Anyone retire with less than $500k?

[Major Tom]

I plan to adjust my living to conform to my resources rather than expect my resources to maintain some specified standard of living.

Thanks for posting! I enjoyed reading it and am glad that JoeWras quoted and commented on the above from you, because it made me take a closer look at that statement. Living according to that one dictum will ensure your success. Good for you!

Please do check in from time to time (if not more often) to let us know how things are going.

 

[ER Eddie]

Yeah, thanks for posting, CatinHand. I like hearing from ordinary folk with less "stash" than all the millionaires floating around here. It's a good reminder that, if you want it bad enough, you can find a way to retire early, even if you don't have barrels of cash. Plus, I just like hearing about the way people have "made it work" without having huge portfolios.

Your plans sound pretty adventurous, too. I like the idea of setting down in a particular spot, then just moving on when it gets boring. Have fun.

 

[CatInHand]

Thanks again everyone.

I see people posting about how they are managing their money acquisition so they'll be able to live on a dollar amount that's, oh, twice my maximum income, and I just don't get it. Then again, having never been in the position of receiving six figures a year, I don't know what it would feel like to cut back to squalorly amount like $70,000 per year.

Oh, and I've been dying to say this....

To whoever posted that anyone living below the average income of $50,000 must be receiving subsidies, no. Believe it or not, many people live quite reasonably and even manage to save money on that kind of chicken feed without begging at the doors of you rich folk hoping for a moldy crust. I even gave away lots of time and money to people and organizations that needed help.

 

[timo2]

Thanks again everyone.

To whoever posted that anyone living below the average income of $50,000 must be receiving subsidies, no. Believe it or not, many people live quite reasonably and even manage to save money on that kind of chicken feed without begging at the doors of you rich folk hoping for a moldy crust. I even gave away lots of time and money to people and organizations that needed help.

Agree, a person can live on less than imagined. I saw my mother and father in law prove that. That's when I decided that was not for me. After looking around the internet, I found the 'elder index' that relieved some of my fear of being broke when I'm old. I previously put a link to the elder index on this site http://www.early-retirement.org/forums/f28/elder-index-65029.html

from the WOW page "The Elder Index measures how much income a retired older adult requires to meet his or her basic needs—without public or private assistance. The Elder Index measures basic expenses for elders age 65+ living in the community, not in institutions. "

according to the elder index for my location, my wife and I need $41,508 income in retirement per year. If we didn't have a mortgage still, it would be quite a bit lower.

 

[Major Tom]

Cat - Perhaps I'm misinterpreting your post, but you seem as if you almost begrudge the higher earners their money.

I definitely agree with your philosophy of styling your lifestyle according to your resources, instead of beginning with the expectation of a certain standard of living, but that same principle can be applied just as effectively to someone earning $250K/yr or more, as it can to someone bringing in $20K or less, can it not?

 

[CatInHand]

Cat - Perhaps I'm misinterpreting your post, but you seem as if you almost begrudge the higher earners their money.

Thanks for pointing that out; that is absolutely not my intention and I didn't realize that it could be read that way.

A very long time ago I had a dream that I still vividly remember:

I was walking down a peaceful green sun dappled road. It was a dirt road and lined with pine trees and foresty stuff. At the end was my boss (at the time) standing quietly in front of a building.

I turned back a bit and started climbing a steep, grassy hill. It was a difficult climb, but doable. When I got to the top there was another road, a highway with cars zooming down it.

Somehow I sort of divined that this really was a metaphor for my life: I could have the slow dirt road, or the fast highway.

I chose the dirt road. The highway was clearly faster and cleaner - and difficult to get to - but I realized it wouldn't have made me happier.

That's kind of how I view people with monetary wealth. They worked hard to achieve it and I respect that, but I don't understand it.

 

[Major Tom]

Thanks for the clarification - and I was worried that my question might make it look as though I was picking a fight, which I wasn't; I was merely seeking to open a dialogue (and you recognized that, so thanks!)

 

[JoeWras]

I know I cannot live like some the extremers here because of the health insurance issue. I'm relatively healthy, but am now officially gonna be on a "high cost" list.

I applaud those who have found extremely good and low cost insurance, make use of clinics, etc. But I cannot plan to go that route. I will have no health benefits from an employer, so it will probably be PPACA for me once I'm done w*rking. This is going to cost two of us at least $15k a year. I'm planning on $20k. A $500k portfolio won't work. Period.

I just want to say to everyone though: please don't cheat your health. I see too many people put more money into car repairs than their health.

 

[Major Tom]

I just want to say to everyone though: please don't cheat your health. I see too many people put more money into car repairs than their health.

+1

It's easy to kid ourselves into thinking we are taking care of ourselves when we could be doing a lot more. I do eat reasonably well (lots of fruit and veggies) but am constantly being reminded by my SO that eating the same thing every day is not the best idea, regardless of how good it is, but I have a big tendency to fall into habitual patterns of living.

The other elephant in the room for me is exercise. A bicycle is my sole form of transport. Doctors always like it when I tell them that, but I recently faced the fact that I was riding the thing like an old man - pedaling gently all over town and never breaking a sweat. I have now started doing pull-ups on an exercise bar, as well as body curls, and I pedal the bicycle harder too. I can feel the muscles in my stomach and arms waking up. It's a good feeling, and will hopefully show up on my next cholesterol test (LDL is high).

 

[ER Eddie]

Oh, and I've been dying to say this....

To whoever posted that anyone living below the average income of $50,000 must be receiving subsidies, no. Believe it or not, many people live quite reasonably and even manage to save money on that kind of chicken feed [...].

Absolutely. I could live on half that without breaking a sweat.

I think there's a real freedom in having few material needs. Freedom to not have to spend your life in a job/career because it pays well. Freedom to retire early. "Truly, the more you possess, the more you are possessed."

 

[daylatedollarshort]

I think there's a real freedom in having few material needs. Freedom to not have to spend your life in a job/career because it pays well. Freedom to retire early. "Truly, the more you possess, the more you are possessed."

We finally figured that out and have been getting rid of stuff for over a year. I am looking forward to downsizing by at least 1K sq feet less than we have now.

I am really trying to limit new purchases to stuff that is either fun like a reciprocal museum pass or sustainable living related like LED bulbs and solar lights.

 

[Mulligan]

Absolutely. I could live on half that without breaking a sweat.

I think there's a real freedom in having few material needs. Freedom to not have to spend your life in a job/career because it pays well. Freedom to retire early. "Truly, the more you possess, the more you are possessed."

I spend comfortably less than $50k a year, and I have a mortgage, child support, and paying for DD college. Plus I go on at least 6 air flight vacations a year, with a golf membership to boot. But I have noticed a major reason why expenses have dropped so much is I really enjoy being at home a lot. The thought of being in a car on the go, and eating out all the time just doesn't excite me like it used to. Money is starting to pile up in my savings account because of this. It is just a byproduct, not the intention.

 

[imoldernu]

Agree, a person can live on less than imagined. I saw my mother and father in law prove that. That's when I decided that was not for me. After looking around the internet, I found the 'elder index' that relieved some of my fear of being broke when I'm old. I previously put a link to the elder index on this site http://www.early-retirement.org/forums/f28/elder-index-65029.html

from the WOW page "The Elder Index measures how much income a retired older adult requires to meet his or her basic needs—without public or private assistance. The Elder Index measures basic expenses for elders age 65+ living in the community, not in institutions. "

according to the elder index for my location, my wife and I need $41,508 income in retirement per year. If we didn't have a mortgage still, it would be quite a bit lower.

Thanks for the links. The "Elder Index" was an excellent resource for planning. The specificity of "by-county" statistics for my home state of Illinois was particularly enlightening, and points up the incredible difference that
WHERE YOU LIVE
makes on the retirement decision.

So often unsaid, housing and living costs in Hawaii, New York City, or Atherton CA, can be multiples of other areas. In our case, where we live today (90 miles SW of our previous home in the Chicago Suburbs) the average income is less than half of that in our 'working days' home... and the cost of living is commensurately less.

Getting down to the nitty gritty of mortgages, rents, services, transportation, food etc.... the differentials can be from 20% to 70%. The numbers for Illinois were from 2008, but based on a close reading, and knowing my own costs... they were right on!.

When we chose our retirement home(s) we were very concious of these vast differentials, and it most certainly affected our ability to stay retired and solvent over the past quarter century.

 

[web_diva]

comicbookgujy, have you thought about looking into Ecuador or Panama, or even Thailand? I have known a few expat retirees who have been able to retire in countries (several offer incentives to retiring expats with that kind of money).

I know it may not be your cup of tea, but I have always thought of doing that once we make it to a million. With the incentives programs, plus my own interest I think it could be very doable. I would want to work part time to keep some money coming in, but that would only be because I would go crazy doing nothing all day. Hopefully it would be something I actually loved doing though. Later in the more 'elderly' retired phase I might look to move back to my home country. We have been expats for a decade though, so I might be a bit more open to it than most.

Here's a blurb about the US expat community in Equador and what it costs to live there is mentioned throughout: Watch XFINITY Videos Online | Featured | Comcast | Watch XFINITY Videos Online | Comcast

 

[dvalley]

You can live 'on the road' pretty comfortably for a lot less than you'd think. There're thousands of people that have done it. However, most of them did it because it's what they wanted to do. Here's one blog that I've been looking at every now and again for the past 4 years: Simple Living and Simple Travel

I'm sure some people will be ok with living in mobile homes too while others may feel that going from being CEOs or CxOs of MegaCorp they don't want their kids to visit them in trailer parks.

A colleague of mine did something in between, he retired (from an IT position) at age 46 with about $700k to his name. He dropped a nice (from pics at least) pre-fab home on a 15acre land out in TX and now lives there with his wife and is getting into cattle and ranching stuff. He's one of those guys who will spend weeks researching anything he gets into his head and then figures it all out to get involved.

 

[brett]

We spent a six weeks in Costa Rica last Jan/Feb.

We met a number of Americans who have moved down...mostly for the reduced cost of living. Not sure what it would be like in summer, but Jan/Feb was fabulous.

We stayed at a B&B in San Jose. There was an lady who was a medical tourist. She flew down from the US to have a medical procedure. The B&B owner told us that medi tourism to San Jose formed a large part of his business.

 

[haha]

He dropped a nice (from pics at least) pre-fab home on a 15acre land out in TX and now lives there with his wife and is getting into cattle and ranching stuff. He's one of those guys who will spend weeks researching anything he gets into his head and then figures it all out to get involved.

He probably should have spent a bit longer researching before he started ranching on 15 acres of land.

Maybe taking up go-karts might work, and it would save him some money and a lot of work in the bargain.

The blog you referenced its interesting; thanks!

Ha

 

[dvalley]

^ he's not doing anything on a large scale, may be I used the wrong terminology. His goal is a self sufficient life. In fact, he recommended the 'Self Sufficient Life and How to Live it' by John Seymour to me which I read and would love to try it once I get out of the rat race.

Go-karting...ha I raced shifter karts and Spec Miata for 10years, then got into motorcycling. In hind sight what a waste of money but what a thrill. Reminds me of the motorcycling quote:

"Life should not be a journey to the grave with the intention of arriving safely in an attractive and well preserved body, but rather to skid in sideways, body thoroughly used up, totally worn out, and screaming "WOO HOO, What a Ride!""

 

[HFWR]

He probably should have spent a bit longer researching before he started ranching on 15 acres of land.

Maybe taking up go-karts might work, and it would save him some money and a lot of work in the bargain.

The blog you referenced its interesting; thanks!

Ha

Not sure what the exact rules are, but in Texas, if you fence your property and raise livestock/horses, you get a discount on your property tax from being zoned "agricultural"...

 

[explanade]

Are people drastically giving up things in order to be able to RE?

Yes a lot of expenses, you may discovered you can do without. The tradeoffs in free time and the hassles of work may be worth giving up amenities or luxuries.

OTOH, maybe it makes the transition to ER easier if you can maintain (or even increase) your lifestyle? For instance, one draw for ER for a lot of people would be to do more traveling, so they'd be spending more on leisure travel than they could when they were working.

 

[daylatedollarshort]

Are people drastically giving up things in order to be able to RE?

One thing I realized is that I like saving money and need more exercise, so actions like using drying racks instead the dryer and cooking more from scratch instead of buying fast or processed food accomplish two goals at once.

 

[jetpack]

I quit my job 10 years ago with $300k. That was only semi retirement though. I still worked on online ventures (which became hugely successful), and now I have enough to really retire ... I'd hope you'd consider other cash sources along the way. Any interesting ventures that you'd consider?

 

[Fermion]

We are going to try it on about 1.2 million in our mid 40s soon, but that is for a couple. Will bail on the plan if we drop below 1 million in the first 5 years. Life is a crapshoot anyway.

Oh, shooting for a 3.5% SWR and we have 23 and 25 years of paying into SS....last 12 years at maximum.

 

[panhead]

I would say it's definitely doable with $500k, but not at 5% draw. If you can get that closer to 3-3.5%, it would be worth a shot as long as you stay ready to adjust fire. I'd look at a camper/mobile home on some cheap land somewhere, maybe stay working long enough until you can afford to buy the land, or maybe even do it on the move, but be careful about gas and learn how to camp for free most of the time.

Other than that, thailand, etc sounds like a good idea.

 

[Surewhitey]

I'm not sure that a couple with a million is the same as an individual with 500K, though an in-depth discussion of budgets, with numbers would be interesting. If you are both disciplined, you're in a better position than an individual with 500K (housing costs, for example). That said, my situation wasn't directly applicable to the OP either, as I ESR'ed with a little more than 500K (between 600 and 640K IIRC).

Excuse me if I'm being dumb (I probably am), but what does "We generate 75-90% in general" mean? I know that can't possibly mean that you generate a return of 75-90% on your investments. It must be something obvious that I'm missing.

Sorry for the delay...we've been in Merida for a short trip...

we generate 75-90% of our living expenses from our investments (dividends & CD's in taxable accounts), so our savings doesn't really go down much, if any, month to month.