Living mostly on Social Security in retirement

[LeavingOhio]

Thanks that is one neat link.

Not sure if you're kidding or not as when I clicked it again I got am Early-Retirement.org page that said something about external links, but when I went there myself (wwwDOTcity-dataDOTcom) the link then worked when I came back and clicked on it.

Incidentally, when I put the link in, all that text was put in in place of what I typed. For example, I didn't type "races" or any of the rest of that. I certainly wouldn't suggest people plan to retire somewhere based on the races of the people who live there.

 

[MichaelB]

Not sure if you're kidding or not as when I clicked it again I got am Early-Retirement.org page that said something about external links, but when I went there myself (wwwDOTcity-dataDOTcom) the link then worked when I came back and clicked on it.

Incidentally, when I put the link in, all that text was put in in place of what I typed. For example, I didn't type "races" or any of the rest of that. I certainly wouldn't suggest people plan to retire somewhere based on the races of the people who live there.

The link works for me, and the text came from the website, not you.

One way to avoid that problem is to embed the link using this

function. Write the word, highlight it with the cursor, click on the

and inset the link location. For example, the city-data link is here.

 

[LeavingOhio]

I just looked at that article, and saw the following excerpt. Note that the bold-faced word was mine.

It’s sometimes hard to imagine life in retirement, but picture living on Social Security alone. Assume all you earn is $2,500 a month, the maximum check a worker currently receives at full retirement age from Social Security. Where can you comfortably pay taxes, afford housing and still have some left over to actually enjoy retirement?​

That income of $2,5000/month is $30K/year. My mother, a widow, lives very well on that, or even less. Her SS is not that amount, but she also has a small pension, plus a supplement from her IRA. The key is that she owns a relatively new, small but comfortable home (too big for her actually, after my father passed away), which is worth perhaps $200K.

What does my mother spend $2,500/month on? She pays utility bills, buys some food, pays for Medicare supplement, goes to her hair dresser twice a month, puts a bit of gas in her paid-for car, and faces an occasional big dental bill. That's it! Oh, she buys quite a bit of clothes actually, and all the bedroom closets are overflowing!

Once a retiree owns her place, that $30K/yr lets her live in many places in the country. It should not be a big deal with that income.

I agree with this. If you own your home (one that does not have a ton of taxes to be paid on it), no kids live with you, you don't drive to and from work every day eating gas, you no longer have to put money into retirement savings, etc., you can live VERY cheaply if you want.

 

[nun]

I agree with this. If you own your home (one that does not have a ton of taxes to be paid on it), no kids live with you, you don't drive to and from work every day eating gas, you no longer have to put money into retirement savings, etc., you can live VERY cheaply if you want.

Agreed. Income is only one side of the ER balancing act; the other is spending. Retiring debt and big ticket items while you are working reduces the need for income in ER......obviously it also reduces the potential capital you have to generate income, but if we are talking about living off only SS it's probably necessary to use income earned while working to reduce the need for retirement income. So I have paid off the mortgage and I'm getting as much dental work done now as I can $36k is my budget as a single guy, no kids, living in Boston, no mortgage, no other debt and paid for car.. $1k goes to monthly housing costs (taxes, insurance, repairs) and health insurance premiums, $1.5k covers monthly recurring costs (food, utilities, taxes etc) and $500 is for unexpected costs that I'll rollover in months were it is not used. I am not ER'ed yet, but my current budget is close to this, except for commuting costs and that work pays most of my insurance premium

 

[LeavingOhio]

...and the text came from the website, not you.

Yep. I just wanted to make sure everyone else knew it didn't come from me.

 

[FIREd]

MIL lives on <$30K per year in Northern AL. If it wasn't for her menagerie, her expenses would actually be <$24K. Nice paid-for ranch house with a big back yard. Safe blue collar neighborhood. Lots of free/cheap entertainment. She even has a little bit of money left to do some traveling. But she only saves about $1,200 per year for big ticket items -like replacing her car eventually or having her house repainted- which is probably inadequate.

 

[NW-Bound]

Regarding real estate prices, the area of my boonies home is not as expensive as some places on the coast, but it is not as low as some earlier posts described of some other areas.

For example, a mobile home on 1/4 acre of land goes for $75K to $100K+. A 1-acre lot in a good subdivision goes for $100K. Nice homes go for $250K to $700-800K.

I guess that because so little private land is available (the area is mostly national forest), plus the proximity to a major metropolitan area of more than 4 million people, the demand inflates the price. Within a drive of 2 to 2-1/2 hours, people can escape the summer heat to go to their weekend home at 7,000-ft elevation, and in the winter can go skiing by driving a bit further to the mountain.

So, despite its sparse amenities as described in my earlier post, the area is not as inexpensive as the other places mentioned in the linked article. The latter seem to be more "fun" places. Full-time retirees in this area tend to be recluse. No party animals here like you would see in Florida retirement communities.

 

[meierlde]

I need to move to where you are! One of our homes outside of Austin (not in the city limits but in Travis county) is on the tax rolls at $197K and yet the property tax bill last year was $6K even after homestead exemption. The two biggest factors were the school property taxes (1.5%) and the MUD (.98%).....the rest added in (ESD, County, Hospital District, Community College, etc) resulted in a total effective rate of 3.02% per $100 of valuation.

Yes, you can "defer" property taxes in Texas - and the state will gladly charge you 8% a year in interest to do so.

A lakeside cabin at $50K outside of any incorporated areas on a well with septic sounds like the way to go..........

Lets put a couple of questions about the MUD, for example does it provide trash pickup, if provided that is about $425/year. Seeing its a mud it likely provides both water and sewer, but how are the rates compared to those aqua texas charges to folks on both services not in MUDs. Note that one can also control if one lives in a mud, or if one buys a big enough lot (5 acres in the Hill Country) you could put in a well and septic.
Of course with a well you need to reserve funds for repairs and possibly having to deepen the well depending on the drought. For septic repairs are also possible.

 

[ejman]

Lets put a couple of questions about the MUD, for example does it provide trash pickup, if provided that is about $425/year. Seeing its a mud it likely provides both water and sewer, but how are the rates compared to those aqua texas charges to folks on both services not in MUDs. Note that one can also control if one lives in a mud, or if one buys a big enough lot (5 acres in the Hill Country) you could put in a well and septic.
Of course with a well you need to reserve funds for repairs and possibly having to deepen the well depending on the drought. For septic repairs are also possible.

What exactly is this MUD business? The only mud I know is the one where a whole lot of water (as here in Oregon) combines with a lot of dirt and creates ...mud. I didn't think it rained that much in west Texas...

 

[REWahoo]

Texas MUD explained: What You Need To Know About Municipal Utility Districts

 

[LakeTravis]

MUD = Municipal Utility District. It has taxing authority.

So, we pay an average of $100 a month for water, sewer, and trash collection. Water is a base rate of $38 per month plus $5.50 per thousand gallons.

Yeah, water is the new Texas gold.

In addition to the monthly bill, there is an annual property tax. So we pay another $2100 a year or so, for a total of around $3300 a year. Or more, depending on how dry the summer is and how often we run the sprinklers. A $250 water bill is common in July/August, as is a $300 electric bill.

My other property is lakefront, although the lake is dried up right now. It has a fancy, engineered aerobic septic system with drip irrigation, chlorinator, oxygenator. A propane tank, electric coop, and a private water corporation. Total utilities for it (gas, water, electric, septic) work out to around $1800 a year.

But the property taxes on that place are killer, because it's "Waterfront" even though there isn't water right now.

So yeah, a cabin on a few acres in the country sounds pretty cost effective to me.

 

[NW-Bound]

An earlier post talked about lower RE taxes in unincorporated areas. That turned out to be not true in my case. My main home is in the suburb of a large metro area. The boonies home is in the rural area as previously described. They have comparable values, but are in two different counties. Taxes are the same!

When it snows, the county happens to snow plow only to my property (lucky me!). People down the road from me have to fend for themselves. Heck, they even grade the road themselves. Same tax, but practically no service. The higher tax paid by the better-heeled retirees and weekenders because of their higher home value supports the full-time locals, pays for their schools and tiny county libraries. The part-timers also provide work for the locals. Everybody's happy.

Due to this thread, I thought of searching the census for the survey of the area. Come to think of it, the part-timers or weekenders would not respond to the census survey as it is not their main home. So, that brings down the surveyed income quite a bit (but it is still higher than that of towns shown in the linked article), as there is no high-paying job for the locals here. In fact, I think they would be happy to have any job. There's not much to do!

All this makes me think that the towns shown in the linked article may be a better deal for retirees. The people who are not recluse, that is.

 

[ejman]

Texas MUD explained: What You Need To Know About Municipal Utility Districts

Thank you. Not the kind of mud we have around here - particularly with my horses and goats...

 

[ejman]

MUD = Municipal Utility District. It has taxing authority.

So, we pay an average of $100 a month for water, sewer, and trash collection. Water is a base rate of $38 per month plus $5.50 per thousand gallons.

Yeah, water is the new Texas gold.

In addition to the monthly bill, there is an annual property tax. So we pay another $2100 a year or so, for a total of around $3300 a year. Or more, depending on how dry the summer is and how often we run the sprinklers. A $250 water bill is common in July/August, as is a $300 electric bill.

My other property is lakefront, although the lake is dried up right now. It has a fancy, engineered aerobic septic system with drip irrigation, chlorinator, oxygenator. A propane tank, electric coop, and a private water corporation. Total utilities for it (gas, water, electric, septic) work out to around $1800 a year.

But the property taxes on that place are killer, because it's "Waterfront" even though there isn't water right now.

So yeah, a cabin on a few acres in the country sounds pretty cost effective to me.

Maybe it all balances out. We have 7 acres in SW Oregon, our own well and septic. Property taxes are about $1000 a year but the electricity for the well averages from a low of $25/mo during the rainy season to about $60/mo during the dry months. Our house electricity ranges from about $250 during the winter months to about $100 a month during the summer (we don't have A/C). Most of our heat is from our trusty woodstove (we cut a lot of our own firewood but if we had to buy it it's about $250/cord) typically use about 2 1/2 cords a year.

 

[rockyj]

... Noticed quite a few college towns in the list, maybe the student population is bringing down the median wage.

Being a long-time resident of one the several college towns on this list, and being reasonably aware of comparative costs of living here due to involvement with recruiting for my employer, I am pretty confident that the median household income quoted in the article *is* being pushed down considerably by the many resident single student "households" (as well as by recent grads who hang around for a while doing low-paying holdover jobs until they get on with life elsewhere). Don't get me wrong, this town is a great place to live and raise a family. The college town atmosphere offers a lot of amenities and a degree of economic stability that many other similarly sized towns don't have. It is not prohibitively expensive, but neither is it *that* cheap to live here, unless your point of reference is the much higher cost of metro areas like New York, adjacent suburbs, or similar. I would not feel very flush hanging my hat here on SS alone.

 

[Katsmeow]

I need to move to where you are! One of our homes outside of Austin (not in the city limits but in Travis county) is on the tax rolls at $197K and yet the property tax bill last year was $6K even after homestead exemption. The two biggest factors were the school property taxes (1.5%) and the MUD (.98%).....the rest added in (ESD, County, Hospital District, Community College, etc) resulted in a total effective rate of 3.02% per $100 of valuation.

Yes, you can "defer" property taxes in Texas - and the state will gladly charge you 8% a year in interest to do so.

It is not just the deferral of taxes (which I'm not planning to do myself)....the big thing is the cap on school taxes. In my experience the school taxes are usually the highest.

Anyway, I live in Montgomery County. I am not in a MUD. We are on septic and have private water service. The water service is through a co-op and is much less expensive than MUD taxes. When we were looking to buy our house (about a year ago) I ruled out anything in a MUD. Before we bought this house we were in Fort Bend county and had a well so had no water bill.

 

[bondi688]

It is not just the deferral of taxes (which I'm not planning to do myself)....the big thing is the cap on school taxes. In my experience the school taxes are usually the highest.

Anyway, I live in Montgomery County. I am not in a MUD. We are on septic and have private water service. The water service is through a co-op and is much less expensive than MUD taxes. When we were looking to buy our house (about a year ago) I ruled out anything in a MUD. Before we bought this house we were in Fort Bend county and had a well so had no water bill.

I looked at Montgomery, TX when I was pondering the possibility of moving to the Houston area. It seems to be a very nice, safe, peaceful community. I was looking at Bentwater, but found the property price, property tax, HOA dues, and club dues add up to be too much outlays.

 

[Katsmeow]

I looked at Montgomery, TX when I was pondering the possibility of moving to the Houston area. It seems to be a very nice, safe, peaceful community. I was looking at Bentwater, but found the property price, property tax, HOA dues, and club dues add up to be too much outlays.

Yes, it is. We live in a subdivision but it is an acreage subdivision and is fairly laid back. We have dogs and cats and needed a subdivision without the typical 2 or 3 pet limitation so that narrowed down our list quite a bit. And, it is nice to look out the living room window and see a deer in the front yard....

 

[obgyn65]

I don't know anyone who can do this, including myself. And I consider myself frugal. SS forecast for me is less than $10k if I FIRE this year age 48 because I have worked about 10 years only in the US. Fortunately I have a large cash cushion.

Some thoughts:

How would you break down $1800/month for two persons, to pay rent, taxes, food, transportation, utilities, upkeep, personal care, etc... An interesting exercise in frugality.

 

[W2R]

In 2009, the median household income for those age 65 and over in the U.S. was apparently $31,354.

See Table 692 at the following link. http://www.census.gov/compendia/statab/2012/tables/12s0692.pdf

According to Social Security, the average SS payment in 2012 was $1230/month, or $14,760 per year. For a household of two, that would come to $29,520/year. http://ssa-custhelp.ssa.gov/app/ans...-social-security-benefit-for-a-retired-worker I am not drawing any conclusions but just thought these data were interesting.

 

[nun]

In 2009, the median household income for those age 65 and over in the U.S. was apparently $31,354.

See Table 692 at the following link. http://www.census.gov/compendia/statab/2012/tables/12s0692.pdf

According to Social Security, the average SS payment in 2012 was $1230/month, or $14,760 per year. For a household of two, that would come to $29,520/year. Average monthly Social Security benefit for a retired worker I am not drawing any conclusions but just thought these data were interesting.

To have a shot at living off only SS you have to have minimized expenses by doing things like paying off the mortgage. Then you also probably have to have been paid considerably more than the average salary to bump your SS payment up to the max (which is about $2500/month at 66 in 2012) and you have to be frugal.

 

[LakeTravis]

To have a shot at living off only SS you have to have minimized expenses by doing things like paying off the mortgage. Then you also probably have to have been paid considerably more than the average salary to bump your SS payment up to the max (which is about $2500/month at 66 in 2012) and you have to be frugal.

Indeed. I helped my mother (71) find a home a couple of years ago, she paid cash for it and defers the property taxes. Her car is paid for, she seldom ventures out other than groceries and window-shopping, and her utilities are low. Her biggest entertainment expense is probably her internet connection at $35 a month. She receives ~$1200 a month in SS and has a savings cushion that she doesn't draw from and in fact adds a little to each month. I've tried to encourage her to get out more and maybe even take some nice trips but she doesn't; I'm pretty sure the reason why is that she's very frugal and if it can't be paid for out of her monthly cash flow from SS, it's not something she'll spend the money on.

 

[Brett_Cameron]

In 2009, the median household income for those age 65 and over in the U.S. was apparently $31,354.

See Table 692 at the following link. http://www.census.gov/compendia/statab/2012/tables/12s0692.pdf

According to Social Security, the average SS payment in 2012 was $1230/month, or $14,760 per year. For a household of two, that would come to $29,520/year. Average monthly Social Security benefit for a retired worker I am not drawing any conclusions but just thought these data were interesting.

W2R: Looking at the time you posted this, you had a late night. Enjoy!

 

[W2R]

W2R: Looking at the time you posted this, you had a late night. Enjoy!

I did, in fact! Thanks

 

[plex]

Yup, could live on a standard SS amount no problem. My costs have been consistently in the $1000/month range in a very expensive area, and lower in less expensive areas. In a low cost of living area, including low taxes, with a paid off house, no roommates, and some nice additional amenities that haven't really meshed well with my current and past living situations, I expect my budget would be the same amount.