Poll: What is your basic income need (floor) in retirement?

[eytonxav]

1) ~$80K, no mortgage, but high property taxes
2) 2 adults and 2 kids
3) D/FW, TX
4) Retired since last October.

 

[justin]

I think that the YMOYL/simple living philosophy and FIRE preparation have quite a bit of overlap.

Based on your posts, I believe that your personal lifestyle is pretty well aligned with theirs.

The differences on this forum that I see, are that some post here about scrimping now to be able to consume massive quantities later. In my opinion this thinking is flawed. But... Who am I to judge !

From what I've seen at the simpleliving forum from previous visits, those folks take LBYM to another level (not that there's anything wrong with that). I'd rather spend an extra buck or two, and not have to worry about working hard to squeeze an extra penny or two out of every task or purchase (and spending extra time in the process).

After I figured out that my "net worth increase rate" was $255 per day during periods of typical market returns, the motivation to scrimp and deprive myself to save a buck went away. Now I focus on the easiest or quickest way of doing something even if it is a little bit more expensive overall.

Not to say that I'm a spendthrift, just that I focus my efforts where it counts, and not on trivial items. I'm sure my FIRE date is going to be pushed back by a month or two, but it is ok.

 

[SteveR]

...Not to say that I'm a spendthrift, just that I focus my efforts where it counts, and not on trivial items. I'm sure my FIRE date is going to be pushed back by a month or two, but it is ok.

FIRE is not a race unless you are racing against yourself or your idea of when you want to ER. Goals are sometimes set in stone and that forces some folks to cut back more on living expenses so they can save more so they can retire sooner. Nothing wrong with that if that is what you want to do. But many of us chose to "get rich slowly" and to continue spend $$ on the things we want while continuing to save at our comfortable rate. For many of us, life is too short to create a budget so tight we can't enjoy what is important to us. The fact is, we each have a different view on what is "important" to us.

There is no right or wrong way to get to FIRE; there is only the way that works best for you.

 

[bbbamI]

For floor income, I guess that would be $1k a year if we moved in with mom and dad. The $1k would be for nerve pills. But since that's not gonna happen.....

$30K (mortgage free)
2 adults
TX
I'm retired, DH will retire in 2 years.

 

[loosechickens]

hahahaha....if I had to move in with my mother-in-law, 1K wouldn't be anywhere NEAR enough for nerve pills......

I agree, it's never really about "how much" you spend, but whether what you spend enriches your life, gives you a feeling of contentment, and enables you to feel freedom and abundance in your life. If you're accomplishing that, it doesn't matter if you're living on $10,000 a year or $100,000 a year. It's the satisfaction level that's important. And everyone has a different level and different items that spell satisfaction to them.

I also agree that some of the simple livers carry their particular obsession to extremes....so do some of you here who couldn't run out of money in your lifetimes, but continue to obsess to get better returns and make more. I guess when the obsession is "ours", it seems just a normal interest, but when it's "theirs", THEY are just obsessed. <grin>

But it IS really interesting to explore the differences.....and nice to find the board up and running again....I kept getting "cannot connect to server" all morning. LooseChickens

 

[YVR-Terri]

Floor is about $36K (Canadian) before taxes, including 1150/mo minimum mortgage payment
1 person
Vancouver Canada
28 and working, ER may be possible in 10-15 years (depends on many variables)

 

[kat]

I understood floor to mean living in my present abode at a base level, the floor. Obviously, there are cheaper living situations than my no mortgage house. Live in a tent or rv, etc. But I didn't sense that's where the OP wanted to take this.

My floor, as said previously, is $20,000, including health insurance and taxes, with a paid off house, for one person and a dog. My ceiling is higher.

 

[kramer]

From Kramer's detailed budget:

For $3K more per year I could take a 1-2 month overseas international vacation each year.

Kramer, how do you enjoy 1-2 months overseas for *only* $3k? That seems to good to be true. I have been flummoxed about the disparity between my travel wants and my (Europe) travel budget. Any tips Kramer?

Thanks,
Frankie

Hi Frankie, I am single and travel mostly in the developing world. That means lodging is around $5-$18 per night usually, depending on the location. I try to take ground transport when traveling within a region, and only at daytime to maximize my view of the scenery!

This September I plan to leave for about a 4 to 6 month trip to SouthEast Asia. I am giving notice soon for my apartment here in San Jose, California ($1000/month). My expenses in SE Asia while traveling will be less than doing nothing here in San Jose! I am figuring about $1200/month since I will be moving around so much (this does not include round trip airfare to Asia). If I was staying put in a place like Thailand (or traveling slower), it would probably be closer to $800/month.

Flights within SE Asia are dirt cheap. I will probably do most of my trip on the ground and make one flight from Saigon to Singapore (to meet some family members who want to join me for a couple of weeks), and I priced it at about $35. My total back home USA overhead will be around $120/month for health insurance ($85/mo), car storage($20/mo), and a little miscellaneous. So, if I stay in Asia for six months, I am figuring my total travel plus back home expenses will probably be around $9000, let's say $10K to be safe.

If I were to travel to Europe or any first world country, I would definitely "hostel" it. My best friend is visiting Rome in a couple of weeks. He will be paying about $24/night for a hostel bed downtown for four days. Usually, when I am traveling on my own, I will get a private room but if the costs are higher, I will share. It just depends. Also, it is cheaper for 2 (per person) to travel than 1. When I traveled with a friend through colonial towns in Mexico this past summer, the most we paid per person per night was about $14 for some great places in perfect downtown locations in popular tourist cities (Guadalajara, Guanajuato, Zacatecas, etc.).

I carry everything in a bag a little larger than a carry on. Technically, I should probably add something like $60 per month of travel for gear depreciation.

On this coming trip, I intend to track every expense (including immigration visa fees, exchange rate hits on debits and ATM fees, etc.). Feel free to remind me to report back later!

I also plan to experiment with those sites where folks in a given foreign city offer to host travelers for a day or two, mostly as an opportunity to learn English.

Kramer

 

[myself]

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. ;-)
LooseChickens

LC,
I just figured rough utilities (heat/electric $4,500) + current property taxes (southern NJ - $7,200). We're already more than the $10k ($11,700). Assuming a paid for house (which we've already planned that out), DW and I could possibly live off of $3,800/yr for groceries (or 1/3 less if we planted a lot of our fruits/vegs. Then again, we'd still have to take some extra for the occasional septic pumping. So, our absolute minimum without vehicle insurance/gas would already be at $15,500.

I guess what is one person's "basic" needs are different than others. And don't forget that inflation will affect that amount. After all, we might be able to live "bare bones" now on $15k/yr., but that $15k/yr will be more like $27k in 15 years when the mortgage is paid off.

 

[Art G]

I'm jumping in here really late, but just wondering, for all of you figuring numbers; have you considered converting your number into a percentage of your assets? It might give you a clearer picture of what your earnings need to be in the future and whether or not you'd need to tap into your current assets to get there.
FWIW, I read recently that a couple aged 62 of non-smokers, there's a 50% chance one of you live to 92.

 

[Zoocat]

Basic: $42000, including mortgage and health insurance, and taxes
1 person plus dog
Colorado
58, currently semi-ER

 

[aaronc879]

18K after tax. No mortgage. One person. May need to increase that to 24K depending on health insurance premium.

 

[CuppaJoe]

Thanks for this thread, it’s helping me plan.

1) My spending preference will be about 15% more than pre-R expenses as I will be paying medical insurance; my income should be higher (4% method), (I Rent). Debating about keeping the cleaning lady, will probably keep her and see how it goes for a few months.

So, Chinaco, maybe the pre-tax non-discretionary floor you are looking for would be about 90% of pre-R expenses which I have stated elsewhere and choose not be redundant.

2) Supporting mainly myself but will continue helping one other person, plus one cat.

3) West Coast, plan to stay in high expense area for three or four years after R. My location choices may be limited due to medical insurance coverage.

4) Currently working full-time but may R as early as May ‘08.

 

[FIREd]

The answer to the OP's question depends on where we end up retiring:

If retiring in a mid-size city in the southern US: $30K gross a year minimum. Ideally 60K gross.

If retiring in a mid-size city in Europe: 25K euros gross a year minimum. Ideally 50K euros gross.

Assumptions: 2 people, mortgage paid off before retiring, estimated health insurance premiums included.

 

[CuppaJoe]

OK, I've gotta ask: Did they have a huge linen closet or some very thin towels?

What are towels symbolic of? I'm laughing because I caught myself doing it again this morning: hid the towels which were out on the bathroom racks so that the cleaning lady would not waste any effort carefully folding them and arrranging them back on the racks.

 

[Helena]

$25,000 year

2 people

Texas

Retired / PT self-employed

No debt. House and car paid off.

Still adding $$ to the nest egg.

I could live comfortably on less
but Texas has high property taxes.

 

[Helena]

1) ~$80K, no mortgage, but high property taxes
2) 2 adults and 2 kids
3) D/FW, TX
4) Retired since last October.

I live in DFW too. Property taxes are terrible.

I've never seen $80K per year even when I
was in my corporate job !

 

[myself]

I live in DFW too. Property taxes are terrible.

I've never seen $80K per year even when I
was in my corporate job !

Try NJ taxes. Ours just hit $7,200 last year (although they did give us a rebate that caused it to go down to $5,600).

 

[Helena]

Try NJ taxes. Ours just hit $7,200 last year (although they did give us a rebate that caused it to go down to $5,600).

What is the tax appraisal of your house ?

My house is appraised for $150,000.
Property taxes are $3800.

 

[Art G]

Property taxes in D/FW high, but no state taxes, so I'd say we're a whole lot better off than CA. or up north.

 

[Helena]

Property taxes in D/FW high, but no state taxes, so I'd say we're a whole lot better off than CA. or up north.

When I lived in Arkansas for a short time, they not
only had a state income tax... but also a personal
property tax... so, even though I owned no property in
Arkansas... I paid a tax on my rented home's contents !!

I moved back to Texas.

 

[Urchina]

1. 75K. This includes 35K/year in mortgage, HOA fees and property taxes. Does not include car payments (cars are paid off)
2. 4 people: 2 adults and 2 kids (and 2 cats)
3. Central Coast, California
4. One adult working full-time outside the home, and one adult (me!) at home with kids. And cats.

 

[Art G]

1. 75K. This includes 35K/year in mortgage, HOA fees and property taxes. Does not include car payments (cars are paid off)
2. 4 people: 2 adults and 2 kids (and 2 cats)
3. Central Coast, California
4. One adult working full-time outside the home, and one adult (me!) at home with kids. And cats.

Well, you could always eat the cats.

 

[FinanceDude]

$25,000 year

2 people

Texas

Retired / PT self-employed

No debt. House and car paid off.

Still adding $$ to the nest egg.

I could live comfortably on less
but Texas has high property taxes.

Come to Wisconsin, we are trying to corner the market on high taxes.........

 

[CuppaJoe]

....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.

This is a sub-topic I've thought about many times over the years. While still working, I would have to find an impossibly cheap (and non-existent) apt. in order to get a comparable deal outside of the city. Most options would require both acquiring a car and spending maybe $100+/mo. on public transit.

And the expense of moving to the boonies after R is also no small matter.