Poll: How would you feel with $90k/year in retirement?

[NW-Bound]

I am a handyman, an electrician, a shade-tree auto mechanic, and I occasionally play mason and carpenter too.

My wife calls me her "hero", but I just call myself frugal.

Actually, it's not just money, but I share the same DIY spirit with Jacob of the Extreme Early Retirement. I'd rather be working on something than spending time on the exercise bike or rowing machine (that are collecting dust somewhere in a spare bedroom upstairs).

PS. Ah, talk about dust, I had just admitted to needing some cleaning service. Would a cleaning lady call my home "job security" (beaucoup money for cleaning!), or would she run off screaming?

PPS. Because I did all the work above (I even dust occasionally and I vacuum too), I should be worth my weight in gold. Too bad my BMI is only 25.

 

[67walkon]

Its not how you have coming in, its how much is going out. But we're planning on pretty much living on a $95,000 annual stream of income from something we sold. It will last through 2018. Then I'll be 69 and can take close to the maximum SS amount. By then, if they don't kill it or means test it, my wife and I combined should be able to get around $50K, or even a little more, a year from SS and, assuming about a 4% annual growth rate over the next 6 years, another $80-100,000 from the good old retirement accounts. I think we're there.

116 days to go!

 

[bondi688]

Then I'll be 69 and can take close to the maximum SS amount. By then, if they don't kill it or means test it, my wife and I combined should be able to get around $50K, or even a little more, a year from SS

But the political landscape and the huge deficits are foretelling that there will be mean testing, claw back in form of taxes and cuts to Social Security benefits. I think I'll take SS benefits at full retirement age and not wait another 4 years for the them to make additional and likely negative changes for those of us who had paid full fare and in addition saved for their own retirements.

 

[kenpoed]

I should have clarified, this would be for 2 people to live on.........

 

[NW-Bound]

That's fine. I am a bigger spender than my wife, so it's all right.

 

[NW-Bound]

Its not how you have coming in, its how much is going out. But we're planning on pretty much living on a $95,000 annual stream of income from something we sold. It will last through 2018. Then I'll be 69 and can take close to the maximum SS amount. By then, if they don't kill it or means test it, my wife and I combined should be able to get around $50K, or even a little more, a year from SS and, assuming about a 4% annual growth rate over the next 6 years, another $80-100,000 from the good old retirement accounts. I think we're there.

116 days to go!

But the political landscape and the huge deficits are foretelling that there will be mean testing, claw back in form of taxes and cuts to Social Security benefits. I think I'll take SS benefits at full retirement age and not wait another 4 years for the them to make additional and likely negative changes for those of us who had paid full fare and in addition saved for their own retirements.

On the other hand, if you spend most of your stash by the time you get to 70, meaning depleting your means so that there is not much left to "test", would you not get your entire portion? Spendthrifts get rewarded, while savers get punished?

We are of course drifting off topic again, but the gummint rarely thinks deeply enough to realize that good intentions in law making may just incentivise people to do the wrong things, if not for themselves then for society.

We still have a few years to even get to the early SS withdrawal, but I find it hard to spend all or most of my stash, so that I will be getting more from the government, and be more reliant on it too. I value my independence too much, I guess.

 

[travelover]

Maybe the little people could scrape along on $90K, but I have sophisticated and expensive tastes that must be met. The little people wouldn't understand this any way, so I won't elaborate.


(j/k)

 

[Ronstar]

It would be tight at $90k. I'd have to put DW on an HSN and QVC spending freeze, and we'd have to cut back on travel. But that said, I'm budgeting less than $90k spending for when we retire.

 

[NW-Bound]

...I have sophisticated and expensive tastes that must be met. The little people wouldn't understand this any way...

Eh, this little person is trying to develop sophisticated tastes that require less money. If you can just buy something expensive, where's the elegance in that?

Seriously, I used to watch a lot of Food Network shows. Many chefs call expensive steak houses "heat and serve" restaurants, because what's there to do with an expensive cut? True chefs pride themselves on turning lesser cuts into tasty dishes. That requires true culinary skills.

I must go off to stir my pot of beef stew now. It's made with chuck roast.

 

[obgyn65]

I would be fine with $90k + SS for one person. That is broadly similar to what I am budgeting for myself.

I should have clarified, this would be for 2 people to live on.........

 

[Original Wally]

re SS - I say take them when you can get them... there is a chance that any means test will apply to NEW benefits.

 

[bondi688]

re SS - I say take them when you can get them... there is a chance that any means test will apply to NEW benefits.

If they bring in mean testing or claw back through income tax, it will be applied to people who are already drawing benefits, but I agree that you should not delay for too long, and can at least enjoy the fuller benefits before the changes take effect.

 

[kyounge1956]

(snip)On the other hand, as I have been a pedestrian all my life, I feel uneasy to even hire a house cleaner as it feels, well, just too imperialistic for lack of a better word. (snip)

I'm drifting completely off-topic with this, but this is exactly the way I feel too. I know people of all income levels who hire cleaners - even at the very low end of the range, but I've always felt that if I make a mess, it's only right that I should clean it up. Somehow, I just can't bring myself to let anyone else clean up after me.

Glad I'm not the only person who feels that way.

Not to hijack the thread, but I'm a little bit that way too. I will hire someone to do things I don't have the skills or strength to do myself, but cleaning up the house isn't one of those things. Plus, I would be ashamed for the cleaners to see what my house usually looks like, because I'm such a slob. My mom uses a cleaning service, because this house is too big for her to keep up single-handed any more (and I'm not a whole lot of use in that department at the moment), but usually we go through the house and tidy up a bit the day before the cleaners come!

I am starting to loosen up a little, though. I went down to Lacey last Friday, and with the recent rainfall but continuing mild temperatures this fall, the grass is really growing like crazy. It's an 8000 square foot lot, almost all in lawn, and with normal WA winter weather, it's likely to stay too wet to mow for the next three or four months. I took one look at it and thought, if this keeps up, it will be knee high by the time I get moved in--and maybe still too wet to mow. Then too, I've been told it takes at least as long as you were in treatment to get back to your pre-chemo energy level, plus I will have at least 6 weeks of "no lifting, pushing or pulling over 5 pounds" following reconstructive surgery, which is scheduled for late next April. At that rate, it will be too tall for me to see over by the time it's a) dry and b) I am fit to cut it myself! My mom has offered to give me her old power mower (she also uses a lawn service, so she doesn't need it any more), but even though I probably could cut that much overgrown grass, I don't think I'm going to. Maybe there will be a neighborhood teenager who wants to make a little moolah.

 

[Spanky]

$90K is twice of what we need. Thus, spending an extra $45K per year would definitely give us a lots of flexibility.

 

[Alan]

Is anyone else who is in the 90K area in the same boat? Most sources say you shouldn't have housing be more than 33% of your income. Even if you pay off your mortgage you will still have taxes, insurance, utilities and possible association fees.

So in sum, those fellow posters who answered above that 90K is cool, what percentage of your annual income will be housing and health? Those two categories may amount to 54% of our budget unless we move to a cheaper home and stay healthy. I'm 59 and will retire in two years and DW in five and she will have a pension with a 3% COLA. We live in a state capitol and the area is expensive.

Thanks

For us, housing + health + energy = 22% of before-tax spending

I should have clarified, this would be for 2 people to live on.........

There are 2 of us

 

[Koolau]

Spent a little over $100K last year but hope to be closer to $90 this year. If push came to shave, I could move back to the midwest and live on half that with not too much difficulty. Still, health care can be really expensive. Fortunately, this year, we have had relatively small HC bills (though MC and INS) do add up quickly.

If the nest egg continues to grow, we may well spend more in the future. Can't see having personal servants, but wouldn't mind getting back into flying! That's one way to drain any excess you might find yourself wanting to spend. YMMV

 

[kenpoed]

let's further state, this is for two people, mortgage paid off, assuming zero debt

 

[NW-Bound]

Sure. No car payments either. Children already through college too (I spend a lot more when they were in school).

So, I can even have two houses, pay for my health insurance, and still have money for air travel and to put gas into my motor home, and still spend less than $90K this year.

I would not be able to do that in places like SF, NYC, or Hawaii. However, I am not in a super low-cost area either.

 

[haha]

re SS - I say take them when you can get them... there is a chance that any means test will apply to NEW benefits.

If you mean new benefits only, I think this is very unlikely. The Medicare means tests do not care how long you have been on Medicare, only your income as they define it.

One possibility I see is that Roth withdrawals, while not taxable per se, will become part of adjusted--adjusted--adjusted--income for the purposes of any means testing done.

Ha

 

[ChiliPepr]

Reading these posts, I gotta move to a cheaper part of the country.

+1. We live in the same part of the country.... I am just a bit closer to Boston.

 

[LakeTravis]

I can't imagine spending over $8K a month. Okay, maybe I could but the fact is I've been planning for a monthly spend of $5000 during retirement with the full knowledge that many months would only be half that.

I suppose our lifestyle is pretty simple. And I clean my own house, do my own laundry, cook our own meals since we hardly eat out. I can fix a dishwasher or central heat/air and can wire anything electrical. I've laid tile, mixed and poured concrete (even own a 3cf drum mixer), change our own oil, replace our own brakes, repair most mechanical things.

I'm finding out those abilities save a lot of money over time. Our biggest annual travel expense is a week long trip to DisneyWorld. Luckily, we both have simple tastes and can have a blast there.

Most likely our biggest expense will be healthcare. Both of us are in decent health but it only takes that one disappointing diagnosis to start draining resources.

So my first reaction was that $90K per year would be much more than we'd need, until I realized that my $60K per year planned withdrawals supplemented with an anticipated $36K per year SS actually puts us over $90K. I'm sure we'll end up not drawing so much from personal funds and the excess will be on standby for any health related needs.

Or we'll buy another boat.

 

[haha]

I don't want to speculate about the future, but I certainly have been living on much less than this amount. I don't pinch pennies, but neither do I make many decisions without reference to cost. Well, likely no decisions, to get down to reality.

As I have said before, I could easily spend more, but I do not have more, so I won't.

Ha

 

[kramer]

I have never spent even half the $90K number per year my entire life, even including the cost of employer-paid healthcare when I was working, except the one year that I bought a new car (and amortizing that would have ended up being only around $2K per year over the life of the car). And I was a single guy living and renting in Silicon Valley and taking some international trips.

So I put way more than I would ever need.

 

[scrabbler1]

Could the poll be reworked to ask, "$90k for a couple or $45k for a single"? Even at $45k for a single, though, I would still answer it the same way. I live on under $30k so $45k is still more than I need.

 

[easysurfer]

I'll take it