30K a year

[OAG]

It is his/hers (the dead one) or yours, whichever is the most (but not both). That does not consider the odd ones, like one drawing a non-SS benefit/retirement and one is drawing a SS Benefit.

 

[Goonie]

Have not been to Lawry's in years, but I suspect it is still a great place for prime rib & steak ( a quick check of Chowhound.com confirmed that).

We eat there each year when we go up for the CSO Christmas concert. It's always excellent!!!

Another lower-cost CSO ticket option to consider in the future- Terrace seats. Those are the seats that are above and *behind* the orchestra.

Those would be great seats! However, for the Christmas concert those are used by the choirs.

 

[loosechickens]

It's so interesting to see how folks spend money and what each thinks of as necessitites and luxuries.

We live on less than $30,000 most years, which is far less than our withdrawal rate would allow, but we do have some years like this year when we went to Europe for two months and also just bought a new Prius, and actually slid a bit over a 4% withdrawal rate. We like living quite a bit below our means as a normal thing so that when years like this one come along, we feel quite comfortable in spending more.

It doesn't seem really all that important what each thinks is 'enough', only that they manage their finances in order for their particular 'enough' to be viable.

It's fun reading this thread, though.

LooseChickens

 

[ERD50]

We live on less than $30,000 most years .... but we do have some years like this year when we went to Europe for two months and also just bought a new Prius,

I guess this is an example of where I think people are using fuzzy math.

It seems a bit pointless to say, I get by on $30K most years, except for the years I spend $60K, or 40K?

Just using round numbers, if a new car costs $30,000 and you keep it for ten years, didn't that 'cost' you ~ $3,000 a year? You really need to amortize or average these expenses over their lifetimes to say 'I only spend $X per year'.

To use an extreme example to make a point, I could buy gift cards for every place I do business with on Dec 31st this year, and then claim I got by on zero dollars in 2008.

What, you people can't live on nothing like I do? Spendthrifts!

Get the point?

-ERD50

 

[mh]

We eat there each year when we go up for the CSO Christmas concert. It's always excellent!!!


Those would be great seats! However, for the Christmas concert those are used by the choirs.

the oriiginal L.A. location is still great , they don't serve steaks at the LA
Lawry's (if i remember correctly), just prime rib..

 

[haha]

the oriiginal L.A. location is still great , they don't serve steaks at the LA
Lawry's (if i remember correctly), just prime rib..

I bought steaks at LA Lawry's in the late 60s. They had a huge grill right out in the dining room. Excellent meat!

Ha

 

[mh]

I bought steaks at LA Lawry's in the late 60s. They had a huge grill right out in the dining room. Excellent meat!

Ha

really ? i don't remember that , but i started going there about 1970 ish
maybe they had that before then.. i would like to try a lawry's steak.
maybe they have them at the las vegas one ??

 

[Maurice]

Have not been to Lawry's in years, but I suspect it is still a great place for prime rib & steak ( a quick check of Chowhound.com confirmed that).

I used to live a few blocks from that place. Great steaks!

 

[Lazarus]

I haven't retired yet, but I have been trying to figure out what I will need in retirement. I come up with closer to $40,000. And that does include budgeting for car replacement and house repairs. I think I have thought of all the expence catagories although my numbers might be off. But the median family income in the area I plan to retire in is $34,000 so I think it's doable.

 

[Goonie]

the oriiginal L.A. location is still great , they don't serve steaks at the LA
Lawry's (if i remember correctly), just prime rib..

Same with Chicago...the only other entrees besides prime rib, are salmon and lobster.....for the non-beefitarians.

 

[W2R]

I haven't retired yet, but I have been trying to figure out what I will need in retirement. I come up with closer to $40,000. And that does include budgeting for car replacement and house repairs. I think I have thought of all the expence catagories although my numbers might be off. But the median family income in the area I plan to retire in is $34,000 so I think it's doable.

That does sound very doable to me, especially if your house will be paid off and you have no kids in college. Most of those living on $34K will be making mortgage or rent payments every month and some will be saving for their children's education.

 

[FinanceDude]

Most of those living on $34K will be making mortgage or rent payments every month and some will be saving for their children's education.

It would be hard for them to do that on $34,000, though...........

 

[W2R]

It would be hard for them to do that on $34,000, though...........

Life is hard, but you're right - - we shouldn't plan for a difficult ER. But if his house is paid off, he has no educational expenses, he is no longer having to save for retirement, and his income is $6K above the median, he will be in better shape than most.

$34K is the median income in the area where he plans to reside, and I'd be willing to put good money on the bet that the "median person" ("average Joe"?) there is paying rent or P&I.

Maybe college is not on the agenda for those in a median income household. Still, these days it seems like more than the elite are attending college, and scholarships are limited.

 

[ERD50]

But the median family income in the area I plan to retire in is $34,000 so I think it's doable.

You guys are seriously scaring me. I'll say it again - don't retire on someone else's budget.

What difference does it make what the median income is? Do they have the same expenses as you will in retirement? Are they paying the same health care rates you are? Etc, Etc, etc.

Sure, it is a data point that tells you something about the cost of living in that area. But that is all. Work out your own budget with your own numbers.

I'm reminded of that old story of the 6' tall statistician that drown in the 4' average depth pool.

-ERD50

 

[OAG]

What says ERD50 is true. The median income for this suburb is $96.9K in 2005 dollars while in the rest of this STATE the median income is $35.4K. Extremely misleading. We live in the high median suburb but live on less than a third of the $96.9K. YOUR EXPENSES should be the determining factor not how the neighbors live or how much they want to spend.

 

[Achiever51]

Bottom line, I think it means very, very little to the OP what someone else spends.

...
Don't retire on someone else's budget, you may regret it.

-ERD50

Amen to that!

My DH and I are spending much more than $30k a year now. We planned to sell our house in 2007 (with its annual property tax of more than $9,500), which would allow us to downsize to a much less expensive housing choice, but the drop in the housing market has us waiting it out for probably the next year or so. FORTUNATELY, our planning factored in this possibility and I was still able to retire on schedule. I am looking forward to cutting the housing budget big time ASAP, though!

What I find interesting about this thread are the tidbits of information about housing/property taxes, insurance costs and other expenses from around the country.

 

[youbet]

I'll say it again - don't retire on someone else's budget.

Yep..... That's what I'm taking away from this very interesting thread!

 

[Zoocat]

That median family income of 34K may be very misleading. Credit card usage and debt is rampant in our country. Many families use a credit card as their emergency fund. For that reason I think the median income statistics are relatively useless for planning retirement in any part of the country.

 

[JonnyM]

I talked to our Finance Manger a couple minutes ago. She tells me that 3k/mon covers all expenses, notable inclusions: $5xx new truck payment (her vehicle, but we budget that amount forever with a cola), auto transferred dollars to savings accounts for the aforementioned accruals for major items and home and auto repairs. For example we just dropped 2K on our first modern HD TV's. Our Prop Tax is <$1k, and House was paid off same year I ER'd. I pointed out to my FM/DW that the Full Med is withheld from my ER check before I see it. That's close to $10K, so lets round our total expenses all inclusive to: $46K/yr

It's fascinating to experience all the differences in expenditures and priorities within our group.

I notice we are not typical in that we really like to have and are willing to pay for a relatively New main vehicle with an older cash/auction car as backup. We also enjoy the security of Complete Med coverage at a substantial cost.

Our toys and games budget is pretty high, if you can call something a "tool" there is no limit. A year without a couple more guitars/amps/gadgets is like a day without sunshine.

 

[Running_Man]

You guys are seriously scaring me. I'll say it again - don't retire on someone else's budget.

What difference does it make what the median income is? Do they have the same expenses as you will in retirement? Are they paying the same health care rates you are? Etc, Etc, etc.

Sure, it is a data point that tells you something about the cost of living in that area. But that is all. Work out your own budget with your own numbers.

I'm reminded of that old story of the 6' tall statistician that drown in the 4' average depth pool.
-ERD50

I don't think anyone is looking at only what the average is or whether it is doable based on that alone. But if one is thinking of retiring with 30 thousand per year and has the knowledge that others have successfully retired on that amount that gives comfort to the impetus to take the action to retire and confidence that the planned level of spending is reasonable.

One of the most popular features on this site is Firecalc which is nothing more than what the average expected return you can expect over the long term for the opposite of spending --- income. If the income side average is relevant I do not see how the average expense side is not relevant as well. It should give pause to consider whether or not your spending is out of line with the average polulation, just the same as if your investments are out of line with the average population.

Averages are very useful which is why the Department of Commere collects so many different averages for analysis.

 

[figner]

I too find it interesting how much the responses vary on this thread. Just as another data point, I live in a high cost area (Los Angeles) and might be able to live on 30K/yr depending on the assumptions. Currently my expenses as a single person are about 35K, including some expensive vacations and hobbies which could easily be cut back on. It also includes rent for a 1BR apt. However, I have health insurance mostly paid for through my employer, so that's the big wildcard in my expenses.

As a guess, if I had paid off housing and needed to buy private health insurance, those two might cancel each other out, making 30K/yr realistic. This also doesn't include the cost of taxes, which I'm guessing might be about 10% in ER. So I think it would be doable with some cutbacks, but for me it would be worth working a bit longer so as not to have to scrimp that much.

 

[ERD50]

I don't think anyone is looking at only what the average is or whether it is doable based on that alone.

As another data point, the input is fine - and interesting. My responses were directed a bit more towards those that thought someone spending $X or $Y were either lighting cigars with $20 bills, or living in a cardboard box.

One of the most popular features on this site is Firecalc which is nothing more than what the average expected return you can expect over the long term for the opposite of spending --- income. If the income side average is relevant I do not see how the average expense side is not relevant as well. ...

Actually, that is not apples-apples at all. Firecalc uses historical returns, and the spending and income you enter. It is not using any groups average starting portfolio.

The flip side of 'can I get by on spending $X a year?' would be 'can I get by with a $Y portfolio?'. And the answer in each case is... 'it depends'. The spending question depends on YOUR expenses, needs and wants. The portfolio starting point depends on what you put in for spending and what your portfolio mix is, other income, time frame, and some faith that the future won't be as bad as the worst case history.

But the data points are interesting, and valuable - but I think it is essential for one to do their own calculation. - ERD50

 

[beowulf]

There seem to be a lot of folks who live on $30K or less who are under 65 who have no health insurance, no life insurance, no LTC incurance (assuming they are somewhere over 50 or so). There is also talk of keeping cars forever, not budgeting for any emergencies and such. To me, that's living on the edge of disaster, not being remotely comfortable knowing that one major expense would put things over the edge. Sure, some may say they have $500K in the bank, but why live a lifestyle that denies yourself things? Where do people think the money is going to end up? You certainly can't take it with you. And what happens if you have severe problems later in life - go on medicaid? Ever been in a medicaid facility?

The other thing I can't quite understand is the desire to have a fully paid off house - do people really think that when they need the money in the house a bank is going to just throw money at them with little or no income? Maybe 5 years ago, but certainly not now. Banks like to loan money to people who don't need it, not the other way around.

I know I feel a lot more comfortable with a relatively small mortage ($150K or so - and for the Wash, DC area, that's tiny) and know I have the money in case of an emergency. If it's all in the house, how do you get at it??

 

[Dawg52]

There seem to be a lot of folks who live on $30K or less who are under 65 who are have no health insurence, no life insurance, no LTC incurance (assuming they are somewhere over 50 or so). There is also talk of keeping cars forever, not budgeting for any emergencies and such. To me, that's living on the edge of disaster, not being remotely comfortable knowing that one major expense would put things over the edge. Sure, some may say they have $500K in the bank, but why live a lifestyle that denies yourself things? Where do people think the money is going to end up? You certainly can't take it with you.

The other think I can't quite understand is the desire to have a fully paid off house - do people really think that when the need the money in the house a bank is going to just throw money at them with little or no income? Maybe 5 years ago, but certainly not now. Banks like to loan money to people sho don't need it, not the other way around.

I know I feel a lot more comfortable with a relatively small mortage ($150K or so - and for the Wash, DC area, that's tiny) and know I have the money in case of an emergency. If it's all in the house, how do you get at it??

Well for some, having a mortgage so that you have extra cash to spend for emergencies or for what ever is living on the edge. I don't want any debt facing me in retirement. But to each their own.

 

[kat]

There seem to be a lot of folks who live on $30K or less who are under 65 who have no health insurance, no life insurance, no LTC incurance (assuming they are somewhere over 50 or so). There is also talk of keeping cars forever, not budgeting for any emergencies and such. To me, that's living on the edge of disaster, not being remotely comfortable knowing that one major expense would put things over the edge. .......

The other thing I can't quite understand is the desire to have a fully paid off house - do people really think that when they need the money in the house a bank is going to just throw money at them with little or no income?....... If it's all in the house, how do you get at it??

Well, I didn't spell out what my 30k covers. In any given year, there's about 10k unspent with the idea I'll need or want it for the years I'll be replacing a car, doing expensive repairs, or taking an expensive vacation. I have health, home and auto insurance and see no need for the other kinds of insurance.

If I have a need for a sudden huge amount of money, I'll spend it and sell my cottage in the mountains.

And I've thought about it more than this. Just posting this short reply to say it might be wrong to assume others haven't made their own calculations about these things.