Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
How much to do need to live off of in RE
Old 05-03-2005, 08:50 AM   #1
Dryer sheet wannabe
 
Join Date: May 2005
Posts: 13
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.
__________________

__________________
"If you fear making anyone mad, then you ultimately probe for the lowest common denominator of human achievement."
jimmycarter is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: How much to do need to live off of in RE
Old 05-03-2005, 09:25 AM   #2
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
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
__________________

__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Re: How much to do need to live off of in RE
Old 05-03-2005, 12:54 PM   #3
Dryer sheet wannabe
 
Join Date: May 2005
Posts: 13
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."
jimmycarter is offline   Reply With Quote
Re: How much to do need to live off of in RE
Old 05-03-2005, 01:05 PM   #4
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
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.
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Re: How much to do need to live off of in RE
Old 05-03-2005, 01:06 PM   #5
Thinks s/he gets paid by the post
retire@40's Avatar
 
Join Date: Feb 2004
Posts: 2,670
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.*
__________________
No man is free who is not master of himself. --- Epictetus
Enjoy Yourself (It's Later Than You Think). --- Guy Lombardo
retire@40 is offline   Reply With Quote
Re: How much to do need to live off of in RE
Old 05-03-2005, 01:14 PM   #6
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
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.
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).
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Re: How much to do need to live off of in RE
Old 05-03-2005, 02:37 PM   #7
Recycles dryer sheets
 
Join Date: Apr 2005
Posts: 97
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
__________________
Born with nothing, still have most of it left!
Need to be on the road more!
ex_CFO_now_RVer is offline   Reply With Quote
Re: How much to do need to live off of in RE
Old 05-03-2005, 02:48 PM   #8
Recycles dryer sheets
 
Join Date: Feb 2005
Posts: 239
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!
__________________
All the best....Mike
I'd rather live in a rustic cabin and be free than in a McMansion as a slave!
Mountain_Mike is offline   Reply With Quote
Re: How much to do need to live off of in RE
Old 05-03-2005, 06:54 PM   #9
Recycles dryer sheets
 
Join Date: Mar 2005
Posts: 242
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 ...
__________________
Sparky is offline   Reply With Quote
Re: How much to do need to live off of in RE
Old 05-03-2005, 07:19 PM   #10
Thinks s/he gets paid by the post
 
Join Date: Dec 2002
Posts: 3,875
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
__________________
MRGALT2U is offline   Reply With Quote
Re: How much to do need to live off of in RE
Old 05-03-2005, 07:30 PM   #11
Recycles dryer sheets
 
Join Date: Mar 2005
Posts: 242
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
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).
__________________
Sparky is offline   Reply With Quote
Re: How much to do need to live off of in RE
Old 05-03-2005, 07:31 PM   #12
Recycles dryer sheets
 
Join Date: Oct 2004
Posts: 260
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.**
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.

__________________
GTM is offline   Reply With Quote
Re: How much to do need to live off of in RE
Old 05-03-2005, 07:36 PM   #13
Thinks s/he gets paid by the post
 
Join Date: Dec 2002
Posts: 3,875
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
__________________
MRGALT2U is offline   Reply With Quote
Re: How much to do need to live off of in RE
Old 05-03-2005, 07:39 PM   #14
Thinks s/he gets paid by the post
 
Join Date: Dec 2002
Posts: 3,875
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
__________________
MRGALT2U is offline   Reply With Quote
Re: How much to do need to live off of in RE
Old 05-03-2005, 08:11 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
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?
__________________
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.
cute fuzzy bunny is offline   Reply With Quote
Re: How much to do need to live off of in RE
Old 05-04-2005, 07:27 AM   #16
Thinks s/he gets paid by the post
 
Join Date: Dec 2002
Posts: 3,875
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
__________________
MRGALT2U is offline   Reply With Quote
Re: How much to do need to live off of in RE
Old 05-04-2005, 12:43 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
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.
cute fuzzy bunny is offline   Reply With Quote
Re: How much to do need to live off of in RE
Old 05-04-2005, 12:45 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
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.
cute fuzzy bunny is offline   Reply With Quote
Re: How much to do need to live off of in RE
Old 05-04-2005, 11:39 PM   #19
Thinks s/he gets paid by the post
charlie's Avatar
 
Join Date: Mar 2004
Location: Dallas
Posts: 1,211
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
__________________
charlie is offline   Reply With Quote
Re: How much to do need to live off of in RE
Old 05-05-2005, 08:45 AM   #20
Thinks s/he gets paid by the post
 
Join Date: Dec 2002
Posts: 3,875
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
__________________

__________________
MRGALT2U is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
How long do you really plan to live? JustCurious FIRE and Money 47 03-16-2007 07:56 AM
Live long enough to live forever (book) JJac Health and Early Retirement 10 11-25-2006 08:41 PM
Live Long? Die Young? Answer Isnít Just in Genes Eagle43 Other topics 6 08-31-2006 12:12 PM
Allow changing the 4% parameter in "Work Less, Live More" option? wasdana FIRECalc support 0 08-12-2006 09:41 AM
Forbes Mag: what it costs to live well farmerEd Life after FIRE 16 08-07-2005 06:51 PM

 

 
All times are GMT -6. The time now is 12:22 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.