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Old 05-29-2017, 03:17 PM   #81
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My intention is to come up with a reasonable number that actually works. 3900 per month is shocking for a few here. So many others felt that is a reasonable amount for a family of two (no kids) to live on. I agree about healthcare costs, the uncertainty of market and unexpected expenses. So may be 800K sounds like a more reasonable one then to retire at 50? With each year later we can reduce the amount needed by 50K per year; so if i retire at 56 I will need only 500K

Ideally I would love to have a 2-3M portfolio so that I could simply live off interest and keep my capital intact and feel secure for the rest of my life. But that is not achievable for most. In that case, the other option is to save whatever I can and live on that by 1) moving to a low COL area 2) not owning a home (to avoid unexpected expenses in repairs and to use that home equity to invest) 3) not spending too much on entertainment and buying stuff that's not necessary
If I recall correctly, you are currently spending about $160k per year.

While you might be able to get by on $50k per year, you will have to change your lifestyle drastically. Some are willing to do that and will still be happy. Others will not.

Come up with a budget for what you will actually need once retired, rather than trying to reverse engineer a number that will let you retire as soon as possible from work you hate. Make sure you aren't forgetting obvious expenses.

Only in that way will you know what makes sense for you. You are just guessing now. That doesn't make for a very good plan.
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Old 05-29-2017, 03:23 PM   #82
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When my parents were considering retirement in the early '80s, the rule I heard then was that a retiree should be able to match their Social Security check from other sources. Their situation was roughly that, and their retirement was financially successful.

This is probably still a reasonable rule for people who can live frugally.
Back when your parents retired, they probably had one or more pensions, social security and other savings. That used to be called the three-legged stool of retirement. Those days are gone for many.

And I think you have confused the tenets of the rule. I don't believe the rule as you wrote it makes any sense. If it did, then those who get little to nothing from Social Security need save little to nothing.

And I can't imagine such a rule was ever applied to someone wishing to retire at 50.
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Old 05-29-2017, 04:26 PM   #83
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Does this sound reasonable?
Uhh. No.
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Old 05-29-2017, 04:29 PM   #84
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Most people don't retire in their early 50s.
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Old 05-29-2017, 04:59 PM   #85
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$600k in a LCOLA and a paid for house? Heck yes.

Living like the the Fresh Prince of Bel Air? No. We definitely have a few Carltons here from the looks of this thread lol
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Old 05-29-2017, 05:12 PM   #86
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$600k in 13 years. Net present value with 4% discount rate is $300k. So I think he can safely retire in an RV travelling around the USA.
Edit to add: if OP stops working at 50, he is not going to get $2600 at FRA. Most likely less. But even if he gets $3900 today, that is different purchasing power in 13 years.
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Old 05-29-2017, 05:15 PM   #87
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$600k in a LCOLA and a paid for house? Heck yes.

Living like the the Fresh Prince of Bel Air? No. We definitely have a few Carltons here from the looks of this thread lol

Ya think?

Just look at the thread on flying in airplanes. A lot of the people on here flying first class with tickets in the thousands. This ain't your MMM forum.

Then again there are a few sad cases of people who did work until they could easily afford first class, only to get the big C or other. Life has a way of slapping you upside the head even if you don't retire early.
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Old 05-29-2017, 05:15 PM   #88
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I'm sure it's possible to retire with $600K at age 50 and SS at 67 and I believe many people live on a lot less. However, for me that would be a H*LL to the NO.

My wife and I require about $100K/year to fully sustain what I consider a comfortable middle class standard of living (including a paid off house and retiree medical insurance).

Housing, Utilities, Food, Medical, Transportation: $45K to $50K
Routine spending (entertainment, recreation, travel, gifts. etc.): $25K to $30K
Non-routine spending (replacement of stuff, buying new stuff, life happens stuff): $25K to $30k
I guess my definition of "comfortable middle class standard of living" is different than yours. I don't know anyone who spends a quarter million every 10 years just replacing and buying new things.
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Old 05-29-2017, 05:18 PM   #89
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I know a lot of people who would love to get $3900 a month to live on. Especially if they are not working.
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Old 05-29-2017, 05:20 PM   #90
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Now that we have our 28 acres of designated forest land, where we are camping in our RV for a bit, our expenses are quite low.

Property tax is $29 a year
We have 1100 watts of solar with another kilowatt in our plans, so electric bills are about $0 a month.

Water is $5 a month.

Garbage is $10 a month.

Phone/internet with Cricket unlimited is $55 a month

Subsidized health insurance is $92 a month with $500 year max OOP.

Various insurances including umbrella policy, boat, motorcycles and trucks comes out to about $200 a month.

So aside from food and gas if we drive anywhere, our monthly budget is $365.

Obviously that is bare bones, but pretty low.

$3900 - $365 leaves quite a bit. Probably could take a few cruises.
i'm liking this budget so whats the cost of the 28 acres?
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Old 05-29-2017, 05:25 PM   #91
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I am a newbie to this forum. I saw threads where few people were saying they have 3M or more and still debating whether to retire or not. It just scares the heck out of me. There are so many people who are the sole breadwinners for the family or earn low and cannot even save more than a few 100Ks in their entire life. Good for those who have saved millions already but that shouldn't be the norm for wanting to RE.

My intention is to come up with a reasonable number that actually works. 3900 per month is shocking for a few here. So many others felt that is a reasonable amount for a family of two (no kids) to live on. I agree about healthcare costs, the uncertainty of market and unexpected expenses. So may be 800K sounds like a more reasonable one then to retire at 50? With each year later we can reduce the amount needed by 50K per year; so if i retire at 56 I will need only 500K

Ideally I would love to have a 2-3M portfolio so that I could simply live off interest and keep my capital intact and feel secure for the rest of my life. But that is not achievable for most. In that case, the other option is to save whatever I can and live on that by 1) moving to a low COL area 2) not owning a home (to avoid unexpected expenses in repairs and to use that home equity to invest) 3) not spending too much on entertainment and buying stuff that's not necessary

- Sam
im going to play devils advocate here, your initial proposal would not work for me, especially the every year after 50 you can reduce the nest egg by 50k. That being said, i wasted 5 years working to build up a nest egg thats too big. If you think it works for you and yours do it.
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Old 05-29-2017, 05:41 PM   #92
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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.
Under those circumstances most people would work until full retirement age when they have Social Security and Medicare to give them far more financial security, as well as another 15 years to shore up savings. Retiring early is a whole different ballgame.
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Old 05-29-2017, 05:41 PM   #93
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Ya think?

Just look at the thread on flying in airplanes. A lot of the people on here flying first class with tickets in the thousands. This ain't your MMM forum.
I just hope the OP doesn't ask the same thing on the bogleheads forum....
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Old 05-29-2017, 05:45 PM   #94
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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.

If you want to have a more lavish lifestyle that's a different point; we are talking about the absolute min. we need. If you disagree with that number, what is your number?
where?? I live on the East coast, 700 may get you a studio in the suburbs. 3900 may work for me if I had no housing cost.
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Old 05-29-2017, 05:49 PM   #95
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Ya think?

Just look at the thread on flying in airplanes. A lot of the people on here flying first class with tickets in the thousands. This ain't your MMM forum.

Then again there are a few sad cases of people who did work until they could easily afford first class, only to get the big C or other. Life has a way of slapping you upside the head even if you don't retire early.
but that's not the whole picture. yeah many people here fly first class BUT the sacrifice in other areas. Many people here drive cars until the wheels fall off, many people here don't eat out a lot. There are trade offs.
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Old 05-29-2017, 06:09 PM   #96
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I'm in the first class, lobster and caviar, seared wagyu eating, XO drinking, gimme a jacuzzi in my room and send in the massuse style.

Yup, I'm in the "worked too long" club also.

But at least I know how to blow that dough -
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Old 05-29-2017, 06:10 PM   #97
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but that's not the whole picture. yeah many people here fly first class BUT the sacrifice in other areas. Many people here drive cars until the wheels fall off, many people here don't eat out a lot. There are trade offs.
On MMM they sell their car and ride a bike or use public transportation. If they fly, it is probably free from some sort of credit card bonus signup thing they worked up.

On Bogleheads they don't fly first class, they charter a jet.

ER.org is usually a happy place between those two but sometimes seems to disparage someone who claims they can live comfortably a lowish amount.

I posted our possible budget not to say that is how we are going to live but to point out how cheap it can be to live (aside from health insurance, which right now IS cheap if you can manage low income....might not stay that way).

For the person who asked, we spent about $58k for the 28 acres. Eastern Washington is just silly cheap compared to the west part. Our forester even said we should log the lodgepole (leave the larch and fir) and get back about $8k!
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Old 05-29-2017, 06:44 PM   #98
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One thing we have learned is that spending is not necessarily equal to lifestyle. We have friends that easily spend $200 on a night out. I think we go out as often, if not more, and see many of the same shows and go to the same type of restaurants but spend much less. We watch for Groupons on sale for dining out and have several seat filler subscriptions, winery passports, garden and museum memberships with free reciprocal privileges we use for shows and events and keep an eye out for free events. This week there's a free symphony concert and astronomy night at U.C. Berkeley, Chabot Space and Science Museum has $5 Fridays (I'm meeting a friend who will pay $5, I get in free because I'm a member), we have seat filler tickets for a rocket boat ride from one of my subscriptions, a Groupon for dinner out for Peruvian food and I'm seeing a play with a friend ($45 tickets each free through the public library). So instead of $1000 a month on entertainment we spend maybe $250. We cut our energy bill by 2/3 from making the house more energy efficient. I shop at outlet and warehouse stores for groceries instead of the neighborhood Whole Foods. We made hundreds of budget changes to retire early and if I had to do it over again I would have watched our expenses sooner and retired even ten years earlier than we did. We have the same house and actually newer cars, only we don't have to work and have time to go out a lot more than we used to.

Healthcare is the one area I can't do a lot about but because our overhead is pretty low compared to how much we used to spend we have a surplus in the budget for whatever that ends up costing before we reach Medicare age.
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Old 05-29-2017, 06:57 PM   #99
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This forum really demonstrates the wide range of what various people find to be an acceptable lifestyle. YMMV
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Old 05-29-2017, 07:17 PM   #100
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where?? I live on the East coast, 700 may get you a studio in the suburbs. 3900 may work for me if I had no housing cost.
Maybe Phily rents are extreme but my DD just signed a lease for a nice 2 BR apartment in Albany NY for $895 10 min to downtown.
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