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05-31-2017, 08:14 AM
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#181
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Thinks s/he gets paid by the post
Join Date: Mar 2014
Location: Southern Cal
Posts: 4,032
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Yes, but they all have 1-2 houses paid off. So it's not the high cost of living. Except my secretary has a house paid off in Hawaii.
But they all know, the minute they quit from their job, there is no going back. Aka no more money.
For example, my sister just had a low non impact car accident that cost her $3500, out of pocket for her is $1000 plus money for car rental. This is a problem due to aging, her eyes are getting bad. Where would that money come from if she is not working?
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05-31-2017, 08:38 AM
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#182
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Recycles dryer sheets
Join Date: Sep 2006
Location: clearwater
Posts: 439
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Quote:
Originally Posted by Scuba
They'll work until they can't anymore and then they'll live as best they can on what they have. Maybe it won't be too drastic of a lifestyle difference vs when they were working.
I think much of the divergence of opinions on this thread can be traced back to what lifestyle one was accustomed to pre-ER. If one lived on $50K or less pre-ER, then it's easy to envision how the OP could be comfortable on $3,900/month. If one lives in a HCOL area in a nice home with high property and income taxes, and is accustomed to dining out frequently at nice places, eating high-end food at home, getting great seats at live performances, and traveling globally to somewhat costly destinations, $3,900 sounds like far less than required to provide the desired lifestyle.
It also depends how risk averse one is. As others have said, healthcare costs and events are a major uncertainty. Many of us feel the need to have a substantial cushion set aside for increasing health insurance premiums, copays, and/or LTC. Spending a portfolio of any size down to zero and then relying on SS & Medicare to cover this is beyond many people's risk tolerance.
YMMV
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I agree -
Also - expenses so totally change over time.
eg: when working our income combined around 130k - two children to support, 25% tax bracket $1000 mortgage payment - 7.5% FICA 10 - 15% deferred income
Today - yes, way less income - but, no FICA, 15% tax bracket, no children, no mortgage, no deferred income
= way more spendable income
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05-31-2017, 08:53 AM
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#183
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Thinks s/he gets paid by the post
Join Date: Mar 2014
Location: Southern Cal
Posts: 4,032
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I think it's a disservice to suggest that people who need higher stash often live on the high hog. Far from it. My sister has always LBYM, invested 100% in stocks. Have not had a real vacation for at least 10-15 years. Buy clothes second hand from a Goodwill.
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05-31-2017, 09:04 AM
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#184
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2012
Location: Seattle
Posts: 6,023
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Quote:
Originally Posted by Fedup
I think it's a disservice to suggest that people who need higher stash often live on the high hog. Far from it. My sister has always LBYM, invested 100% in stocks. Have not had a real vacation for at least 10-15 years. Buy clothes second hand from a Goodwill.
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It sounds like your sister could easily live on $3900 a month.
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05-31-2017, 09:10 AM
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#185
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Thinks s/he gets paid by the post
Join Date: Mar 2014
Location: Southern Cal
Posts: 4,032
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Quote:
Originally Posted by Fermion
It sounds like your sister could easily live on $3900 a month.
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Yes, but she doesn't get $3900 a month if she retires now. Last she told me her running budget is $6000 a month. I don't know why so high. But she should be alright if she sells one of her homes.
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05-31-2017, 09:12 AM
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#186
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Moderator Emeritus
Join Date: Sep 2007
Posts: 17,774
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Quote:
Originally Posted by LRDave
This has been a fun thread to read.
To the OP's original question (let me see if the basic premise is right - now 37 and hypothesizing that a $600K nut in 13 years is enough for two to RE - yes?):
I say that is a good target - hopefully realistic for you. Maybe you can even better that amount! So save like a mofo and see how things look at 50.
Having realistic goals is important. You can see from the range of responses that you are likely not terribly far off in terms of balancing RE time vs. financial risk.
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We don't have to worry too much about the OP--his hypothetical situation of $600K to generate $3900 a month starting at age 50 probably isn't his reality. From his intro "Hi I Am" post:
Quote:
So far I saved about 330K in cash and 100k in 401k accounts. I am in the bay area, make about 230k and save like 40k in cash and 27k in 401k annually. Right now it is about 70k per year but in the future with a pending promotion and some salary growth I will be able to save more. I hope I can retire on 1.5 mill in 10 years or with a 2 mill in 15 years if everything goes well. right now i absolutely hate monday mornings and going to work (nothing wrong with my work) so doing it for next 15 years will be hard. i might even retire early from a FTE once I make 1 mill and then do contract jobs for 7 months a year
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__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
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05-31-2017, 09:52 AM
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#187
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Full time employment: Posting here.
Join Date: Feb 2017
Location: Severn
Posts: 947
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Quote:
Originally Posted by Fedup
Yes, but she doesn't get $3900 a month if she retires now. Last she told me her running budget is $6000 a month. I don't know why so high. But she should be alright if she sells one of her homes.
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It's gotta be going somewhere.
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05-31-2017, 11:19 AM
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#188
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Thinks s/he gets paid by the post
Join Date: Mar 2014
Location: Southern Cal
Posts: 4,032
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Quote:
Originally Posted by Lawrencewendall
It's gotta be going somewhere.
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I suspect, she is paying off high credit card debt, debt that she incurred for her dead boyfriend. Somehow he sweet talked her into signing these contracts for his business. Now that he is dead. She is on the hooks. But she never spent on herself.
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05-31-2017, 11:53 AM
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#189
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Thinks s/he gets paid by the post
Join Date: Jul 2007
Posts: 1,085
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Quote:
Originally Posted by 1-31-18
It is very tempting to answer that question at length, but the protocols about political discussions on this board are chilling. So instead I'll mention the parable about grasshoppers and ants and will worry aloud that grasshoppers who vote outnumber ants who vote. I fear, as Bridgewater does, that political and social conflict, currently very high, will increase significantly as the entitlement crisis deepens.
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Just watch out for those anteaters! [emoji3]
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05-31-2017, 12:16 PM
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#190
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,374
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Quote:
Originally Posted by evilanne
.....The second issue is what happens if OP or spouse dies at age 62 or 67? OP's income would be reduced by 1/3rd and spouse's by 2/3rds at 62. ...
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Actually, if the OP dies the spouse would receive a total equal to the OP's SS benefit.... so if either spouse dies then the household income will go down by 1/3rd. But I agree that wheter or not the surviving spouse could live on $2,600/month is a legit issue.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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all you need is ~600K by age 50 to retire
05-31-2017, 12:45 PM
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#191
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Thinks s/he gets paid by the post
Join Date: May 2014
Posts: 1,867
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all you need is ~600K by age 50 to retire
Quote:
Originally Posted by Scuba
They'll work until they can't anymore and then they'll live as best they can on what they have. Maybe it won't be too drastic of a lifestyle difference vs when they were working.
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They also may be a burden on their children, lessening their children's saving furthering the cycle.
It isn't what you make it is what you manage to hang on to...
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05-31-2017, 01:51 PM
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#192
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Thinks s/he gets paid by the post
Join Date: Aug 2010
Location: Back woods of Fennario
Posts: 1,170
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The thing Bogle said about markets pertains equally to politics relative to the future: "Nobody knows nothin'."
__________________
"Time wounds all heels...." - Groucho Marx
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05-31-2017, 04:59 PM
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#193
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Full time employment: Posting here.
Join Date: Dec 2013
Posts: 774
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I don't know about other towns but where I live the unemployment rate is much lower than the national average. Yet there are more panhandlers stationed at the intersections near Walmart Home depot & fast foods restaurants. The cardboard signs say stranded need gas or hungry need money for food & other messages. Most often children or dogs are on display which increases donations I'm sure. It is people are not physically disabled or mentally deficient. They can count & have command of the English language. They know how to budget their income because they have money for beer cigarettes cell phones some have cars that appear to be more consistent with a middle class income level. The businesses around where they panhandle are desperate for w*rkers as they consistently have hiring signs displayed. I've heard reports they donations of dog food. They don't want you to put gas in their car. I was having a street taco at one of the many taco trucks in our area & one of the panhandlers was eating too. I asked him if he was on lunch. No I'm homeless & unemployed. He had a j*b for little while but he didn't like the commute. He had cigars & offered me a beer. Truth is anyone who isn't really doesn't want to. He gets his medical his dental & there's no alarm clocks in his world. He can't get financially wiped out by a catastrophic illness since there's no accounts or property to pilfer. Is it ideal? No. But it has its advantages. He didn't look skinny & had lots of energy. He didn't smell. Needed a shave but so did I. I'm off in the weeds I know. But since we're waxing philosophical. I think his magic number was $60.
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05-31-2017, 05:23 PM
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#194
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Thinks s/he gets paid by the post
Join Date: Jul 2013
Location: Texas
Posts: 1,065
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Hell, I can afford to buy a $60 annuity... Every day is Taco Tuesday!
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05-31-2017, 05:29 PM
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#195
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Posts: 5,350
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I would retire today if I had $600K but not many 50 year olds would be satisfied with the lifestyle at that would give. I would if it meant no more work but that's just me.
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05-31-2017, 05:33 PM
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#196
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2007
Posts: 13,228
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Quote:
Originally Posted by Free bird
I don't know about other towns but where I live the unemployment rate is much lower than the national average. Yet there are more panhandlers stationed at the intersections near Walmart Home depot & fast foods restaurants. The cardboard signs say stranded need gas or hungry need money for food & other messages. Most often children or dogs are on display which increases donations I'm sure. It is people are not physically disabled or mentally deficient. They can count & have command of the English language. They know how to budget their income because they have money for beer cigarettes cell phones some have cars that appear to be more consistent with a middle class income level. The businesses around where they panhandle are desperate for w*rkers as they consistently have hiring signs displayed. I've heard reports they donations of dog food. They don't want you to put gas in their car. I was having a street taco at one of the many taco trucks in our area & one of the panhandlers was eating too. I asked him if he was on lunch. No I'm homeless & unemployed. He had a j*b for little while but he didn't like the commute. He had cigars & offered me a beer. Truth is anyone who isn't really doesn't want to. He gets his medical his dental & there's no alarm clocks in his world. He can't get financially wiped out by a catastrophic illness since there's no accounts or property to pilfer. Is it ideal? No. But it has its advantages. He didn't look skinny & had lots of energy. He didn't smell. Needed a shave but so did I. I'm off in the weeds I know. But since we're waxing philosophical. I think his magic number was $60.
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I'm just going to say that panhandling for hours a day isn't what I call retirement, and I'll leave you in the weeds.
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05-31-2017, 05:36 PM
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#197
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Full time employment: Posting here.
Join Date: Dec 2013
Posts: 774
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What do you have against weeds?
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05-31-2017, 06:38 PM
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#198
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Thinks s/he gets paid by the post
Join Date: Oct 2012
Location: Reno
Posts: 1,338
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Yes--the amount mentioned is pretty much our lowend survival budget assuming everything goes wrong that can go wrong (We have a paid-off house and vehicles and I have health coverage until I qualify for Medicare, and would pay 300/month for DW's health coverage.)
To be sure, the actual retirement is figured on a little more than twice the monthly figure and investments are close to 3x. But it is doable.
Quote:
Originally Posted by ggbutcher
It's interesting how the simplistic premise of this thread digs at the heart of what a lot of us here consider in securing out future. The OP certainly missed such considerations as medical (what a lot of my otherwise well-prepared acquaintances are struggling with) and contingencies, but living on $3700/mo is not so unreasonable. I periodically re-assess our mandatory living expenses, and I come up well below that number even for non-nominal scenarios.
That's the most significant thing I came to when I started actually planning out our retirement, the distinction between mandatory and discretionary expenses. Now, my definition of "mandatory" is more along the lines of "three hots and a cot" (yes, military service can really lower your expectations ).
I think the most important aspect of this perspective has been to plan for certain things while income is in-coming, particularly a paid-off, well-repaired house in a reasonable cost-of-living area, and health care that doesn't break the bank (well, that was more at the expense of 20 years and a couple of hours of indentured service to the U.S. Air Force).
Frankly, in spite of all the things that it's missing, I'm praying our kids at very least have a plan along the OP's lines in mind.
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05-31-2017, 09:29 PM
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#199
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Thinks s/he gets paid by the post
Join Date: Jun 2016
Posts: 4,663
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Quote:
Originally Posted by rothlev
I agree -
Also - expenses so totally change over time.
eg: when working our income combined around 130k - two children to support, 25% tax bracket $1000 mortgage payment - 7.5% FICA 10 - 15% deferred income
Today - yes, way less income - but, no FICA, 15% tax bracket, no children, no mortgage, no deferred income
= way more spendable income
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Good point!
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05-31-2017, 11:23 PM
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#200
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Full time employment: Posting here.
Join Date: Dec 2013
Posts: 774
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The retirement industry loves people who think they'll need 80-100% of their pre retirement income.
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