life than 50k Ny city)?

I do not plan on SS so expect to use pension as lump sum withdrawal upon retiring combined with capital gains from selling home in Zurich (hope for estimated 300k) and additional savings to finance retirement.

Any other advice to help out this late starter?
Answer to
1. Monthly income depends on where you live, lifestyle and having a teenager adds a lot to monthly expense. $36,000 a year doesn't cut it for me and I think you'll need a lot more than that.

2. "Where to Retire" magazine publishes a number of indexes on income, taxes, cost of living by State and is very helpful. I can't find an e mail address but phone is 713 974 6903, located in Houston, Tx, printed every other month and covers stories on just about every State over the time period of a year.

3. I'd try to work enough in the States to qualify for Social Security so you can get Medicare when you reach age of 65. Health Care would be very expensive, I've got both health insurance and medicare so I haven't looked into cost but cost will vary by State and you need to research that as well.'

4. Small towns away from major metro areas generally offer best value. And, many college towns are great to live in. And, usually after a year of residence your teenager would qualify for in State tuition and that could save you a bunch of money.

5. Finally, smart to be thinking now........you've got a long time so keep putting away the cash, read all you can and try to vacation at prospective locations. You'll have more retirement income than most so you'll probably be able to afford more than most. Good luck!
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Old 11-29-2011, 06:23 AM   #4
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As a point of reference, DW and I live in a desirable Chicago suburb. Routine yearly expenses are approx. $45,000 for the both of us which includes approx. $6,000 property taxes, approx. $6,000 out of pocket medical expenses, and at least $2,000 per year for landscaping expenses. Our biggest splurge is 3 to 4 vacations per year which probably total $3,500 per year.

The majority of health care costs are thru my employer, if I were retired or out of work, health insurance would be a huge additional expense. House is paid off so no mortgage payments in the total.

What is not included is the $45,000 total is auto replacement costs or major home repairs such as a new roof.
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Old 11-29-2011, 11:27 AM   #5
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Looking at the "How much did you spend last year" threads can give you a sense of the range of spending of people on the forum, and many indicate how many people are in the household. IIRC, the range was $24k-80K, with a few outliers on both ends. The 80K and above generally still had children they were supporting, or were living in higher cost areas.

The US census bureau shares median income by state and family size:

Income Data - State Median Income - U.S Census Bureau

It ranges from $45K in Mississippi to $83K in Maryland. Three person families are a couple of thousand above the median for all family sizes in most states.
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