Are Retirement Needs Overstated?

[rbmrtn]

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

 

[imoldernu]

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.

 

[daylatedollarshort]

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

 

[Ed_The_Gypsy]

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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[martyp]

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.

 

[GTFan]

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.

 

[Rick_Head]

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.

 

[wmc1000]

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.

 

[Meadbh]

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.

 

[Dcharles]

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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[Ed_The_Gypsy]

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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