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Old 11-29-2010, 10:52 AM   #41
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Sounds like a new topic for a book, "How to Retire Early on the Backs of Taxpayers".


I think most people looking to RE in the next few years may be looking forward to subsidies for health insurance. I know I am. They are offering subsidies for those "earning" up to 400% of the poverty level. And "earnings" are defined as your 1040 AGI, an income stream which can be optimized to get you an optimal level of subsidies (assuming you have some Roth, some taxable accounts, and some Trad IRA's/401ks).
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Old 11-29-2010, 12:13 PM   #42
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Sheesh. This unbridled enthusiasm needs tempering with the facts:

"Texas is infested with scorpions, rattlesnakes, fire ants, crazy raspberry ants, cockroaches on steroids, killer bees, mosquitoes, ticks, chiggers, tarantulas, brown recluse spiders, love bugs, swarming crickets, copperheads, cottonmouths, rabid skunks, wild hogs, alligators, oppressive heat & humidity, bleak desolate scenery, dirty beaches, polluted air, dust storms, drought, wildfires, water shortages, recurring floods, tornadoes, hurricanes, rednecks, huge piles of flaming mulch, spontaneously combusting playgrounds, roads hot as flowing lava, the stench of natural and unnatural gasses, pirate attacks and amoebic meningitis lurking in area lakes, recurring ebola virus outbreaks, flesh eating bacteria, the highest homeowner insurance rates in the US, unbelievably high property taxes, mandatory death sentences for DUI convictions, polygamous religious sects, and, lest we forget, doesn't look kindly towards Yankees (per Orchidflower)."

Sounds like my inlaws home also if you through in Radical politics!
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Old 11-29-2010, 12:36 PM   #43
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In MA on $20k a year you'd qualify for the state "Commonwealth Care" health insurance program and probably pay around $100 a month in premiums. In Boston you can rent a room in a flat share for $800 (maybe a bit less) a month. So those two items would take up half your budget. It would be difficult to live a "normal" life.

I'm looking at ERing on $30k/year (after tax) in Boston after the house is paid off.
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Old 11-29-2010, 01:04 PM   #44
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There are lots of places where you can live this cheaply but are the trade offs worth it. Here in upstate NY there are lots of run down small towns with cheap rents but I wouldn't want to live there. If you live on so little you are going to be living among many people on public assistance, people that are trying to stay out of work any way possible (ie disability, workers comp) etc, people that know how to use the system, or work under the radar with drugs, stolen goods etc.

There are many people on disability, workers comp, and even some public assistance that are deserving, hard working people down on their luck, but from my personal experience in the small inexpensive town I moved from they were in the minority. You may have better luck than I did. Now that I moved to a town where expenses are higher there is much less crime, a great library, good grocery stores and a general attitude of personal responsibility and pride.
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Old 11-29-2010, 01:22 PM   #45
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There are lots of places where you can live this cheaply but are the trade offs worth it. Here in upstate NY there are lots of run down small towns with cheap rents but I wouldn't want to live there. If you live on so little you are going to be living among many people on public assistance, people that are trying to stay out of work any way possible (ie disability, workers comp) etc, people that know how to use the system, or work under the radar with drugs, stolen goods etc.

There are many people on disability, workers comp, and even some public assistance that are deserving, hard working people down on their luck, but from my personal experience in the small inexpensive town I moved from they were in the minority. You may have better luck than I did. Now that I moved to a town where expenses are higher there is much less crime, a great library, good grocery stores and a general attitude of personal responsibility and pride.
This is a post from someone who knows what he is talking about. I often have this-"where could they possibly be talking about feeling" when members post about how to live very cheaply. Unless there is some place in America where there are no drugs, no section 8, no illegals living 8 to an apartment, no street crime or break-ins in cheap neighborhoods, etc- then this stuff is mostly fantasy.

Most people living on very little are not former college professors who got tired of working, but read Wittgenstein in their cherished leisure. On very little money, a formerly middle class person is at a great disadvantage to people to have entire communities of information sharing (often in languages that the fallen middle class person will not even understand), entire bureaucracies devoted to keeping these communities pacified, schools that will not even begin to be safe, let alone give an adequate education to any children that one might have, no acceptance by neighbors, etc.etc.

One does what he has to do, but IMO to elect this situation reflects desperation for which there must be better answers.

There is enough happytalk BS out there to make it wise to stop, look, and listen very carefully.

Ha
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Old 11-29-2010, 01:48 PM   #46
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This is a post from someone who knows what he is talking about. I often have this-"where could they possibly be talking about feeling" when members post about how to live very cheaply. Unless there is some place in America where there are no drugs, no section 8, no illegals living 8 to an apartment, no street crime or break-ins in cheap neighborhoods, etc- then this stuff is mostly fantasy.

Most people living on very little are not former college professors who got tired of working, but read Wittgenstein in their cherished leisure. On very little money, a formerly middle class person is at a great disadvantage to people to have entire communities of information sharing (often in languages that the fallen middle class person will not even understand), entire bureaucracies devoted to keeping these communities pacified, schools that will not even begin to be safe, let alone give an adequate education to any children that one might have, no acceptance by neighbors, etc.etc.

One does what he has to do, but IMO to elect this situation reflects desperation for which there must be better answers.

There is enough happytalk BS out there to make it wise to stop, look, and listen very carefully.

Ha
+1

Excellent point Ha. I agree, much of the low income community is made up of folks who wouldn't necessarily share the values of a previously middle class, now income-challenged, early retiree. Finding a community of kindred spirits amongst the poor with whom to dwell would be one of the biggest challenges. I'm sure it's possible and I know how I'd go about it. But I'd be darn sure where and amongst who I was going to dwell before I permanently pulled the switch and began a life of low income survival.
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Old 11-29-2010, 03:27 PM   #47
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[COLOR=black][FONT=Verdana]This is a post from someone who knows what he is talking about. I often have this-"where could they possibly be talking about feeling" when members post about how to live very cheaply. Unless there is some place in America where there are no drugs, no section 8, no illegals living 8 to an apartment, no street crime or break-ins in cheap neighborhoods, etc- then this stuff is mostly fantasy.
Ha
I live in an Iowa college town and county seat with a population around 10,000. I've probably ridden my bike on every block in town, I can't think of any place where I would worry about street crime. I'm sure we have drugs and section 8 users, but there isn't a neighborhood that feels dangerous.

There are a couple houses in the the paper listed at $100k, I'm not sure what that converts to in rent.
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Old 11-29-2010, 03:28 PM   #48
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Oh come on now, lets not get ridiculous, it isn't that hard to find affordable housing in a good area. My parents live in one of the most affluent areas in the country, and there are town houses (1500 sq ft) a couple blocks away that buy/sell in the low 100k range. I actually saw some of my former engineering college graduates living over there.

Sure, you won't necessarily get a 3,000+ sq ft house for anywhere near that amount (or if you live on the California coast), but you certainly don't need to be living with the lower class either.
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Old 11-29-2010, 03:37 PM   #49
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I live in an Iowa college town and county seat with a population around 10,000. I've probably ridden my bike on every block in town, I can't think of any place where I would worry about street crime. I'm sure we have drugs and section 8 users, but there isn't a neighborhood that feels dangerous.
I have been to Topeka, Kansas (many times) and that pretty well describes that town, also.
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Old 11-29-2010, 03:51 PM   #50
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Oh come on now, lets not get ridiculous, it isn't that hard to find affordable housing in a good area. My parents live in one of the most affluent areas in the country, and there are town houses (1500 sq ft) a couple blocks away that buy/sell in the low 100k range. I actually saw some of my former engineering college graduates living over there.

Sure, you won't necessarily get a 3,000+ sq ft house for anywhere near that amount (or if you live on the California coast), but you certainly don't need to be living with the lower class either.
I think your definition of "affordable" housing and mine are different. Just saving the downpayment for a $120k townhouse would be a challenge on a $20k/yr pre-tax income. Then the PITI, association fees and utilities would need to be paid. Kind of a stretch on $20k pre-tax.

Given you're paying rent, med insurance and all other support for yourself, you'd have to research your situation carefully to avoid "living with the lower class" (as you put it). You'd be in the equivalent situation to someone who was working for $10/hour with no benefits. And that's not middle class.

In any case, my position is not that it can't be done. I'd just be darn sure of what my surrounding would be like before I jumped in. Here in the Chicago area there are some accomodations available in the $600 - $700 range. But I'd spend a lot of time hanging around those buildings before signing a lease to ensure I'd be a happy camper while living there. I think it would be hard to find a community where my middle class values would be commonly shared in that price range.
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Old 11-29-2010, 04:59 PM   #51
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Here in the Chicago area there are some accomodations available in the $600 - $700 range. But I'd spend a lot of time hanging around those buildings before signing a lease to ensure I'd be a happy camper while living there. I think it would be hard to find a community where my middle class values would be commonly shared in that price range.
YMMV as far as cost of living. Chicago is on the more expensive end of things, particularly with regard to housing from what I gather.

Some cities/regions are high rent for whatever reason. Plenty of other perfectly nice cities, regions, or parts of cities are not high cost of living, for whatever reason. $700 rent gets you a crappy place to live with sketchy roommates in some cities. In other cities, it gets you a decent, yet basic apartment or townhome in a decent part of town (where the median income of your zip code is a little less than the median income of the city overall).
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Old 11-29-2010, 05:25 PM   #52
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I think your definition of "affordable" housing and mine are different. Just saving the downpayment for a $120k townhouse would be a challenge on a $20k/yr pre-tax income. Then the PITI, association fees and utilities would need to be paid. Kind of a stretch on $20k pre-tax.
The OP was asking about retirement living on $20K. So, can we assume that our hypothetical retiree has saved at least the money to own a little townhouse?

We are helping our daughter look to buy a 1000-sq.ft. townhome in a nice area. People were paying $220K for them at the top of the market. There are several on the market now, at prices around $80K. This is absolutely a nice subdivision.

Back to the original question, I think the $20K is ample if it weren't for the medical costs.
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Old 11-29-2010, 05:37 PM   #53
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The OP was asking about retirement living on $20K. So, can we assume that our hypothetical retiree has saved at least the money to own a little townhouse?
OP said: "This amount would have to cover all living expenses, including mortgage/property taxes/utilities/ or rent and health insurance."

So no, the hypothetical retiree will not have the money to own a little townhouse--he will have to pay for housing out of the $20K, whether mortgage payments or rent.
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Old 11-29-2010, 05:47 PM   #54
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If so, I think our hypothetical retiree should keep on working until he is 65. A link I provided earlier about a woman full-time RV'er shows that she is living well on $20K, which includes her medical insurance. However, at least she has the travel trailer+towing truck as assets. If a person has absolutely no asset, well, he better keeps working until he has some.

Let's take the problem another way. The original question is whether he can retire, and not to retire early. At 65, he gets Medicare, and the question of medical costs is lifted. Then, yes, I think he can retire.
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Old 11-29-2010, 06:38 PM   #55
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Stop wurkin' and start livin'

You can retire on that amount with money to spare. You just have to live the right way:

Do you wanna work for the man the rest of your life ?


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Old 11-29-2010, 06:46 PM   #56
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The OP was asking about retirement living on $20K. So, can we assume that our hypothetical retiree has saved at least the money to own a little townhouse?
We can assume whatever we want. That's what makes these "how much $$$ does it take" discussions kind of silly. At the $20k range, housing and medical insurance are the keys. Some people assume they'll have both covered outside of their "income" and others assume they'll have to pay for both. OP didn't say he had a house, just $20k of income. So that's what I was thinking through. It's all hypothetical.
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Back to the original question, I think the $20K is ample if it weren't for the medical costs.
Sure, why not? It's all what you assume. In my case I live in a modest home in a Chicago suburb. I take nice vacations regularly, have a small RV, dine out, enjoy live entertainment in the city, have 3 cars, pay my special needs grandson's therapy bills, help MIL financially and, well, you get the picture. My income? Just a few hundred bux over the $20K OP is asking about. It can be definitely be done! It just depends on the circumstances and assumptions!

Speaking of assumptions...... I assume you are spending more than $20K. And it's probably a good guess that at some point in your life your could have stopped working (I know you're still PT) and retired with a $20K spending level with a 100% prognosis of success. Yet, you keep accumulating. Maybe $20K isn't enough?
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Old 11-29-2010, 06:47 PM   #57
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Oh come on now, lets not get ridiculous, it isn't that hard to find affordable housing in a good area. My parents live in one of the most affluent areas in the country, and there are town houses (1500 sq ft) a couple blocks away that buy/sell in the low 100k range. I actually saw some of my former engineering college graduates living over there.
i would certainly like to see a listing. i can only speak of the places I have lived, and NONE of them fit your description.

Ha
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Old 11-29-2010, 06:52 PM   #58
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I have been to Topeka, Kansas (many times) and that pretty well describes that town, also.
You guys just love to argue. In what sense is Topeka, KS northeast? Northeast of Guymon, OK?

I remember reading of some yogi who lived on air and water, no need for food. I bet that would help quite a lot too.

Ha
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Old 11-29-2010, 06:53 PM   #59
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Some cities/regions are high rent for whatever reason. Plenty of other perfectly nice cities, regions, or parts of cities are not high cost of living, for whatever reason. .
Housing prices vary from place to place? Who would have known? Thanks for keeping us up on this stuff!
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Old 11-29-2010, 06:56 PM   #60
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very low cost housing area...



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