How much minimum monthly retirement income should be enough for retire?

[DrRoy]

I think you can retire. I find that I am spending more than I did before RE. A good bit of that is because I am overfunded and the market has been good. I could adjust spending down if needed but it is so nice not to have to.

 

[Time2]

The following are my conditions:

My monthly pension can covers the most current average monthly basic expenses plus 20% extra.

most?

Also, approximate 30% of extra 457k monthly fund for emergency and vacation uses ( 4% of my total assets).

I don't know what this means.

Therefore, I have 1.2x 1.3 = 1.56. 56% extra fund can be used every month and set aside.

So if all of your monthly expenses are $5,000 and you have $7,803 coming in every month, and the $7,803 is reasonably secure, I would say that you could retire. Especially with SS being icing on top of all that.

SS doesn't count on yet because it requires 62 yrs above to collect it.

house has been paid off

Pension covers medical insurance. I can pick PPO or HMO.

Is it safe to retire? Or still wait....

 

[scrabbler1]

Shinge, just comparing your situation to mine suggests you can retire. I needed to have a reasonably reliable income stream using my non-retirement assets and income streams such as SS, while keeping a decent cushion for unanticipated expenses. Then, when I become old enough to include my retirement assets and income streams (my "reinforcements"), my financial picture only gets better. You have this and health insurance already covered, at least through age 65 (I didn't always have that, especially prior to the ACA). You surely look good to go!

 

[Koolau]

One of the reasons we hedge on saying "yes" or "no" is that none of us knows the future. It sounds like you have enough to meet expenses into your future (only you know how accurate your numbers are.) You have SS on the horizon to fill in the lumpy bits. BUT none of us knows how our lives will turn out. We often speak here of "black swan" events (those that are unlikely, but DO occasionally happen to someone.) For many of us here, we worry about long term care - which could bankrupt almost anyone at $10K/month (for one person) if you live long enough in a care facility. What about divorce or death of a spouse? At a minimum that will screw up your tax situation - and a lot more, though I have no experience, thank God.

You might spend a few hundred dollars on hiring a Certified Financial Planner (but do NOT get one who sells stuff - only pay by the hour.) Ask her to go over your numbers and assumptions to see if your projected income will cover your expected expenses. Ask for advice on where to place your money if you don't feel comfortable with what "we" do here (heh, heh, a WHOLE other area of fun!)

Let us know what FIRECalc says. Think about some "back ups" to your Early Retirement plan (Go back to w*rk? Move to LCOL area? Sell assets like the extra car or whatever? etc. etc.?)

If you are determined to ER, you can probably make it work. We just can't say yes or no and be as accurate as you can (once you do ALL the math and the what-if thinking.) Good luck because YMMV.

 

[Shinge1233]

most?






I don't know what this means.




So if all of your monthly expenses are $5,000 and you have $7,803 coming in every month, and the $7,803 is reasonably secure, I would say that you could retire. Especially with SS being icing on top of all that.

Thank you for your comments!

Let me talk you my exact number....

Every month average basic expense includes house, food , entertainment, repair...are $ 4100.

My pension is $5200 monthly plus 2% every year living adjustment.

$450000 457 k fund ...based on 4%rule.. I have $1500 every month to use for emergencies or vacation.

Social security at 62 , I have $2200 monthly approximate. But I am only 57 yrs old and need to wait 5 more yrs.

So... Total retirement income before 62 is $6700 monthly and average monthly expenses are $4100 . After 62, I will have $8900 monthly retirement income and $4100 expense plus inflation and living adjustment.

Therefore, I am thinking to retire...

 

[cfran]

I think your situation is that simple, you are good to go by a good margin and there is zero reason to overthink it!

 

[finnski1]

Thank you for your comments!

Let me talk you my exact number....

Every month average basic expense includes house, food , entertainment, repair...are $ 4100.

My pension is $5200 monthly plus 2% every year living adjustment.

$450000 457 k fund ...based on 4%rule.. I have $1500 every month to use for emergencies or vacation.

Social security at 62 , I have $2200 monthly approximate. But I am only 57 yrs old and need to wait 5 more yrs.

So... Total retirement income before 62 is $6700 monthly and average monthly expenses are $4100 . After 62, I will have $8900 monthly retirement income and $4100 expense plus inflation and living adjustment.

Therefore, I am thinking to retire...

With those numbers and your health insurance covered seems like you are in very good shape. That's a very nice pension PLUS a COLA!
Enjoy your retirement.

 

[Dawg52]

I think your situation is that simple, you are good to go by a good margin and there is zero reason to overthink it!

+1. Go for it.

 

[levindb]

As others have said, you are stating what your current expenses are, and that is a great start.

The next step, is to look at your FUTURE expenses. How about that world cruise you were dreaming about? Do you want to move to a new location? Close to ocean, warmer temps, maybe a lake and a small boat may be in your future. You seem to focus on retiring FROM something, but what will you be retiring TO? What will you do Monday morning after you retire?

I did not see any numbers for taxes in your brief summary and handling taxes in retirement is slightly different from when you are drawing a salary. To cover taxes with $50K of annual spending, you may need another $10K in pension/withdrawals.

Do you have, or will you have a spouse/partner to share your life with? Older folks with $$ become more attractive...

 

[Shinge1233]

As others have said, you are stating what your current expenses are, and that is a great start.

The next step, is to look at your FUTURE expenses. How about that world cruise you were dreaming about? Do you want to move to a new location? Close to ocean, warmer temps, maybe a lake and a small boat may be in your future. You seem to focus on retiring FROM something, but what will you be retiring TO? What will you do Monday morning after you retire?

I did not see any numbers for taxes in your brief summary and handling taxes in retirement is slightly different from when you are drawing a salary. To cover taxes with $50K of annual spending, you may need another $10K in pension/withdrawals.

Do you have, or will you have a spouse/partner to share your life with? Older folks with $$ become more attractive...

Yes, it is true. I might need to add 15% more for the federal and state taxes . So my pension is approximate $4400 per month after taxes with COLA and no debt. However my average monthly expenes are also conservative which is close to $3600 plus $500 for saving.
In fact, I would like to move to Florida if I can. My house value in Los Angeles is close to$700000. I believe I can get a small house for living and get other one for rental income in Florida, just in case. Of course, my wife will go with me. We just want a simple life in a little town.

 

[Chuckanut]

My question ...When should I retire? What mean enough? . We always think not enough then never retire... If I have enough pension for my basic expense and have emergency or saving fund , and 457k set aside. Why do I need to work for?

Like many, I can't tell you if you should retire. But, I can share my story and you may take what you wish and leave the rest.

I had not thought I could retire earlier than 65-66. But, I was motivated to look harder when I lost several slightly younger than me loved-ones in their mid-50's. I first tried a Monte-Carlo calculator and later graduated up to FireCalc.

I was surprised (maybe shocked?) to find that the only thing between me and retirement was medical coverage. On the advice of a friend I went to a retirement presentation put on by the state for teachers and state employees. I found out that I could purchase medical coverage through one of the state plans offered to active employees. I had to pay the entire cost, but it was a good plan and still cheaper than buying one on my own. That was in mid-August. At the start of October I informed my principal that this was my last year teaching.

 

[1242Vintage]

Make sure the amount you estimate for state and federal taxes is reasonably accurate!

I retired back in May 2020 with a pension and other monies in 457 plan, 401(k) and IRAs and am doing my 2020 taxes now.

My biggest lesson-learned at almost a year into retirement is that I underestimated taxes and therefore didn’t have enough withheld from my monthly pension payments.

Double check your math and estimate on taxes to make sure you don’t have any surprises.

 

[Shinge1233]

Thanks for all response, helps , and advises.

Actually I am a state worker and have worked more than 25 years. Therefore I have 100% medical coverage when I retire. I may require to pay a premium if I want a better HMO or PPO coverage.

By the way, I am still planning to retire anytime but still not firm yet. I would like to get more examples and nice experiences here for reference. Hope to have a good life after retire.

 

[dak2018]

Sounds like you have adequate resources - especially if you have a $700K house that can be sold. You also indicated willingness to move to a potentially lower cost of living location, and that is a big deal. Flexibility can overcome lots of financial restrictions, but I don't see that you really have any restrictions to worry about!

My only comment would be to make a serious effort at reconstructing your spending for the last couple of years and to make an estimate of how things will look moving forward. The lumpy expenses ( cars, home repairs, etc.) will happen, and you want to be well positioned to take care of them without stress.

Go for it - the clock is ticking on us all!

 

[Montecfo]

Well, I am pretty confident that my mil pension will continue unless a) I murder someone or 2) the entire US Government goes bankrupt.

But, not a bad question. I know a mess load of airline pilots who have had a rough go because of changes to their retirement plans and bankruptcy (and having 2+ ex-wives probably doesn't help, either).

You get to have 2 or more wives in America?

What a country!

Is that just limited to pilots?

 

[Walt34]

You get to have 2 or more wives in America?

What a country!

Is that just limited to pilots?

Nope, this a democratic country. Any fool can have as many ex-wives as he wants.

I even knew one guy who had five of them.

 

[23isme]

Thanks for all response, helps , and advises.

Actually I am a state worker and have worked more than 25 years. Therefore I have 100% medical coverage when I retire. I may require to pay a premium if I want a better HMO or PPO coverage.

By the way, I am still planning to retire anytime but still not firm yet. I would like to get more examples and nice experiences here for reference. Hope to have a good life after retire.

I think you are in a situation where the services of a financial planner could be useful. A good one will have seen many different situations and can spot things that you may not have noticed, and ask questions to ensure you have covered your bases as some here have mentioned such as taxes, lumpy expenses, insurance, etc.

 

[P.S.]

Hi Shige,
Welcome to ER community.
Sounds like in your mind, retirement is doable and you would like confirmation. Also, you would like to know some success stories to encourage you to make the leap.
So good thing you found this forum b/c it is full of personal experiences of FIRE -> check out the “Life after” section for post retirement updates. You will find threads detailing the emotional, physical, and psychological journeys of retirees spanning a wide age spectrum, including plenty in their 50’s. Many experiences starting from T+1 (The First Day of Retirement).

Also, this is a chatty group. Now that GME and COVID have been pretty much talked out... the more info you give and specific advice ?’s requested, the more response you’ll get. This forum is almost 20 years old, while the human experience remains constant. I encourage you to dive deep into the threads. You’ll learn a lot, and probably gain some new friends/acquaintances to take on your journey.

 

[Koolau]

Hi Shige,
Welcome to ER community.
Sounds like in your mind, retirement is doable and you would like confirmation. Also, you would like to know some success stories to encourage you to make the leap.
So good thing you found this forum b/c it is full of personal experiences of FIRE -> check out the “Life after” section for post retirement updates. You will find threads detailing the emotional, physical, and psychological journeys of retirees spanning a wide age spectrum, including plenty in their 50’s. Many experiences starting from T+1 (The First Day of Retirement).

Also, this is a chatty group. Now that GME and COVID have been pretty much talked out... the more info you give and specific advice ?’s requested, the more response you’ll get. This forum is almost 20 years old, while the human experience remains constant. I encourage you to dive deep into the threads. You’ll learn a lot, and probably gain some new friends/acquaintances to take on your journey.

Just remember that we are a bunch of strangers in cyberspace and therefore our advice is worth what you pay for it. In the final analysis, it's your life, so you must make your own decisions and live with them. Most of us are happy to talk about what happened to us, but we don't know your situation well enough to actually "advise" you. SO, take what we say with many grains of salt. Do your own research and analysis. But DO keep us up to date on your decision and let us congratulate you when you do make your move.

Aloha.

 

[P.S.]

... the more info you give and specific advice ?’s requested, the more response you’ll get.

Just remember that we are a bunch of strangers in cyberspace and therefore our advice is worth what you pay for it. In the final analysis, it's your life, so you must make your own decisions and live with them.

Very important. Any post should be understood as opinion, and a response to any preliminary or situational info provided.
If someone reads a response, and accepts it and acts on it as financial advice, caveat emptor.

 

[cyber888]

Ok, so your pension is $5,200 and your expenses $4,100.

But what about income taxes ? Will you be paying another 10%-12% in income taxes (or $500-$600). This will reduce your pension to $4,600

Thank you for your comments!

Let me talk you my exact number....

Every month average basic expense includes house, food , entertainment, repair...are $ 4100.

My pension is $5200 monthly plus 2% every year living adjustment.

$450000 457 k fund ...based on 4%rule.. I have $1500 every month to use for emergencies or vacation.

Social security at 62 , I have $2200 monthly approximate. But I am only 57 yrs old and need to wait 5 more yrs.

So... Total retirement income before 62 is $6700 monthly and average monthly expenses are $4100 . After 62, I will have $8900 monthly retirement income and $4100 expense plus inflation and living adjustment.

Therefore, I am thinking to retire...

 

[Shinge1233]

Hi Shige,
Welcome to ER community.
Sounds like in your mind, retirement is doable and you would like confirmation. Also, you would like to know some success stories to encourage you to make the leap.
So good thing you found this forum b/c it is full of personal experiences of FIRE -> check out the “Life after” section for post retirement updates. You will find threads detailing the emotional, physical, and psychological journeys of retirees spanning a wide age spectrum, including plenty in their 50’s. Many experiences starting from T+1 (The First Day of Retirement).

Also, this is a chatty group. Now that GME and COVID have been pretty much talked out... the more info you give and specific advice ?’s requested, the more response you’ll get. This forum is almost 20 years old, while the human experience remains constant. I encourage you to dive deep into the threads. You’ll learn a lot, and probably gain some new friends/acquaintances to take on your journey.

Thanks a lot for your info and advise!

 

[Vacation4us]

If you move from California to Florida will your health insurance stay the same at the same cost? DH is a former state employee and insurance changes and costs more if we leave the state. I would look into that prior to retiring.

 

[skyking1]

Ok, so your pension is $5,200 and your expenses $4,100.

But what about income taxes ? Will you be paying another 10%-12% in income taxes (or $500-$600). This will reduce your pension to $4,600

pretty much exactly, using 2021 rates
~63,000
minus standard deduction for single 10,850
52,150

Taxes for first 9950 = 995
Taxes for next 30,575 = 3669
Taxes for next 11,625 = 2558
total taxes = 7222
~600 per month in taxes on the pension for single person.

If you had not figured taxes in your 5200 monthly, there it is for a single person in 2021

 

[dixter]

This how I started out for retirement...before I retired I went and got two credit cards that gave me 100K miles for airlines...

Then I started to put every single item that cost me money on those cards and of course I paid the cards off each and every month...

if you do this you get a real idea of exactly how much it costs you to live for a year... so now you have, taxes,insurance,health care, food, gas... other items you paid for .... after the two year period I knew up to the penny how much I spent...

I then multiplied the average of the two years of money spent and I doubled that figure and divided by 12...

by doing that its more than I actually need but it does a couple things... I get more after tax dollars in the bank account, my after tax dollars savings account grows in case I need extra funds, and I know I can afford a vacation if I want to take it... or splurge on some item(s)...

Its worked perfect for me all these years... before the travel industry shut down last year we had enough free airline miles we would take trips each month... now we just have a ton of miles piling up...