Retirees - Retirement Income and Lifestyle

chinaco · 07-01-2007, 03:58 PM

How much money did you need in retirement as a percent of the last year of your pre-retirement income. For example: if your family income was $100k during the last year of work and your retirement income was $50k, it would be 50%.

Please post comments and discuss whether your lifestyle was upgraded or downgraded in terms of buying things... What I mean by that is are you are spending more or less in retirement on things you enjoy... when compared to back when you were working.

For example: We get by on less in retirement, but because of getting rid of work related expenses, we can afford to travel much more. We have the same amount of spending in retirement and lifestyle is about the same because we have increased medical expenses.

kumquat · 07-01-2007, 04:35 PM

Interesting question but Ill give a try.

I've been RE for exactly one month so it may not be too accurate. As far as income goes, FireCalc says we can withdraw 140% of final income at 95% success, so I guess >110% works for the income part (if needed).

We spent about 350% of our usual monthly expenses. However, a lot of that was not likely to repeat (home upgrades, trip with DD), or annual stuff spent this month (house taxes). If I look at day to day stuff, I'm down about 20% from the days of w*rk.

unclemick · 07-01-2007, 04:51 PM

12% to 89%. In my 14th yr of ER need to settle down and get a grip.

12% in the early 1990's - she threatened to murdalize me. A lot of 18 to 24% early on and then let it jump during some remodeling years. Last year was a 89% remodeling year.

Probably settle in a 60% cause I can afford it - time in the market and all.

Note $ and % are identical for me - cause in 1992 his and hers equaled 100k.

Still love Dory's old post - 33% That's My Story - cause that's what got me to sign up back in 03.

Could I live on 12k/yr again?? - now THAT would be chewy!!!

heh heh heh

Party on!

Moemg · 07-01-2007, 05:16 PM

I budgeted for 100% because I pay for extra care for my Mom and I travel quite a bit .Remember I'm an RN so my salary was not that high to begin with .

grumpy · 07-01-2007, 06:04 PM

I answered 40% because my last year prior to full retirement I was already drawing my CSRS pension and was working part time as a consultant to NASA. DW was also in her last year of work so our income that year was close to $200K. We saved nearly half of that. Now in our 4th year of full retirement we will spend on the order of $90K. This is in line with the pre-retirement planning I did.

We are being a lot less cautious in buying things we enjoy. In May I bought DW her first new car since 1993, a top of the line Accord (V6, leather, nav system, etc.). Last week we bought a 42" LCD HD TV. We have been doing quite a bit of expensive travel (cruise to Italy and Greece last year, Panama Canal the year before and Alaska the year before that).

Grumpy

AltaRed · 07-01-2007, 11:20 PM

I didn't vote since in our first year of retirement, we bought many luxury toys that won't be repeated. 2 luxury automobiles, big screen HDTV, furniture, etc. Probably a total exceeding $120k for the toys.

With those now out of the way, we expect our annual expenses (not including income tax) to be about the same level forward as they were pre-retirement..... which just happened to be somewhat less than 50% of my pre-retirement gross income.

lazygood4nothinbum · 07-02-2007, 08:56 AM

Quote:

Originally Posted by chinaco

How much money did you need in retirement as a percent of the last year of your pre-retirement income. For example: if your family income was $100k during the last year of work and your retirement income was $50k, it would be 50%.

hmmmm. i'm not sure if i'm on or off your chart. by your question i have as much as i need--which was what i had--so that would be about 100%? but by your example i have more than i need because with inheritance i now have more than i earned (not that my inheritance was completely unearned; i took out the garbage and raked the leaves as a kid, ya know.) so i guess by example it would be a negative 10 to 20%.

as i'm spending about the same as i used to i actually have more than 10-20% spendable now then when i worked and as i intend to sell the house and vagabond it in a few years in developing countries i'll be spending even less so having even more. none of which makes any sense to me.

but don't think my niece/nephews will be any happier for that confusion as i intend to splurge big time with the excess later on if i'm still around for that.

Goonie · 07-02-2007, 10:42 AM

My net income (from a cola'd DB pension) after Fed tax, is 87.6% of what my net pay was while I was w*rking. And my monthly expenses are pretty much unchanged from what they were while employed.....about 40-50% of my net. Of the remaining 50-60%, about 30% is going toward investments and the remainder is being banked for emergencies or any other unexpected things that may pop up.

The only deductions taken from my pension are Fed tax and health ins premiums. Of course no Medicare or SS taxes, also no Union dues, or State income tax (my pension is exempt from IL tax). Those all save me a big chunk of change!

My vote BTW was 90%. Starting next year with the cola and an additional check in July...called the "13th check"....I'll be at about 92% of what my w*rking net would have been for this year.

Life_is_Good · 07-02-2007, 02:01 PM

I only need about 40% of my pre-retirement income mainly because I no longer have a house payment. It also helps to move to an area which has a much lower cost of living. Would I do it again..... YOU BETCHA!!

sweetana3 · 07-02-2007, 02:48 PM

Since we live on 33% of our total income right now, when we retire we need that amount and the tax amount to cover it. Or about 50% of our current income. It is much more how much you spend than how much you earn. Been tracking income and enpenses for over 20 years.

Retire Soon · 07-03-2007, 12:01 AM

We're living on 50% of our pre-retirement income. I agree with Life_is_Good in that it's advantageous not to have a house payment coupled with relocating to a lower cost of living area.

chinaco · 07-03-2007, 04:45 AM

Quote:

Originally Posted by sweetana3

Since we live on 33% of our total income right now, when we retire we need that amount and the tax amount to cover it. Or about 50% of our current income. It is much more how much you spend than how much you earn. Been tracking income and enpenses for over 20 years.

Sounds like you are in a similar situation to us. We have two incomes right now. We spend about 40% with a mortgage. We are targeting 60% which is substantially higher than our yearly spend today. Plus, we will not have a mortgage.

My reason for posting the thread is to do a sanity check on whether or not my target is too high. Am I anticipating spending more than we actually will spend?

So far approximately 45% indicated that they needed more than 50% of their income. I guess a follow-up question for those that need more than 50% is: Is your % based on a single income or two incomes (you and spouse)?

lazygood4nothinbum · 07-03-2007, 07:00 AM

single but i plan to marry up.

Rustic23 · 07-03-2007, 10:09 AM

30 to 35% is our number. We have been retired a year now, and I don't see any material change in our lifestyle. I think the reason was we were living well below our means while working, and now we are living within our means.

JonnyM · 07-03-2007, 02:05 PM

Quote:

Originally Posted by Rustic23

30 to 35% is our number. We have been retired a year now, and I don't see any material change in our lifestyle. I think the reason was we were living well below our means while working, and now we are living within our means.

Practically the same here. About 35% overall, although DW unintentionally preceded me by a couple three years, which began the power down, getting used to living on less. I would say the difference is we tended to NOT live well below our means near the end, more like the knowledge that we would be existing with less "extra" disposable income, we went a bit nuts with our acquisition of long-term non-perishable "stuff". The upside was had good timing with the Mortgage as our House became fully OURS just a couple months after FIRE.
Makes a big diff!

Bikerdude · 07-04-2007, 08:46 PM

Lets see, 60% of my pre-retirement gross income and 115% of my net pre- retirement income. I don't know which one to vote for but I know which one I like better.

chinaco · 07-05-2007, 04:23 AM

Quote:

Originally Posted by Bikerdude

Lets see, 60% of my pre-retirement gross income and 115% of my net pre- retirement income. I don't know which one to vote for but I know which one I like better.

Good question. I am talking gross... But I cannot edit my poll description because of the new rule.

On the net side... seems like an impossibility... unless you are factoring in things other than taxes on the net side or if you had work related expenses you had to pay for (i.e., non-personal/family expenses).

Are you self employed?

chinaco · 07-05-2007, 04:25 AM

Quick note: If the poll results are flipped on their side... I see a little bit of a bi-modal histogram going on. I wonder if part of that pattern is due to 1 income versus 2 income households?

farmerEd · 07-05-2007, 05:40 AM

We live on a 10% or less of my yearly income from last few years of working...but that was true even when I worked...several years of high income and frugal spending habits (relative to income anyway) is what made it possible to er in the first place.

View Poll Results: Select the % that is closest to your situation
>110%	3	4.62%
100%	8	12.31%
90%	2	3.08%
80%	4	6.15%
70%	5	7.69%
60%	7	10.77%
50%	9	13.85%
40%	15	23.08%
30%	7	10.77%
20%	4	6.15%
10%	1	1.54%
Voters: 65. You may not vote on this poll

07-01-2007, 03:58 PM	#1
chinaco Thinks s/he gets paid by the post Join Date: Feb 2007 Posts: 2,951	Retirees - Retirement Income and Lifestyle How much money did you need in retirement as a percent of the last year of your pre-retirement income. For example: if your family income was $100k during the last year of work and your retirement income was $50k, it would be 50%. Please post comments and discuss whether your lifestyle was upgraded or downgraded in terms of buying things... What I mean by that is are you are spending more or less in retirement on things you enjoy... when compared to back when you were working. For example: We get by on less in retirement, but because of getting rid of work related expenses, we can afford to travel much more. We have the same amount of spending in retirement and lifestyle is about the same because we have increased medical expenses. __________________ Disclaimer: I make no warranty or guarantee about the accuracy or completeness of this information. I am not a financial planner, my comments only represent my opinion. Last edited by chinaco; 07-01-2007 at 04:09 PM.

07-01-2007, 04:35 PM	#2
kumquat Full time employment: Posting here. Join Date: Nov 2005 Posts: 836	Interesting question but Ill give a try. I've been RE for exactly one month so it may not be too accurate. As far as income goes, FireCalc says we can withdraw 140% of final income at 95% success, so I guess >110% works for the income part (if needed). We spent about 350% of our usual monthly expenses. However, a lot of that was not likely to repeat (home upgrades, trip with DD), or annual stuff spent this month (house taxes). If I look at day to day stuff, I'm down about 20% from the days of wrk. __________________ Life's a bitch and then you come back* - Hindu proverb

07-01-2007, 11:20 PM	#6
AltaRed Full time employment: Posting here. Join Date: Feb 2004 Posts: 794	I didn't vote since in our first year of retirement, we bought many luxury toys that won't be repeated. 2 luxury automobiles, big screen HDTV, furniture, etc. Probably a total exceeding $120k for the toys. With those now out of the way, we expect our annual expenses (not including income tax) to be about the same level forward as they were pre-retirement..... which just happened to be somewhat less than 50% of my pre-retirement gross income. Last edited by AltaRed; 07-01-2007 at 11:25 PM.

07-02-2007, 10:42 AM	#8
Goonie Thinks s/he gets paid by the post Join Date: Oct 2006 Location: North Central Illinois Posts: 2,115	My net income (from a cola'd DB pension) after Fed tax, is 87.6% of what my net pay was while I was wrking. And my monthly expenses are pretty much unchanged from what they were while employed.....about 40-50% of my net. Of the remaining 50-60%, about 30% is going toward investments and the remainder is being banked for emergencies or any other unexpected things that may pop up. The only deductions taken from my pension are Fed tax and health ins premiums. Of course no Medicare or SS taxes, also no Union dues, or State income tax (my pension is exempt from IL tax). Those all save me a big chunk of change! My vote BTW was 90%. Starting next year with the cola and an additional check in July...called the "13th check"....I'll be at about 92% of what my wrking net would have been for this year. __________________ "Be who you are and say what you feel, because those who mind don't matter and those who matter don't mind." - Dr. Seuss - Retired April 2007 @ 50 with COLA'd DB Pension plus Lifetime Medical & Dental Insurance.

07-01-2007, 04:51 PM	#3
unclemick Give me a museum and I'll fill it. (Picasso) Give me a forum ... Join Date: Jul 2003 Location: north of Kansas City Posts: 5,560	12% to 89%. In my 14th yr of ER need to settle down and get a grip. 12% in the early 1990's - she threatened to murdalize me. A lot of 18 to 24% early on and then let it jump during some remodeling years. Last year was a 89% remodeling year. Probably settle in a 60% cause I can afford it - time in the market and all. Note $ and % are identical for me - cause in 1992 his and hers equaled 100k. Still love Dory's old post - 33% That's My Story - cause that's what got me to sign up back in 03. Could I live on 12k/yr again?? - now THAT would be chewy!!! heh heh heh Party on!

07-01-2007, 05:16 PM	#4
Moemg Thinks s/he gets paid by the post Join Date: Jan 2007 Location: Sarasota,fl. Posts: 3,096	I budgeted for 100% because I pay for extra care for my Mom and I travel quite a bit .Remember I'm an RN so my salary was not that high to begin with .

07-01-2007, 06:04 PM	#5
grumpy Full time employment: Posting here. Join Date: Jul 2004 Posts: 975	I answered 40% because my last year prior to full retirement I was already drawing my CSRS pension and was working part time as a consultant to NASA. DW was also in her last year of work so our income that year was close to $200K. We saved nearly half of that. Now in our 4th year of full retirement we will spend on the order of $90K. This is in line with the pre-retirement planning I did. We are being a lot less cautious in buying things we enjoy. In May I bought DW her first new car since 1993, a top of the line Accord (V6, leather, nav system, etc.). Last week we bought a 42" LCD HD TV. We have been doing quite a bit of expensive travel (cruise to Italy and Greece last year, Panama Canal the year before and Alaska the year before that). Grumpy

07-02-2007, 02:01 PM	#9
Life_is_Good Recycles dryer sheets Join Date: Mar 2007 Posts: 88	I only need about 40% of my pre-retirement income mainly because I no longer have a house payment. It also helps to move to an area which has a much lower cost of living. Would I do it again..... YOU BETCHA!!

07-02-2007, 02:48 PM	#10
sweetana3 Recycles dryer sheets Join Date: Nov 2006 Posts: 75	Since we live on 33% of our total income right now, when we retire we need that amount and the tax amount to cover it. Or about 50% of our current income. It is much more how much you spend than how much you earn. Been tracking income and enpenses for over 20 years.

07-03-2007, 12:01 AM	#11
Retire Soon Full time employment: Posting here. Join Date: Nov 2005 Posts: 535	We're living on 50% of our pre-retirement income. I agree with Life_is_Good in that it's advantageous not to have a house payment coupled with relocating to a lower cost of living area.

07-03-2007, 07:00 AM	#13
lazygood4nothinbum Thinks s/he gets paid by the post Join Date: Feb 2006 Posts: 3,788	single but i plan to marry up. __________________ "off with their heads"~~dr. joseph-ignace guillotin "life should begin with age and its privileges and accumulations, and end with youth and its capacity to splendidly enjoy such advantages."~~mark twain - letter to edward kimmitt 1901

07-03-2007, 10:09 AM	#14
Rustic23 Thinks s/he gets paid by the post Join Date: Dec 2005 Location: Lake Livingston, Tx Posts: 1,030	30 to 35% is our number. We have been retired a year now, and I don't see any material change in our lifestyle. I think the reason was we were living well below our means while working, and now we are living within our means.

07-04-2007, 08:46 PM	#16
Bikerdude Full time employment: Posting here. Join Date: Jul 2006 Posts: 529	Lets see, 60% of my pre-retirement gross income and 115% of my net pre- retirement income. I don't know which one to vote for but I know which one I like better. __________________ “I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan

07-05-2007, 04:25 AM	#18
chinaco Thinks s/he gets paid by the post Join Date: Feb 2007 Posts: 2,951	Quick note: If the poll results are flipped on their side... I see a little bit of a bi-modal histogram going on. I wonder if part of that pattern is due to 1 income versus 2 income households? __________________ Disclaimer: I make no warranty or guarantee about the accuracy or completeness of this information. I am not a financial planner, my comments only represent my opinion.

07-05-2007, 05:40 AM	#19
farmerEd Full time employment: Posting here. Join Date: Jan 2004 Posts: 697	We live on a 10% or less of my yearly income from last few years of working...but that was true even when I worked...several years of high income and frugal spending habits (relative to income anyway) is what made it possible to er in the first place.