Retire on 3k per month thoughts...

[RJK]

I hope to hang up the spikes soon and have planned
on 3000.00 a month income. That consists of:
1. 1k from SS for me
2. 1k from wifes SS
3. 1k from savings ( 300k saved with 4% withdrawl rate)
$36,000 a year to "git r done", live in Wisconsin were
cost of living is not terrible. Also believe that cost will
eventually come down as more people retire/lose jobs/
etc.. Lets face it, who can really afford 40K cars if you are retired or unemployed... Thoughts

 

[Cut-Throat]

That is a reasonable plan as I posted in your other thread. Don't plan on costs coming down, although they could as the U.S. wages will go the direction of China's instead of the other way around.

The CEOs of the U.S. will have little trouble affording $40K cars - Heck I'm even going to buy one myself!

 

[John Galt]

Re. "who can really afford 40K cars?' Cut-Throat?

Seriously, I think your plan is fine. I lived in Wisconsin for 11 years, and while I did not care for the politics,
the COL was okay. Anyway, your plan is similar to ours
except we will never see $36,000 per year.

John Galt

 

[RJK]

As long as they (The Crooks in Washington) don't change Social Security benifits for those over 55,
I think I can Git R Done...

 

[FunGoals]

36K a year is possible however there should be room for inflation, the unexpected & just having fun during the ENTIRE retirement. It also depends on how much of the 36K is currently leftover after expenses & whether some of the expenses can be decreased as others rise

I received a severance for over a year after I retired & deposited the entire amount every 2 weeks in Ingdirect. I retired to live on a pension - the severance was temporary. I intended on making an investment in real estate or stocks. The money was liquid it started looking like a 2005 corvette or mustang gt. Luckily I found an ad in the Sunday paper for a 7 month 3.1% cd. Something needed to be parked & it wasn't a corvette or mustang.

 

[retire@40]

36K a year is possible however there should be room for inflation, the unexpected & just having fun during the ENTIRE retirement.

Inflation is already account for in the 4% SWR since it is assumed that average inflation is 3% and average earnings will be 7%. And SS benefits are increased each year for inflation.

I agree that the 36K budget should have a line item for "unexpected" expenses. I would say $100 to $200 a month as a minimum.

I also agree that if you can't have fun in ER then you shouldn't ER until you can. If you have to worry about where you spend every cent, ER life will be to stressful to be worthwhile.

Never ask of money spent
Where the spender thinks it went.
Nobody was ever meant
To remember or invent
What he did with every cent.

Robert Frost​

 

[gratefuled]

On a certain level this thread stands out as very odd.

I keep my EMT-B certification up-to-date because I enjoy volunteering for the Red Cross, and, less altruistically, because it's easy to find full-time work with benefits in the EMS field Which is to say that if I find myself in a pinch, within a couple of weeks I can get an ambulance job that carries a subsistence wage and medical insurance.

(Many interesting sidebar items about the healthcare system deleted.)

But it's that "subsistence wage" thing that makes this thread stand out. My wife and I are planning to ER to a rural town in the Southeast where the municipal EMTs start at $28K per year. Before taxes.

Which is obviously less than $3K per month. Yet these people still do OK; I've talked to some of them. They get married, rent an apartment, have a couple of kids, drive a decent car, go fishing, etc.

It's interesting to see what people can get by on, eh?

Ed

 

[FunGoals]

In my retirement planning I have SS increases being canceled by rising medicare costs.

I have several accounts I can access quickly for the unexpected & the expected. The primary account is nicknamed " Next BIG Thing " where about $400 is maintained. If I know in advance that I need more I make transfers from weekly spending money. Other accounts that can be used are " HouseHold Repairs ", " LongTerm Bills " as well as " Vacations "

Unexpected items are not always unpleasant. Sometimes its a really good sale or having fun. When I " borrow " part of the $400 I know I have to replace it in about a month from pocket money.

Will the principal remain the same or decrease with the 7% SWR & will the 7% vary?

 

[haha]

But it's that "subsistence wage" thing that makes this thread stand out.  My wife and I are planning to ER to a rural town in the Southeast where the municipal EMTs start at $28K per year.  Before taxes.

Which is obviously less than $3K per month.  Yet these people still do OK; I've talked to some of them.  They get married, rent an apartment, have a couple of kids, drive a decent car, go fishing, etc.

It's interesting to see what people can get by on, eh?Ed

No doubt you will be fine Ed. OTOH, many people want more than a working class SOL in the rural south. So for them, it would maybe not be a good plan.

Mikey

 

[renferme]

My Dad is retired (for many years) in Clearwater Florida and living on about 1200/month ss and 370/month from a CD.
So, if you can't make it in Wisc., then move to FL.

 

[John Galt]

We could live on 1200/month SS and 370/month CD
interest and not break a sweat. But, that's just us.
We don't get anal about it. We just know how far we
could cut back, which provides a lot of security. On a
related issue.............today on the Rush Limbaugh
program, they spent a lot of time talking with people
who were into dumpster diving. These were not bums,
but people with money who understood there was gold
in the dumpsters. We don't do that, but we could.
Getting something for nothing is a rush! You just need
to have the right attitude. Same with your lifestyle.
If most of us could cut back 50%, we would still be in
the top 1% world wide. Think about it.

JG

 

[cc]

I heard the dumpster divers too - steaks, chicken, chips etc.

I didn't hear any of them say they scrounged up free health insurance though...

 

[Zipper]

Mrs. Zipper is still working, I'm retired.

$C4000/mo net is good.

You guys scare me with your healthcare costs down there.

 

[Zipper]

.............and John, if I might?

Anyone who would listen to Rush Limbaugh is a freakin' idiot!

 

[Cut-Throat]

.............and John, if I might?

Anyone who would listen to Rush Limbaugh is a freakin' idiot!

Actually, I don't think John really enjoys Rush, He just gets his news and information from him, so that he can keep atop of world events

 

[Bob_Smith]

Rush Limbaugh - the Tokyo Rose of the right wing fringe.

 

[bruce1]

You guys scare me with your healthcare costs down there.

Me too.

Bruce

 

[indymom]

Same here

 

[John Galt]

Rush Limbaugh is a great man. He has brains and guts,
qualities which are in short supply these days. My
main area of disagreement is with his eternal optimism.
He thinks the leftist drift can be fixed. I do not.
Only time will tell which of us is right.

JG

 

[Martha]

You guys scare me with your healthcare costs down there.

The only, absolutely only, reason I haven't joined my husband in early retirement is the big unknown of where health care costs are going. He thinks that a million dollars worth of assets basically should be considered for health care and our other expenses come from the rest.

 

[John Galt]

Hi Martha! Health care is a scary issue for many,
including me. Although I could have piled
up a million bucks if I had continued working, starting very late as I did I might never have ERed. So, in my case, I will have to be very creative
and take some risks. I've been lucky all my life and
hopefully this will continue. Unclemick is my
inspiration

JG

 

[Nords]

"We're not in Kansas anymore"

That's the title of Walter Updegrave's latest on financial planning.

If it's the first book one reads on the subject, then it's probably in the top 20 (behind multiple awards for "Four Pillars"). If it's not the first book you've read on the subject, then don't bother... not much new.

His treatment of medical insurance was fairly straightforward-- get it from your employer or get your own high-deductible catastrophic-coverage policy and then live healthy. (I'd love to see a healthcare study of the "real" medical costs of otherwise healthy people.) I have to agree that a healthcare backlash is eventually going to halt the inflationary spiral.

Speaking of medical-care issues, Updegrave had an interesting financial analysis of long-term healthcare. He claims that the epic 1991 study in teh New England Journal of Medicine included ALL nursing home care, even if just for a few days. Statistically "only" 20% of those over 65 would spend a year or more in LTC, and only 10% would spend more than five years. If you live by statistics, I guess that's pretty comforting-- right up there with only a 10% chance of dying by the time you're 65.

So he says that if your estate is under $100K, don't worry about LTC insurance because recent LTC costs are around $56K/year. You'll spend down your assets relatively quickly and you'll be on Medicaid before you'd recoup the costs of LTC insurance premiums.

If you have more than $2M net worth, again don't worry about LTC insurance. You'll have enough assets to handle all the expenses. Of course you should worry more how your spouse is planning to shield his/her assets before Medicaid kicks in, especially if that spouse is exhibiting a new interest in lethal weapons.

In the "gap" between $100K-$2M, LTC is probably worth the cost. It's less expensive than self-insurance and, if bought during one's 50s-60s, the total premium cost will probably be less than the benefits received later.

 

[RJK]

I forgot to mention in my 36K per year dollars to spend for my wife and I that I will be golfing more, thus getting better and winning untold amounts of cash from my golf buddies.
Perhaps even turning pro as I refine my game and get
my handicap down a bit... :

 

[John Galt]

Hey Nords......good post!

In addition to watching out for your spouse's "new
interest in lethal weapons", you should also be alert
for any small bottles exhibiting a skull and bones
on the label

JG

 

[unclemick]

Roll the dice - 11 years no health insurance, 3 years to medicare - Bon Temps Rolliere - New Orleans food, drink, smoke - weak on exercise. Heath Cobra was ~ $750/mo in 1992 - had I bought - I'd still be working. Maybe $600 total medical in eleven years.

All the women are covered though - including 3 years in ST fixed for my 88 year old mom in case of nursing home to cover the 36 mo look back for medicaid.

Total portfolio maybe 1 mil ex house, cars, misc real estate. Plan to get wild next year and spend 36k or over. Note SS next year, two small pensions, Mom's SS - 39k/yr taxable 'before' the portfolio.

1993 - 2003 varied low 12k/yr to more often 18-24k and gradually spending more on fun each year.

Heck - I may even buy a kayak.