Retire on 3k per month thoughts...

This is mostly for retireat40. You mentioned getting a
complete physical at 63 and then (depending on results)
winging it until Medicare kicks in. I have had the same thought. Also thought about "going bare". I wish I had now, but of course that is hindsight. Re. "complete physical", I've had them, but
I am not going to do that again unless I am feeling the grim reaper over my shoulder. I have spent enough time with doctors
and had enough tests. So far, they have cured very little.
Most of what ails me is chronic and I get more help on the
Internet than from my doctors, in most cases. Plus,
every time I have a check up they want to run more tests
which turn up more stuff to "check out", which results in
more doctors and tests, and more stuff to worry about, ad nauseum. If I get something really terminal, I expect I'll just lay in extra bourbon and
read some good books. "Resting comfortably" is my story,
and I'm sticking to it 'til the end.

JG

Every day we see more and more companies that are
downsizing and laying folks off. A lot of these people will
never get high paying jobs again-THUS- prices of things
will have to come down or the stuff the rich guys make
will have no one that can afford to buy them, thus creating a snowball effect. Overstock causing more layoffs. I won't be buying a new car anytime soon, nor will a lot of folks that have lost their jobs, look out auto industry. Therefore, I think that 36K a year is quite reasonable amount as I believe things will get cheaper.So there!

[Martha]

Living on $36,000 a year. I decided that now that I am part time and as practice for retirement, I would reduce my draw at work to $3000 a month. What I didn't think about was that I deduct 15% for 401(k) from each check, $333 each month for flex plan (new glasses and dental work for both this year), income taxes and $230 a month for health insurance premium. I am paid twice a month. My first paycheck was $632. Ack! I need to rethink this. My stingy husband however thinks that this should be plenty to live on.

[ESRBob]

Martha,
Does this mean your 36k didn't include the health insurance, health savings account, taxes and whatnot? (Aside from teh 401k savings). Or is it just a question of getting the right amounts into the right checking accounts etc.

I always wonder whether people are really counting all their annual expenses when they calculate or think about what their living expenses (except for those who log everything in quicken-- they know!).

In particular, amortizing costs of predictable but infrequent purchases (car, house painting, major applicances), taxes, and adding in costs of money management fees -- (the SWR models are all based on asset class returns before fees, and let's not forget the funds own internal brokerage expenses which you _never_ see).

If you are well below a 4% SWR then I'd say don't worry too much about this stuff, but if you are right up against the limit (as I am) then it becomes more important to really do your calculations right.

Interesting that just a few years ago I could blow through 36K "like Grant took Richmond". Now, we would
be "livin' large" on that amount to cover a whole year!

JG

[Janie]

For anyone who has had difficulty finding health insurance due to a preexisting condition, I would suggest your best option is finding a public-sector job. Hold it for 5 years (if you're keen to retire) or to the minimum retirement age, and you'll be able to retire and keep your benefits.

I recently began working for a university and health insurance is free (for me; would be an additional charge to add husband, but he has insurance thru his employer). There is NO preexisting clause.

John,

I am generally a big fan of your posts, but I do not understand your analogy re: "...like Grant took Richmond." From my reading of the history of that War, Grant had a very hard time taking Richmond. Was that your meaning?

Just a test to see if you were paying attention. My
mother (or someone in my family) used to use that
line all the time. I got tired of correcting them. You are correct and my anology was
not. It just popped into my head so I used it in place
of some other battle which Grant won in a walk (none comes to mind at the moment). Anyway, Richmond hung in there until the end. In fact, I believe that Washington
was menaced more often during the war.

JG

[Martha]

Martha,
Does this mean your 36k didn't include the health insurance, health savings account, taxes and whatnot? (Aside from teh 401k savings). Or is it just a question of getting the right amounts into the right checking accounts etc.

Being an owner of a business, even a part time owner, how much I take out is somewhat in my control until bonus time (when calculations are made as to what we are actually entitled). Therefore, when I told our accounting department I wanted a draw of 36,000 a year, accounting deducted from that amount taxes, my 401(k) contribution, flex benefits and insurance payments. This is what reduced my purported 36,000 a year to 632 dollars twice a month. Therefore, my exercise in pretend retirement didn't work. However, it will be an interesting exercise in frugality.


:-/

[charlie]

It's the unpredictable expenses that bite!

We just finished fixing a water line leak under
our slab foundation ..... have not got the bill
yet but it will be in the neighborhood of $2500.

Not covered by home insurance of course.

Cheers,

Charlie

[KB]

Maybe that's a blessing that it's not covered. If you did file a claim, they might cancel you.

Yeah, I agree. Operating as we do............ that is, very close to
the edge budget-wise, anything unexpected requires
some real creative energy. Most of the stuff I can see
coming can be finessed somehow. It's those pesky
surprises that cause loss of peaceful slumber.

JG

[Nords]

We just finished fixing a water line leak under our slab foundation ..... have not got the bill yet but it will be in the neighborhood of $2500.

I'm curious, Charlie, how did you find the water leak? Or did it find you first?

What cost $2500?!?

[charlie]

Nords,

We had a small leak in an outside faucet. After
the repair, the plumber noticed that our water
meter was showing about 1 gal/minute usage
with nothing turned on. This prompted me to
check water usage on the bill ........ my wife pays
the bills and did not tell me that the last one was
abnormally high.

We have a slab foundation and all the pipes are
run under the slab. They had to jack hammer
a hole in our utility room. One cold water pipe
had 3 leaks withing a 3' span ...... I told them to
quit digging and bypass the bad line by routing
a bypass outside of the house.

All of the leaks were from the inside-out. That is
the cavity was larger on the inside than the outside.
The plumber said that the problem was probably
caused by nearby lightning striking a utility pole
behind our house and some of the surge was
grounded through our water system. Who knows
if he is right. Anyway, there are no more leaks for
now at least.

We were lucky in that the water lines running
to the other side of the house were not affected.
The one that was bypassed was only about 1'
from the inside edge of the foundation and it
only provided cold water to the kitchen.

We are holding our breath hoping that nothing
worse develops. The pipes to the rest of the
house run under a brick floor in our den that
would be very difficult to repair.

This is the slab house owner's nightmare ...... and
most mid priced homes built in Texas since
the 60s are slab.

Cheers,

Charlie

[Nords]

Thanks, I think I'll go check our grounding rod now...

I've heard of a few homes in our neighborhood with the same leak problem, but the leaks sought out the owners. Puddles inside the front door, walls collapsing, and other subtle hints of trouble.

The putative cause is thin-walled copper pipe with acidic public water. I've never heard of a lightning-inspired water leak but we don't get much lightning here either. I'm just hoping that our water conditioner keeps the problem away, and I'd sure hate to see what lightning could do to a Hawaii home!

[charlie]

Nords, It could have been a corrosion problem
compounded by a bad run of pipe. Our water
in Texas is notoriously "hard" or alkaline.
In the 50s before they started using copper
pipe, corrosion was a very common problem.

Cheers,

Charlie

[gayl]

For anyone who has had difficulty finding health insurance due to a preexisting condition, I would suggest your best option is finding a public-sector job. *Hold it for 5 years (if you're keen to retire) or to the minimum retirement age, and you'll be able to retire and keep your benefits.

Slight correction: in order to be able to have HC benefits as a retired public sector employee, you must be eligible to a pension. In most CA positions, that means that you must have been employed at least 10 yrs / retire at 50 or a 30 yr safety employee retire at any age or 5 yrs retire at 70+. Sounds like you have an unusual advantage if you only have to work 5 yrs and retire at any age whether you can draw a pension or not.

Also the amount that you contribute towards your pension is higher than most realize. The yr before retirement, I was contributing 1600 a month ... my sister currently contributes 12% of her salary per month and it is due to go up. Yes, the retirement benefits are wonderful but you will contribute a major portion of the funds.

36k plenty, some years won't even spend that much.
As we age won't be able to travel/sports/etc. Spend it
while your looking at the flowers from above...

[wzd]

Being an owner of a business, even a part time owner, how much I take out is somewhat in my control until bonus time (when calculations are made as to what we are actually entitled). Therefore, when I told our accounting department I wanted a draw of 36,000 a year, accounting deducted from that amount taxes, my 401(k) contribution, flex benefits and insurance payments. This is what reduced my purported 36,000 a year to 632 dollars twice a month. Therefore, my exercise in pretend retirement didn't work. However, it will be an interesting exercise in frugality.


:-/

Martha - For pretend retirement, you need to be sure the taxes are the taxes on $36000, not including your year end bonus. Also, 401k withholding is not a valid retirement expense. So be careful to treat yourself fairly in the experiment!

Wayne

[Martha]

No kidding Wayne. I was going to up the draw to be a more accurate representation of 36,000, but decided to heck with it, leave it at 1200 net a month. Actually, to be a true retirement test I should make it zero.