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Old 12-27-2013, 04:47 PM   #21
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$12k/year for a family of four seems very frugal and you should be planning for future possibilities not your current circumstances.

I'm single, 52 and my assets are similar to yours and I just about feel comfortable retiring. Although my annual budget is $36k (no mortgage) which seems more realistic that your $12k estimate. My monthly food/drink budget is $400.
Agreed that I should plan for future, but the present is oft an indicator and first tool for determining future expenses.

Not clear why you feel my $12k figure is unrealistic as all you've pointed out is that my figure is lower than yours. Keep in mind that a substantial portion of the population lives on a lower food and utilities budget than mine. I think as we succeed some lost sight of the fact there exists a lower middle class whom survive fine on lower budgets.
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Old 12-27-2013, 04:54 PM   #22
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So the property tax is included in the $1,000 per month? What about life insurance, car insurance, homeowner's insurance? Do the kids do any sports? Do you take vacations? Do you wear clothes?

How have you been tracking your spending? I find it hard to believe that you only spend $1,000 per month on a family of four in California.
Been tracking spending for 15 years now. My monthly for food, gas, utilities doesn't change much each month. But you made some good observations...since I pay insurance premiums and taxes in a lump sum once each year, I haven't put them in a monthly expense column. To be fair and accurate on future planning, I should divide those yearly lump sum amounts by 12 and add to the monthly net. Thanks for pointing that out.
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Old 12-27-2013, 04:58 PM   #23
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@Dager, Most Americans do not live on less than $12K. In fact, the medium income is probably more like $50K.
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Old 12-27-2013, 05:05 PM   #24
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@Dager, Most Americans do not live on less than $12K. In fact, the medium income is probably more like $50K.
As of 2010, the median income in the US was $29,000. The average is likely around $50,000.
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Old 12-27-2013, 05:11 PM   #25
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@Dager, Most Americans do not live on less than $12K. In fact, the medium income is probably more like $50K.
I was referring to what people spend on food and utilities, not what people gross in total salary. In my area the median is closer to $40k, which nets to about $30k after taxes, of which half is likely allocated to house payments (mortgage or rent), leaving $12k for food and utilities and an extra $3k for emergencies and miscellaneous. I think that's standard for a typical household. I grew up in a household of four and my parents made about $20k salary before taxes (many years ago, so it's not as bad as it appears, though we were still poor). We managed and we didn't eat just scraps.

Thanks for taking the time to comment.
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Old 12-27-2013, 05:32 PM   #26
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As of 2010, the median income in the US was $29,000. The average is likely around $50,000.
That figure may be the median for singles. Median family income is closer to the higher number
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Old 12-27-2013, 05:35 PM   #27
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Been tracking spending for 15 years now. My monthly for food, gas, utilities doesn't change much each month. But you made some good observations...since I pay insurance premiums and taxes in a lump sum once each year, I haven't put them in a monthly expense column. To be fair and accurate on future planning, I should divide those yearly lump sum amounts by 12 and add to the monthly net. Thanks for pointing that out.
Anyone who has saved a million by 35 (congratulations!) and lives on a $1000 a month doesn't need my advise but I still will throw out a few thoughts anyways... Kids can become more expensive as they get older... A few things that have hit me with mine in case you haven't already planned for it. 1) will they get cars? 2) car insurance will go up for family when they start to drive 3) will your wife's insurance cover any dental issues for them 4) hobbies/ sports activities along with camps 5) dances, proms, presents, weddings etc. These things always seemed to be draining my wallet quite often and I only had one!
I thought I was frugal living on about $3000 a month being single with mortgage of $800, but that is obviously not the truth. I don't know how you do it on $1000, but it certainly must take some planning and discipline that I don't have.
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Old 12-27-2013, 05:38 PM   #28
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As of 2010, the median income in the US was $29,000. The average is likely around $50,000.

Oh no, that can't be true, it has to be closer to $50K. There's no way half of the US live on less than $29K.
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Old 12-27-2013, 05:40 PM   #29
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That figure may be the median for singles. Median family income is closer to the higher number
You're right. For households, the median is $50,000. The average is $70,000. I hadn't realized it was that high. I'm more in touch with the low end jobs. Most people I know make under $40K.
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Old 12-27-2013, 05:51 PM   #30
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You're right. For households, the median is $50,000. The average is $70,000. I hadn't realized it was that high. I'm more in touch with the low end jobs. Most people I know make under $40K.
Most people I know live in households comprising of two income household and make way in excess of $100K. I often have to remind myself that this is not most of America.
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Old 12-27-2013, 06:22 PM   #31
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Our property tax is $2k/yr. We purchased the house for $170k; it's value has risen dramatically due to our area. Tax increases in California are capped at 2% per annum.
Not to pile on about the home equity, but many homes in the outer suburbs of the bay area that were worth $200,000 in the late 90's/early 2000's did indeed triple their value, only to come crashing to earth when the bubble burst in 2006/2007.

The recent runup in prices has restored some of the "value", but counting on home equity can be risky.
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Old 12-27-2013, 06:36 PM   #32
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Will your wife be retiring as well?
This is the key question. If your wife is an executive at a major hospital, I assume she is making six figures. If you are asking if you have enough assets to be a stay at home Dad with her continuing to work, I would guess it would be a layup for you, since her income will likely cover your family's needs. If she stops working, you don't have enough.
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Old 12-27-2013, 06:40 PM   #33
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Been tracking spending for 15 years now. My monthly for food, gas, utilities doesn't change much each month. But you made some good observations...since I pay insurance premiums and taxes in a lump sum once each year, I haven't put them in a monthly expense column. To be fair and accurate on future planning, I should divide those yearly lump sum amounts by 12 and add to the monthly net. Thanks for pointing that out.
That sounds like a pretty big "oops" you have there. My own expenses, which are about $18k a year (single person, no kids, no debts, 50 years old, early retiree), include about $5k which are paid not monthly but less frequently such as income taxes and auto and home insurance.

Add me to the list of those who are surprised at your low food bills. I pay about $200-$225 a month for food and that may be on the low side compared to most people here. I very rarely eat out but I do not grow my own food (I live in a studio apartment in a co-op complex).
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Old 12-27-2013, 06:53 PM   #34
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First, my food budget doesn't include restaurant meals; I've actually allocated that expense in the "entertainment" category (any luxury/excesses are in that category).

Second, we cook our meals and eat mostly rich dishes (a staple we grew up on) and we have lots of fresh fruits and veggie plants in our backyard (tomatoes, potatoes, apples, oranges, garlic, onion, etc.), so we save b/c we don't need most store bought fruits and veggies. I grew up poor, so I learned early on how to spend wisely (coupons are a must). Keep in mind that most Americans live on substantially less then we do, so when you ponder how anyone could have a food budget under $1k just think of the Walmart cashiers, the fast food workers, the gas station attendants, the retail clerks, etc.--I assure you they all live more frugally than I and many have larger families to feed.
So why ask us? Many of us a lot older than you and with no young children would strongly prefer not to try to live like this, but if you want to, what is stopping you? It is not yet against the law.

Ha
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Old 12-27-2013, 07:02 PM   #35
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So why ask us? Many of us a lot older than you and with no young children would strongly prefer not to try to live like this, but if you want to, what is stopping you? It is not yet against the law.

Ha
Oh it's really quite easy living on little. A sack of beans and a sack of rice once a month will feed em'. The question becomes... Do you want to live like that ?

Here's some picture suggestions for inexpensive living. Stop workin' for the Man ! The good life awaits you !





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Old 12-27-2013, 07:12 PM   #36
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Most people who live on that kind of money don't do it by choice. It sounds, though, like you are talking about retiring and becoming a house-husband while your wife continues to work? People will raise eyebrows about it, but as long as it works for you both, it's fine. Maybe you ought to explore some other options? A sabbatical, a change in work responsibilities, a job change, a career change, starting a business? Are you sure you are not thinking about retirement because you are feeling depressed? Maybe it would be worth discussing with your doctor?
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Old 12-27-2013, 07:44 PM   #37
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I see many posters commenting that $1Mil is not enough to retire on, but I haven't found any posts that explain the reasoning behind such an opinion. Please excuse my naivety, but I'm lost in the shallow depths of my ignorant bliss. Perhaps someone can educate me and correct the error in my thinking.
To directly answer those questions, most people simply have much more in expenses than you do. I assume/hope they are saying that $1M isn't enough for them to retire on, not for anyone to retire on. $1M isn't enough for some, and is more than enough for others. It shouldn't matter to you whether it is enough for others, it's all in your own numbers. For myself I choose not to live as frugally as you seem to be living with those numbers, so I didn't stop when I hit $1M.

One other factor to consider is that $1M in appreciated stocks is not the same as $1M in a Roth IRA. In the first case you'll have to pay capital gains tax if or when you start liquidating stocks. It doesn't seem to be enough to break your plan, but it's just something to think about.
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Old 12-27-2013, 07:48 PM   #38
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I have lived on less than $12k a year. It's not an experience I would ever want to repeat.
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Old 12-27-2013, 07:50 PM   #39
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I have lived on less than $12k a year.
Me too - but it was in 1970...
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Old 12-27-2013, 07:57 PM   #40
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Me too - but it was in 1970...
Nice avatar. You look exactly as I pictured you
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