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Old 05-29-2017, 04:36 AM   #21
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I'm struggling to find a way to live under $80K per year (about $6,700/month) and I own my home and have some retiree healthcare. Which, by the way, you did not mention health care/health insurance cost from 50-67. I understand people can live on a lot less, but when you ask for a minimum to "exist", you still need to define exist.
I'm not struggling over it, but I'm not interested in the bare minimum to survive. I want to be comfortable, travel, and enjoy some things. DW wouldn't have let me RE if it was to just barely survive.
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Old 05-29-2017, 05:24 AM   #22
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This is a good framework of a plan. It is not a plan.

This is my 10th year of ER. All of the years we kept below $3900 / mo. DW and I live comfortably and do what we want to within reason. However, we own our home free and clear. Also, this annual amount does not include "one of" items like a new car. We spent $5800 for a new furnace last week. Would you have to go back to work if this happened in your plan? As many have mentioned, stuff happens. You need to have some fudge room for this unknown "stuff".

I am in a low cost of living area of the country. In the Bay Area or NJ, this is not even a framework of a plan.

To be a plan, the devil is truly in the details.

Gumby's remarks are useful.
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Old 05-29-2017, 05:46 AM   #23
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That is very close to my situation:
- 500k savings (been a good saver but bad investor)
- 400k paid-for house
- 62k pension starting at age 60 with another 10k starting at age 62 (reduced to 85% with lifetime spouse benefit at 100%)

The pension is significantly underfunded so that could be reduced. My plan was to retire at age 55 which is still a possibility, but more than likely I will keep working until age 60 and since i won't be retiring with the companies giving me the pension I will still need to come up with health insurance money until medicare kicks in.
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Old 05-29-2017, 05:54 AM   #24
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I agree with the comments re needing details and COL info for your area before making a firm assessment. However a broad rule of thumb is that if you have assets equal to ~25 times your annual cash flow needs, you are financially ready. If you feel you can live the lifestyle you want and fund healthcare costs on $3,900/month, that suggests you need about $1.2M. My "number" is much higher, but we live in So CA, and our subsistence costs are more than $3,900/month, before considering travel, dining out and other "luxuries."
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Old 05-29-2017, 06:12 AM   #25
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While I try not to give advice, planning for the future has to start somewhere.

While our retirement began at age 53, and the planning did not come by way of a financial calculator, the past 28 years were based on a situation, not unlike that proposed by maceratian.

While I don't think I'd be ready to do it over again today, wouldn't trade the happiness of our years of freedom for anything we might have missed along the way.

Some of our history here:

http://www.early-retirement.org/foru...ent-62251.html
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Old 05-29-2017, 06:17 AM   #26
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Just one year into ER and I've discovered that expenses pop up with great regularity:

Roof repairs 8k
Water Softener 2k
New car 20K
Even a simple dental cleaning resulted in a crown popping off.

Fortunately these items barely put a dent in our cash reserves. However who knows what's next and how Mr Market will behave in the future. The OP's plan would scare me to the point that I'd rather w*rk (shudder) than live on the edge.
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Old 05-29-2017, 06:20 AM   #27
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So the absolute minimum you need to save by 50 to retire safely is 600K. For each later year you retire, you can reduce the 600K by 50K / year. Does this sound reasonable? Not saying we can retire with 600K at 50 as it depends on economy and its good to have some buffer, but if we want a number this sounds like the absolute min. needed
It appears that you have concluded you can live on $3900/month (and perhaps less than that for the 17 years between 50 and 67).

Remember that out of that must come all of your expenses including housing, food, transportation, travel, medicare costs (it's not free), other healthcare costs, taxes, etc.

Some could (and do) live on that amount. Many others would prefer to have more.

You are still young and you hate working. But don't let that confuse what it really would take for you to retire. Try to be realistic.

Work harder to determine what your real expenses will be in retirement before you try to conclude how much you will need.
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Old 05-29-2017, 06:21 AM   #28
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OP is not entirely off the mark.

The median US household income is something in the low to mid $50k range.
An 8% rate of return on $650,000 and you'd be making more passively than a lot of folks do w*rking full time. OP said for 2 people, median household is more than that so there's a little cushion there.

That being said, banking on a consistent 8% going forward in today's market is going to be sporty. If you can handle a lower rate of return until SS or pensions kick in to stem the bleeding, you may be able to glide it in.

As others have mentioned, the are a lot of sticks waiting to pounce on your spokes:
Cost of healthcare
Medicare
Sequence of returns
Tax code changes
SS changes
Illness / accident
Etc

If you were laid off, couldn't find w*rk, and lived in the right area, you'd find a way to get by.

I'd use that number more of a gauge on how I'm going than as a green light/go for launch indicator.
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Old 05-29-2017, 06:32 AM   #29
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Where I live, it could easily be done at $3,900/mo. I know some who do it on that or less. Just depends on where you live and what you want out of retirement. Lot's of variables...
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Old 05-29-2017, 06:37 AM   #30
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I know dozens of people who earned $3900 a month or less when working and then retired happily on even less than that. Of course, here in Canada we don't have the health care costs that the US does.

My house is paid off and my basic monthly living expenses are well under $1500 a month. I have no interest in expensive toys, and my hobbies are inexpensive.
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Old 05-29-2017, 06:39 AM   #31
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Interesting coincidence: my/our invested assets passed the $500K mark when I was 50 and DH was 65, after DH and I sold our houses in NJ, married and moved to a LCOL area when I changed jobs. (We had substantial equity in the houses but I hadn't included it till it was turned into cold cash.)

I worked for another 11 years. It's made all the difference. I know there are people here who could have made that work, especially with DH's SS, but I'm a traveler and so was DH. I'm also well aware, from watching DH age, that you get to the point that you want to hire out things that were previously DIY- you're no longer comfortable on ladders, you really don't feel like tearing apart the toilet, etc. I clean my own house and mow my own lawn but that lawn is a real cardio workout because of the grade of the hill on which the house sits. Someday I'll have to hire that out, too.

It would have taken a lot more than that for me to feel comfortable retiring at age 50.
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Old 05-29-2017, 06:54 AM   #32
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I would not want to 'survive' for my last 30-40 years on the planet.

That being said, if you found someplace that had abundant natural recreation activities and enjoying them was what made you happy, then it could work.
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all you need is ~600K by age 50 to retire
Old 05-29-2017, 06:54 AM   #33
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all you need is ~600K by age 50 to retire

$3,900 hmmm... let's see
Monthly expenses ..
Real Estate tax $800
Insurance on home $100
Health insurance until 65 $2000
Car insurance $200
Utilities $200

It might work if I gave up eating, the $3600 dentist bill, estimated $3k out of pocket for my knee operation. Yup I need to move and only eat oat meal.
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Old 05-29-2017, 06:58 AM   #34
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Good points on the medicare expenses. I wasn't aware of them.

Assuming a 3.4% pct return, on 600K, you would make about 1700 interest per month and rest of what you need monthly comes from the capital.

So if you spend 3900 per month, it will last for about 16.8 years. I think 3900 is a decent amount to have a comfortable living; rent of a 1 BR apt is 700$-900$ in lot of cities.
But you won't safely have $3900 per month from 50-67. Among the other things I mentioned earlier, your plan does not appear to include inflation. At a modest 3% inflation rate, that $3900 you started with will require drawing $6446 from your stash the year before you reach full retirement age. That is why I suggested using FIRECalc. It does account for inflation, and market risk. And, as I noted earlier, it says you'll be able to safely spend only $2700 per month, with an annual increase for inflation.

Second, in case I was not clear earlier, you and your spouse also will not have the equivalent of $3900 per month at age 67, because social security is calculated on your highest 35 years of earnings, and zeroes are added to the equation if you haven't worked for 35 years. Unless you started working at age 15 and immediately started paying the max FICA and never stopped, you will not get $2600 a month, your spouse will not get $1300 a month, and together you will not get $3900 per month. You should go to the SSA website and calculate your SS payment using your actual numbers. It will likely be much less.

So, while you may think you can live on $3900 per month (and you may be right) you will not have $3900 per month.

That said, better to have $600k at age 50 than nothing.
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Old 05-29-2017, 07:03 AM   #35
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$3,900 hmmm... let's see
Monthly expenses ..
Real Estate tax $800
Insurance on home $100
Health insurance until 65 $2000
Car insurance $200
Utilities $200

It might work if I gave up eating, the $3600 dentist bill, estimated $3k out of pocket for my knee operation. Yup I need to move and only eat oat meal.
Utilities: $200
House insurance - $70
Property taxes - $200
Auto fuel and insurance - $300
Groceries - $300
Phone/internet/cable - $200

total - $1,270

Add in $700 for maintenance and miscellaneous expenses and I'm at $2000, leaving $1900.
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Old 05-29-2017, 07:20 AM   #36
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The scary thing about this thread is that $600k by age 50 is actually far above what most of America has.

If having $600k is doom and gloom, then we as a nation are heading for big trouble fast.

I am not sure having $3 million is going to protect you against the mobs who don't even have $30,000.

I guess time will tell.
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Old 05-29-2017, 07:24 AM   #37
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$3,900 hmmm... let's see
Monthly expenses ..
Real Estate tax $800
Insurance on home $100
Health insurance until 65 $2000
Car insurance $200
Utilities $200

It might work if I gave up eating, the $3600 dentist bill, estimated $3k out of pocket for my knee operation. Yup I need to move and only eat oat meal.
This just goes to show how everyone has different expenses...

Monthly expenses ..
Real Estate tax $200
Insurance on home $80
Health insurance until 65 $0
Car insurance $95
Utilities $200

Income of $3900 per month would leave us with about $3300 in spending money per month with a payed off home. Of course the biggest factor is insurance cost and real estate taxes.
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Old 05-29-2017, 07:27 AM   #38
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I ran our numbers since we stopped working at age 46.

According to SS estimator we still get $2412 a month at age 67 for one spouse and half of that is about $1200, so we are talking $3600 for a couple who quit working at 46 and have all zeros after that.

It isn't *that* far off of $3900 a month and this is a real world example.

We do have more than $600,000 in investments though...
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Old 05-29-2017, 07:34 AM   #39
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The scary thing about this thread is that $600k by age 50 is actually far above what most of America has.

If having $600k is doom and gloom, then we as a nation are heading for big trouble fast.

I am not sure having $3 million is going to protect you against the mobs who don't even have $30,000.

I guess time will tell.
But most of America does not stop working at age 50.
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Old 05-29-2017, 07:40 AM   #40
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We could live very nice on $3900 We live on way less now. In fact with that budget we could buy a home in the suburbs and buy a new Camry.
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