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Old 12-13-2009, 02:32 PM   #81
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Great thread and I kind of hesitate to post, but thought I would since other than Khan most of the numbers being talked about here suggest the need to accumulate great wealth (or delete the "Early" part from Early Retirement) if we're talking about a 4% SWR.

My wife and I live on well under 24K a year (including taxes). We managed to do so in small-town Colorado and New Mexico but things were tight mostly due to health insurance premiums (though we are, knock on wood, quite healthy and relatively young). Here in Mexico where we live now it's a lot easier. We choose to rent rather than own, but we owned inexpensive, solidly built smaller houses (~1100 sq. ft.) in the U.S. as well. As many on the board know, the Kaderlis have been living on about 24K a year for the past two decades in retirement and have traveled extensively during that time. It's all a question of choices but I wouldn't want someone reading these posts to think that without a couple of million in assets there's no way to pull off early retirement.
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Old 12-13-2009, 04:46 PM   #82
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Well, I am getting by on slightly under $50K. I have a mortgage of 100K left and the property taxes are $2600 annually and climbing. I have retiree healthcare which I get all of the increases in. In 2010 my premium will be a shade north of $300 monthly. Electricity is a biggie at $300 a month year around (darn 2 story home) and all else fairly reasonable. I will tap into my 401k when I need more or it grows too big. Right now it is just in abeyance for a rainy day. I am holding off on travel till I rebuild a healthy slush fund or sell and buy down from this 3600 sq ft with a pool energy hog. Being a single woman with 10 left thumbs I wind up with some repair bills for things I can not or will not attempt doing.
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Old 12-13-2009, 05:19 PM   #83
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I'm not retired yet but I can't imagine that I would be happy living on less than my present income. At age 60 my income will double from what it is at present when I can tap my retirement accounts, SS and my pension.
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Old 12-13-2009, 10:49 PM   #84
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Bentley

Two thoughts. First, do you know those expenses are realistic. I've been known to come up with budget numbers that represent wishes rather than being realistic.

Second thought. Do you not have any discretionary spending for entertainment, travel and so on?
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Old 12-14-2009, 07:26 AM   #85
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Bentley

Two thoughts. First, do you know those expenses are realistic. I've been known to come up with budget numbers that represent wishes rather than being realistic.

Second thought. Do you not have any discretionary spending for entertainment, travel and so on?
1. Yes, most of these numbers are actuals. Of course there will be future rate increases with the big unknown being health insurance. Currently just over $700/month. A couple others are "best guess" numbers. Which is why I added another $10,000 to the annual requirement.

2. You are right, there is no discretionary dollars included, and probably should be. DW and I have traveled enough associated with job and moves that, honestly, we are looking forward to NOT traveling much for a few years. She does not like hotels, and I'm about sick of them....lol

Obviously, there is an inflationary risk here that will probably keep me working, at least part time, for another year.

Thanks for your input.

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Old 12-15-2009, 07:39 AM   #86
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I've never heard this phrase before, and it just cracked me up!

I don't have any kids so I don't have any need to leave something behind when I "pop my clogs" - I just have a will in place so that SO will get the house and the investments if I go first. In fact, I imagine when I get older and further into retirement, I'll probably start to feel comfortable withdrawing a little more from the portfolio.

Although I know the phrase, I'd never really thought about the derivation. In looking it up, I found an interesting alternative explanation, the second in the quote below. I'm inclined to believe the first though, the second has almost no hits in Google.


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When I grew up in Sheffield I was led to believe that 'popping one's clogs' derived from the fact that many people in the North were so poor that when they died their families took their clogs to a pawn shop to 'pop' or pawn them.
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This expression was familiar to me in my childhood in Derbyshire. A lot of my older relatives started their working life in textile mills and I guess it is a saying coined in the mills of the North of England. The expression is 'cock', not 'pop', one's clogs. I suppose later generations, not working in mills nor wearing clogs, couldn't understand the wording in the original expression and substituted 'pop' for 'cock' perhaps because the former has some connection with dying or killing in American slang. A similar process has seen 'Parthian shot' evolve into 'parting shot'. To 'cock your clogs' simply means to die. You keel over in the factory or mill, and everything about you is then horizontal except your clogs which are sticking up or 'cocked', perhaps like the hammer of a firearm.
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Old 12-15-2009, 08:16 AM   #87
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Anyone use Thrivent? I'm talking to a rep now for ideas on creating income from savings.
All Thrivent will do is put you in expensive funds and sell you VAs. Their products are not highly rated at all. You can do better elsewhere.......
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Old 12-15-2009, 09:10 AM   #88
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For the two of us, we budget $70,000 after tax. We have no debt, but health insurance is $11,000, and there is some extra in there for car replacement, house repairs, ect. The last three years we have been pretty close to that number. I have been retired the last two.
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Old 12-15-2009, 09:37 AM   #89
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I budget 36K for myself and DS1. I don't have a mortgage, but property taxes and Health insurance are in the $9500 range and part of this year DS2 lived with us so it increased for about 4 months. Every year I print out the annual spending and see if there are areas I need to focus on to keep within my budget. Or if I need to increase my budget.
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Old 12-15-2009, 12:44 PM   #90
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May I ask what, if any, retirement expense tool people who are indicating say 40K or less per year are using to come up with their expenses. I'm 57 hoping/planning to retire in May 2011. Current income is $90K base (+ $8-15K annual bonus). I currently have very low 7 figures set aside for retirement (45%-45%-10% Equity-Bonds-Cash). About $45,000 emergency fund. I max out on 401K and IRA (+3% from company match). I'm single, but providing some support to daughter and grandchildren (and her husband). Not too much. I unfortunately will have a mortgage left to pay off after retirement ($45K in 5/2011). Everything else paid off or up to date. I live fairly frugally

I keep coming up with post retirement living expenses of between $55,000 - $65,000/yr. What am I missing?
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Old 12-15-2009, 12:58 PM   #91
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Scout, there is no retirement expense planning tool I'm aware of to get you to a certain number. Retirement expenses are based entirely on your own set of personal circumstances and the only way to reduce them is to change your spending habits, location, and/or expectations.
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Old 12-15-2009, 12:59 PM   #92
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May I ask what, if any, retirement expense tool people who are indicating say 40K or less per year are using to come up with their expenses. I'm 57 hoping/planning to retire in May 2011. Current income is $90K base (+ $8-15K annual bonus). I currently have very low 7 figures set aside for retirement (45%-45%-10% Equity-Bonds-Cash). About $45,000 emergency fund. I max out on 401K and IRA (+3% from company match). I'm single, but providing some support to daughter and grandchildren (and her husband). Not too much. I unfortunately will have a mortgage left to pay off after retirement ($45K in 5/2011). Everything else paid off or up to date. I live fairly frugally

I keep coming up with post retirement living expenses of between $55,000 - $65,000/yr. What am I missing?
What would your expenses be after paying off the mortgage? Many (not all) who post expenses of $40K or less have no mortgage or rent.
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Old 12-15-2009, 01:27 PM   #93
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May I ask what, if any, retirement expense tool people who are indicating say 40K or less per year are using to come up with their expenses. I'm 57 hoping/planning to retire in May 2011.
Retirement living expenses can be determined from working living expenses by adjusting for any differences you may anticipate (such as travel, medical, mortgage expense differences), depending on what you want to do in retirement. This gives you your projected living expenses when retired. For many of us these projected living expenses when retired are very closely tied to our working living expenses since probably most will not change.

To me, part of retirement planning was reducing my living expenses (while still employed) and saving the excess. When one's projected living expenses when retired and one's projected income from nestegg and other retirement income sources converge, it is time to retire.

I didn't use any retirement expense tool. I took my working expenses and subtracted my mortgage (since I planned to, and did, pay it off), and added a little for hobby expenses in retirement since I didn't have time for any hobbies while working. I have no plans to travel and as a newly retired federal employee my medical coverage will cost me about the same whether employed or retired.

You have a vision of your retirement, and what you want to do that could be different from the present. If you want to travel, add that. If you have to buy individual medical insurance, check into costs for that and add that. If your commuting expenses are large, you may spend less on them after retirement. And so on...
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Old 12-15-2009, 01:48 PM   #94
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In practice, reducing your expenses is very difficult, especially long pre-existing obligations. That is why most retirement calculators I have seen pretty much never assume you will be living on anything less than 90% of your current expenses, and usually it is more common to assume 100%.
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Old 12-15-2009, 01:49 PM   #95
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May I ask what, if any, retirement expense tool people who are indicating say 40K or less per year are using to come up with their expenses.
There are a couple of good responses to this already, so I just want to add something that may not have been mentioned. Remember that your taxes will probably change a lot when you go from earning a large salary to drawing from your nest egg. Almost everyone ends up in a lower tax bracket at retirement, often a much lower bracket. And no more FICA unless you have a small business or pt j*b.
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Old 12-15-2009, 01:54 PM   #96
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May I ask what, if any, retirement expense tool people who are indicating say 40K or less per year are using to come up with their expenses. I'm 57 hoping/planning to retire in May 2011. Current income is $90K base (+ $8-15K annual bonus). I currently have very low 7 figures set aside for retirement (45%-45%-10% Equity-Bonds-Cash). About $45,000 emergency fund. I max out on 401K and IRA (+3% from company match). I'm single, but providing some support to daughter and grandchildren (and her husband). Not too much. I unfortunately will have a mortgage left to pay off after retirement ($45K in 5/2011). Everything else paid off or up to date. I live fairly frugally

I keep coming up with post retirement living expenses of between $55,000 - $65,000/yr. What am I missing?
Living in the midwest and no debt is the ticket.
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Old 12-15-2009, 01:57 PM   #97
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This query comes at a good time....just finished summing up year-end budget. We spent $61,000. this year - remarkably consistent with 08 at $63K and 07 at $65. Of this year's expenditures, $29,712 was spent on travel, $0 Fed. income taxes, and the rest to daily life, groceries and entertainment, home, auto, pets. We have to pay TOO MUCH for private health ins. ($400/mo. for a $10,000 deductible - not good for anything but catastrophic). We are loving retirement life and playing all out before the clock runs out.
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Old 12-15-2009, 02:42 PM   #98
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I probably could spend less. My 2010 budget shows a tad over $41k in after income tax/after health insurance expenditures. It is based on what I have been spending for the last few years with calculated adjustment for income taxes with my reduced income. I'm retiring in 2 1/2 weeks so this real. Single, no mortgage, no car payments. Elderly sick pets so they are costing me for a while. And this is not an inexpensive area to live in. Property tax was really big this year >$4k. When I get around to relocating, my expenses should go down a bit.

My mother lives on about $20k and is happy. Different part of the country and her housing is a bit subsidized by my brothers.

Interesting so many are living on a lot less.
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Old 12-15-2009, 03:30 PM   #99
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I'm semi-retired (got a little side job now), DW is working for now as a school librarian. Married, 2 kids (10 and 12). After tax and all rental property expense accrual and everything else....................drum roll.....................$132K.

Yikes! I think I win the booby prize.
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Old 12-16-2009, 01:53 AM   #100
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husband and wife, avg 59 yrs old, starting 3rd yr of retirement, living in So california, we downsized and bought a smaller house with our old home's equity. So cal is an expensive place to live.

annual:
mortgage payments................0
car payments........................0
prop taxes............................5.1K
health insur payments............5.9K
car and house insuranc...........3K
utils incl HOA........................6K
food and gasoline..................8.4K
allowances - 2 people............14.4K
misc and household spending...6.6K
car repair budget...................1.3K
drugs, xmas, dental budgets.....2K

total....................................52.7K

travel budget.........................8K

total total 2010 budget..........60.7K

I found that we are spending about 80% of what we spent before we retired. Your mileage may vary.

A lot of retirement books suggest that you consider downsizing. We did. For us it was the difference between a comfortable retirement and an uncomfortable retirement. It allows us to travel.
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