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Re: what % of salary do you live on
Old 02-18-2006, 04:26 PM   #41
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Re: what % of salary do you live on

Quote:
Originally Posted by old woman
Well I feel old and can see what's next. My Mom is 79 and I am becoming more like her everyday, her Mom is 98 and she is becoming more like her everyday, so I can see myself being more like grandma everyday, not that that is a bad thing, grandma has a pretty good life except she is forgetful.
I am using them as role models on how to retire without running out of money. Grandma has a little house in town where she could walk everywhere, but now has moved to the country to assisted living because she broke her leg and is forgetful, she may have dementia. Mom has a house in the city and a car and can drive upto about 40 miles before her eyes hurt too much. She used to enjoy travel but now her feet hurt if she overdoes things so she stays home most of the time except for local games of bowling and lunch with friends, it is a cheap life. She can afford more but doesn't want more so her savings grow every year.
So for me I want a low maint home where I can walk or take public transportation when I can't or don't want to drive. I want my home nice enough I would enjoy being at home, a yard to putter in, some flowers. I also want to be near my mom she is 240 miles from her mom and it makes it hard on her to go see her. Grandma has been retired 41 years so far and mom 18 years so I can see the money needs to last a good long time.
Just a quickie. I am 61 and dealing with various health "issues".
It's no fun. DW says, "You seem to be able to do what you want to do."
Only partly true. I tell her."What is the alternative? Sit in my chair until
I die?" I would rather push the envelope as far as I can before
I "go gently into that good night". Because I can see the end from
here, the pace of my "adventures" has increased a lot. The
"Do it now!" approach has taken hold big time.................

JG
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Re: what % of salary do you live on
Old 02-18-2006, 04:45 PM   #42
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Re: what % of salary do you live on

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Originally Posted by nun
I'm working towards ER. One thing that annoys me is the figure of 70 to 80% of your
salary that is often quoted as the income you need in retirement. I think this is
rediculously high as I don't expect to have a mortgage to pay in retirement and
I'll live on the same amount for other expenses as I do now, which is about $1500 per month. What % or amount do you live on?
I have often posted that we live on about 25% of my pre-ER
gross income, or 25K per year (2 people, 4 dogs). OTOH, I just did our
tax returns and the total gross was around 30K, all of which we
spent. Bottom line, whether 25K or 30K we spend it all and try to keep the net worth from declining. That is good enough for us.

JG
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Re: what % of salary do you live on
Old 02-18-2006, 05:07 PM   #43
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Re: what % of salary do you live on

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Originally Posted by PJ03
Hey Alan, I grew up in NI and left in 82. I did work there from 79 through 82 making very little compared to today.
Do you know if I will be entitled to a pension from HMG.
If you only had NI contributions for 1979 to 1982 I'm not sure you have enough creditsand any UK pension would be small even if you did. If you are a UK citizen living abroad you can pay Class 2 NI contributions if you need to catch up credits, cost is just over 100 pound per year. Also you can use UK NI contibutions as credits towards your US SS contributions and vis versa.
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Re: what % of salary do you live on
Old 02-18-2006, 05:33 PM   #44
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Re: what % of salary do you live on

It was a Scott Burns column that first pointed out to me that expenses in retirement can be drastically lower than your working years. *Here are some things that we will not be necessary to pay in retirement:

a. Contributions to retirement plans
b. FICA and Medicare taxes
c. Our mortgage payment (but it appears that health insurance will be about the same as our current mortgage payment.)
d. Contributions to after-tax investing plans
e. Any income taxes needed to earn the money to pay any of the above.

In our case, the percentages for the above are a) 17%, b) 6%, c) 6%, d) 20%, e) 6% for a total of 55%. * I guess that means we could possibly live on 45% of our current salary. And 45% of salary is about what our expenses (including local taxes) are in pre-retirement.
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Re: what % of salary do you live on
Old 02-18-2006, 05:53 PM   #45
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Re: what % of salary do you live on

h'mmm. our 85% (of a fairly good salary) is pretty high for this bunch?
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Re: what % of salary do you live on
Old 02-18-2006, 07:13 PM   #46
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Re: what % of salary do you live on

I agree with the other posters who have said that your expenses in retirement will be purely unique to you. Studies have found average percentages of pre-retirement income that people need in retirement, but these average percentages are just that: averages. Everyone needs to estimate their own expenses in retirement based on their unique circumstances.
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Re: what % of salary do you live on
Old 02-18-2006, 10:26 PM   #47
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Re: what % of salary do you live on

Note retired yet, and living off of 42.3% of household gross income. Currently paying huge taxes. Should be able to live off of 23% of current household income once I FIRE.
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Re: what % of salary do you live on
Old 02-19-2006, 03:20 AM   #48
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Re: what % of salary do you live on

i figure ill need at least 100% of our income when i retire...as i say the only thing you have more of when you retire is time and with us time cost money...we enjoy doing things and even on the days we do nothing just grabbing a lunch with the kids at a diner cost bucks..in fact just walking out of the house here in new york city costs bucks..i hope wherever we end up moving has no stores.then we will be fine on less
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Re: what % of salary do you live on
Old 02-19-2006, 07:41 AM   #49
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Re: what % of salary do you live on

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Originally Posted by mathjak107

.in fact just walking out of the house here in new york city costs bucks..i hope wherever we end up moving has no stores.then we will be fine on less
mathjack,

I feel your pain. Thats very funny! I've fretted over lots of critera for that ideal chunk of retirement heaven. But "no stores"...I'd be ok with just a Home Depot and a bait shop
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Re: what % of salary do you live on
Old 02-19-2006, 09:00 AM   #50
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Re: what % of salary do you live on

From all the answers its obvious that the 80% salary figure to live off is ridiculous. However, this forum's probably not a good place to ask this question as I bet most people here already living on a lot less than the 80%. You're saving lots and living well within your means so you can retire early. If you're living paycheck to paycheck and renting an apartment your answer might be 100%.........
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Re: what % of salary do you live on
Old 02-19-2006, 09:16 AM   #51
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Re: what % of salary do you live on

Sounds about right. The 80% number simply says you take your costs and sub off the stuff that you spent while working, as mentioned above.

Some people might become heavy travellers and jump to 150-200% while doing that.

Some might start doing their own housekeeping and lawn work, maybe even home and car repairs, and drop to 50%.

Some might start doing their own cooking at home, dump some of the expensive tastes, find inexpensive hobbies, and drop even more.

An interesting tidbit I read recently is that a lot of potential ER's make up a dream list of what their retired life will be like; all the stuff they imagine they'll be doing instead of work. Unfortunately most people are undisciplined and when work structures are removed, they become even more so. A good way to resolve this is to prepare short, intermediate and long term goals and "things to do".

Unfortunately that will end up increasing your spending a little bit, but if you do a lot of the stuff with your own time, you get good bang for your buck.
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Re: what % of salary do you live on
Old 02-19-2006, 05:59 PM   #52
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Re: what % of salary do you live on

We are saving 42% of our gross. I can't remember what percentage we are living on. I have a spreadsheet that I use as a roadmap to our retirement. I follow that so I don't really pay attention to what I spend. If the savings or checking account gets low I cut back my spending.

We will live on more in retirement than we are currently living on.

-helen
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Re: what % of salary do you live on
Old 02-20-2006, 09:01 AM   #53
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Re: what % of salary do you live on

We're currently living on about 52% of our gross salaries. Our total expenses will decrease a lot when we retire.
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Re: what % of salary do you live on
Old 02-20-2006, 09:12 AM   #54
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Re: what % of salary do you live on


Hmm.... I'm living on nearly all of it, as I work very part time hours and hopefully watch the port do a wee more growing , or at least not draw from it if it doesn't grow.
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Re: what % of salary do you live on
Old 02-20-2006, 12:08 PM   #55
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Re: what % of salary do you live on

This is a pretty terrific self selecting group of responsible, thoughtful people

Only one person said they want 100% income replacement when they retire! My Dad was only a truck driver on a modest income who is dead now but when he retired 20 years ago he had 100% income replacement from SS, union retirement, company retirement, profit sharing, and IRAs. I don't think a lot of working folks will have that kind of deal in the future.

Also I wonder if statistics for the average US household will indicate most people will need/expect 100%+ when they retire to keep up their unsustainable life styles and provide the "extras" they anticipated they would do/ have when they retire.
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Re: what % of salary do you live on
Old 02-20-2006, 12:24 PM   #56
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Re: what % of salary do you live on

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Originally Posted by Helen
We are saving 42% of our gross.* I can't remember what percentage we are living on.* I have a spreadsheet that I use as a roadmap to our retirement.* I follow that so I don't really pay attention to what I spend.* If the savings or checking account gets low I cut back my spending.

We will live on more in retirement than we are currently living on.

-helen
OK, Helen, I may be and idiot, but if we're talking gross income, and you're saving 42%, are you not living on 58%?* Or is there some place in between that is neither saving or spending?*

Seriously I'm not trying to be a smarta$$.* Just wondered what I was missing.* *

I do the same thing as far as, if the checkbook gets low I stop spending.* But usually it gets high ( :) so I move some to an investment account.*

I passed 43% of my gross thru the checkbook last year (not including investments), and gave 25% of it to IRS, SS and Medicare, so I must have saved 32%.
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Re: what % of salary do you live on
Old 02-20-2006, 12:57 PM   #57
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Re: what % of salary do you live on

We lived on 42% of our gross where the rest went to : feds (28%); state taxes (5%) and savings (25%).
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Re: what % of salary do you live on
Old 02-20-2006, 01:41 PM   #58
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Re: what % of salary do you live on

Excluding taxes I live on about 35% of gross. my thinking is that I can reduce that even more by moving once I retire.
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Re: what % of salary do you live on
Old 02-20-2006, 09:30 PM   #59
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Re: what % of salary do you live on

Pre or after tax?


If we are taking pre tax income then it is about 35%
After tax it is 46%
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Re: what % of salary do you live on
Old 02-21-2006, 01:13 AM   #60
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Re: what % of salary do you live on

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Originally Posted by Sheryl
OK, Helen, I may be and idiot, but if we're talking gross income, and you're saving 42%, are you not living on 58%?* Or is there some place in between that is neither saving or spending?*
You are right. When I was running my numbers I excluded things like taxes and mortgage payments to see how much I was living on. My logic was the mortgage would be gone in retirement and my tax rate would be lower.

So, I basically broke it down to savings, taxes, mortgage and living expenses. But, that wasn't what the OP was asking.

-helen
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