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Old 11-29-2010, 07:03 PM   #61
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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 ?


Darn it MB, every time you put that picture up, it sets off a laughing spell here at our house! At the bottom of our recent portfolio dip, we pictured that lifestyle as being just a small step away! Mr and Mrs youbet, the kids, the grandkids and my MIL living in a rotting slide-in camper in desolation and squallor.

But hey, better than workin' fer da man!
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Old 11-29-2010, 07:13 PM   #62
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Or..you can build your own:

Tiny house movement thrives after real estate bust - USATODAY.com
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Old 11-29-2010, 07:24 PM   #63
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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).
Haven't read about these subsidies, but I'm more looking at retiring overseas where I can buy health insurance from bupa or International Health, Life and Income Insurance for expatriates for ~ $1000 a year.

As for the OP, what is the particular attachment to the Northeast US? Family or some other obligations? I live in Boston, and you can certainly pay all of your living expenses plus some small indulgences on your budget if you had a paid-off house in a county without very high real estate taxes and if you had employer subsidized health care. You can even eat out at a cheap buffet 2-3 times a week for $10 a piece during lunch hours. However, expensive meals such as sashimi dinner will have to be curtailed to once a month. I spend less than $2000 a month, but I am still working 5 days a week, so I'm not trying to fill 7 days a week with entertainment and diversions.
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Old 11-29-2010, 07:25 PM   #64
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Come on guys, it really is pretty easy.

$1,000,000 invested in intermediate term municipal bond fund (like Vanguard), throwing off a real return of, say 2%, would give you a perpetual $20,000 inflation adjusted for eternity with zero taxes. In fact, you would be eligible for every scrap of welfare the government allows. In 2014 you will get a health care subsidy that pretty much entirely covers your medical costs. Probably some other stuff you could get too, but not sure what is income tested vs means tested.

So designing the budget for a cheapo 2014 retirement monthly budget:
Healthcare costs - $50/month
Rent - $500 (this gets you a nice safe 2bd house in rural deep south...good climate and pretty low crime)
TV - antenna
Internet - library
Utilities - $75
Food+Toiletries - $200
Car - public transportation or bicycle
Entertainment - hiking, biking, reading, fishing, go to library and spend 8 hours/day bragging on early-retirement about how you manage to live on 20K a year
Clothes - Thrift shop - $25


Total Monthly costs: $850
Total Monthly tax free income: $1667
Surplus: $817

Not real sure what to do with the surplus...I guess re-invest it in the municipal fund?
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Old 11-29-2010, 07:42 PM   #65
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So designing the budget for a cheapo 2014 retirement monthly budget:
Healthcare costs - $50/month
Rent - $500 (this gets you a nice safe 2bd house in rural deep south...good climate and pretty low crime)
TV - antenna
Internet - library
Utilities - $75
Food+Toiletries - $200
Car - public transportation or bicycle
Entertainment - hiking, biking, reading, fishing, go to library and spend 8 hours/day bragging on early-retirement about how you manage to live on 20K a year
Clothes - Thrift shop - $25


Total Monthly costs: $850
Total Monthly tax free income: $1667
Surplus: $817

Not real sure what to do with the surplus...I guess re-invest it in the municipal fund?

No way would you be paying $75 in utilities in the deep south unless you really like to sweat .
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Old 11-29-2010, 07:53 PM   #66
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No way would you be paying $75 in utilities in the deep south unless you really like to sweat .
You forget that he will be spending 8 hours a day bragging on ER.org in the public library where there is free aircon. The point is that even in 79's half-tongue-in-cheek budget, there is room to spare. There is not preparing for ER, and there is being scared to death that you'll never ER or even LR. I hope the OP can find the balance between the two types of responses and make up his own mind.
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Old 11-29-2010, 07:57 PM   #67
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Well, I grew up in south Georgia without air conditioning. We spent a lot of time at the public pool or the local lakes/rivers. Fans help a lot, and also you can just deal with it, like about a billion+ people do in India.

I think the issue people are having with living on $20,000 is they have been spoiled. They simply MUST purchase the name brand bag of flour instead of the store brand, or upgrade their cell phone when the new Iphone 27 on the latest 8G network comes out. I think it could be quite fun living on $20K...the only reason I am not doing it now is because I don't have the $1 million yet and am living on the left coast as cheap as possible (still expensive) socking it away as fast as possible. All in all the climate here sucks compared to Georgia (29 degrees and rain here, 78 degrees and sunshine in Georgia). Salary here is 4x more though...
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Old 11-29-2010, 08:01 PM   #68
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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.
just want to point out Medicare is not free. You pay for it. The part b (doctors visits) premium will be over $100 per month next year. Part D (drug coverage) is an additional premium. The plan does not cover all of what you need. Copays and out of pocket can add up to a lot of money if you get sick. I know this as I help MIL with her health insurance claims.

I am painfully aware of medical costs myself as our premiums went up 68% this year and with a hx of cancer and back surgery after a fall on the ice we'll lose everything either condition required treatment without good insurance. Any of us at any time could have a heart attack, fall down the stairs or be diagnosed with a disease. Quite a gamble to not have good health insurance.

While it is possible to live on $20,000 a year (slightly above minimum wage working fulltime) it is certainly not anything I would willingly do.
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Old 11-29-2010, 08:01 PM   #69
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Haven't read about these subsidies, but I'm more looking at retiring overseas where I can buy health insurance from bupa or International Health, Life and Income Insurance for expatriates for ~ $1000 a year.
The Obamacare/Health Care Reform that kicks in in 2014 will give subsidies to those making less than 400% of Federal Poverty Level ($88000 AGI for family of 4). This will make health insurance nearly free for those living at 133-150% of FPL ($33000 AGI for family of 4). I'll be able to pull $45-50k a year from the portfolio fairly easily without exceeding $33000 AGI, hence get free or very cheap health insurance.

$50k/yr and paid off house goes a long way here in the southeast.
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Old 11-29-2010, 08:24 PM   #70
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No way would you be paying $75 in utilities in the deep south unless you really like to sweat .
Well, in this particular example, the budget shows the person renting. That usually includes all utilities except electric. I could get by with less than $75/mo average for just electric even in the deep south. It costs much more to heat in winter than to cool in summer. Just think, if your ideal temp in 72, then you have to cool less than 20 degrees average in deep south summer but have to heat 50 degrees or more in northern winter. So $75/mo for just electric should be very doable unless you have a McMansion and that's a whole 'nother problem.
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Old 11-29-2010, 08:33 PM   #71
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Well, in this particular example, the budget shows the person renting. That usually includes all utilities except electric. I could get by with less than $75/mo average for just electric even in the deep south. It costs much more to heat in winter than to cool in summer. Just think, if your ideal temp in 72, then you have to cool less than 20 degrees average in deep south summer but have to heat 50 degrees or more in northern winter. So $75/mo for just electric should be very doable unless you have a McMansion and that's a whole 'nother problem.
And actually there is probably a way, if you are motivated enough, to get some government assistance on your electric bill. I would already feel a wee bit bad about having the rest of you pay for all of my health care costs though, and so probably would not pursue this.

Perhaps a use for the extra ~$800 a month we have leftover from our $20K a year deep south income could be set aside to buy a small farm with a peanut subsidy alotment (where they pay you NOT to grow peanuts). Or maybe just take a road trip to Panama City, FL every two months and eat seafood/fly kites.
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Old 11-29-2010, 08:35 PM   #72
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Well, in this particular example, the budget shows the person renting. That usually includes all utilities except electric. I could get by with less than $75/mo average for just electric even in the deep south. It costs much more to heat in winter than to cool in summer. Just think, if your ideal temp in 72, then you have to cool less than 20 degrees average in deep south summer but have to heat 50 degrees or more in northern winter. So $75/mo for just electric should be very doable unless you have a McMansion and that's a whole 'nother problem.

I looked at that but he was referring to a two bedroom house and they do not usually include utilities .
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Old 11-29-2010, 08:38 PM   #73
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Actually I just checked the local paper online in the town in south Georgia where I grew up:

2BR-2BA Duplex in a very quiet neighbor hood for only $425 a month plus a security deposit. Rent includes water and security light

So rent was a bit cheaper than I had thought. This leaves an extra $75 added to our $817 surplus per month on a $20K/year income.

So now we have to figure out what to do with almost $900 extra a month, tax free!

If you are willing to not live exactly in the town where I grew up:
AVAILABLE NOW!! 907 Nardo St., Valdosta Ga. 2bd/1ba, dinning room, carport, central heat, fenced yard, Includes, Stove & Washing Machine Included. Very Clean, $380mo/$380dep. No Pets.
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Old 11-29-2010, 08:47 PM   #74
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I looked at that but he was referring to a two bedroom house and they do not usually include utilities .
I've only rented apartments, no houses, so i'm not sure what's usually included. Even now that i'm an owner I only pay electric. Everything else is covered by the condo fee.
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Old 11-29-2010, 08:59 PM   #75
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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 am still waiting for the info so I can go to Realtor.com and find a 1500 sq ft townhouse "in one of the most affluent areas of the country" in the "low $100k range."

Please, give an end to my suspense.
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Old 11-29-2010, 09:28 PM   #76
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We can assume whatever we want...
Sure. Just like we assume that "past is prologue" when we extend FIRECalc past results into the future. So many decisions in our life are made based on assumptions.

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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?
I already said what I have been spending more than once. Yes, it is more than $20K. Can it be cut back? Yes, if I cut out the "non-essential" expenditures, but again, medical costs are tough to manage. And why didn't I stop working? Well, you are making the assumption that I hate what I have been doing. If I truly abhor my job and need to ER asap, perhaps I could find a way to retire with $20K/yr.

About the accumulation, I have said more than once that I like to have money for the pleasure of counting it. I like to hoard money. And when I get paid to do interesting work, in order to have more money to hoard, well it's obvious what I have got to do.
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Old 11-29-2010, 10:01 PM   #77
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perhaps I could find a way to retire with $20K/yr.

Uh huh...........

That's what's great about the internet. We can all "perhaps" do something! Me too!

Sounds to me like you wouldn't be a happy camper on a $20k pre-tax income. Makes sense to me, I wouldn't be either, although mine is just slightly above that. But I understand, it's fun to arm wrestle hypothetical stuff!

Way, way back at the beginning of this silly thread, I said that we wouldn't really be able to answer the question because we didn't have the information necessary to crunch the numbers and we don't know how OP feels about tight-budget living. We just know, from another thread, he makes real good money now, about $80k. So would he be able to enjoy his retirement and life based on a $20k pre-tax income while living in the NE. I have no clue and I think I'm done with this thread.
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Old 11-29-2010, 10:07 PM   #78
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Come on! Didn't I provide a link earlier in this thread showing how a single gal who is a full-time RV'er is having great fun on $20K/year? In my case, if I really like to RV that much, and if I can talk my wife to join me - I assume that she is allowed to bring her own $20K to the table, so to speak - then, my oh my, are we in hog heaven with that $40K or what?
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Old 11-29-2010, 10:13 PM   #79
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Go for it! Keep us posted! And why not bring along a couple friends and have $80k?

You folks sure are high rollers out there. If I needed that kind of money to live, I'd still be working........
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Old 11-29-2010, 10:23 PM   #80
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Go for it! Keep us posted! And why not bring along a couple friends and have $80k?
Well, even two is a tight fit in a space of 8'x25'. Anyway, I do not know if I like to RV that much yet. I will find out after the Alaskan trip next year.

If I do not like it, then it would be just me. You, sir, on the other hand seem skeptical that people can have a good life living in an RV for $20K.
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