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How much to do need to live off of in RE
05-03-2005, 07:50 AM
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#1
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Dryer sheet wannabe
Join Date: May 2005
Posts: 13
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How much to do need to live off of in RE
I am curious to get some answers as to how much money one needs in retirement. I suppose some say it all depends on what your salary was prior to retirement but I know some people can do it with less. How much for a couple? How much for a single person? Guesses or estimations are welcome. Thank you all very much.
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"If you fear making anyone mad, then you ultimately probe for the lowest common denominator of human achievement."
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Re: How much to do need to live off of in RE
05-03-2005, 08:25 AM
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#2
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Moderator Emeritus
Join Date: Feb 2004
Location: minnesota
Posts: 13,228
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Re: How much to do need to live off of in RE
This is a tough question depending on individual circumstances, but I do think rules of thumb, like 70% of pre-retirement income, are next to useless. I have seen ranges here from $12,000 to $100,000 plus a year.
It is helpful to look at your specific circumstances, like:
1. How many people are you budgeting for?
2. A big variable that has increased greater than inflation is healthcare costs. Do you have retiree health insurance? If not, costs vary widely by age, where you live, health, and type of policy you purchase (amount of deductible, are drugs covered, etc). I have seen costs here for the policy alone vary from less than $200 a month to more than $1000 a month. There also are copays and deductibles; dental and eyeglasses often are not covered. If you are retiring very young, be prepared for big increases in these costs.
3. What are your housing costs? Mortgage? Rent? Fully paid for home? Utility costs? Property taxes vary widely throughout the US. Don't forget to budget for repairs. New roofs, furnaces, appliances, etc.
4. What are your vehicle expenses? Even if you car is paid for, need to budget for replacement, insurance, gas, repairs.
5. What kind of taxes do you expect. Is your income coming from after tax investments, a 401(k) or pension?
6. Food, clothing, and other day to day living needs. Are you an Amy Dacyczyn type, the frugal zealot, who scrimps, saves, and recycles? Or the type that wants to do some traveling, eat out once in a while, etc?
l
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No more lawyer stuff, no more political stuff, so no more CYA
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Re: How much to do need to live off of in RE
05-03-2005, 11:54 AM
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#3
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Dryer sheet wannabe
Join Date: May 2005
Posts: 13
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Re: How much to do need to live off of in RE
Martha,
Thank you for your replies. I suppose the cost that I worry about the most is healthcare. It is truly the "X" factor if you will. Healthcare involves two uncertainties, the individual's health and the cost of medical care. My emergency fund can tackle most expenses, even moderately large ones such as a big house or car repair.
__________________
"If you fear making anyone mad, then you ultimately probe for the lowest common denominator of human achievement."
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Re: How much to do need to live off of in RE
05-03-2005, 12:05 PM
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#4
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Moderator Emeritus
Join Date: Feb 2004
Location: minnesota
Posts: 13,228
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Re: How much to do need to live off of in RE
JC, couldn't agree more. The two things I worry about in early retirement are healthcare inflation and a bad stock/bond market "conspiring" together to make our plans fall apart.
But I can't spend all my time worrying. Might be dead tomorrow.
__________________
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No more lawyer stuff, no more political stuff, so no more CYA
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Re: How much to do need to live off of in RE
05-03-2005, 12:06 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Feb 2004
Posts: 2,670
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Re: How much to do need to live off of in RE
There were some posts here a few months back on this topic.* If I remember correctly, most people responded with current detailed spending budgets for 2 people in the $40K range.* Of course, you would need to gross this up for income taxes, so that would bring you to about $50K in total gross income.*
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No man is free who is not master of himself. --- Epictetus
Enjoy Yourself (It's Later Than You Think). --- Guy Lombardo
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Re: How much to do need to live off of in RE
05-03-2005, 12:14 PM
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#6
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Moderator Emeritus
Join Date: Feb 2004
Location: minnesota
Posts: 13,228
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Re: How much to do need to live off of in RE
Quote:
Originally Posted by retire@40
There were some posts here a few months back on this topic. If I remember correctly, most people responded with current detailed spending budgets for 2 people in the $40K range. Of course, you would need to gross this up for income taxes, so that would bring you to about $50K in total gross income.
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There are quite a few budgets posted if you look at the most viewed topics, especially the ones for living on $3000 a month and the $50 dollar a day thread (which most seemed to agree was not very doable).
__________________
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No more lawyer stuff, no more political stuff, so no more CYA
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Re: How much to do need to live off of in RE
05-03-2005, 01:37 PM
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#7
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Recycles dryer sheets
Join Date: Apr 2005
Posts: 97
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Re: How much to do need to live off of in RE
Hi!
Everyone's retirement situation is different.* My situation is that while working, my wife and I traveled the USA on my company's expense account,* health benefits were provided at no cost and I had a new company car each year.* Thus, we were able to save* 75% of our after tax income for 15 plus years.* Now that I am ER'ed, we need about $100,000 (to be indexed for inflation) versus the $40,000 we were spending before.* We will now have to pay our own travel, health, car and motorhome expenses.
My mother and stepfather live on about $20,000, but dont travel.* *I also have a friend who lives on about $350,000, lives in south Florida and travels the world, first class.* He and his wife have a nice life, probably worth $50 million.
Everyone is different and that is a good thing!
Dave
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Born with nothing, still have most of it left!
Need to be on the road more!
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Re: How much to do need to live off of in RE
05-03-2005, 01:48 PM
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#8
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Recycles dryer sheets
Join Date: Feb 2005
Posts: 239
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Re: How much to do need to live off of in RE
My rule of thumb is retiring when I have the ability to generate $50,000 per year, with a paid-off house. I'm closing in on it!
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All the best....Mike
I'd rather live in a rustic cabin and be free than in a McMansion as a slave!
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Re: How much to do need to live off of in RE
05-03-2005, 05:54 PM
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#9
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Recycles dryer sheets
Join Date: Mar 2005
Posts: 242
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Re: How much to do need to live off of in RE
2004 was our first full year of ER. We spent $34,000.
We have catastrophic health insurance ($5,000 deductible) for >$2400 per year for both. We're 44 and 45 and pay outright for high blood pressure and high cholesterol meds. Otherwise we're healthy.
Mortgage is paid off. No kids, 1 dog. It's amazing what federal taxes are when they're not taxing INCOME.
We're living a little cautiously, but still have our wine and go out to dinner when we want (which is not that often).
All in all, not bad ...
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Re: How much to do need to live off of in RE
05-03-2005, 06:19 PM
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#10
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Thinks s/he gets paid by the post
Join Date: Dec 2002
Posts: 3,875
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Re: How much to do need to live off of in RE
Hello Sparky! Sounds like us except that we spent about 25K,
including $3,800 for health insurance. We have 4 dogs and we
also pay cash for all meds.
JG
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Re: How much to do need to live off of in RE
05-03-2005, 06:30 PM
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#11
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Recycles dryer sheets
Join Date: Mar 2005
Posts: 242
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Re: How much to do need to live off of in RE
Quote:
Originally Posted by MRGALT2U
Hello Sparky!* Sounds like us except that we spent about 25K,
including $3,800 for health insurance.* We* have 4 dogs and we
also pay cash for all meds.
JG
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Are you getting your meds from Canada? We are, and are saving about 30-40% over US prices.
That is, until the US drug companies shut that down (Pfizer already has).
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Re: How much to do need to live off of in RE
05-03-2005, 06:31 PM
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#12
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Recycles dryer sheets
Join Date: Oct 2004
Posts: 260
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Re: How much to do need to live off of in RE
Quote:
Originally Posted by jimmycarter
I am curious to get some answers as to how much money one needs in retirement.**
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As summarized before most on this board need about $40k per year to live. If you are invested moderately I think you will need $1 million in cash to substain that.
In Charles Schwab's book he says one needs $250,000 dollars in cash for every $1000 per month withdrawn. So $3333. per month requires $833,583 in cash. Thats moderate investing.
If your portofolio is conservative $340,000 in cash for every $1000 per month or a bank book worth $1.133,553.
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Re: How much to do need to live off of in RE
05-03-2005, 06:36 PM
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#13
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Thinks s/he gets paid by the post
Join Date: Dec 2002
Posts: 3,875
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Re: How much to do need to live off of in RE
25K (gross) for 2 people and 4 dogs. No problem. $50 per day is
still doable.
JG
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Re: How much to do need to live off of in RE
05-03-2005, 06:39 PM
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#14
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Thinks s/he gets paid by the post
Join Date: Dec 2002
Posts: 3,875
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Re: How much to do need to live off of in RE
We are not getting our meds from Canada. Neither of us takes
any prescription meds on a long term basis, with one exception.
I negotiated a price for generic with the pharmacy and the cost is quite low. We've been lucky so far.
JG
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Re: How much to do need to live off of in RE
05-03-2005, 07:11 PM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
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Re: How much to do need to live off of in RE
Hey JG...you know it doesnt count to split up your posts to one paragraph per in order to stay ahead of me, now dont you?
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Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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Re: How much to do need to live off of in RE
05-04-2005, 06:27 AM
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#16
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Thinks s/he gets paid by the post
Join Date: Dec 2002
Posts: 3,875
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Re: How much to do need to live off of in RE
Hey th, no "post splitting" here..............................
I usually strive for brevity (it being the soul of wit and all) .
Unless.................. I really get "pumped" about something. As long as I stay away from political discourse I am able to stay relatively in control
of my pontifications Anyway, since I have opinions on everything and absolutely no shyness about sharing them, well.............
it gives me quite an advantage post-wise.
JG
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Re: How much to do need to live off of in RE
05-04-2005, 11:43 AM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
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Re: How much to do need to live off of in RE
Well now that you're a member, you CAN go back and edit a post to add content to it ya know...
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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Re: How much to do need to live off of in RE
05-04-2005, 11:45 AM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
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Re: How much to do need to live off of in RE
Otherwise, two can play at that game I have to sit home all day waiting for a refrigerator delivery, so I can probably catch you by late this afternoon...
Besides, I've deleted at least 300-400 of my posts over time. Can I have those back now?
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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Re: How much to do need to live off of in RE
05-04-2005, 10:39 PM
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#19
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Thinks s/he gets paid by the post
Join Date: Mar 2004
Location: Dallas
Posts: 1,211
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Re: How much to do need to live off of in RE
GTM, my wife and I collect about $20k per year in SS ..... draw
down about $24k from $600k in investments and clear 8-12k
per year from a part time business. You don't need no stinking
$1-2 mil in investments if you are lucky enough to live in the
right part of the country and are already into SS.
Cheers,
Charlie
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Re: How much to do need to live off of in RE
05-05-2005, 07:45 AM
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#20
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Thinks s/he gets paid by the post
Join Date: Dec 2002
Posts: 3,875
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Re: How much to do need to live off of in RE
Hello Charlie! You are preaching to the choir in my case, obviously.
Since I left for good in 1998, the financial aspects of ER have actually been pretty easy, and.................I still have one year, 4 months
and 5 days to SS
JG
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