Poll: How much income do you need to retire?

[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.

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]

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]

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]

Excluding rent $15k.

Is this the under a bridge option?

 

[INTJ10]

I just don't see how we could realistically plan on needing less than $24K per year for healthcare (insurance and oop) if you would have to depend on ACA for healthcare. Once we hit 65 it would change dramatically. I wish someone could convince me I am wrong. So given that we need $24K for healthcare, we would need more than $100K.

 

[youbet]

Is that for one or two?

These polls frequently leave out what assumption should be made regarding family size which makes the data not-so-good. At our house, we spend close to double what either of us would spend alone. I answered the poll with the amount we spend as a couple and I hope that's correct.

 

[INTJ10]

I answered for the cost of a family since the kids are still on the our healthcare.

 

[Dan4495]

I'm budgeting $160K/yr.

 

[Dash man]

"Need" is a lot different than what we plan. We could easily be comfortable with $75K/yr, but we're able to spend about $180K/yr as long as we don't go overboard.

 

[Sue J]

We are empty nesters with no mortgage, no debt, in a relatively low cost of living area.

DHs pension brings in just under $34,000, after taxes withheld it's closer to $32,000. We are quite comfortable on that. I'm happy with that because it covers all our regular monthly expenses including 1/12th of the property taxes and saving about 13%. I also save 100% of my net part time income. If our needs are met, we enjoy a few wants and we are saving a good sized chunk, I'm quite content.

Savings gets piled up to cover big things that come up. I like having a good sized emergency fund.

We don't have a big desire to travel but an occasional trip to see family or a vacation is easily affordable.

 

[grasshopper]

$65k for us. I can't figure the folks that can go to europe for 3 months on $3k, but say they increase their budget for travel by $25k.

 

[jcretire77]

Perhaps I am pessimistic? Planning to withdraw at max $138K per year. Less 20% for taxes (27.6K) leaves $110,400 /12 = $9200 /month. Currently we are both employed spend about $6.6K per month. Down to $4K if need be. I am adding $1K for more fun during retirement and even though we are both currently healthy $1.6K for health insurance premiums, deductibles, prescriptions. $9.2K ($110,400). And thus I am at least OMY

 

[Corporateburnout]

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.

Our needs are similar to yours $80-90K before taxes. We probably can do it on $65-70k but we really don't want to. We enjoy eating out, a nice bottle of wine every week, attending sporting events and plays every now and then and taking a few trips a year.

Cutting back is doable but it's not what we had in mind for retirement.

 

[misanman]

We are figuring on $9500 a month before taxes. Retiring at end of 2014 so we'll know pretty soon how this works out.


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[Dog]

Estimating comfortably $60k/year including taxes. House is paid for so property taxes will be our biggest expense - small waterfront home on puget sounds (unless DH loses retirement healthcare). $75k will allow more luxuries.


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[FUEGO]

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.

Interesting that moving back to Europe would be $25k cheaper per year than the southeastern USA. I've always considered this to be a relatively cheap COL area, especially compared to Europe.

What are the big cost drivers making Europe significantly more affordable for you?

 

[traineeinvestor]

We're temporarily in the top bracket but this includes (i) mortgage on our home - about 7 years to go (ii) two children in school - too many years to go and (iii) university fees for my MFA. Once these are done with the number falls a lot ... unless we increase spending on things like travel.

 

[urn2bfree]

Our houses and cars are paid for, but where we are property taxes and living costs are among the highest in the country. Plus health care expenses need to be budgeted in as neither of our current jobs offers retirement health insurance. Our current annual expenses are at mid 200k, with company provided health insurance. When we ER, although we can scale back parts of living expenses, we will have to buy insurance on our own. Plus we'd like to travel... So all in all, I would say we need $200k/yr of income to retire, and that gives us some room to cut back if necessary.

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."


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[wingfooted]

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 Quote Investor- “If you can’t live on $200,000 a year, you have a spending problem, not an earning problem."


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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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