Early Retirement Extreme

[harllee]

I hope I don't have to do it but I have looked at the numbers and I know my DH and I could live comfortably on just our SS payments. It gives me comfort to know we could if we have to.

 

[NW-Bound]

When I first came to this forum, the highest concern that ER wannabes had was the high cost of healthcare. Indeed, many had pre-existing conditions that prevented them from being able to get coverage at all.

Now, with ACA, that worry is largely gone. And with subsidies, healthcare is readily affordable, and even free for some.

The problem one faces is the transition to Medicare down the road. As one poster brought this up in a recent thread, a person without enough work credit may not be able to get inexpensive healthcare when he turns 65. I did not follow the thread closely to understand all the ramifications, but it's something to consider if an ER wants to quit work really early.

 

[NW-Bound]

I hope I don't have to do it but I have looked at the numbers and I know my DH and I could live comfortably on just our SS payments. It gives me comfort to know we could if we have to.

Yes.

As we have no debts, own our homes and vehicles, our expenses are much lower than when we were young. And as we also did not retire really early - my wife at 50 and myself at 55 - we will get enough from SS to live comfortably, particularly as I still defer mine.

When one gets too old to travel, and cuts back discretionary expenses like gift and charity givings if necessary, it does not take much to pay for utility bills and food. And I don't think old people can digest much Wagyu beef.

 

[daylatedollarshort]

The happiest man in the world found so far on brain wave studies is actually a Buddhist monk. I have never had my brain waves checked like that but I did have a test with some neurotransmitter results recently. My serotonin levels were pretty high. So I guess that proved to me that I can be frugal and happy most of the time, and I'm not just kidding myself. We have a less than 1% withdrawal rate after SS and pensions. I don't really see how raising our WR would raise my serotonin levels any higher.

 

[Dtail]

Yes.

As we have no debts, own our homes and vehicles, our expenses are much lower than when we were young. And as we also did not retire really early - my wife at 50 and myself at 55 - we will get enough from SS to live comfortably, particularly as I still defer mine.

When one gets too old to travel, and cuts back discretionary expenses like gift and charity givings if necessary, it does not take much to pay for utility bills and food. And I don't think old people can digest much Wagyu beef.

Bolded by me - I think RobbieB will be the eventual test for this comment.

 

[kgtest]

My wife and I have a fairly high NW yet I mow my own lawn, clean my own house, repair everything I can (thanks to YouTube), etc. but not sure I could live that extreme.

For me its a time > money equation. Right now, I have 3 little kids and I place a high value on supporting them as they are growing and don't want to miss a ton of memories from their childhood. It's a work/life balance for sure but I spend money to support there interests and I don't mind BTD on family vacations and outings.

We do somewhat watch our costs when shopping and I do a lot of things myself that I notice some of my neighbors hire out like lawn care, blowing my sprinkler system out, painting, gutter clearing, etc.

I did hire a plumber earlier this year when we had a sink backup that had consistently persisted to the point the plunger and snake weren't clearing the clog. Turns out the trap and some of the plumbing was slanted towards the disposal and had been caulked together so it required breaking the actual pipes and installing new ones. I am glad I didn't tackle that and the price to repair was fair considering the effort and expertise.

I also don't resurface my own asphalt drive, and usually find a deal under $325 for about 1250sq ft of surface. BUT I DO seal my concrete patio since its not as messy of a job and it's in the shade. I have much respect for those asphalt guys, its a dirty and HOT job with lots of self sufferings involved since I like it done on high temp days when the sealer really soaks in. The last 3 times I felt bad for the guy doing it as he is a little overweight which added ot his suffering but he seemed to enjoy his job and he did a good one so no discredit, just seemed like additional misery for him (I could be off on that though and everyone has their own story).

If my garage door spring breaks I will fix it myself. I've fixed my water heater, furnace, washer and dryer.

I hired out the deck build and patio build mainly because of the time factor again...but I did some of the finishing and prep work myself to save some money. Still ended up costing close to 40k though OUCH BTD.

As for Extreme ER, I want to live comfortably where my budget allows some cushion for surprise expenses. I do my own tree care, I could see that adding up quickly as we have a LOT of big tree's. I've saved thousands trimming and removing tree's that need it.

I do our own landscaping, and hauling of materials as I bought a dump trailer to haul mulch, rock, bricks etc. Replaced a few wood walls with brick. DW helps a LOT with the land/hardscape and now my son is getting old enough where he can help and does voluntarily lol.
DW does most of the indoor painting, she really enjoys it, but I will take outlets and other accessories off the walls for her and put them back on when she is done, clean out her brushes, buy the paint and supplies for her etc. We make a good team.

We do our own carpet cleaning, I see a lot of people hire that out. I bought my own Carpet Cleaner so I wouldn't need to hire it out. I sometimes do my own tire rotation, tire repair for nail holes and some mechanical work. I need to tackle an AC condenser, I was quoted around $650 to replace it and fill it with Chilling Freon...The parts to do the job are $75-140 plus tax for the condenser and 48oz of R-134A is about $72. Is it worth saving $500 in labor to do it myself. Probably. I already have all the tools to do the job. Even if it takes me 5 hours I am paying myself $100/hr instead of the mechanic.

Hard to tell what the future will hold, maybe all 3 of our kids live/move to different states so perhaps travel costs will be higher / more frequent than today. Gas will be more expensive, a given, taxes will be more expensive that's a given. As I age I might decide to hire out lawn care but maybe not...again hard to tell if the body will hold up over time, but hoping I have at least 30 to 40 more years of DIY. Once I am ER'd I will def attempt to do some of the repairs myself because I will have bought myself at min 40+ hrs of free time each week which is roughly an extra 2,000 hrs a year to get things done...but like I said for now time > money.

I want to get into cooking a bit more when I ER, making more elaborate dishes with more flavor...but with 3 kids a lot of times it seems like we are winging it to support the time they require to just get to our daily obligations. I think the key for me will be staying busy without BTD during ER. But if I can affort it then who cares.

 

[tmm99]

To each his own.

My grandfather was worth mid eight figures when he died...

Mid-eight figures? As in 50ish million dollars? Wow, even if he had a lot of children, that's a lot of money for everyone! He definitely should have blown some dough when he was alive!

 

[marko]

Mid-eight figures? As in 50ish million dollars? Wow, even if he had a lot of children, that's a lot of money for everyone! He definitely should have blown some dough when he was alive!

Well, after a half-dozen different taxes, charities, a dozen various heirs (related and unrelated) and bequests, misc fees, accountants and lawyers you'd be surprised how fast the money goes.

He was not a guy who was going to take steps to insure his estate kept the bulk of the assets (because that would have cost HIM money). "You'll get what's left when I die" and 'gift' was a four letter word for him.

But yes, he should've BTD. Still, we did ok as did mom and her brother even more so.

These aren't people who think like normal people. I've told the story here how he cut the pay of his housekeeper after she told him she lost her second job. Why? "Because I figured now she had nowhere else to go".

 

[ncbill]

I could winterize our 3 season cabin for $5000 (probably less). Property taxes and insurance are a little under $2000 a year. It's 300 yards from the beach. Theoretically we could live there for about 8 months a year, shut it down and spend the 4 coldest months in Mazatlán for about $6000 for a decent rental.

Add in food, utilities, entertainment, etc and we could live quite well on $20k a year with little or no sacrifice.

Hmmm....our mountain cabin (extended family) is used 7-8 months/year, then winterized by shutting off the water & water heater, draining the plumbing, & pouring RV antifreeze into all the traps.

Currently total costs (insurance, taxes, utilities) run ~$3,000/year.

And the miser with the 25" TV should check Facebook Marketplace...saw a 60" plasma HDTV on there for $200.

 

[Mulligan]

To each his own.

My grandfather was worth mid eight figures when he died but lived like a pauper. We found it very, very sad that he'd deprive himself needlessly. It was so unnecessary. He did spend a lot and lived quite well in his younger days but as time went on he got incredibly miserly.

YOLO, but remember "if you don't spend it, your heirs will!" (thanks gramps!)

When there's no need to go without, why do so? Yes, you shouldn't acquire things for the sake of it, but there's all sorts of options out there to make your life easier, more comfortable and more interesting. Doing without them when you can afford it seems as much a waste as spending irresponsibly.

DW's best friend is worth over $5MM and admonished us for buying a 70 inch TV! "My 25 inch TV plays the same picture" What a shame.

"He knows the price of everything and the value of nothing". Oscar Wilde

Marko, on a much smaller scale I had same situation with my dad. He was very frugal and unwillingly to spend his money. I tried to encourage him to spend it on himself and his wife and got nowhere. I said “its gonna get split 6 ways and pissed away”. He said, “I hope you all have as much fun pissing it away, as I had saving it”. So I gave up after that response.

 

[GenXguy]

Now, with ACA, that worry is largely gone. And with subsidies, healthcare is readily affordable, and even free for some.

I still worry about this as I'm looking at a possible retirement within a year with quite a few years left until Medicare age, and there's no guarantee the ACA won't get repealed after the 2024 election cycle while I would still be years from Medicare age.

As one poster brought this up in a recent thread, a person without enough work credit may not be able to get inexpensive healthcare when he turns 65.

That was probably me, although not about me, and SS benefits can be affected the same way.

 

[GenXguy]

I hope I don't have to do it but I have looked at the numbers and I know my DH and I could live comfortably on just our SS payments. It gives me comfort to know we could if we have to.

The promised SS benefit could pay for all my bare bones expenses and budgeted sinking fund dollars, but not discretionary spending, however, that assumes there are no cuts to benefits before or after I'm collecting benefits, so in reality, it might come up short. Thank goodness for the stash.

 

[Music Lover]

I could winterize our 3 season cabin for $5000 (probably less). Property taxes and insurance are a little under $2000 a year. It's 300 yards from the beach. Theoretically we could live there for about 8 months a year, shut it down and spend the 4 coldest months in Mazatlán for about $6000 for a decent rental.

Add in food, utilities, entertainment, etc and we could live quite well on $20k a year with little or no sacrifice.

Further to the above, by doing this we would live just as well...in fact, we would live better if you factor in that we would be avoiding 4 months of Canadian winter, and we would spend less money to do so. In addition, we would also have the proceeds from the house to enjoy.

 

[kgtest]

Marko, on a much smaller scale I had same situation with my dad. He was very frugal and unwillingly to spend his money. I tried to encourage him to spend it on himself and his wife and got nowhere. I said “its gonna get split 6 ways and pissed away”. He said, “I hope you all have as much fun pissing it away, as I had saving it”. So I gave up after that response.

My DF has a similar issue. He isn't mid 8s by any means, but the man has more then he personally would ever "need". He knows it. We do lots of estate planning and try and grow it together. But spending it is a sin. At 71 he has recently spent a little bit. He is paying for our whole fam and his grand kids to stay at a cabin for a weekend. He gifted my sister and I our Roth contribution last year (but not again this year). He will loan money out, but rarely ever a gift in the sense of the word, always to be paid back with many reminders as payments are made.

It's his money he can do as he wants...but if he tries to cut us out of the will....lol! He has no intentions of doing that. I tell him if it doubles every 5 yrs as it has been, and he lives to be 90 like most men in his family...we will be set for life and I won't have to work a day longer.

We are working on finding a florida property together...again. Tried round 1of this a couple years ago but it never panned out. Now we are gonna go at it again and try and find a side by side that he can stay in part time and VRBO the rest, while renting the second side out. Always needs to pay for itself type of deal. Grew up with depression era parents and never had much of a want. Occasionally he will surprise me though. He recycles his dixy cups by washing them in the dishwasher...still wears his work shirts from 5 yrs ago that were given to him and has duct tape holding his shoes AND his coat together that he found on the side of the road. The coat has the name Jim on it which is clearly not his, but its a game to him. I've seen people pay for his items at the gas station because he looks so much like a hobo that they thought he needed charity.

 

[DrRoy]

No way. We average $7K per half month, and I even mow my own lawn when I am home.

 

[arcyallen]

No way. We average $7K per half month, and I even mow my own lawn when I am home.

I think the benefit of reading the thoughts on ERE is you can possibly redefine what amount of spending is "ridiculous". I used to think $7k/year was ridiculous. I don't think it's for me, but I also don't think it's ridiculous anymore. I would have also thought spending $14k/mo was ridiculous before listening to some other voices. Now, while I don't think it's for me I also don't think it's ridiculous (or fancy) anymore.

Seeing the extremes in a different light helps us reduce the effect of "of COURSE!" thinking. We all get to define that for ourselves, but I think it's helpful that we're open to redefining it too.

Silly little example: Jacob recommends buying used older high quality furniture on Craigslist because if you ever need to sell it you'll likely get what you bought if for. I'd never thought of that! Right now, I have my coffee on a small "poolside table" I got from my friend from his parents house when they moved. I could have easily bought a fancy $10k table to do the job, but I actually love this table and where it came from. I call it my "Sweeney Heirloom", named after him. I think of it as one of the fanciest things I own!

 

[harllee]

No way. We average $7K per half month, and I even mow my own lawn when I am home.

So you spend $170,000 per year? Is it mainly on travel?

 

[Phroig]

I still worry about this as I'm looking at a possible retirement within a year with quite a few years left until Medicare age, and there's no guarantee the ACA won't get repealed after the 2024 election cycle while I would still be years from Medicare age.

This is exactly why I haven’t retired.

 

[Fermion]

The problem one faces is the transition to Medicare down the road. As one poster brought this up in a recent thread, a person without enough work credit may not be able to get inexpensive healthcare when he turns 65. I did not follow the thread closely to understand all the ramifications, but it's something to consider if an ER wants to quit work really early.

It was my understanding that you qualify for free part A if you OR your spouse have enough work credits. I think it would be very few married couples where both did not have enough work credits.

 

[daylatedollarshort]

I wasn't influenced by any of the early retirement bloggers, but my initial path to ER started with picking up a copy of Countryside magazine about homesteaders and realizing they they seemed to be living lower stress, healthier, and lower consumption lifestyles than we were. It really made me start to question how many modern day products we really need to be happy and how many we were buying more because of advertising.

After that I started reading books on happiness research and found a huge difference between the advertising version of happiness and what really makes people happy according to actual research. The happiness books have been real money savers because most of the factors don't cost a lot, like exercise, music, making more social connections and forest bathing.

Before that we were always trying to maximize how much we earned. Afterwards I realized it was pretty fruitful to try to try to figure out how to keep living better for less money, though it is still a lot more than $7K a year. We know someone who has a skilled trade job, a low overhead lifestyle and seems to live well on $20K a year, which they can make just working a couple of days a week. The rest of the time is spent taking classes, fishing, volunteering, and camping - hobbies that don't cost a lot of do tick off a lot of the happiness research boxes.

 

[marko]

Mid-eight figures? As in 50ish million dollars?

To clarify a bit, "mid 8 figures" could be anywhere between 25 and 75 IMO. He was on the lower end.

 

[Fermion]

My inheritances have been more along the lines of a rusty sander or maybe some pictures.

 

[aja8888]

My inheritances have been more along the lines of a rusty sander or maybe some pictures.

That's pretty much the story for me except that I had to also pay for the funerals.

 

[ncbill]

The promised SS benefit could pay for all my bare bones expenses and budgeted sinking fund dollars, but not discretionary spending, however, that assumes there are no cuts to benefits before or after I'm collecting benefits, so in reality, it might come up short. Thank goodness for the stash.

Sometimes it's all you gots.

Buried an aunt a few years ago who did the right thing...in her 50s once the kids were out of the house she refinanced the mortgage to a 15 year, planned to have it paid off around age 70, then retire.

But her entire department was outsourced just a few years later, so she had to refinance to a 30-year mortgage & cash in her pension to make it to SS at age 62, which became her sole income for the rest of her life.

By adding a HELOC she was able to stay in her home of over 30 years, visit her out-of-state kid (& grandkids) at least once a year.

But it was a pretty lean retirement on that SS check...~$1,500 before Medicare/Medigap/drug plan deductions last year she was alive.

She had drained the last of her IRA account shortly before I took over her finances roughly a year before the terminal cancer claimed her.

Even with the mortgage & HELOC I was able to get about half of the sales proceeds of her home to her beneficiaries.

 

[NW-Bound]

^^^ That $1500/month check still works out to $18K/year. And your aunt drew from IRA on top of that.

Still a far cry above $14K/year for a couple.