$100 per Day or Less

[Eagle43]

Since we were discussing good ER books on another thread, I got out my Terhorst book and reread portions. In it, he discussed living on $50 per day. Now that was written about 1985, so it's gotta be more to live on, now.

I'm thinking $100 per day should be plenty. That would be double his prescription and equal $36,500. I can easily cover that with pensions, and not touch IRA.

BTW, his maxims include getting rid of most assets, like cars and homes, and to spend on yourself, not your stuff.

So, I throw it out to the forum, how much is enough to live comfortably, simply, and still enjoy life? My situation, here in Texas, is $100 per day. My med insurance is a lot cheaper than most, so I know I'm lucky. And everything probably costs more in California and other higher cost-of-living areas. Oh, in the book, he exempted $4000 for travel, for some reason. But, without exempting anything, what do you need to cover food, taxes, medicine, travel, fun, lodging, trans, etc. It seems to me that if you can figure this out (LBYM), and you can cover it, your retirement is doable. Can you live on $100/day?

 

[preben]

In Thailand $100/day would have me living like a king incl. all the travel I would like. $50/day would still be fine there. Cheers!

 

[retire@40]

When talking of living on $100 a day, it's important to specify if this is per person or per couple. Sharing the fixed costs (like rent) is a plus, but the variable costs (like food) will add to the daily cost of living.

 

[malakito]

Good topic!

Excluding mortgage interest (I plan to have my home paid off by retirement) my family of five has lived quite comfortably in the US on an average of $174.65 per day over the last six months.

malakito.

 

[Yipee-Ki-O]

Single guy, no mortgage or other debts. Hiking, camping and other cheap hobbies. Frugal (cheap?) by nature. Total expenses averaged $79 a day in 2003 and $74 in 2004. Would probably be averaging closer to $100 a day had not a back injury in 2002 put an end to my obsession with golf.

 

[GTM]

$50 a day in 1985 is $88.73 today so the $100 is even more than the Terhorst's allocated.

I think $100 is doable for most single people that either rent or have homes without mortgages but pay taxes, insurance, maintenenance and other home expenses.

Housing/rent and food will probably be ones greatest expense followed by auto and medical (I believe both are necessary in the US).
I figures those 3 expense areas will run close to $2000 a month so that's 2/3's of the $100 per day.

As we know there are tons of other things we do and buy. Clothes, computer stuff, household items, dry cleaning, entertainment (just look at your credit card statement) that will probably absorb the remaining thousand.

The problem I find are the unexpected or special things that come up about 6 times a year.

A major car repair maybe $1000
A new computer
A 2 week vacation another $2000
Out of pocket medical expenses, dental, eyeglasses

There always seems to be something.

But accounting for everything and being very careful I think $3000 a month is a good number.

 

[Sheryl]

Crap.  I had a long post about this typed up when it vanished without warning.  Probably more than anyone wanted to know, anyway.

Summary:  From 1999 to 2003 my daily expenses (calculated each year) have been between $96 and $108.  

2004 was $135 (several excuses - major car repair, mother passing away, so travel for that, plus much other travel for fun reasons)

For 2004 my fixed house, utility, insurance costs are $31.65/day, food is $11.50, travel $18.88.  

It's the "everything else" that I need to keep an eye on!

 

[eridanus]

$100/day, single, Texas

with travel
with insurance
with mortgage
with car payment


Edit: Spent $28241 in 2004

 

[uncledrz]

DW and I, no debt.
$100 a day, $3000 a month is doable for day to day living expenses. Excludes income taxes.
Might be difficult to ER on that amount because I believe prices of necessary items (read medical expense/insurance) will increase 10-20% per year and therefore would have to prepare to expend greater sums for those expenses than general inflation.

 

[Mr._johngalt]

I am going to beat a very dead horse. $50.00 per day
for 2 properly motivated people will likely always be my gold standard. I have already explained how to do it.

JG

 

[Zipper]

No mortgage and no health care costs.

Mrs. Zipper is still working and I'm fully retired.

$4000/mo net or ~ $130/day.

 

[unclemick]

$34/day - single step daughter in Ms, no morgage, no health insurance - commercial fishing in season, - kept her in beer, cigarettes, cable, dog and cat, ten year old truck and generally living 'high on the hog'.

Now in spare room - household of five adults - temporarily plotting to spend $214/day by the end of the year(early SS kicks in).

"You can't take it with you." Crap! - just goes against my frugal nature.

My personal best was 12k/yr - way back in the 90's. I remember it fondly - nobody else does.

So $34 - 214/day. Quite a range eh!

 

[Mr._johngalt]

Man unclemick, I can't imagine how you are going to spend $214 a day, nor why you would want to.
Bigger fish camp?

JG

 

[retire@40]

$100 also needs to be defined as either "gross" or "net." If you spend $100 a day it means you need to net $36,500 a year. Depending on your tax situation, you may need to have gross income much greater than that.

I would guess for most people the gross may need to be in the $40K to $50K range. At $45K, you would need more like $123 a day.

 

[Martha]

After I leave work we likely will need to use COBRA for insurance for the 18 months. If we went on COBRA today, with copays and deductables, I estimate we will spend $15700 a year on medical costs, excluding dental and glasses. $43 a day. And this number is continuing to inflate.

After COBRA expires, we can get on the risk pool for less cost oddly enough. Though that can change any time.

I think the expense side of the SWR debates is almost a bigger issue than the income side. Will health care inflation continue? My TIPS aren't coming close to covering current health care inflation.

 

[Martha]

One risk of going bare is that it can make it much more difficult to get insurance later. Most likely you will have pre-existing condition exclusions for a period of time.

 

[Mr._johngalt]

I never actually "went bare" (talking health insurance here folks ), but I did jump all around which is as bad. Piggybacked on DW's group insurance for a while.
Currently we have cheap but limited coverage paid out of pocket. BTW, Martha, I too noticed after I first retired
that COBRA was way more expensive than several other
options. Probably if I was close to 65 and DW
wasn't working I would just roll the dice and hold on for
Medicare.

JG

 

[sgeeeee]

After I leave work we likely will need to use COBRA for insurance for the 18 months.  If we went on COBRA today, with copays and deductables, I estimate we will spend  $15700 a year on medical costs, excluding dental and glasses.  $43 a day.  And this number is continuing to inflate.

After COBRA expires, we can get on the risk pool for less cost oddly enough.  Though that can change any time.

I think the expense side of the SWR debates is almost a bigger issue than the income side.  Will health care inflation continue?  My  TIPS aren't  coming close to covering current health care inflation.

When I left work, the problem with COBRA was that the company had been paying for a high-end, policy with minimal co-pays and very reduced personal expenses for any medical or dental need. The policy provided great benefits but was very expensive. While this was a nice benefit while I was working, it wasn't the kind of insurance policy that made sense to me after retirement. I was far more interested in a low cost, high deductible, catastrophic coverage policy.

The deal I negotiated when I left, was that the company would continue to pay for my insurance premims for 6 months. I spent that six months getting all the dental work done I had been putting off, complete medical check-ups, and eye exams and new glasses. Also I shopped insurance and chose a policy to begin when my company benefit ran out. It turned out to be a lot more confusing and time consuming than I had anticipated, but it did work out okay.

 

[Martha]

SG, even though we don't have dental or eyeglass coverage at work, we can pay with pre-tax dollar through a flex benefit plan. In what may be my last year at work, we set aside a big chunk in the flex plan after each of us went to the dentist and said tell us what we need in the next couple of years and do it now. You know, replace all those early 1960's fillings, get crowns where the tooth is iffy, etc. One way to save a few bucks while still working especially if your tax bracket is pretty high.

 

[cute fuzzy bunny]

One risk of going bare is that it can make it much more difficult to get insurance later. Most likely you will have pre-existing condition exclusions for a period of time.

Indeed, when I changed to BC/BS from my HMO last year, they pulled a blood test from 2001 that had a minor variance in one of the panels that wasnt reproduceable. BC/BS rejected me on that basis. My doctor said even if they got the same reading on subsequent tests, it was really nothing at all and was probably diet related "Did you eat a big steak within a couple of days of the test?" And I had...

I know here in CA if you take the COBRA (and mine from my old job indeed cost more than buying the same package directly from the insurer) and exhaust it, the same insurance company (or another one with a similar policy) has to take you due to HIPPA, regardless of pre-existing conditions. Dont know if that applies to every state though.

We're well under $100/day but I guess its a big difference if you're doing a mortgage or other debt, which we arent.

 

[peteyperson]

Since we were discussing good ER books on another thread, I got out my Terhorst book and reread portions.  In it, he discussed living on $50 per day.  Now that was written about 1985, so it's gotta be more to live on, now.

I'm thinking $100 per day should be plenty.  That would be double his prescription and equal $36,500.  I can easily cover that with pensions, and not touch IRA.

BTW, his maxims include getting rid of most assets, like cars and homes, and to spend on yourself, not your stuff.

So, I throw it out to the forum, how much is enough to live comfortably, simply, and still enjoy life?  My situation,  here in Texas, is $100 per day.  My med insurance is a lot cheaper than most, so I know I'm lucky.  And everything probably costs  more in California and other higher cost-of-living areas.  Oh, in the book, he exempted $4000 for travel, for some reason.  But, without exempting anything, what do you need to cover food, taxes, medicine, travel, fun, lodging, trans, etc.   It seems to me that if you can figure this out (LBYM), and you can cover it, your retirement is doable. Can you live on $100/day?

Quick note.

For the Terhorsts it was $50 for two, which is now around $87 US CPI adjusted.

For the PT it makes a big difference for two people as a large part of the cost is rental accommodation and this is often the same or very little extra for two than for one.

Petey

 

[cute fuzzy bunny]

and this is often the same or very little extra for two than for one.

You havent seen how much crap my wife has...

 

[peteyperson]

You havent seen how much crap my wife has...

Yeah well, I'm spared that problem at the moment!

I do think that getting a LBYM clued-up partner is key. Otherwise you'll just be fighting about what you're not spending, how you shop in a LBYM and she doesn't and so on. Don't see that working!

Petey

 

[cute fuzzy bunny]

Oh she's an LBYM'er all right. I gave her $20 for odd expenses a couple of months ago and yesterday I asked her if she had any cash and she said "Yeah, heres that $20 you gave me a couple of months ago".

She did stop at Sams Club to buy about $50 worth of clothes last month. She keeps that up and we're off to the poorhouse!

 

[Martha]

I know here in CA if you take the COBRA (and mine from my old job indeed cost more than buying the same package directly from the insurer) and exhaust it, the same insurance company (or another one with a similar policy) has to take you due to HIPPA, regardless of pre-existing conditions. Dont know if that applies to every state though.

Here is the down and dirty on insurance portability:

To be eligible under HIPAA, you must:

1. Have at least 18 months of continuous creditable coverage
2. Have been covered under a group health plan, a governmental plan, or church plan (or health insurance offered in connection with such plans, such as COBRA) during the most recent period of creditable coverage
3. Not be eligible for coverage under a group health plan, Medicare, or Medicaid
4. Not have other health insurance coverage
5. Have not had your most recent coverage canceled for nonpayment of premiums or fraud (unless it was your employer that failed to pay premiums)
6. Have elected and exhausted any option for continuation of coverage (under COBRA or a similar state law) that was available under your prior plan.

If you qualify as an eligible individual, any insurer that sells individual health plans in your service area must offer you a plan. But keep in mind that your premiums are not governed by HIPAA; rather, they are determined by state law and can generally be set higher if you have medical problems. Thus, while your application for coverage won't be rejected because of your health problems, the health plan can charge higher rates as long as it has state approval. These rates can be very, very high.

In addition, your benefits could be vastly different under an individual plan. That's why when you're moving from a group plan to an individual plan it's especially important to shop around for the best rates and benefits to suit your needs.