Poll: How much income do you need to retire?

[rbmrtn]

I have used 30k/yr for planning, but actual spending has been less than 20K. Of the actual expenses, almost 40% is tied up with property tax and insurances ( auto/health/home),

[Walt34]

We're in what I'd call a lower-cost-of-living area but not anywhere near the lowest, even though it is in WV. When SS starts in a year or two we'll be about $73k/year which we regard as "very comfortable but not luxurious". Everything is paid for so no debt and slowly drawing down on some savings until starting SS rather than make a stretch, but we could if we had to.

We know people who are doing fine on half of our income so we know we could too if we had to so we feel lucky to be in the position we are.

[nuke_diver]

I went with 75-100K as a comfortable number. The reality is a lot less but that number would include taxes and travel. Travel would be reduced/eliminated in bad times and I imagine taxes would as well. In fact taxes are the thing that makes the range hardest to figure out

[FIREd]

It is hard to come up with a number for us because we don't really know what we will do once DW retires. If we decide to continue renting in or near San Francisco, I think that $125K-150K would be a good target. If we move elsewhere in the US (somewhere in the southeast probably) and purchase a cheap home, $75K-$100K might be sufficient. And if we move back to Europe, $50K-$75K might be plenty comfortable. Right now we are shooting for $120K-$150K in order to keep our options open.

[38Chevy454]

Still working for now, but I figure about $60K/year total, after taxes will give plenty for the discretionary portion to cover travel and extras. Minimum fixed expenses is about $24K/year, but that does not allow for any real extras. $3K/mo gives a lot of flexibility on discretionary side of the budgeting.

Assumptions in my numbers are no mortgage or car debt.

[Rustic23]

Lots of good answers.

As I said there have been lots of threads on how much we spend on retirement. I believe that the primary number one must know is 'how much you must spend'. Close to that may be how much you want to spend. In our case I know the number, day to day, we must spend to maintain our lifestyle. I also know what could be cut, and what I might like to add. Our 'secure' income stream is twice our 'must' spend amount. That puts us in the $50 to $75 thousand dollar range. And while intrinsically I know this is enough, my real feel safe number is one step higher.

Good points that people in higher COL regions would need a higher number, and may bump a category. However, I think the risk tolerance factor might also bump a category or two. It's hard to structure a poll that evaluates a subjective matter with an objective tool. That's where comments come in. A better poll might have been percentage above expenses. In our case it is 44% more than our total expected annual spending.

[Cobra9777]

I answered $100-125K, based on the OP's description. I was a bit surprised to see only 9% in that category. The reality for us is $80-100K, excluding income taxes. And that's fairly comprehensive, with decent allowances for travel, entertainment, hobbies, and periodic one-shots, like car replacements and home improvements/repairs. We'd like to go a little higher on travel, which is the only reason I rounded up. But we're in that early stage of retirement (53-54) where we want to travel extensively, but are also nervous about spending too much too soon, and potentially screwing up the whole plan.

I'm also surprised and impressed by the large number who answered $25-50K. I sometimes wonder if those numbers are truly comprehensive, especially in the area of periodic one-shots. But more importantly, it always makes me pause to think about our lifestyle and expenses. With the possible exception of our house (which will be downsized at some point), I don't consider our lifestyle to be out of the ordinary at all, and certainly not luxurious. We are seasoned scrimpers on recurring expenses, like cars, TV, phones, utilities, groceries. But, in addition to travel and hobbies, we do enjoy concerts, sporting events, a decent bottle of wine now and then, eating out with friends and family a couple times a week, and helping the kids in small ways. Subtract all that... and the result is not really what I had in mind for retirement.

[W2R]

Quote:

Originally Posted by Rustic23 Lots of good answers. As I said there have been lots of threads on how much we spend on retirement. I believe that the primary number one must know is 'how much you must spend'. Close to that may be how much you want to spend. In our case I know the number, day to day, we must spend to maintain our lifestyle. I also know what could be cut, and what I might like to add. Our 'secure' income stream is twice our 'must' spend amount. That puts us in the $50 to $75 thousand dollar range. And while intrinsically I know this is enough, my real feel safe number is one step higher. Good points that people in higher COL regions would need a higher number, and may bump a category. However, I think the risk tolerance factor might also bump a category or two. It's hard to structure a poll that evaluates a subjective matter with an objective tool. That's where comments come in. A better poll might have been percentage above expenses. In our case it is 44% more than our total expected annual spending.

Using last year's data, I added up my present spending for these categories:

utilities
car/gasoline
house maintenance and upkeep
medical
clothing
insurance
tax, and
1.5 times my grocery expenses, in an attempt to model grocery costs if we didn't eat lunch at restaurants every day.

(The result hasn't been a bare bones budget, because I could cut back in each category if I needed to.)

My maximum spending so far in my first five years of retirement, has been 26% higher than that. But that doesn't count the rare expenses like replacing a roof or car. Your estimate of 44% higher would definitely cover that type of unusual expense, at least for me. Like some other single retirees who live in low COL areas and who don't want to travel much, I would still be in the lowest category even if I spent 44% higher.

[NW-Bound]

Quote:

Originally Posted by Cobra9777 ... The reality for us is $80-100K, excluding income taxes. And that's fairly comprehensive, with decent allowances for travel, entertainment, hobbies, and periodic one-shots, like car replacements and home improvements/repairs...

I certainly hope that my recent one-shot expenses will not turn into machine gun fire!

Well, at least I hope to pay for my daughter's upcoming wedding only once. And the new siding on the mountain home is guaranteed for so many years.

But then, the big deck is looking bad after not quite 10 years. And our cars are getting old. Pool and cool deck may need resurfacing.

"If it's not one thing, it's 'nother".

[RetireAge50]

At age 50 if I can conservatively estimate 75k income I'm done.


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[eyeonFI]

I plan for about $55k. That's single with 2 young kids in a high cost area (but house, car, and kids' college tuition is already paid for).

[jkern]

Essentials are about $26K and total standard of living cost about $55K. Single, living in SF Bay Area with 23 year old daughter on her own (so she says!).

[MuirWannabe]

$125-140K seems to be the range I keep finding given our current spending plus up and down adjustments after retirement. This is inclusive of taxes and allowances for periodic hits for home repair and autos. Still, seems so high compared to most others. And as Cobra says, it does not feel like we are big spenders in spite of this estimate. If I could comfortably knock that number down by $20K I could retire today. But instead I'm still working for now and scratching my head while looking for cutting opportunities we can tolerate.

Just seems like every month it's something new that hits from a one-off perspective. One month its a large dental bill, next month its a full AC replacement, next month we did a vacation, next month.......and so it goes.

Muir

[ziggy29]

This was a little tough for me to answer but in today's dollars, since you said *need* I think we can do it with less than $50K. We don't have extravagant tastes but we would prefer to retire with around $60-70K... but we could do it reasonably with less than $50K.

I would say $40K would be "tight" but doable, $50K would be reasonably OK, and $60-70K would give us what few frivolous splurges and pleasures we have to make us quite happy. Anything above that would be gravy, and much of our income above that level would go to charity anyway -- which does, in its own way, enhance our enjoyment of life.

Quote:

Originally Posted by MuirWannabe Just seems like every month it's something new that hits from a one-off perspective. One month its a large dental bill, next month its a full AC replacement, next month we did a vacation, next month.......and so it goes.

Very true. If you aren't budgeting for one-off "emergency" type stuff (and yeah, it seems like there is a different one every month), you probably aren't budgeting well.

[Rick_Head]

Need or want?

While I could find a way to live on about $25K (for 2), it's not the way we want to live. My vote went with to the $100K+ option because that's what we have and we like the option of spending it all. Some years we do, some we don't.

[Car-Guy]

Quote:

Originally Posted by Rustic23 I got to wondering how much income do you think you need to retire. Here are my criteria. "In order for me to retire comfortably, I think I need $xx,xxx, before tax, inflation adjusted income per year." This is not just 'how much to cover expenses' but how much you think you need to live comfortably, pay bills, travel, etc.

Needed to live "comfortable" - maybe 60 to 70k
Actual spend the past 2 years in retirement - 120 to 125k per yr

[Ally]

This thread is comforting. We have income of 77,000 with social security and pension without drawing anything from investments. I'm one of those who worries about running out of money, but it looks like we should be fine in our low cost area.


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[REWahoo]

Quote:

Originally Posted by Ally This thread is comforting. We have income of 77,000 with social security and pension without drawing anything from investments. I'm one of those who worries about running out of money, but it looks like we should be fine in our low cost area.

Fine? I'll say.

[lemming]

I went to war with the Army I had. So my spending should be $35K. I spent more the first 6 years of retirement then prudent but my portfolio is up .
I haven't "saved" any money during that time. I guess I could start an envelope for a new car but I won't move money out of 401k to do that until it is time. I do have a line item in my budget for it-so maybe I have paid for it.
Markets do go down-if I stuck $30k in a drawer maybe I would feel better about car shopping in a couple of years.

[haha]

Quote:

Originally Posted by Totoro Excluding rent $15k.

Is this the under a bridge option?