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

[NW-Bound]

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".

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]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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

 

[cgarden]

Not to mention the best drivers in the country

+2!

 

[NW-Bound]

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.

OK, it may not be so easy for people like us. But I think we can learn really, really fast. Look at Ellison who bought an entire island.

Well, prior to that, let's just start with a couple of medieval castles in Europe that I have seen offered on the market. Rehabbing these cold castles is not cheap. Adding R-30 insulation all around, then heating and cooling to them will cost much moolah, and you may even end up employing the entire surrounding village. It costs money to be like a count or an earl, you know?

I have also read about a yacht with two helipads. Think about that a bit, and I saw that it made sense. When a fellow billionaire flies in per your dinner invitation, where does he land if your only helipad is occupied by your chopper already?

I don't think $90 million/yr is enough for the above lifestyle, really!

 

[ejman]

I have also read about a yacht with two helipads. Think about that a bit, and I saw that it made sense. When a fellow billionaire flies in per your dinner invitation, where does he land if your only helipad is occupied by your chopper already?

I don't think $90 million/yr is enough for the above lifestyle, really!

Nah, you just push your chopper overboard it was last year's model anyway! besides, they are a dime a dozen http://www.globalplanesearch.com/helicopters/bell/

 

[NW-Bound]

Now you're talking.

Oh man! I imagine a billionaire, or rather his wife, would already spend much time to select the right interior decor for the custom-equipped chopper. Having to do that every year, gosh, that's a real chore.

 

[NW-Bound]

Nah, you just push your chopper overboard it was last year's model anyway! besides, they are a dime a dozen Bell Aircraft for Sale - Used Helicopter Sales at GlobalPlaneSearch.com

I just thought of something. If you could not afford a yacht with front and back helipads, and but want to impress your visitor, make sure to wait at the last moment to push your chopper off while your friend was hovering waiting to land.

Then, find a way to hint to him that it shows how much you appreciate his friendship and company for dinner.

 

[Alan]

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

This year we spent 3 months driving around N. America, stayed in very nice cabins in Utah, Oregon, Wyoming, Yellowstone, Colorado plus a month in a 3-bed condo in Friday Harbor on San Juan Island. Total expenditure was ~$15k.

Last year we spent 7 months, mostly in the UK but with trips to Europe and total cost was ~$35k

So, I think your budget estimates for your planned trips are pretty good.

Next year we are planning (and have mostly booked) a 4 month trip consisting of a month in Ireland, 2 weeks in France, 10 day Scandinavian cruise and the rest in the UK.

 

[Lazarus]

OK, it may not be so easy for people like us. But I think we can learn really, really fast. Look at Ellison who bought an entire island.

Well, prior to that, let's just start with a couple of medieval castles in Europe that I have seen offered on the market. Rehabbing these cold castles is not cheap. Adding R-30 insulation all around, then heating and cooling to them will cost much moolah, and you may even end up employing the entire surrounding village. It costs money to be like a count or an earl, you know?


I have also read about a yacht with two helipads. Think about that a bit, and I saw that it made sense. When a fellow billionaire flies in per your dinner invitation, where does he land if your only helipad is occupied by your chopper already?

I don't think $90 million/yr is enough for the above lifestyle, really!

Don't forget to get an estimate on cleaning out the moat and stocking it with alligators.

As for the helicopters, what kind of castle only has one hellipad? The neighbors will accuse you of bringing down the property values.

I took a look on realtor.com and they don't have a check item for castles, moats or helipads. How is one to find the right property with tools like this?

 

[rescueme]

Nah, you just push your chopper overboard it was last year's model anyway!

It's been done before

 

[NW-Bound]

This year we spent 3 months driving around N. America, stayed in very nice cabins in Utah, Oregon, Wyoming, Yellowstone, Colorado plus a month in a 3-bed condo in Friday Harbor on San Juan Island. Total expenditure was ~$15k.

$5K/month in locations like the above is lower than I would have guessed.

A few years ago, I would have thought of following in your footsteps, selling everything and hitting the road. But I have realized that I am way too much of a homebody to travel like that. Even when RV'ing, which is a small home on wheels, we have not been away from home for more than about 6 weeks.

Don't forget to get an estimate on cleaning out the moat and stocking it with alligators...

These European castles are in cold climate. I wonder if you would need heaters in the moat to keep your alligators comfortable. Then, you will find out that you need to upgrade the town electric line to run your moat heaters. Ka ching!

The dukes had it easier in the old days. They got [-]cheap[/-] free labor from the peasants, and if they cut the laborers some slack so that the latter could have some time to till the land, grow and harvest some grain, they could even extract some taxes.

Nowadays, laborers want at least minimum pay, nice working conditions as mandated by OSHA-like laws. Not only that it costs much more, it even takes all the fun out of being a lord.

 

[Lazarus]

If you don't heat the moat in winter it will ice over and the peasants can cross over and get in your courtyard. Can't have that. They are so always begging for food and looking pitiful. Really a downer. What's the use of being a lord if you have to look at rabble in your courtyard?