Poll: What is your basic income need (floor) in retirement?
- Thread starter chinaco
- Start date
Exactly. My casual drug addict cousin gets free medical care for her and her son (no deductible, either). She gets food stamps. She has worked one month out of about the last five years. She gets about 90% of the rent on her 2 bedroom apartment paid by HUD/Section8, a subsidy of a bit over $1000/month. Her son goes to public school, of course. When she works, she has free child care available to her.HaHa said:
Also, most low income families receive the earned income tax credit which is also not included.
My cousin had her child after seven abortions in less than three years. Having all of these subsidies has helped her maintain her drug addicted lifestyle and avoid work and the positive changes a regular schedule and responsibilities would force on her. I have seen it with my own eyes. She does not get up until noon-ish, hangs with drug addicted friends who enjoy her nice place, etc.
Now, after all these years, she is finally getting pressure from the government to find a job. I have no idea how it has gone on this long.
Kramer
oldcrowcall
Recycles dryer sheets
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1. Can't seem to get it below $80,000. no mortgage or rent
2. Two people
3. new england
4. both retired
retirement is costing us waaay more than I figured.
2. Two people
3. new england
4. both retired
retirement is costing us waaay more than I figured.
SecondCor521
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Sam said:
Good point.
The $10K per year figure for me is just for one person, and is annualized actual expenses from 1/8/07 through 4/7/07. I've posted my budget here before.
But that $10K per year figure ignores housing costs because I plan to have my home paid off. I could probably assume an imputed rent figure of about $1K per month or a little more, so that would add say $14K to the figure to get to $24K per year.
Also, my expenses during the past four months are probably lower than what they would be in retirement for a lot of reasons I won't go into here.
So there is some brag factor going on here.
2Cor521
loosechickens
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This is really interesting......I was responding to the OP question which was:
"What is your minimum income need in retirement in dollars before tax. Please state the expected minimum yearly income need. This would be the floor that covers non-discretionary expenses and the basic discretionary items that would support your basic needs."
and by that definition, our basic needs could be met on $10,000 or less. And I wasn't considering trapping any squirrels, etc. ;-) And when I was discussing barter, I was thinking more in terms of some things we do already, i.e. volunteer in National Wildlife Refuges where our skills are welcome and where we are provided a spot to park our RV, laundry, propane, etc., free of charge. We could do that sort of thing on a more serious level. Or numbers of people we know who have land where we would be welcome. After all, if the bottom falls out enough for us to have to think of living on $10,000 most folks are going to be in trouble. And someone like us who can make or fix most anything, have lots of useful skills of carpentry, plumbing, electrical, solar photovoltaics, sewing, food growing and preservation, etc. are always welcome wherever they go when many others have no such skills. All those things would assist us should we have to live on that bare bones budget. And in fact, in our nomadic life, we have met many more than one person doing just that.
Obviously, $20,000 would be more realistic if you are looking at maintaining a degree of comfort that would allow some eating out, movies, discretionary purchases, etc. I'd be much more comfortable with the $20,000 figure, but know that the $10,000 could be done, because we know many people who are doing it. Remember we don't live in suburbia with other well paid college educated folks. We're living out here on the road where we rub elbows with everybody, from the very poor to the very rich. Something many middleclass Americans never really experience. They often think others are all like themselves unless they're "poor people". Remember how the planners in New Orleans didn't even consider that some people wouldn't have cars or credit cards to flee the storm? Their lives were so removed from those realities that they didn't even think of such a thing and were caught flatfooted in their planning. We have opportunities everyday to see how people with few resources manage very well on little.
We spend much more than that now, but we never mistake what we spend now with what we would HAVE to spend. We spend now because our withdrawal rate is below even a conservative percentage and we can. We're not depriving ourselves at all at present. Quite the contrary. We're even looking at going to Europe for two months this fall and traveling in a rented VW Westfalia van. And even living really, really comfortably here in the U.S., buying organic food, eating out, etc., and budgeting for that European travel, we STILL won't even come close to what many of you have as a "rock bottom budget". We don't deprive ourselves of anything, yet couldn't come up to $50,000 per year even this year with the projected trip expenses.
I think housing makes a huge difference. As does living in a motorhome that effectively prevents much accumulation of consumer goods. When I look at amounts people pay for mortgages, property taxes and heating and cooling 3,000 or more sq. foot houses, no wonder it takes so much. And when you have all that space to fill, I can see where folks could spend huge amounts of money just on "stuff".
As an example, we went to visit friends with a house and I sat on the john musing at the linen closet across from me with an open door, and counted 63 towels. We have 4. And I'm sure that the relative level of other stuff is just the same. When your belongings are fewer, it stands to reason that you spend less.
The one downside of the motorhome is the fact that it depreciates. From $200,000 new, nine years ago, it has lost half or more of its' value. We knew that when we bought it, and we bought it with the plan to keep it for the duration so the kids would have to deal with looking at the depreciation. We paid for it when we bought it, so there's no loan on it, and as long as we don't try to sell it, the depreciation is kind of immaterial. It still looks virtually brand new so its' use is unimpaired.
I wasn't in any way disparaging others' budgets, although it is incredibly interesting to me to see them because it is really very different, both in outlook and in level of things that folks seem to think are necessities.
Look, I sure don't really WANT to live on $10,000......I LIKE having money and spending whatever we like, but I never mistake liking something with needing something. We're really lucky that way because we're not really very "things" oriented, don't have expensive hobbies, enjoy making and doing things for ourselves. All this money is really not necessary to our happiness. Sometimes it even seems like it robs us of using our ingenuity to do things like we used to do.....mostly having money seems more like not relevant. We were happy and felt abundance when we had little money and we're happy and feel abundance now that we do. That's all.
Carry on......I didn't mean to sound like "I can live cheaper than you can.....nyah, nyah, nyah......". But I DO like the fact that our needs are very modest and can be met with very little. That's a nice feeling.
LooseChickens
"What is your minimum income need in retirement in dollars before tax. Please state the expected minimum yearly income need. This would be the floor that covers non-discretionary expenses and the basic discretionary items that would support your basic needs."
and by that definition, our basic needs could be met on $10,000 or less. And I wasn't considering trapping any squirrels, etc. ;-) And when I was discussing barter, I was thinking more in terms of some things we do already, i.e. volunteer in National Wildlife Refuges where our skills are welcome and where we are provided a spot to park our RV, laundry, propane, etc., free of charge. We could do that sort of thing on a more serious level. Or numbers of people we know who have land where we would be welcome. After all, if the bottom falls out enough for us to have to think of living on $10,000 most folks are going to be in trouble. And someone like us who can make or fix most anything, have lots of useful skills of carpentry, plumbing, electrical, solar photovoltaics, sewing, food growing and preservation, etc. are always welcome wherever they go when many others have no such skills. All those things would assist us should we have to live on that bare bones budget. And in fact, in our nomadic life, we have met many more than one person doing just that.
Obviously, $20,000 would be more realistic if you are looking at maintaining a degree of comfort that would allow some eating out, movies, discretionary purchases, etc. I'd be much more comfortable with the $20,000 figure, but know that the $10,000 could be done, because we know many people who are doing it. Remember we don't live in suburbia with other well paid college educated folks. We're living out here on the road where we rub elbows with everybody, from the very poor to the very rich. Something many middleclass Americans never really experience. They often think others are all like themselves unless they're "poor people". Remember how the planners in New Orleans didn't even consider that some people wouldn't have cars or credit cards to flee the storm? Their lives were so removed from those realities that they didn't even think of such a thing and were caught flatfooted in their planning. We have opportunities everyday to see how people with few resources manage very well on little.
We spend much more than that now, but we never mistake what we spend now with what we would HAVE to spend. We spend now because our withdrawal rate is below even a conservative percentage and we can. We're not depriving ourselves at all at present. Quite the contrary. We're even looking at going to Europe for two months this fall and traveling in a rented VW Westfalia van. And even living really, really comfortably here in the U.S., buying organic food, eating out, etc., and budgeting for that European travel, we STILL won't even come close to what many of you have as a "rock bottom budget". We don't deprive ourselves of anything, yet couldn't come up to $50,000 per year even this year with the projected trip expenses.
I think housing makes a huge difference. As does living in a motorhome that effectively prevents much accumulation of consumer goods. When I look at amounts people pay for mortgages, property taxes and heating and cooling 3,000 or more sq. foot houses, no wonder it takes so much. And when you have all that space to fill, I can see where folks could spend huge amounts of money just on "stuff".
As an example, we went to visit friends with a house and I sat on the john musing at the linen closet across from me with an open door, and counted 63 towels. We have 4. And I'm sure that the relative level of other stuff is just the same. When your belongings are fewer, it stands to reason that you spend less.
The one downside of the motorhome is the fact that it depreciates. From $200,000 new, nine years ago, it has lost half or more of its' value. We knew that when we bought it, and we bought it with the plan to keep it for the duration so the kids would have to deal with looking at the depreciation. We paid for it when we bought it, so there's no loan on it, and as long as we don't try to sell it, the depreciation is kind of immaterial. It still looks virtually brand new so its' use is unimpaired.
I wasn't in any way disparaging others' budgets, although it is incredibly interesting to me to see them because it is really very different, both in outlook and in level of things that folks seem to think are necessities.
Look, I sure don't really WANT to live on $10,000......I LIKE having money and spending whatever we like, but I never mistake liking something with needing something. We're really lucky that way because we're not really very "things" oriented, don't have expensive hobbies, enjoy making and doing things for ourselves. All this money is really not necessary to our happiness. Sometimes it even seems like it robs us of using our ingenuity to do things like we used to do.....mostly having money seems more like not relevant. We were happy and felt abundance when we had little money and we're happy and feel abundance now that we do. That's all.
Carry on......I didn't mean to sound like "I can live cheaper than you can.....nyah, nyah, nyah......". But I DO like the fact that our needs are very modest and can be met with very little. That's a nice feeling.
LooseChickens
W2R
Moderator Emeritus
Wow, what a great post, loosechickens! I didn't copy it all below, but it is all worth reading several times.
That was beautifully stated. So many of us trade too much of our time for money. My father died a wealthy man, but found out he had terminal cancer literally the day he was moving out of his office to retire.
I know we are not all in danger of that. But we are all so influenced by Madison Avenue and the psychology of advertising. Do we really NEED all the junk we buy, and end up throwing away a few years later? Obviously not. What many of us need is the capability of retiring a year or two earlier than planned, which we could do if we stopped buying so many impulse items.
Definitely I will be happy once my time is my own, as long as I am not worried about where I will sleep, what I will eat, or how to pay for the doctor. Come to think of it, my house is paid off, and by the time I retire I will have medical coverage guaranteed for life, and there is that vegetable garden I have been thinking of...
loosechickens said:
That was beautifully stated. So many of us trade too much of our time for money. My father died a wealthy man, but found out he had terminal cancer literally the day he was moving out of his office to retire.
I know we are not all in danger of that. But we are all so influenced by Madison Avenue and the psychology of advertising. Do we really NEED all the junk we buy, and end up throwing away a few years later? Obviously not. What many of us need is the capability of retiring a year or two earlier than planned, which we could do if we stopped buying so many impulse items.
Definitely I will be happy once my time is my own, as long as I am not worried about where I will sleep, what I will eat, or how to pay for the doctor. Come to think of it, my house is paid off, and by the time I retire I will have medical coverage guaranteed for life, and there is that vegetable garden I have been thinking of...
free4now
Thinks s/he gets paid by the post
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1) 40k renting minimum, 50k realistic
2) 1 person
3) West Coast, San Francisco
4) I'm FIRE for a year now and spent 50k last year.
2) 1 person
3) West Coast, San Francisco
4) I'm FIRE for a year now and spent 50k last year.
free4now
Thinks s/he gets paid by the post
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- Dec 28, 2005
- Messages
- 1,228
Interesting thread. When I started reading this I thought the numbers people were reporting were too low. I consider minimum spending the amount below which I'd want to look for work to get more. The minimum that would keep me FIREd.
Something else to keep in mind is that it can be expensive to get into a lower spending situation. Moving from an expensive area to a cheaper area can easily cost tens of thousands of dollars to sell your home, scout the new location, and move. It's cheaper for me to rent here in San Francisco for a few years than it would be buy a home and live a few years in some supercheap place like Iowa. Converting to a $10k or $20k or even $30k lifestyle is not something that can be done free or instantaneously, and the cost of that conversion may be more than you save, unless you commit to 5-10 years or more.
Something else to keep in mind is that it can be expensive to get into a lower spending situation. Moving from an expensive area to a cheaper area can easily cost tens of thousands of dollars to sell your home, scout the new location, and move. It's cheaper for me to rent here in San Francisco for a few years than it would be buy a home and live a few years in some supercheap place like Iowa. Converting to a $10k or $20k or even $30k lifestyle is not something that can be done free or instantaneously, and the cost of that conversion may be more than you save, unless you commit to 5-10 years or more.
Rich_by_the_Bay
Moderator Emeritus
free4now said:
Interesting observation.
We'd like to downsize to a smaller home, but don't yet know where our longterm retirement locale will be (depends on kids' plans, wife's career and a few other things that are a few years away). And it may well be that we stay where we are.
So while a downsize seems sensible, if we move again 2 or 3 years later it will cost us a bundle. It's cheaper to stay in this oversized house than it is to downsize (not to mention Florida's property tax caps which we'd lose upon moving to another house in the state).
haha
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I have an older friend who is a doctor. About 10 years ago he was getting ready to retire. We had lunch and I asked him if he and his wife were going to move to a summer place he had owned for some years. He said "No, we are staying put right here. I've had a lot of patients, seen them retire, seen how they did emotionally and physically, and I think if you've been happy in your home city it's best to stay there in retirement if you can afford to do so.”
He was normal retirement age or a bit older, not an ER, and I’m sure this can make some difference.
He’s still happy and doing fine.
Ha
He was normal retirement age or a bit older, not an ER, and I’m sure this can make some difference.
He’s still happy and doing fine.
Ha
free4now said:
DW and I will be running into the relocate situation. It will be cheaper in the long run but short term is will be an added expense. We got a head start on it though and have narrowed down where we want to RE . This was done by taking short trips over the years at different times of the year to get an idea of the climate and other details regarding the surroundings.
That's a tough one. We've lived all over the world so when we landed in Hawaii we knew we were onto a good deal. Five years later when the Navy exhiled us to San Diego we knew we wanted to get back to Hawaii. (Many of the island's naysayers are kama'aina who've never lived anywhere else, let alone in places with winter.) After spending 15 of the last 18 years here, raising a kid on the island, and finding our "dream house", we don't see any reason to move again.Rich_in_Tampa said:
I doubt that grandkids will do it for us after watching my parents-in-law move here to watch their granddaughter grow up. In retrospect I think that was probably good enough for the first three of the 5½ years they spent here. After that they realized that the weather was pretty nice but they didn't like the sun-exposure carcinomas, they hadn't made any friends, they hadn't developed any new routines or hobbies, they weren't acculturating, and they'd pretty much turned into hermits. Moving back to their ol' stomping grounds was a good idea... especially for us kids!
Spanky
Thinks s/he gets paid by the post
Want2retire said:
Agreed - detach the need for more and enjoy every moment while you are still alive.
I keep telling DW not to look at those beautiful houses in the magazines and not to shop so often. We have enough stuffs in the house! Our storage room is getting filled.
1) $15,000 to $16,000 - no mortgage, no debts, both cars paid off. Largest single expense will be heating oil for my fairly large Victorian house. Individual health insurance costs are fairly inexpensive in Pennsylvania, so that's a help.
2) just me
3) Northeast U.S.
4) still working - FIRE by Dec. 2009 or earlier, before age 55
2) just me
3) Northeast U.S.
4) still working - FIRE by Dec. 2009 or earlier, before age 55
I love it! I can totally relate.
My move from Northern to Southern California is basically costing me nothing. I sent some stuff down in a visiting relative's van a couple of months ago. And I can fit the rest in two more car loads, trips that I would be taking whether I was moving or not. It is very liberating not to have too much stuff.
Kramer
REWahoo
Give me a museum and I'll fill it. (Picasso) Give
loosechickens said:
OK, I've gotta ask: Did they have a huge linen closet or some very thin towels?
loosechickens
Recycles dryer sheets
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Exactly, Kramer....my sentiments exactly.
Wahoo.....it was one of those big linen closets with double bi-fold doors, maybe six to eight feet long......just regular towels, but I kid you not, 63 of them. I sat there and counted them. The whole thing was crammed with towels, washclothes and handtowels, etc. and only two people lived in that house.
Much the same thing happens to me whenever we visit people with houses. I don't think you guys realize just how much STUFF you have, but when you live as we have lived for the past fifteen years.....two years in a VW Vanagon, four years in a 26 foot travel trailer and nine years in a motorhome, even the average suburban 2,500-3,000 foot house looks absolutely BLOATED with junk to us.
All that stuff costs money to acquire, money to insure, time and effort to keep organized......and people take such drifts of belongings so for granted, they don't even realize the excess.
Did you ever see a book called, (I think), the Material World? It was a big coffee table book with photos of families from all over the world with most of their worldly goods spread out outside their homes. The same people did one a few years later called Hungry Planet, I think doing the same thing with a week's supply of food.
Compared to most of the folks from the other countries, the American households had stuff running out their ears....well, literally all over their yards.
Most of you guys are just drowning in STUFF, yet it seems to us that most want more, more, more ..... ;-) Just witness right here on these boards that folks with seven figure accounts are still always finagling ways to make more.....it's kind of funny when you think about it......It's as though in our country almost no one has a concept of "enough".
LooseChickens
modified to add links to the books mentioned:
http://www.amazon.com/Material-Worl...7137460?ie=UTF8&s=books&qid=1178683001&sr=1-1
http://www.amazon.com/Hungry-Planet...7137460?ie=UTF8&s=books&qid=1178683001&sr=1-2
Wahoo.....it was one of those big linen closets with double bi-fold doors, maybe six to eight feet long......just regular towels, but I kid you not, 63 of them. I sat there and counted them. The whole thing was crammed with towels, washclothes and handtowels, etc. and only two people lived in that house.
Much the same thing happens to me whenever we visit people with houses. I don't think you guys realize just how much STUFF you have, but when you live as we have lived for the past fifteen years.....two years in a VW Vanagon, four years in a 26 foot travel trailer and nine years in a motorhome, even the average suburban 2,500-3,000 foot house looks absolutely BLOATED with junk to us.
All that stuff costs money to acquire, money to insure, time and effort to keep organized......and people take such drifts of belongings so for granted, they don't even realize the excess.
Did you ever see a book called, (I think), the Material World? It was a big coffee table book with photos of families from all over the world with most of their worldly goods spread out outside their homes. The same people did one a few years later called Hungry Planet, I think doing the same thing with a week's supply of food.
Compared to most of the folks from the other countries, the American households had stuff running out their ears....well, literally all over their yards.
Most of you guys are just drowning in STUFF, yet it seems to us that most want more, more, more ..... ;-) Just witness right here on these boards that folks with seven figure accounts are still always finagling ways to make more.....it's kind of funny when you think about it......It's as though in our country almost no one has a concept of "enough".
LooseChickens
modified to add links to the books mentioned:
http://www.amazon.com/Material-Worl...7137460?ie=UTF8&s=books&qid=1178683001&sr=1-1
http://www.amazon.com/Hungry-Planet...7137460?ie=UTF8&s=books&qid=1178683001&sr=1-2
califdreamer
Recycles dryer sheets
loosechickens said:
Sure about that?
loosechickens
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well, that certainly wasn't my intent, although it may have come across that way, because I did find them really surprising.
My apologies if any felt disparaged....if it makes you feel better, you can disparage mine for being so chintzy. ;-)
LooseChickens
My apologies if any felt disparaged....if it makes you feel better, you can disparage mine for being so chintzy. ;-)
LooseChickens
These are our expenses for 2 people living in England, aged 52 and FIRE. All amounts calculated in dollars at 2 to the pound
Essentials:
property taxes: $2,400
utilities: $4,000
groceries: $4,000
insurance (cars(2), house, medical): $3,400
car fuel: $2,400
house maintenance/improvement: $4,000
car maintenance/repairs $800
So, a pretty "basic" life for $30,000.
Then our "desirables"
broadband/phone/cell: $500
clothes: $2,000
booze: $2,000
meals out: $1,000
gym sub: $500
soccer season tickets(2): $1,200
theatre/cinema: $900
cds, dvds, books: $1,500
gifts: $2,400
vacations: $10,000
other and miscellaneous: $3,000
So, another $25,000 for a comfortable life.
So, over here, $55,000 covers most of the comforts of life.
The minimum state pension, here, is about $12,500 (at age 60). There are many people living off that amount and by all accounts it is just about enough for food, heat, clothing and property tax - nothing more.
Essentials:
property taxes: $2,400
utilities: $4,000
groceries: $4,000
insurance (cars(2), house, medical): $3,400
car fuel: $2,400
house maintenance/improvement: $4,000
car maintenance/repairs $800
So, a pretty "basic" life for $30,000.
Then our "desirables"
broadband/phone/cell: $500
clothes: $2,000
booze: $2,000
meals out: $1,000
gym sub: $500
soccer season tickets(2): $1,200
theatre/cinema: $900
cds, dvds, books: $1,500
gifts: $2,400
vacations: $10,000
other and miscellaneous: $3,000
So, another $25,000 for a comfortable life.
So, over here, $55,000 covers most of the comforts of life.
The minimum state pension, here, is about $12,500 (at age 60). There are many people living off that amount and by all accounts it is just about enough for food, heat, clothing and property tax - nothing more.
teejayevans
Thinks s/he gets paid by the post
- Joined
- Sep 7, 2006
- Messages
- 1,691
ashtondav said:These are our expenses for 2 people living in England, aged 52 and FIRE. All amounts calculated in dollars at 2 to the pound
Essentials:
property taxes: $2,400
utilities: $4,000
groceries: $4,000
insurance (cars(2), house, medical): $3,400
car fuel: $2,400
house maintenance/improvement: $4,000
car maintenance/repairs $800
So, a pretty "basic" life for $30,000.
I don't know how they do math in England, but here in the states, that adds up
to $21,000
TJ
But feeling richer already...
youbet
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
loosechickens said:
Actually it's all relative..........
My college roommate from years ago and lifelong friend would puke at all the stuff you have and the excessive consumption you demonstrate! He likes to do contract work around the country and moves from efficiency apartment to efficiency apartment with everything he owns in the back of his Subaru station wagon.
A number of years ago, I suggested he could use a class A RV as his home to accomodate his itinerant life style. Big mistake! I then received an hour lecture on the waste of occupying something so huge and wasteful and that would allow one to accumulate SO MUCH STUFF!
Everything is relative! By comparison, you're not chintzy, you're a wasteful and extravagent spender!
youbet
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I hadn't been following this thread and finally read it all at once this morning. Interesting stuff.
One note....... All the examples are useful and interesting in themselves but can't be compared to each other. Strictly apples to oranges. Many folks aren't including the value of free or subsidized health insurance, depreciation expense on owned capital items (including RV's) that are utilized to keep current, out-of-pocket expenses down, opportunity costs (including the opportunity cost of owning your home), the fair value of bartered goods or services, etc.
For the folks who can live on $10K........ Congratulations! Health insurance for DW and myself costs us almost that much! If you get free/subsidized health insurance and aren't counting the equivalent value in your budget estimates, you don't understand how budgeting and cost comparisons work!
One note....... All the examples are useful and interesting in themselves but can't be compared to each other. Strictly apples to oranges. Many folks aren't including the value of free or subsidized health insurance, depreciation expense on owned capital items (including RV's) that are utilized to keep current, out-of-pocket expenses down, opportunity costs (including the opportunity cost of owning your home), the fair value of bartered goods or services, etc.
For the folks who can live on $10K........ Congratulations! Health insurance for DW and myself costs us almost that much! If you get free/subsidized health insurance and aren't counting the equivalent value in your budget estimates, you don't understand how budgeting and cost comparisons work!
