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ER on less than 600K ?
Old 05-19-2006, 07:23 PM   #1
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ER on less than 600K ?

Has anyone been able to ER on 600k or less? If so how did you do it? I read the Barron's article previously referenced, and was just wondering if this was a rare occurence or something done by a lot of folks (comfortably) in today's economic climate.
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Re: ER on less than 600K ?
Old 05-19-2006, 08:13 PM   #2
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Re: ER on less than 600K ?

Well, I suppose some people would consider me ER on about 600k... I have about 640k in liquid assets and a condo worth 550k free and clear. I just started ER a few months ago, living on about $2k/month (no housing payment since I own the condo), and I have a roomate whose rent pays my HOA and real estate taxes.

I don't think that's really what you were asking... I'm being kind of smart alecky. You probably were interested in people whose net worth including residence is 600k. I'm posting primarily to point out that the "net worth doesn't include your primary home" convention leads to confusion and strange conclusions.

Maybe someday we'll have one word for "net worth including residence" and another word for "net worth not including residence", but for now I suppose we're just stuck with the ambiguity.

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Re: ER on less than 600K ?
Old 05-19-2006, 08:15 PM   #3
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Re: ER on less than 600K ?

Quote:
Originally Posted by ferco
Has anyone been able to ER on 600k or less? If so how did you do it? I read the Barron's article previously referenced, and was just wondering if this was a rare occurence or something done by a lot of folks (comfortably) in today's economic climate.
No problem if your 4% SWR of $24K/year fulfills all your needs. *"Wants" might be another matter entirely...

Depending on your income, the "33%" thread might do it.

The Kaderlis have turned $24K/year into an art form.

But for the most entertaining answer to your question I'd recommend going over to Raddr's board and asking JohnGalt. *Remember that he's a Mensa member so his answers may be a little difficult for us mere mortals to comprehend.

And then there's The Legend of Dolly Freed...
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Re: ER on less than 600K ?
Old 05-19-2006, 08:15 PM   #4
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Re: ER on less than 600K ?

It's just numbers. 600K at 4.5% is $27K. That will fund a comfortable, but not lavish, life in Thailand. You do need to be over 50 to qualify for long term visa.
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Re: ER on less than 600K ?
Old 05-19-2006, 08:34 PM   #5
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Re: ER on less than 600K ?

Just a couple of people.

One ended up washing out tin foil and living in a group home. The other has a working wife but lies about it. The latter seems like a better option.



But seriously...you're looking at possum living, real problems with a big downturn as you dont have a lot of budget to cut back on, or a somewhat decent life in some areas outside of the US.
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Re: ER on less than 600K ?
Old 05-19-2006, 08:49 PM   #6
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Re: ER on less than 600K ?

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Originally Posted by Nords
But for the most entertaining answer to your question I'd recommend going over to Raddr's board and asking JohnGalt. Remember that he's a Mensa member so his answers may be a little difficult for us mere mortals to comprehend.
A bit sadistic today, are we Nords? :

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Re: ER on less than 600K ?
Old 05-19-2006, 08:55 PM   #7
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Re: ER on less than 600K ?

You have to remember that the 4% number is just a guideline. * Taking more out would have gotten you in trouble if you ER'd around 1929, for example, but you'll find a couple of old-timers here who retired on less, hit a nice 20-year bull market, and now are sitting very comfortable.

If I had $600K and was sick of working, I'd try to establish some backup plans *before* bailing. * *Instead of continuing the same grind for the next N years trying to hit D dollars, why not start looking for additional income streams that will keep going even after retirement? * Real estate, laundrymat, website, etc. * Get a little entrepreneurial to speed things up and to give you a fall-back after you cut the salary lifeline.
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Re: ER on less than 600K ?
Old 05-19-2006, 09:05 PM   #8
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Re: ER on less than 600K ?

Ferco,
The first question is how much longer do you plan to be on this planet? 600K is a lot of money, especially if your planning on leaving soon.

Billy
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Re: ER on less than 600K ?
Old 05-19-2006, 09:14 PM   #9
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Re: ER on less than 600K ?

There are also lots of very low cost lifestyles. When we were boating full time, the typical annual costs were in the $12 - $18k range, and $24k for the big spenders. That was with the boat paid for, and cheap health insurance.

Living on a boat in no fixed location, like RVing, living in Thailand, or the like, is great if it's something you want to do anyway. Doing it because it saves you money will probably make you miserable.

On the other hand, being miserable for the next 30-40 years will make it seem like you are living forever... :P cheap immortality!
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Re: ER on less than 600K ?
Old 05-19-2006, 09:22 PM   #10
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Re: ER on less than 600K ?

yeah, you could move in with a lot of peoples ex-spouses and get that feeling of immortality with a lot less effort. In fact, going to work might feel pretty good after that.
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Re: ER on less than 600K ?
Old 05-19-2006, 09:25 PM   #11
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Re: ER on less than 600K ?

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A bit sadistic today, are we Nords? :
It takes guts, brains, & willpower...
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Re: ER on less than 600K ?
Old 05-19-2006, 09:31 PM   #12
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Re: ER on less than 600K ?



(first 5 things I was going to say, all written and deleted)
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Re: ER on less than 600K ?
Old 05-19-2006, 09:46 PM   #13
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Re: ER on less than 600K ?

Hi Ferco--

You left some things out of the equation: Your age and where you live and its attendant costs of living. What about your lifestyle? Do you have any tpe of DB pension or social security in your future?

I am a firm believer that if the house is paid for, the cars are paid for, the kids are through college and married, and the credit cards are paid in full each month--the cost of retiring becomes much more doable.

Hope this helps put things in perspective.

Professor
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Re: ER on less than 600K ?
Old 05-19-2006, 10:04 PM   #14
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Re: ER on less than 600K ?

If you're willing to move to a low cost country then it is doable without all the dumpster diving. Our budget runs less than 30k per year in Panama and that amount supports a family of three and private school. No car pmts and no cc debt though. We take a couple of days every other month to go explore the differnt parts of the country which is included in the above budget.
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Re: ER on less than 600K ?
Old 05-19-2006, 10:16 PM   #15
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Re: ER on less than 600K ?

I have a friend who used to work here and returned to Bombay India. During his recent visit, he said that you can live very comfortably with $12K a year.
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Re: ER on less than 600K ?
Old 05-19-2006, 11:12 PM   #16
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Re: ER on less than 600K ?

Hmm. Am I wrong to think that some people here are spoiled? $2,000/mo is more than many people in this country live on. Here in Oregon, one can rent a nice 2 bedroom apartment for $700/mo. $300/mo for food, $150 for utilities, etc.

Aside from health insurance, this is very doable. If you want to travel, stay in a hostel. If you don't want to rent, you can buy a condo or rowhouse for $200K and get a reverse mortgage when the time comes.

Personally, I get a bit cranky when I see people scold anyone who dares contemplate a lower-middle class drawdown. Heaven forbid the thought of wearing levi's and enjoying a burger and beer with friends at the local sloppy joe's. Leave the $50 bottle of wine on the shelf and find a hobby that doesn't take you to the mall.

When you factor in social security, I'd say $600K will allow an otherwise happy 50 year old to never work again - or work only sporadically.

Jon
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Re: ER on less than 600K ?
Old 05-19-2006, 11:30 PM   #17
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Re: ER on less than 600K ?

Quote:
Originally Posted by ferco
Has anyone been able to ER on 600k or less? If so how did you do it? I read the Barron's article previously referenced, and was just wondering if this was a rare occurence or something done by a lot of folks (comfortably) in today's economic climate.
Fero,

You could easily ER in Thailand on 600K. I've been here for +3 years, and I'm now spending about 13.2K per year inclusive of taxes, laptop, travel in China, Cambodia etc.

Lance
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Re: ER on less than 600K ?
Old 05-19-2006, 11:34 PM   #18
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Re: ER on less than 600K ?

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Hmm. *Am I wrong to think that some people here are spoiled? *$2,000/mo is more than many people in this country live on. *Here in Oregon, one can rent a nice 2 bedroom apartment for $700/mo. *$300/mo for food, $150 for utilities, etc.

Aside from health insurance, this is very doable. *If you want to travel, stay in a hostel. *If you don't want to rent, you can buy a condo or rowhouse for $200K and get a reverse mortgage when the time comes.

Personally, I get a bit cranky when I see people scold anyone who dares contemplate a lower-middle class drawdown. *Heaven forbid the thought of wearing levi's and enjoying a burger and beer with friends at the local sloppy joe's. *Leave the $50 bottle of wine on the shelf and find a hobby that doesn't take you to the mall.

When you factor in social security, I'd say $600K will allow an otherwise happy 50 year old to never work again - or work only sporadically.

Jon
Right there with ya. *I've been living on about 15000 a yr. Include market value of the medical insurance I get as retired military and it comes to about 21,000.

All I want is what I call "Having the Day". *As long as I have sensory contact with the world, the sun, the air, and am not in too much pain I don't need a red sports car, a big house, expensive restaurants (which on my scale is any restaurant) or traveling plans
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Re: ER on less than 600K ?
Old 05-20-2006, 12:14 AM   #19
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Re: ER on less than 600K ?

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Personally, I get a bit cranky when I see people scold anyone who dares contemplate a lower-middle class drawdown.* Heaven forbid the thought of wearing levi's and enjoying a burger and beer with friends at the local sloppy joe's.* Leave the $50 bottle of wine on the shelf and find a hobby that doesn't take you to the mall.
Jon and Razztazz - this is music to my ears. I'm right with you on this view. A very useful key to an unencumbered retirement is to understand that it's not how much we have but how much we need.

Beautifully put, both of you! 8)

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Re: ER on less than 600K ?
Old 05-20-2006, 12:39 AM   #20
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Re: ER on less than 600K ?

PortlandDiehard, well said!* In NM a 2 BR apt can rent for less than $500 and that is your main cost driver.*

Before I retired I noticed that the debt to income ratio for banks to provide a loan was in the 33% range.* If this is a true estimate of what the amount of debt service a person can live with is then couldn't someone live debt free on twice what their equivalent "home" payment is, provided they didn't have to make an equivalent "home" payment?* So if someone wanted to retire couldn't they retire (if they were debt free) by buying a 4 unit apartment building outright and living in one unit.* With 25% of the projected rents (1 unit's rent) for building expenses (including vacancy factor) that would make their equivalent "home" payment 33% of the remaining rental income, which is exactly the banks qualification debt/income ratio.* And in NM you can easily get a 4-plex with 2 BR units for $200k so it should be very doable to retire on $600k.* All you need to do is find a 4-plex in an area and with the apartment size that you are willing to live in.

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