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Re: How much is enough
Old 07-04-2004, 10:26 AM   #41
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Re: How much is enough

I know what you mean about moving out of state. My parents are here and are in their 80s now.

My only sibling and her kids and grandkids are in Northern Florida, where I'm thinking of moving.

I'm leaving Tuesday morning to go check it out. I'll know more if I think I can uproot and move there in a couple of years.

I'm a 4th gen Californian so living elsewhere is not something I ever planned on doing. But the lure of ER is more interesting than living in my new house and working.
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Re: How much is enough
Old 07-04-2004, 12:05 PM   #42
 
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Re: How much is enough

Maybe this budget will help. I'm just retiring in Wisconsin [note high real estate taxes] Family ages 63,58,21,and 17. No debt and no health insurance. The total budget is about $47000/y. Income taxes are not included because I won't pay any [hallelujah] until the mandatory withdrawal starts at 70 1/2.

Autos [3]
Insurance 2500
Maintenance 500
Gas 24000mi 2000
Deprec. for replacements 2000

Home
Ultilities inc phone,tv and computor 4500
Home insurance 800
Maintenance 1000
Deprec. for new roof etc 500
Taxes 4600

Living Expenses
Food 6000
Dining and entertainment 2000
Misc dog food, soap etc. 1200
Beer and cig. 1000

Misc.
Clothes 500
Gifts 600
Vet cost 200
Mag and books 500
Charities & church 2000
Vacations 3000

Medical
Premium [5000 deduct.] 8400
Doctor and drugs 1500
Eyeglasses 400
Dentist 1000

TOTAL 46700
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Re: How much is enough
Old 07-04-2004, 03:14 PM   #43
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Re: How much is enough

I live in an area on the outskirts of yuba city that was just annexed into YC. Wife has a house in Marysville. I used to live in El Dorado Hills for 7 years and down in the south SF bay for 3.

YC/Marysville is still something like the 3rd biggest welfare town. Plenty of "unsavory" looking folks around. No more or less "trouble" than I had in EDH but shopping and eating out puts you with a sub working class crowd. Frankly doesnt bother me. I'm 30 minutes down route 65 or 99 to Roseville or Sacramento. There are some really nice middle class developments here and there where the living is similar to what you'd find in a typical Folsom neighborhood.

There are a number of new home construction developments being put up in older neighborhoods and a lot of old homes being knocked down in favor of new homes.

Prices have gone up a bit up here, and I'm not sure its commensurate with how far we are from the urban sprawl wave. My house would have sold for $175k 2 years ago, sold to me for $250 a year ago. Thats for a 6 year old 1900 sq. foot stucco house on a quarter acre in a cul de sac in a very nice neighborhood. There are a couple of similar properties listed for $300k today. The homes right behind me which are 1400 sq foot, about 15 years old, on .18 lots and on a main road that takes just a small amount of traffic run for about $200k. My wifes house will end up for sale sometime soon. 1500 sq ft 50 year old house, completely renovated, on a third of an acre. Somewhat crappy neighborhood thats starting to turn around. We'll get $170-180k for it. A new stucco house on a .15 lot in one of the new builders developments run about $300-350k for 1800-2500 sq ft homes, sort of like the Folsom Broadstone development.

Not cheap, but a lot less than Excramento for the same thing. In many ways it reminds me of what Folsom was like 8 years ago when I first moved there.

Food, restaurants and utilities are cheaper here.

For any listings anywhere, go to www.realtor.com for homes for sale. To see recent home sale transactions register at www.domania.com and do a search.

One other thought: I like my neighbors here a lot better than the ones I had in my old mcmansion neighborhood. I used to have overprivileged kids driving their bmw's through stop signs at twice the speed limit while chatting on their cell phones, and their hoighty-toighty parents who thought their money entitled them to do as they pleased without regard to their neighbors.

A fine example was the neighbor who had the dogs that barked 24x7, and the other one who was replacing some grass with a concrete pad - so his kid drove his pickup into the dirt and kicked it all over the place, then drove around the neighborhood leaving dirt clods everywhere.

In my new neighborhood I get bags of garden produce left on my doorstep, people stop by and apologize if they made a little too much noise or made a mess, and then clean it up. A couple of months ago my next door neighbors tree blew down in a storm and everyone in the cul de sac went out and helped him cut it up and haul it off.

Sometimes living with the rich and famous isnt as wholesome an experience as you might think. I'm considering my new neighbors and their kids a much better environment for my kids to grow up in than my old one. Of course, your mileage may vary...
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Re: How much is enough
Old 07-05-2004, 04:08 AM   #44
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Re: How much is enough

They got off into real estate properties and living on berries.
Budget was for 2 with a more reasonable standard of living.

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Re: How much is enough
Old 07-05-2004, 01:49 PM   #45
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Re: How much is enough

Quote:
*No debt and no health insurance. *The total budget is about $47000/y. *
1eng--
thx for the detailed budget -- my read of the national statistics on median income/spending suggest that this is right around the US average, so you probably speak for a lot of us. I did however see 8400 for health insurance-- is this extra or part of the 44k budget? I guess this also includes your 21 year-old -- presumably living at home? I also liked that you have depreciation in there for cars and roof etc which is something a lot of us try to gloss over... My only other pet peeve: we should probably be counting our investment management fees as an annual expense -- it is no less real for being snicked away from us before we even see it... >:(

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Re: How much is enough
Old 07-05-2004, 05:02 PM   #46
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Re: How much is enough

I was in the same ballpark. I shopped around on car insurance and cut the cost in half. If you are in a state with a large group of AARP members, their insurance rate is very reasonable.
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Re: How much is enough
Old 07-06-2004, 01:05 PM   #47
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Re: How much is enough

Quote:
My estimates are:
  • $19.3K for number 1: Amount needed to exist in retirement - food, clothing, shelter, gas, cable TV, telephone, internet, health ins., taxes, etc
  • $25.7K for number 2:extra ...needed for enjoying life - travel, hobbies, wine etc
  • $45.0K total - Grow at 5% per year
The above assumes no debt, house & car paid etc.
Well, I like your figures, but mine are much less. 2092 per month covers it all. A little tight sometimes (like when a trip to Zion National Park popped up this morning just when I got back from Lake Tahoe, and New England looms around the corner). Now if I had an additional 25.7k to spend on travels etc I'd be sitting sweet! As it is, the 2092 has to cover it all. And it will.

Quote:
Posted by: KB Posted on: Jul 4th, 2004, 1:05pm
I live in Folsom and know what you mean about getting crowded and expensive. * I just looked up recently sold homes in Woodland, and the lower prices are 255,000 and up to around 400,000.
I wish they'ld come down. Dtr bought in Stockton last year and it has gone up 50%. Son isn't in yet and he'll never ER at these prices! Residing in Clayton, Contra Costa County -- outside Walnut Creek.

1eng, informative budget ... seems to have plenty of wiggle room

Question for all: what is your definition of ER? I retired at 52, but that hardly feels early any more (been free 4.5 months )
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Re: How much is enough
Old 07-06-2004, 04:27 PM   #48
 
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Re: How much is enough

Hello gayl...........I felt like I was ERed when I semiretired
in 1993, even though I was still working part time.
Of course I went from gross workaholism to a kind
of a laid back, part time, relaxed situation. Anyway,
I was 49 in 1993 amd 54 in 1998 when I retired
completely. Quite a few of my contemporaries
still work. I am in the minority, but no longer unusual
at age 59.

John Galt
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Re: How much is enough
Old 07-07-2004, 01:59 PM   #49
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Re: How much is enough

So you decide on a budget that covers every foreseeable cost. You are dept free.
How much over that budget would provide reasonable comfort zone.
i.e. your budget is 45K, on the low end you anticipate a 5.5% return with 3% inflation. How much over the 45K should this result in ?

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Re: How much is enough
Old 07-07-2004, 06:43 PM   #50
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Re: How much is enough

Bobbee,
Others may calculate differently, but here is how I do it to be what I consider conservative: Assumes you don't have a pension.

I assume a 4% SWR- based on all the studies and my analysis, for a younger person (ER by definition) who statistically will live 40 years or so longer, I believe it is too long to think about drawing down assets, so 4% is a level which should preserve assets in real terms over longer periods. I assume about a 7-8% nominal return after investment fees, or 4-5% real return. (maybe a little higher than your 5.5%? but should be doable with a diversified blend of stocks and bonds.)

Doing the math, you would then need a $1,125,000 financial portfolio to support a 4% SWR and produce 45,000 a year. (Use the reciprocal of 4%, 25, for an easy way to calculate this -- 45k x 25 - 1125k)

If you don't have 1125k, and you don't have a pension coming, then you dig deeper and figure that you only need to have your 45k until you collect SS, at which point you need your living expenses in excess of SS to be supported by the portfolio. SO you can draw down between now and age 65, withdrawing more than 4%, and seeking to get to a smaller portfolio which will support the 20 or 30k additional you think you will need in retirement (if your SS is going to be 15 to 25k per year, for instance.)

FireCalc should do these calcs for you all rolled up inside its 'black box'. as well as take account of sale of assets, changes in living expenes etc. Very useful tool.

The point is you should think in terms of using a safe withdrawal rate (SWR) percent of your portfolio, not a simple annual earning amount with a cushion. Why? Because assets rise and fall in value, and inflation will ravage you over time, too. It also might push you to invest mostly in bonds, to get the 'sure return', which can leave you short in the long run.

I'm guessing everybody on this board will have a slightly different answer to your question-- something we all grapple with in our ER planning -- but that is my approach. I don't have a pension, won't get much SS and currently spend a little more than my 4% SWR, which I make up for with a bit of part time work. I figure the SS will replace my part time work income 20 years down the road, so for me the whole deal revolves around 4%, withdrawn forever, with the idea of downsizing the house (which we own outright) as the cushion if something awful happens in the markets, or in my spending, at some point.

ESRBob



So I don't think in terms of annual cushion, but in terms of
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Re: How much is enough
Old 07-08-2004, 06:42 PM   #51
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Re: How much is enough

Quote:
Re. a previous post about Vermont winters, I truly don't understand (absent special circumstances) why anyone chooses to live in winter weather like that.
John Galt
Skiing.
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Re: How much is enough
Old 07-08-2004, 06:50 PM   #52
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Re: How much is enough

Although I do not Ski, I enjoy watching it snow 8), and walking in the woods while it snows.

My son likes to ski, and I enjoy going to the ski lodge and watch the snow fall, and the people ski, and read a good book.

There is a freshness to the atmosphere that you only get after a snowstorm has cleared the air.

And snow is a great way to charge the aquifers - slow melting snow has a tendency to soak into the ground and not all run off.

And you must ask yourself why most of the most sucessfull civilizations (at least before air conditioning) are in the places where there are four seasons a year. It probably is healthier for people for the winters to kill off the insects and many pathogens once a year.
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Re: How much is enough
Old 07-09-2004, 06:36 AM   #53
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Re: How much is enough

Quote:
And you must ask yourself why most of the most sucessfull civilizations (at least before air conditioning) are in the places where there are four seasons a year. It probably is healthier for people for the winters to kill off the insects and many pathogens once a year.
How are you defining successful? My theory is that in tropical places the people spent all their time swimming, surfing, sunning and eating fruit all year instead of working whereas in four-season climates the people had to plan ahead, organize and innovate or die of starvation or bitter cold. 8)
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Re: How much is enough
Old 07-09-2004, 10:13 AM   #54
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Re: How much is enough

Almost...many of the past highly successful civilizations were in hot places where there was little cool weather. Mesopotamian, aztec, mayan, toltec, etc.

Except for not understanding crop rotation, smallpox, invaders with guns and cannons, and other sundry items, those civilizations might still be thriving.
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Re: How much is enough
Old 07-09-2004, 04:51 PM   #55
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Re: How much is enough

ESRBob
Good info

Why are tips rated so high with FIRECALC ?

Why do these unrelated posts appear in the middle of a topic ?

How can you figure the federal tax over the long run, ie. 10 %
(by the time you subtract all the deductons etc.)



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