30K a year

[Spanky]

It's all relative. I make 43K per year pre tax but I live on only $1500/month the rest is saved. My borther, 7 years out of college, has never made more than $24,000 in a year. He says if he made my money he'd "live like a king". Seems like most people on here spend my yearly income on just the mortgage and eating out. My parents never made more than 30K year until after I was 18 my dad finaly got a job in the 50K range. So we never knew anything but how to live on under 30K so it doesn't feel like deprivation to us. It almost seems easy. I would have a hard time finding ways to spend $80K per year. Although I wouldn't mind trying!

You are correct - everything is relative. Our sister-in-law was able to put her two kids through college (with government grants and aid) and lives comfortably with only $20K income in Southern California. However, she does not have any savings or health care insurance. She now receives financial support from one of her sons. It's hoped that her son will continue to support her and the government can extend assistance if needed.

 

[youbet]

I'm still under $30,000 without trying hard.

I agree that things won't always sound consistent

Your story exacerbates the inconsistency......

If, as you say, the cost of a supporting infrastructure is very low and easy to have and it requires only $30K or less to live nicely in retirement, why the concern about folks being able to retire? SS alone for a couple is typically in the $30K range.

What's up with that?

 

[Moemg]

Your story exacerbates the inconsistency......

If, as you say, the cost of a supporting infrastructure is very low and easy to have and it requires only $30K or less to live nicely in retirement, why the concern about folks being able to retire? SS alone for a couple is typically in the $30K range.

The problem with that is one Social Security payment disappears if the person dies so you are now living on $15,000.

 

[Khan]

Not necessarily a boat load. My house cost $95,000 in 1992. I put down the $25,000 I saved in my first two years out of law school earning less than $40,000 a year. Within five years, I paid off the $70,000 mortgage and my school loans......... Then saved for the new roof. Unexpected car accident, great pay out on the collision insurance, ended up with a new Honda, will keep it forever........ Arrived at enough in my nest egg to cover my lifestyle, then saw a great deal on a tiny place in the mountains and bought it....... And yes, I'm still under $30,000 without trying hard.

I agree that things won't always sound consistent here, but that makes sense! We're all dealing with different types of expenses, needs, preferences, and we chime up at different times.

My house cost $38,500 in 1978; county appraisal in 2005 was $62,500.

 

[haha]

My insurance is $280/month with a $2700 yearly deductible. That's just for me, a single person. My insurance doesn't cover dermatologist visits or treatments which have also been running about $6-700/year as well. I don't expect that Medicare will relieve much of this expense once the country realizes how much it will begin to cost. Much of the Medicare benefit that middle class retires have now will begin to diminish. Hope I'm wrong. But I don't see how the country can pay for it.

For that reason, anyone planning on living on 30K really needs to take a hard look at possible medical expenses, including supplemental health insurance, IMHO.

You are right about this. 2007 I paid $93/mo Medicare Premium; $157/mo Medigap,and $20 /mo for the cheapest available drug plan. Next year they will all go up- including Medicare for which I will have to pay a higher than standard premium due to a high income in 2006. I expect this premium to last at least a few years until I have fully disposed of some appreciated stock. I do appear to have a lower deductible than your plan has.

What Medicare does do, at least so far, is assure you of coverage at a price that is not rated upward for your medical condition or age beyond 65.

Ha

 

[old woman]

I don't know what medical will cost so I am penciling in $12K for it, I hope it is enough.
I might have a mortgage but it will be a choice. I will buy a different house and if I take a mortgage I will invest the amount I didn't spend. So without a mortgage my retirement budget will be:
Property taxes & ins 4,000
Car expenses 5,000
Food & Misc 5,000
Utilities, phone 5,000
Income tax 2,000
Medical 12,000
Wants 5,000
Total 38,000
I will collect rent from roommate to offset the total of at least 8K so come in right at 30K.
I will get SS of about 12K so need 16K from investments so need to have about 400K invested if I retire at 62 plus 12K for each year I retire earlier. I have 445K now so could retire if I had to. Every year I wait now means I can save 25K and investments are growing so a couple more years I will be living good in retirement and can up the budget.

 

[youbet]

The problem with that is one Social Security payment disappears if the person dies so you are now living on $15,000.

Yeah........ OP was asking about a couple living off of $30K. But many respondents are replying from the viewpoint of a single, an entirely different scenario. I went off and did a little reading on the web....... I think the concept of expenses and income for a single vs a couple confounds the analysis significantly.

On the expense side, I'm thinking $30K for a single and $60K for two people seems quite doable. $30K for two people, much less doable.

On the income side, I agree Moemg, if you're counting on a combined income to support retirement, you better understand what happens to the survivor when the first one dies.

Also, My quick guess that SS payments for two people would be around $30K seems to be high...... at least after I read this on the SS site:

Estimated Average Monthly Social Security Benefits Payable in January 2008:

Before
2.3% COLA
After
2.3% COLA​

All Retired Workers​

$1,055
$1,079​

Aged Couple, Both Receiving Benefits​

$1,722
$1,761​

Widowed Mother and Two Children​

$2,192
$2,243​

Aged Widow(er) Alone​

$1,017
$1,041​

Disabled Worker, Spouse and One or More Children​

$1,652
$1,690​

All Disabled Workers​

$ 981
$1,004​

 

[kat]

Your story exacerbates the inconsistency......

If, as you say, the cost of a supporting infrastructure is very low and easy to have and it requires only $30K or less to live nicely in retirement, why the concern about folks being able to retire? SS alone for a couple is typically in the $30K range.

What's up with that?

Life is like that: people are different. Case in point. I have a friend through volunteer work we both do with crime victims. He spends money freely. Always has food in his hands, new purchases on the seat of his car. And he has faced foreclosure several times, filed bankruptcy once. He'll have a state pension, and as someone pointed out already that's a fine arrangement in NY. But there are many people making similar choices without the pension in the future. I'm 45 with a different life situation, different choices. Both realities can be true. Maybe inconsistency isn't the right word. There are various ways to live and we make different choices.

 

[youbet]

Life is like that: people are different. Case in point. I have a friend through volunteer work we both do with crime victims. He spends money freely. Always has food in his hands, new purchases on the seat of his car. And he has faced foreclosure several times, filed bankruptcy once. He'll have a state pension, and as someone pointed out already that's a fine arrangement in NY. But there are many people making similar choices without the pension in the future. I'm 45 with a different life situation, different choices. Both realities can be true. Maybe inconsistency isn't the right word. There are various ways to live and we make different choices.

You entirely missed my point kat. But, let's just drop it, I pretty much answered my question for myself by doing a little research and concluding that SS payments are, on average, lower than I was assuming and it seems to be singles who are comfortable at the $30K level. OP's post was asking about two people living on $30K, a totally different scenario.

 

[kat]

I agree! Let's drop it! My point is some people can't/won't live on $30,000 (SS in your quote). We're different.

 

[youbet]

I agree! Let's drop it! My point is some people can't/won't live on $30,000 (SS in your quote). We're different.

OK. But, we're really not so different...... I agree with you that folks should be able to live on $30K EACH given a prepaid infrastructure and no sky high health insurance premiums or other expensive, unique circumstances. Heck, you and I are both doing it!

 

[kat]

OK. But, we're really not so different...... I agree with you that folks should be able to live on $30K EACH given a prepaid infrastructure and no sky high health insurance premiums or other expensive, unique circumstances. Heck, you and I are both doing it!

Property tax is the same no matter how many people live in the house. Same with some people's telephone, internet, security system, trash, heat, replacing the roof. I never claimed to speak for anyone but myself. I bet some couples live under $30,000, but we don't need to have that discussion!

 

[youbet]

Property tax is the same no matter how many people live in the house. Same with some people's telephone, internet, security system, trash, heat, replacing the roof. I never claimed to speak for anyone but myself. I bet some couples live under $30,000, but we don't need to have that discussion!

No we don't. Neither of us has any experience with it. I'm married living on more than $30K. You're living on less than $30K, but apparently single. Neither of us is in the two people/less than $30K group!

 

[Allegany]

No Way On 30k

Well I thought I could easily retire on 36K for me and the wife. Then reality set in. 2008 Health Insurance 1642.10 /month. Mortgage 700/ month brings the total to around 28K. Taxes around 4400. Electric and phone around 200/month. This bring the total to around 35k fixed costs. 1000 for everything else just dosen't make it. Our budget for next year is around 69k. Oh well, as they say in the commercial, life comes at you fast.

 

[Dawg52]

2008 Health Insurance 1642.10 /month.

Wow, that's the worse than Martha's number. Just curious, do you have health problems and have an extremely low deductible?

 

[kjpliny]

Well I thought I could easily retire on 36K for me and the wife. Then reality set in. 2008 Health Insurance 1642.10 /month. Mortgage 700/ month brings the total to around 28K. Taxes around 4400. Electric and phone around 200/month. This bring the total to around 35k fixed costs. 1000 for everything else just dosen't make it. Our budget for next year is around 69k. Oh well, as they say in the commercial, life comes at you fast.

Dang...that's like $20k/year. Probably better off saving it and having none...in 5 years you could pay a $100k medical bill.

 

[Meadbh]

Couldn't live on $30K per annum

I'm single and live in a relatively low cost area but honestly don't think I could live on $30K without feeling seriously deprived. I'm currently spending ~$45K after income taxes and wouldn't want to reduce further. I need wiggle room.

 

[FIREd]

Your story exacerbates the inconsistency......

If, as you say, the cost of a supporting infrastructure is very low and easy to have and it requires only $30K or less to live nicely in retirement, why the concern about folks being able to retire? SS alone for a couple is typically in the $30K range.

What's up with that?

There are plenty of people who have never earned more than 30K per year (for a couple) and will retire without experiencing a major downshift in lifestyle thanks to SS and perhaps a small pension or a small nest egg. They are however unlikely to consider early retirement (because SS is so crucial for them to retire, they have to wait until they are old enough to start receiving benefits) and therefore they are unlikely to post here. I am not worried about these people because they know how to be thrifty.

The people who are freaking out are those who are accustomed to a 60-100K lifestyle and realize that they may only count on a 30K income (SS) in retirement. They can't imagine living on such a small amount of money. They have grown accustomed to luxuries they can't imagine living without, like 400 TV channels and dining out a few times a week. They can't bring themselves to sell the 5000 sqft house and move out of their exclusive neighborhood. Those are the "unprepared and scared boomers" featured in the media.

My MIL is such a boomer. She lived high on the hog for years ($20K per MONTH!). Got divorced late in the game. At 65 she is now receiving 6K per month in alimony. By herself she spends more money than the two of us with half the income (we live in the same city), yet she keeps complaining how money is tight (never mind she is making almost twice the median income for our state). She is worried and angry about her future. But the other day she was talking to her other divorced girlfriends and felt silly when she realized that most of them lived on less than $2500 a month and never complained.

Living on less and enjoying what you have is a state of mind.

 

[eridanus]

I don't have a clue how anyone could live on $30K a year unless they are in an extremely low tax area, have virtually no insurance of any type and absolutely no debt - to include house payments. And them I still can't figure it out.

Here's our position - no kids at home, no cc debt, no car debt.


Main Mortgage - $15K
Property Tax - $5K
Homeowners Ins/Homeowners Assoc - $1K
Vacation Home - $5K (incl taxes, ins)
Groceries - $4K
Dining Out - $3K
Auto Repair - $3K
Insurance (Car/life/health/LTC) - $9K
Gasoline -$1K
Clothes - $3K
Heating Oil - $2K
Electricity - $2K
Medical/Dental - $3K
Household - $3K
Cable - 1K
Gifts - $4K
Home Maint - $3K
Misc - $10K
Entertainment - $2K
Travel - $5K
Phone - $1K
Other Utilities - $1K

Total Expenses- $88K

Except for lower expenses with my mortgage, property taxes, HOA dues, vacation home (none), auto repair, insurance, gas, clothes, heating oil, electricity, medical/dental, household?, cable (none), gifts, miscellaneous?, entertainment, and phone, I spend exactly the same amount.

 

[accountingsucks]

Yikes...some of the high numbers on here are nuts. I agree living on 30K a year is more than feasible. I am single and 32, with home and car paid for. I live in Canada so no health insurance concerns....anyways I get by on about $1300 average a month in expenses. I could live on around 22K pre tax I think if I absolutely had to. That would be very tight though and probably would mean no vacation in a given year. 30K would be an absolute piece of cake though. I can't believe some of you are spending 80K+ a year...do you really need that 5 bedroom house??

 

[AltaRed]

I'm single and live in a relatively low cost area but honestly don't think I could live on $30K without feeling seriously deprived. I'm currently spending ~$45K after income taxes and wouldn't want to reduce further. I need wiggle room.

I feel the same way and I live below my means. I don't deprive myself, but I take advantage of sales, buy mid-scale stuff when I need new stuff, and do not buy much in the form of extras. Annual expenses still run in the order of $45k net of income taxes.

What I don't see in most (if any) of the expenditures is the accrual for durable goods that need replacement on a certain cycle (vehicles, major appliances, major household repairs such as furnance, roof, A/C). That could easily run $5k per year for middle-line stuff.

 

[Rambler]

I could live on around 22K pre tax I think if I absolutely had to. That would be very tight though and probably would mean no vacation in a given year. 30K would be an absolute piece of cake though. ??

My folks do 22k or less, vacation and all. But, they have no mortgage, no CC debt, low prop tax, and low desire to be consumptive.

I can't believe some of you are spending 80K+ a year...do you really need that 5 bedroom house??

I don't, but DW wants it for the grandkids (not yet...please! Hope it is 5-8 years down the road.).

R

 

[maddythebeagle]

There are plenty of people who have never earned more than 30K per year (for a couple) and will retire without experiencing a major downshift in lifestyle thanks to SS and perhaps a small pension or a small nest egg. They are however unlikely to consider early retirement (because SS is so crucial for them to retire, they have to wait until they are old enough to start receiving benefits) and therefore they are unlikely to post here. I am not worried about these people because they know how to be thrifty.

The people who are freaking out are those who are accustomed to a 60-100K lifestyle and realize that they may only count on a 30K income (SS) in retirement. They can't imagine living on such a small amount of money. They have grown accustomed to luxuries they can't imagine living without, like 400 TV channels and dining out a few times a week. They can't bring themselves to sell the 5000 sqft house and move out of their exclusive neighborhood. Those are the "unprepared and scared boomers" featured in the media.

That is what this recurring thread is about I think....people that are obviously spending more than 30k/yr while working and want to FIRE and wonder if they can on 30k....It certainly has been pointed several times in threads that people probably wont be happy if they downshift....

 

[Rambler]

Oh, my folks do buy a new car every 10 years or so...last one was a new Toyota Corolla which they well equipped for a nicely discounted price...around 15k.

 

[Khan]

I feel the same way and I live below my means. I don't deprive myself, but I take advantage of sales, buy mid-scale stuff when I need new stuff, and do not buy much in the form of extras. Annual expenses still run in the order of $45k net of income taxes.

What I don't see in most (if any) of the expenditures is the accrual for durable goods that need replacement on a certain cycle (vehicles, major appliances, major household repairs such as furnance, roof, A/C). That could easily run $5k per year for middle-line stuff.

The ~$5K difference between income and outgo goes into MMA.

Replaced 1989 vehicle this year
Washing machine ('92) starting to leak
Furnace (boiler) from '79 still going strong
Roof 10 years in on a '30 year' roof
Bought a new window A/C this year
Fridge, stove and dishwasher installed in 2000