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$25,000 to $50,000 79 19.90%
$50,000 to $75,000 111 27.96%
$76,000 to $100,000 96 24.18%
$100,000 to $125,000 57 14.36%
$125,000 to $150,000 17 4.28%
over $150,000 37 9.32%
Voters: 397. You may not vote on this poll

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Old 11-17-2014, 12:24 PM   #101
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I still feel jilted that an under 25K option wasn't included. It's tough for a poor boy to get any respect around these parts
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Old 11-17-2014, 01:15 PM   #102
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Too many "if's" to give a sensible answer, but some thoughts on cost as related to after retirement, when the basics like cars, house and other normal capital expense items such as furniture have been accounted for, and an estimate of what the cost will be when the time comes to move into an environment where basic care is available and expenses becomes fixed...

Ongoing current and expected cost in today's dollars.

"Extra"- Costs that we have now, but will not likely continue with after age 80. Florida and Lake (owned) homes. Current "extra" annual total approximately $12,000. That includes all maintenance, fees, utilities and taxes.
.................................................. ...............................

Current- We live in a regular home in Illinois, so these are the approximate expenses for two of us. Zero income Taxes.

1800 HOA exp.
3000 House tax and Insurance
11,000 Healthcare
5000 Auto (2) insur, maint, registration, gas and depreciation.
6000 Meals.. home and eating out.
2400 Electronics, TV, Internet, Phone, Computer
2000 Maintenance... repair, onetime costs
2400 Entertainment, travel, clothes, toys, Sin (beverages, fun stuff)
2400 Utilities
2000 Everything else

$38000 With the "Extra" $12000 = $50,000

.................................................. .......
Moving to CCRC apartment when necessary. In 2 to five years.

30,000 2BR,2BA Apartment- includes taxes, transportation, 2 meals/day, all utilities including heat and internet. One fee. No "buy-in".
600 phone
11,000 healthcare
10,400 $200/week for everything else.

$52000
.................................................. ........

Now... as to how much we need to get from our savings and investments to pay these bills. Since Social Security is "real" for us @ $25,000/yr.
$52K - $25K = $27,000/yr from capital

I realize this is a departure from the way retirement costs are calculated here, but for us, with a limited horizon that is likely 10 years or much less, it makes more sense to look at real dollars, rather than projections based on statistical estimates. Since we do not include leaving an inheritance in our planning, we can look at real dollar spend-down. We feel our future is secure, and with enough of a cushion to handle changes in the economy.

An even easier way to calculate a reasonable (what I call) PhaseII
(twenty years after SS kicks in) So...
#1.
SS@ 65 to age 85 = 20 years. Example $25K yr.
$500K Nest Egg divided by 20 years = $25K/yr.
That equals $50K/budget.
#2
SS@ 65 to age 85 =20 yrs.
$1M Nest Egg divided by 20 year = $50K/yr.
That equals $75K/budget.

A quick way to look at the numbers, assuming investment just kept pace with inflation.
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Old 11-17-2014, 01:24 PM   #103
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Originally Posted by Major Tom View Post
I still feel jilted that an under 25K option wasn't included. It's tough for a poor boy to get any respect around these parts
FWIW, except for the healthcare, we'd have no problem getting down below $25K (for 2) if it were necessary. Our early planning back in 1989, was well below that.
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Old 11-17-2014, 01:35 PM   #104
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I voted for $76,000 to $100,000. I calculate our base expenses (once we reach retirement) to be about $45,000 so there's a lot of cushion for travel, entertainment and other discretionary.
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Old 11-17-2014, 01:37 PM   #105
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Here are a few thoughts that I had, in blue:

Quote:
Originally Posted by wingfooted View Post
OK, see a theoretical breakout below. A $200K limit is really going to reign in some of the luxuries. A 'problem' for $5MM+ asset folks is that taxes are still a major expense category as you will be depending on your portfolio to throw off 5% or so in capital gains / dividends per year and most of these will be taxed at the higher marginal federal, state + ACA rates. And the tax situation may indeed be even worse if a good percentage of your assets are in non Roth IRA's and you are making RMD's.

All expenses are annualized:

Capital Gains Tax on 5% portfolio appreciation @ $5MM @ 25% $62,500
Real Estate Tax $22,000 for both properties? Do you really need the second home?
Upkeep, $1MM house at 3% per year $30,000 your choice
Second home / condo - assoc fees $12,000 this is an extravagance.
Maid @$1500 per month $18,000 not a lot if she has to clean a huge house!
Grounds keeper @$1000 per month $12,000 consider xeriscaping
Power @ $500 per month $6,000
Medical @ $3000 per month $36,000
Salon/Massage $5,000 stop coloring your hair, see if massages can be covered by a health insurance plan
Health Club / Trainer $4,800
Food @ $1200 per month $14,400 eat less, save on the trainer too
Dining Out - Once per week @ $150 $7,800 you choose to eat regularly at places that most people save for very special occasions
New Car @ $50,000 every three years $16,667 I just had an offer to replace my 2.5 year old vehicle with a new model for $7700
Upkeep on sailboat/power boat $12,000 extravagance
Gas / Diesel $5,000
Telephone/Cell $3,500 how many phones does one person need?
Internet / Cable $2,500
New laptop & ipad every two years $3,000
Gifts / Charitable $5,000 I'm surprised this category is not higher. Are there opportunities for tax deductible charitable giving?
Clothes / Misc @ $3000 per month $36,000 last year I spent $200 on clothes
Three vacations per year, business class tickets + $15000 spend money (each) $72,000 what is the second home for?


Annual Spend $323,667
Amount Available $200,000

Where do you cut from here ? $200K could almost be consider poor folk ?
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Old 11-17-2014, 01:43 PM   #106
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Interesting blog: Results so far, abour 1/4th live under 50k a year, almost 1/4th live on over 100k a year, about 1/2 live between 50k and 100 k a year.
Most times we hear (on other posts) from people living on very little, 25k-35k a year. I couldn't do it.....health care, taxes, food, home costs make it impossible for me....I don't know how anyone really does it. Some can't live on $200,000 year? I could and do....the only thing driving me into upper spending is gifts to kids, grandkids and charities..... We can afford it and enjoy seeing happy grandkids.....we love a nice home, a couple new leased cars every three years, a couple of nice vacations and, yes, it costs money......not over 200k a year. A lot of it is habit and cost of home......if your occupation meant joining country clubs, living in an expensive home etc., it's hard to give up.......great post.....love hearing from people in every income level talking about how, where and what they spend on......just glad we like diet coke, chinese and mexican food.....that saves us thousands each year compared to those that eat steak and drink wine when they go out. But most important......we have LBYM our entire life....we don't have to worry......we're happy......so I guess we've won! Now we pray for health rather than more wealth.
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Old 11-17-2014, 01:48 PM   #107
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Quote:
Originally Posted by Rick_Head View Post
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.
That is us too. Most years we go to Europe for a month and Mexico for 6 months. Some years we buy a newer car. Other years we buy newer furniture. We seldom buy clothes or baubles or gadgets.

But we also give to charity every year.

We also spend a lot of money on entertaining.

Plus we are financing the grandkids post-secondary education. The first of five just started uni this fall.
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Old 11-17-2014, 02:03 PM   #108
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Not to mention, if that's ordinary income (versus investment income), Federal/state/local income taxes alone can easily reduce $200,000 to $125,000.

Amethyst

Quote:
Originally Posted by wingfooted View Post
I personally don't see anything wrong with $200K per year. If you have $5MM+ in assets - why not ? A few toys, a few upgrades, a few international vacations, a CC membership - $200K can go very quickly.


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Old 11-17-2014, 02:28 PM   #109
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I find the OP's question a little difficult to answer because a huge chunk of the income needed is to build a "reserve" for future healthcare liabilities.

Excluding that we live quite comfortably on 24k general living expenses + 6k health care premiums + 12k rent + vacation (variable but before FIRE we never had time for more than 1 international trip per year).


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Old 11-17-2014, 03:20 PM   #110
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US average spending for

Couples, both over 60: $55,800 + income tax
Singles, ages 60-79: .. $30,600 + income tax

People answering this Early Retirement Forum survey seem to be skewed toward spending levels above the national average.
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Old 11-17-2014, 04:12 PM   #111
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Quote:
Originally Posted by Independent View Post
US average spending for

Couples, both over 60: $55,800 + income tax
Singles, ages 60-79: .. $30,600 + income tax

People answering this Early Retirement Forum survey seem to be skewed toward spending levels above the national average.
If the survey is for couples, maybe a little bit above. I'm just glad that my estimated expenses are similar!
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Old 11-17-2014, 05:04 PM   #112
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$125 k a year, before taxes. DW retired in June and I do it in February, hopefully this is a fat budget, I think it is-- but we'll see. No debt and live in a fairly low COL area...

After DW pension, the WR on our investments to hit the $125K budget is 2%.
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Old 11-17-2014, 06:44 PM   #113
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I am not saying that it is not possible. I am not saying there is anything "wrong" with $200k per year. I will say it seems a bit extravagant for most people.
When you meet Mr. Most People, say hi for me. I have never met him.


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Old 11-17-2014, 08:16 PM   #114
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After seeing these numbers I feel like a pauper. Under 25k not even a choice.
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Old 11-17-2014, 09:50 PM   #115
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After seeing these numbers I feel like a pauper. Under 25k not even a choice.
Back on earth, your spending would be a bit closer to per person averages:

http://www.bls.gov/cex/2013/combined/age.pdf
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Old 11-18-2014, 12:16 AM   #116
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It really doesn't matter what I 'need'. We will have to live on no more than about $54k/yr, plus 3%/yr for inflation or we are toast.
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Old 11-18-2014, 01:24 AM   #117
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When you meet Mr. Most People, say hi for me. I have never met him.


I do not understand this comment. It is simply math. Most people means anything over 50% of people. Spending over $200K per year is about 4 x more than the median spending. I can't put my finger on where that puts $200k but I would guess around the 95th percentile. I would welcome being educated on the actual number, but clearly it is much more than 50%. If 95% get by on less, and extravagant means more than necessary--why wouldn't I find such spending extravagant for most people as I stated?
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Old 11-18-2014, 02:18 AM   #118
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Quote:
Originally Posted by urn2bfree View Post
Is no one else curious about this $200+ annual expenses?
Can we see a rough breakdown of this?
What are these expenses of over $16,000 a month?
Country club dues?

To quote the White Coat Investor- “If you can’t live on $200,000 a year, you have a spending problem, not an earning problem."
Yes, somewhat curious, but only because seeing details of others' spending helps to paint a picture of the variety of different lifestyles our members have. As MichaelB commented, the OP asked how much we felt we needed for retirement, and not how much we felt others should need. ER1970 estimated that he needed 200K, so why should we question that?

One of the many enjoyable things about this forum is that we have a wide range of different lifestyles and incomes represented. I don't think there's anything wrong with showing curiosity about the details of a member's spending (after all, that is one of the reasons we're here - to discuss such things), but why question their desired income in retirement? I think we are justified in critiquing a stated investment/withdrawal strategy if it seems that it would be unable to provide the desired withdrawal amount over the course of a retirement, but to suggest that a member doesn't need the income level he has said that he does?

Personally, I like the fact that here, I get to rub shoulders with a few people who spend as little as I do, along with many who spend a bit more, and a few who spend considerably more. It makes the place more interesting - not so much because of the dollar amounts, but because of the variety of different lifestyles that are represented.

I suppose I'm starting to sound a bit like a mod but I feel very strongly that we should all strive to be inclusive, and not to pick on someone simply because their income requirements in retirement differ widely from ours.

Viva la différence!
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Old 11-18-2014, 02:26 AM   #119
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The main point of my question is not to criticize the spending--but criticize the calculation..with no major debt, I have to wonder if the math is wrong. often people have little to no understanding how drastically taxes can be reduced in retirement. Or they include school tuition as an ongoing expense instead of the limited obligation it represents. Without details it is impossible to know if $200k is the right amount--right in the sense of correct- not morally. This is why I asked for details. As you pointed out, by showing more details we can all learn more about what it will be like for us, boosting spending in some areas over what others might spend, and eliminating or drastically reducing spending in other specific areas.
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Old 11-18-2014, 03:06 AM   #120
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Quote:
Originally Posted by Independent View Post
US average spending for

Couples, both over 60: $55,800 + income tax
Singles, ages 60-79: .. $30,600 + income tax

People answering this Early Retirement Forum survey seem to be skewed toward spending levels above the national average.
Couples (family = 1.8 persons) age 65 and older the expenditures drop to $41,000

http://www.bls.gov/cex/2013/combined/age.pdf
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