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Old 06-10-2007, 02:25 AM   #21
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I can live on half my income from my job. After 40% for 401K and 7.65% for FICA and Medicare and some saving for ROTH and taxable I am living on about 45% of my pre retirement income now. Once I get SS it will cover about 25% of my income so my savings only have to cover 25% plus my medical cost. If I paid off my home I could live on just SS and medical expenses.

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Old 06-10-2007, 04:41 AM   #22
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We still work. We spend a bit more than 33% of our pre-retirement income... about 40%. But that is with a mortgage. Our planned ER yearly (allocated) minimum expenditure is about 50% of our income. That is a healthy boost. We think we will spend that much. We could surprise ourselves (since spending habits are a bit ingrained now).

If we pulled the mortgage off, our current expenditures would easily be at 33% maybe less.

We do spend money on 3 nice vacations a year. We do not buy much stuff, but have some services that some might consider wasteful. I suspect that if we started taking a hard look at our spending and cut certain things... we could easily get by on 25% and be just as content. Downsizing the Home will help because of the additional expenses (insurance, Prop Taxes, Heating/Cooling). I will bet we can cut that in half. Believe it or not at our current income tax rate that is a fair amount of money by itself.

Here is some twisted logic... If one can cut an expense in half, the half that is saved provides funding for the other half of the remaining expense. Unfortunately, that does not result in a net expense of zero.

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