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

[haha]

Quote:

Originally Posted by NW-Bound Now that we are talking about beers, although I am no beer connaisseur, I know Miller lite does not make me "happy" as something tastier like Duvel or Tripel. But what is this "Imperial Russian Stout"? I might not know what I have been missing.

This is my position also.

Things can always be upgraded, in terms of quality, not quantity. Quantity quickly reaches its utility limits, but not so quality. I like Islay single malts. In this state anyway, they aren't available for less than $50/750ml. That's a long way from Old Mr Boston vodka, in price, and enjoyment. Similarly a dry aged beef tenderloin from Whole Foods is a long way from Safeway's steaks. If it does not impact my balance sheet meaningfully, I am going to spend the money for the enjoyment. Same with gifts. If I have a girlfriend who treats me well, I like to give her gifts. Rare is the situation when more money doesn't buy a better gift, at least for the feminine type of woman that I am attracted to.

I bought a condo that works well for me; I could easily quality upgrade by spending 10-20 x as much for a nice place on the 22nd floor, west side, in one of the new towers down near the Public Market.

I clean my own house. Could that be upgraded? Let me think...

Ha

[ERD50]

Quote:

Originally Posted by NW-Bound Now that we are talking about beers, although I am no beer connaisseur, I know Miller lite does not make me "happy" as something tastier like Duvel or Tripel. But what is this "Imperial Russian Stout"? I might not know what I have been missing. I need to search BevMo! to see if I can get some. See, I am quite willing to re-evaluate my preferences, given new info.

"Imperial Russian Stout", or "Russian Imperial Stout", "RIS" for short.

Here's a world class example:

Old Rasputin - Imperial Stout

Quote:

OLD RASPUTIN RUSSIAN IMPERIAL STOUT Produced in the tradition of 18th Century English brewers who supplied the court of Russia's Catherine the Great, Old Rasputin seems to develop a cult following wherever it goes. It's a rich, intense brew with big complex flavors and a warming finish. The Old Rasputin brand image is a drawing of Rasputin with a phrase in Russian encircling it—A sincere friend is not born instantly. How hard it is to make and keep a good friend. –"Jericho," Joni Mitchell VITAL STATISTICS Style: Russian Imperial Stout Color: Black ABV: 9% Bitterness: 75 IBUs

and a review:

Old Rasputin Russian Imperial Stout - North Coast Brewing Co. - Fort Bragg, CA - BeerAdvocate

And it is BLACK. With very strong flavors. Hmmmm. Need to pick one up soon.


-ERD50

[NW-Bound]

Quote:

Originally Posted by haha Things can always be upgraded, in terms of quality, not quantity.

You are right that as we get older and consume less, one should look to upgrade in quality as he cuts back on quantity. It might not cost that much more.

Talk about quantity, remember the Venetian calf liver I made for dinner last night? I used the entire 1-lb pack, and as my wife usually eats only 1/2 to 1/3 of what I consume, I ate most of it myself. I have always told my wife that we should avoid leftovers, but in this case I should not have finished it.

Yes, the quality was there, but the quantity, oh dear, the QUANTITY... I had problem sleeping, and thought I would suffer from indigestion. Just had a light salad for lunch today, and am slowly feeling better.

Quote:

Quantity quickly reaches its utility limits, but not so quality.

Still, I am not going to pay high prices for something that I consider past the diminishing return point, or something that my palate or taste cannot distinguish or appreciate. I do not buy expensive wine for that reason. Expensive liquor, yes, expensive wine, no.

Quote:

I clean my own house. Could that be upgraded? Let me think...

I would not feel comfortable letting someone clean my house unless it is already quite tidy. And if it is so, why wouldn't I finish the cleaning myself? I may reconsider in the future, but at this point think I am not likely to change.

[haha]

Quote:

Originally Posted by NW-Bound I would not feel comfortable letting someone clean my house unless it is already quite tidy. And if it is so, why wouldn't I finish the cleaning myself? I may reconsider in the future, but at this point think I am not likely to change.

You never lived where maid service is a give?. People would think you were nuts and a miser if you insisted on cleaning your own place. At the same time, she comes often, so your man-pad never gets to be a hellhole like it can when we do all the work ourselves.

Ha

[NW-Bound]

Quote:

Originally Posted by ERD50 "Imperial Russian Stout", or "Russian Imperial Stout", "RIS" for short. Here's a world class example: Old Rasputin - Imperial Stout

I found that the BevMo! near my home had several examples of RIS, but not the one you posted. I will try a sample to see if I like it.

And talk about "upgrading", there are many consumable items like this that do not cost that much to enjoy. But about other more expensive consumer products, like first-class airfare, luxurious hotels in Paris or London, or balcony suites on a cruise ship, let's face it: they are nice, but they are outside of my reach to enjoy these on a regular basis.

And even if something looks quite affordable on a one-shot basis, one must remember that

"A luxury once sampled may become a necessity" - Anon.

I added the word "may" because I have not suffered from this yet, I don't think. What would I do? Go rob a bank to go on a fancy cruise?

[NW-Bound]

Quote:

Originally Posted by haha You never lived where maid service is a give? People would think you were nuts and a miser if you insisted on cleaning your own place.

I must say no, I have not.

I remember my neighbor across the street who moved into a much better neighborhood (homes in the 7 and 8 figures) after striking it rich with a gutsy stock option gamble. I visited him shortly after he moved in, and he complained that nobody in that neighborhood worked on his own yard. He felt very awkward.

I have not seen him since then to know if he has succumbed to peer pressure and done a "gardener upgrade".

Quote:

At the same time, she comes often, so your man-pad never gets to be a hellhole like it can when we do all the work ourselves.

Well, my missus gets after me before it becomes that bad!

[eridanus]

Quote:

If you were told you could retire at 60 on 90k in todays dollars, exclusive of SS income, would you be happy, disappointed, etc?

I'd be greatly disappointed and probably hitting the sauce every night. Retiring at 60 is way too late for me.

[WestLake]

This amount is in the ballpark of what I'm planning (prior to SS and IRA withdrawals - income from rentals and dividends), but I used to say that I would not retire until I was assured of $100,000 with no mortgage.

I have the mortgage(s) almost paid but now that I'm turning 55 next year, the income goal doesn't seem as important.

[rescueme]

Quote:

Originally Posted by eridanus Retiring at 60 is way too late for me.

Me too! That's why I retired when I turned 59 ...

Well, I can say I retired in my 50's (which is close to my 40's) ....

[novaman]

Quote:

Originally Posted by ERD50 bold mine - Why re-evaluate? What does someone else's situation have to do with what you need/want? Some people have retired on far less, for various reasons. Maybe they never were in a position to make so much, or had other expenses, or really had to leave their job (stress, downsized, etc). But they wanted (or had) to retire, so they figure a way to do it with what they have. If (just picking a number) $40,000 is all you can budget, with no real expectation for more income, most people could find a way to be happy with that. But for most of them $90,000 would be welcome. And for some, $90,000 just isn't enough for the kind of retirement they envision. We didn't all have cookie-cutter lives/personalities. I really don't understand basing a decision like this on what other people feel, though it can be interesting to hear heir perspectives. Miller lite is more popular than a nice Imperial Russian Stout - is that supposed to convince me to re-evaluate my preferences'? I don't get it. -ERD50

My reevaluation has to do with attempting to accurately forecast my expenses in retirement. When I read what the experts have to say, I see answers that are all over the map. Some say your needs will drop by 20% when you retire. Some say you will need the same income stream when you retire as when you were working. Some say you will need more. And then there are some who say you will need much less. It is interesting to see that at least anecdotally that the vast majority of people on this forum either by their own experience or conjecture say that 90K is enough.

[Mulligan]

Quote:

Originally Posted by novaman My reevaluation has to do with attempting to accurately forecast my expenses in retirement. When I read what the experts have to say, I see answers that are all over the map. Some say your needs will drop by 20% when you retire. Some say you will need the same income stream when you retire as when you were working. Some say you will need more. And then there are some who say you will need much less. It is interesting to see that at least anecdotally that the vast majority of people on this forum either by their own experience or conjecture say that 90K is enough.

That is why I believe probably the most important advice posters ever give potential ER's on this forum, is track your expenses to anticipate your financial needs. Everyone is literally all over the map in relation to what point of their life they are entering retirement. I for example, needed actually a little more than 100% of my preretirement budget due mainly to continuing child support, college education expenses, funding potential health care costs, and a mortgage. My expenses will eventually drop later, but not now. Many articles a person reads about retirement expenditures have built in assumptions that don't always factor in what your situation is.

[ERD50]

Quote:

Originally Posted by novaman My reevaluation has to do with attempting to accurately forecast my expenses in retirement. ...

Some of us are trying to tell you - there is no correlation. Those 'experts' you read are taking a one-size-fits-all-rule-of-thumb approach to get their article in by the deadline. They are worse than useless.

Consider the following:

Person A has only been able to earn a somewhat modest income over their career. But they have dreams of retiring and traveling the world with high class accommodations. If they LBYM, save aggressively, invest well, have some luck, and delay retirement, they may be able to do this. Their retirement expenses may well be much greater than their working income.

Person B had a high level career, traveled all over, and is really looking forward to early retirement to leave the 'rat race'. He never wants to see another airport, and is certain that he would be happiest in a modest home, with his books, and a few inexpensive hobbies to keep him satisfied. His retirement income will be far less than his career income.

You have to figure out what you want, and what it will cost. No 'expert' writing a column for general consumption, or poll can tell you that.

-ERD50

[W2R]

Quote:

Originally Posted by ERD50 Person B had a high level career, traveled all over, and is really looking forward to early retirement to leave the 'rat race'. He never wants to see another airport, and is certain that he would be happiest in a modest home, with his books, and a few inexpensive hobbies to keep him satisfied. His retirement income will be far less than his career income.

With the slight adjustment above, since I was always a scientist and not in management, that is a great description of my situation! Thanks, you really hit the nail on the head with that one, even describing the modest home, books, and inexpensive hobbies. It really costs me almost nothing to be happy. Maybe I would have a different life in retirement, had I not traveled so much as a kid and then even more when I had to travel for work (ugh!).

[studbucket]

90k is actually my target for when I retire in ~18 years. However, that's about the same as $45k in today's dollars.

[prototype]

Wow, I can’t believe about 40% of the people who took the poll said the $90K would be enough or not enough. I guess if you are planning to retire in someplace like Manhattan, I can see where you might need that. I am using ~$55K in today’s dollars. OK, so no second home, no $100K classic car in the in the garage. But a comfortable life in a moderate cost area (haven’t decided yet, but probably the Va. Countryside). That is actually about 40% of what I made before I retired, but at that time I was helping put 2 kids through college and saving like crazy (especially the last 5 years), and paying off all my debts (house, car…), and financially recovering from divorce. $45K mentioned in the last post by studbucket, is essentially what I computed to be my bottom line for my comfortable life needs number also. Firecalc and all the other calculators I use to double check things all show I should be OK at the $55K to $60K range. So many things can change so fast (inflation rates, taxes (fed, state, and local), medical expenses… So I know I’ll need to be flexible on my spending and that there may be years of “feast and famine” so to speak.

[Marc]

I found this poll, and all the responses, very interesting. What piqued my interest was the number chosen; $90K. I recently turned 55 and finally did a more detailed estimate of retirement expenses even looking at taxes, insurance, and utilities in our preferred retirement location. Even with a house payment and medical insurance/copays, our monthly budget only topped out at $4,500.

This was dwarfed by our estimated annual travel budget of $90K

Some serious thought went into the travel budget but it is still only a wag. Even more importantly, it is all discretionary. So, I am looking at a cost of living of around $144,000 plus reserve after taxes. With most of our money in tax deferred accounts, taxes are the most serious issue we face in timing our retirement. I am figuring I need to average out at $180K income (parts of it Roth or taxable accounts) allowing for $30K in taxes. Current income is immaterial.

Marc

[rescueme]

Quote:

Originally Posted by prototype Wow, I can’t believe about 40% of the people who took the poll said the $90K would be enough or not enough.

I could not believe the number of folks that said they could not (assuming two people) could get by with less ...

Apparently their goal is to just sit on the porch and not persue their bliss in retirement. That may be great for them, but not for us.

We look at retirement to experience the things we did not get to do in our accumulation years, and are spending more (net) than we ever did during our w*rking years. It costs a bit of $$$ to complete our bucket list, at this age.

I guess it's a case of pay me now, or pay me later. We chose to cut back in the early years to be able to experience our desires without the limits of having a j*b and the limitations of time and responsibility those years brought.

Different strokes...

[ChrisC]

Quote:

Originally Posted by Marc This was dwarfed by our estimated annual travel budget of $90K Some serious thought went into the travel budget but it is still only a wag. Even more importantly, it is all discretionary. So, I am looking at a cost of living of around $144,000 plus reserve after taxes. With most of our money in tax deferred accounts, taxes are the most serious issue we face in timing our retirement. I am figuring I need to average out at $180K income (parts of it Roth or taxable accounts) allowing for $30K in taxes. Current income is immaterial. Marc

I've been thinking about significant travel during the first five years of retirement. We have loads of hotel reward points and two timeshares we'd like to leverage. But even with these prepaid travel features, our SWAG is around $50K for an annual travel budget the first five years, which will consist of two major travel events each year (e.g. 2-3 weeks cruises, international travel, etc, with family or friends). I can't see $90K for two people.

I'm just curious about your estimate. What travel are you planning and are you funding family travel such as taking the grandkids along with you? This has got me thinking that I might be underestimating the cost of travel.

[ejman]

Quote:

Originally Posted by NW-Bound Beyond basic food and housing needs, most of what people spend on are not truly necessary. I can spend quite a bit less than what I do now (which is less than 90K), if I have to. But I can easily spend 100x or 1000x more, as that takes no skills. What most people spend in retirement is a continuation of their lifestyle when they were working. And that depends on their working income. It's that simple.

Wow 1000X ?. I'm not sure I would be able to spend $90 million per year. But if I could, just think, at $90 million per year, a 30 year retirement would be $2.7 billion. A nice next door feller like Mr. Buffett could finance this level of retirement for a dozen of his best friends and still have enough money left to do it all over again.

[Marc]

Quote:

Originally Posted by ChrisC I've been thinking about significant travel during the first five years of retirement. We have loads of hotel reward points and two timeshares we'd like to leverage. But even with these prepaid travel features, our SWAG is around $50K for an annual travel budget the first five years, which will consist of two major travel events each year (e.g. 2-3 weeks cruises, international travel, etc, with family or friends). I can't see $90K for two people. I'm just curious about your estimate. What travel are you planning and are you funding family travel such as taking the grandkids along with you? This has got me thinking that I might be underestimating the cost of travel.

We like luxury travel; nice cruises, safaris in Africa, and time in Europe. While working, we try to take two three week vacations per year.

How we arrived at estimate:

Two months driving around North America = $20K
One month in Europe/Africa = $20K
Three months cruising = $50K

As I said, a wag; our cruising expense "per diem" is slightly higher now so we will probably substitute some cheaper cruises.

Marc