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Old 06-09-2015, 12:49 PM   #21
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I just psychoanalyzed my last paycheck, and got the following breakout:

Federal Tax: 10.42%
State/local Tax: 7.24%
SS: 5.98% (weird, I always thought it was 6.2%, but I think what you pay in health insurance reduces the amount taxed?)
Medicare: 1.4% (Thought this was 1.45%, but maybe the above applies here too?)
401k: 24%
Excess Life Insurance: 0.24%
Dental Insurance: 0.32%
Medical Insurance: 3.15%
Vision Insurance: 0.14%

Net pay: 47.11%
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Old 06-09-2015, 02:27 PM   #22
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One good thing about being poor, is that we don't have to pay income tax.
We do overspend on our Florida home, and our lakefront camp, but FL wil go away this year, and the lake place in another two or three years. An extra $10K to $12K/year that will disappear.
Old cars, low maintenance, low tax living quarters, and a lower cost of living area help.
One additional benefit that I have never seen mentioned in the discussions about "where to live"... Al three of our places are in what we call unitary government... community/city areas. This means that the city or community management consolidates the power utility, water and waste removal services. Instead of rogue price increases that can spike these expenses, our three city/community management teams are powerful negotiators for the interests of the people.

As far as the % of retirement expenses to the last years salary... after 26 years, the real dollars are about the same. Inflation adjusted, about half.
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Old 06-09-2015, 07:53 PM   #23
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Quote:
Originally Posted by Andre1969 View Post
I just psychoanalyzed my last paycheck, and got the following breakout:

Federal Tax: 10.42%
State/local Tax: 7.24%
SS: 5.98% (weird, I always thought it was 6.2%, but I think what you pay in health insurance reduces the amount taxed?)
Medicare: 1.4% (Thought this was 1.45%, but maybe the above applies here too?)
401k: 24%
Excess Life Insurance: 0.24%
Dental Insurance: 0.32%
Medical Insurance: 3.15%
Vision Insurance: 0.14%

Net pay: 47.11%
Dunno about psychoanalyzing your paycheck but...

Yup, no SS, Medicare, federal income tax and state/local income tax on health/dental insurance premium deductions. 401K and life insurance premium is also exempt from federal and state income tax but are subject to SS and Medicare.
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Old 06-10-2015, 08:39 AM   #24
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We currently spend about twice what we spent when w*rking - which is also significantly more than final salary. Part of that extra spending is the cost of Paradise (aka Hawaii) but we also have significantly added to our charity and kids houses, kids Roths, etc. spending. Since it is all in our original plan, it is not a problem (and can be curtailed significantly if need be.) I always thought the 80% rule was okay for most folks (within its limitations) but also knew it was not appropriate for our plan. YMMV
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Old 06-10-2015, 11:55 AM   #25
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My first ER light bulb moment came after I randomly picked up a homesteading magazine at someone's house and realized it didn't cost all that much to live and still have all the basic necessities of life. We ended up keeping the same house, upgrading the cars but cutting out a lot of unnecessary and overpriced consumer goods and services that were keeping us on a work - spend - work treadmill.
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Old 06-10-2015, 01:23 PM   #26
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realized it didn't cost all that much to live and still have all the basic necessities of life.
Very true. I currently spend about 20% of what I was making when working, and about 40% of that amount goes to insurance ( auto/home/health ) and property taxes
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Needs @ age 65
Old 06-10-2015, 01:54 PM   #27
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Needs @ age 65

For a household of 2: All insurances and fees and ancillary costs included in main expense factors
in (000's)

Housing $12
Healthcare $10
Food $5
Transportation $5
Entertainment $3
Utilities $3
Personal care $2
Savings $2
Emergency $3

Total $45K

Income $25 Social Security
Income, (other) $20K

Simple, sustainable, tax free budget for consideration.
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Old 06-10-2015, 03:10 PM   #28
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We save a fair bit on food now that we are home and have time to cook and price shop groceries. We still go out to eat for entertainment once or twice a week, but we don't get carry out too often these days simply because we are too busy to cook. A recent survey from Suntrust showed dining out was often an impediment to saving more even for households making $75K or more a year:

Living Paycheck to Paycheck on $75,000 a Year - TIME
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Old 06-11-2015, 08:57 AM   #29
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One good thing about being poor, is that we don't have to pay income tax.
This is my strategy as well. :-)



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Old 06-11-2015, 09:23 AM   #30
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I was living off of 50% of my paycheck because of all of the saving I was putting into my retirement accounts. Even after ER I'm spending less than I thought I would. I'm still saving plenty of money but now I'm using it for travel expenses.
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Old 06-11-2015, 09:30 PM   #31
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My eyes always roll every time I see a retirement piece claiming that you need some X% of salary to be comfortable, when it's obvious that you actually need some X% of what you spend pre-retirement to do so.

But given that the target market for such advice is the majority crowd that spends most if not all of what they make (after taxes and assuming little saved in 401ks etc.) it's not even realistic to talk about retirement so anything goes. It's just a fantasy anyway.
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Old 06-11-2015, 11:03 PM   #32
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It's all up to you. DW and I upped the spending the first few years for travel, gifts to kids and general extravagance, enjoyed it. YMMV.
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Old 06-12-2015, 08:04 AM   #33
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Percentages are irrelevant as there is no standard pre-retirement salary. Someone making $30-$50K per year before retirement will obviously need to replace a greater percentage of their income than someone earning $90-$100K or more given the same lifestyle after retirement. Many people enjoy a retirement on $30-$40K while some couldn't manage on $80K+ if they had to.
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Old 06-12-2015, 08:51 AM   #34
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Percentages are irrelevant as there is no standard pre-retirement salary. Someone making $0-$50K per year before retirement will obviously need to replace a greater percentage of there income than someone earning $90-$100K or more given the same lifestyle after retirement.
Agreed. As a former (relatively) high earner, at the peak of my earning power my lifestyle spending came to approximately one fifth of the dollars I earned. In ER, lifestyle spending has decreased to perhaps one sixth of earnings peak.
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Old 06-24-2015, 05:38 PM   #35
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The big expense for many of us who retire early is medical coverage. So far we have anticipated the added expenses and we're still within our plan. It is nice not having to sock away the money each month for retirement! Life is too short........travel and e joy life while you have your health!


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Old 06-25-2015, 08:38 AM   #36
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Percentages really do not apply to us. I had a number of high-earning years working away from home, but high expenses, effectively supporting two households plus transportation, shipping costs and foreign taxes, giving us no net on occasion. I am only now learning what our baseline is.

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