Is this Amount of Income Enough to Retire Early On?

[scrabbler1]

Your logic that it could be done by OP escapes me. You're spending more, own your home and are backed up by a FIRE portfolio that generates $30k in dividends alone.

How does that support your assertion that OP, without the home and dividend generating portfolio as back up in case of financial issues, could do it?

All I was doing was answering this question by the OP:

"I would like your opinion as to whether you think there is anywhere in the Northeast USA that a single person could retire early with $20,000 a year gross income (adjusted for inflation) before taxes? This amount would have to cover all living expenses, including mortgage/property taxes/utilities/ or rent and health insurance."

If you chose to read a whole lot more into my answer then that is your issue, not mine.

 

[youbet]

All I was doing was answering this question by the OP:

"I would like your opinion as to whether you think there is anywhere in the Northeast USA that a single person could retire early with $20,000 a year gross income (adjusted for inflation) before taxes? This amount would have to cover all living expenses, including mortgage/property taxes/utilities/ or rent and health insurance."

If you chose to read a whole lot more into my answer then that is your issue, not mine.

Perhaps I was reading more into your answer than you meant to imply. It just seemed like you were stating you spend more than $20k annually, don't have to pay rent or mortgage because you own your coop, have significant financial reserves to back you up and will collect a pension later. I just didn't see how that added up to OP living on $20k on an ongoing basis.

 

[NW-Bound]

Regardless of what one's cost of living is, it helps to have a lot of reserves, just in case.

As many here know, I got really interested in the life of RV full-timers, though I have no real interest in leading one (I might have long trips, but that's not the same). So, I stumbled across a blog of a couple who have been doing fine, until the wife had to rush to the hospital, for fear of a heart attack.

It turned out to be...

a heartburn. Her 2-day stay in the hospital cost them plenty, which they did not reveal. I also did not recall reading them say anything about health insurance, or perhaps if they did have it, it came with a high deductible like our $10K/yr.

Anyway, they suddenly had a budget shortfall, and had to spend last summer work-camping to make up that money by working 8 hrs/day at the minimum wage, and only recently finished that job.

They seem a very upbeat couple, and are able to handle the short detour in their life with their outlook intact. I admire people like that, but my gloomy nature would make me swear at myself for not having sufficient funding for such emergencies. Or worse, it might make me angry at my wife for not being able to tell a heartburn from a heart attack. Or my wife might feel guilty.

So, whatever one does, the main issue is "Know thyself".

 

[obgyn65]

+1

So, whatever one does, the main issue is "Know thyself".

 

[easysurfer]

The OP isn't the only one who pondered the question:

Marty Nemko: How I Could Live Decently on $20,000 a Year

+1 on the know thyself.

 

[Bossonova]

You might have a shot in Western Mass. Health Insurance is state mandated and there are subsidized policies for people with low incomes. You could probably rent a place in Springfield area for $600/month., lower if roommate situation. You would need to be mega frugal.

 

[plex]

Quite possible, especially if the health insurance subsidies actually do kick in as they are slated to in 2014. It would cost less than $800/year+actual costs.

Only major issue left would be housing, you'd either need to either find something in an inexpensive, low tax area of the country for $100k or keep your rent below $800/month.

Lifestyle wise, you would need to have very inexpensive hobbies. Very little travel. You could have an inexpensive car, but you'd need to keep driving it to a minimum, mostly grocery store trips.

Doable anywhere, grad students live on less than $20k in every single city in the country, I know I lived on half that.

 

[forest_parks]

No not in the Northeast but if you will move west then

Cheapest places to live in America – Topeka, KS for under $840 a month

Thanks very much for linking my article. The article is old so not sure how relevant the actual pricing is but I am pretty sure you could still get by cheap in the mid west.

Most of my recent talks and research has been pointing to Texas with Austin being a very vibrant and affordable city to live in.

 

[RonBoyd]

Most of my recent talks and research has been pointing to Texas with Austin being a very vibrant and affordable city to live in.

And there are such beautiful sunrises: http://www.early-retirement.org/forums/f29/what-did-you-do-today-37868-309.html#post1005617

Who could ask for anything more? Spread the word.

 

[forest_parks]

Wow that is a beautiful pic! I am in Cairo right now and sunrises tend to be a bit hazed by pollution but I was out in the desert last week and wow, just wow!!!

 

[REWahoo]

Sheesh. This unbridled enthusiasm needs tempering with the facts:

"Texas is infested with scorpions, rattlesnakes, fire ants, crazy raspberry ants, cockroaches on steroids, killer bees, mosquitoes, ticks, chiggers, tarantulas, brown recluse spiders, love bugs, swarming crickets, copperheads, cottonmouths, rabid skunks, wild hogs, alligators, oppressive heat & humidity, bleak desolate scenery, dirty beaches, polluted air, dust storms, drought, wildfires, water shortages, recurring floods, tornadoes, hurricanes, rednecks, huge piles of flaming mulch, spontaneously combusting playgrounds, roads hot as flowing lava, the stench of natural and unnatural gasses, pirate attacks and amoebic meningitis lurking in area lakes, recurring ebola virus outbreaks, flesh eating bacteria, the highest homeowner insurance rates in the US, unbelievably high property taxes, mandatory death sentences for DUI convictions, polygamous religious sects, and, lest we forget, doesn't look kindly towards Yankees (per Orchidflower)."

 

[zinger1457]

You might have a shot in Western Mass. Health Insurance is state mandated and there are subsidized policies for people with low incomes.

Sounds like a new topic for a book, "How to Retire Early on the Backs of Taxpayers".

 

[RonBoyd]

Sheesh. This unbridled enthusiasm needs tempering with the facts:

And never a dull moment. What more can one ask for?

 

[REWahoo]

What more can one ask for?

Colorado.

 

[RonBoyd]

Colorado.

Colorado has none of those things. It is a nice place to visit, though. (Bring your money.)

 

[FUEGO]

Sounds like a new topic for a book, "How to Retire Early on the Backs of Taxpayers".

I think most people looking to RE in the next few years may be looking forward to subsidies for health insurance. I know I am. They are offering subsidies for those "earning" up to 400% of the poverty level. And "earnings" are defined as your 1040 AGI, an income stream which can be optimized to get you an optimal level of subsidies (assuming you have some Roth, some taxable accounts, and some Trad IRA's/401ks).

 

[fisherman]

Sheesh. This unbridled enthusiasm needs tempering with the facts:

"Texas is infested with scorpions, rattlesnakes, fire ants, crazy raspberry ants, cockroaches on steroids, killer bees, mosquitoes, ticks, chiggers, tarantulas, brown recluse spiders, love bugs, swarming crickets, copperheads, cottonmouths, rabid skunks, wild hogs, alligators, oppressive heat & humidity, bleak desolate scenery, dirty beaches, polluted air, dust storms, drought, wildfires, water shortages, recurring floods, tornadoes, hurricanes, rednecks, huge piles of flaming mulch, spontaneously combusting playgrounds, roads hot as flowing lava, the stench of natural and unnatural gasses, pirate attacks and amoebic meningitis lurking in area lakes, recurring ebola virus outbreaks, flesh eating bacteria, the highest homeowner insurance rates in the US, unbelievably high property taxes, mandatory death sentences for DUI convictions, polygamous religious sects, and, lest we forget, doesn't look kindly towards Yankees (per Orchidflower)."

Sounds like my inlaws home also if you through in Radical politics!

 

[nun]

In MA on $20k a year you'd qualify for the state "Commonwealth Care" health insurance program and probably pay around $100 a month in premiums. In Boston you can rent a room in a flat share for $800 (maybe a bit less) a month. So those two items would take up half your budget. It would be difficult to live a "normal" life.

I'm looking at ERing on $30k/year (after tax) in Boston after the house is paid off.

 

[52andout]

There are lots of places where you can live this cheaply but are the trade offs worth it. Here in upstate NY there are lots of run down small towns with cheap rents but I wouldn't want to live there. If you live on so little you are going to be living among many people on public assistance, people that are trying to stay out of work any way possible (ie disability, workers comp) etc, people that know how to use the system, or work under the radar with drugs, stolen goods etc.

There are many people on disability, workers comp, and even some public assistance that are deserving, hard working people down on their luck, but from my personal experience in the small inexpensive town I moved from they were in the minority. You may have better luck than I did. Now that I moved to a town where expenses are higher there is much less crime, a great library, good grocery stores and a general attitude of personal responsibility and pride.

 

[haha]

There are lots of places where you can live this cheaply but are the trade offs worth it. Here in upstate NY there are lots of run down small towns with cheap rents but I wouldn't want to live there. If you live on so little you are going to be living among many people on public assistance, people that are trying to stay out of work any way possible (ie disability, workers comp) etc, people that know how to use the system, or work under the radar with drugs, stolen goods etc.

There are many people on disability, workers comp, and even some public assistance that are deserving, hard working people down on their luck, but from my personal experience in the small inexpensive town I moved from they were in the minority. You may have better luck than I did. Now that I moved to a town where expenses are higher there is much less crime, a great library, good grocery stores and a general attitude of personal responsibility and pride.

This is a post from someone who knows what he is talking about. I often have this-"where could they possibly be talking about feeling" when members post about how to live very cheaply. Unless there is some place in America where there are no drugs, no section 8, no illegals living 8 to an apartment, no street crime or break-ins in cheap neighborhoods, etc- then this stuff is mostly fantasy.

Most people living on very little are not former college professors who got tired of working, but read Wittgenstein in their cherished leisure. On very little money, a formerly middle class person is at a great disadvantage to people to have entire communities of information sharing (often in languages that the fallen middle class person will not even understand), entire bureaucracies devoted to keeping these communities pacified, schools that will not even begin to be safe, let alone give an adequate education to any children that one might have, no acceptance by neighbors, etc.etc.

One does what he has to do, but IMO to elect this situation reflects desperation for which there must be better answers.

There is enough happytalk BS out there to make it wise to stop, look, and listen very carefully.

Ha

 

[youbet]

This is a post from someone who knows what he is talking about. I often have this-"where could they possibly be talking about feeling" when members post about how to live very cheaply. Unless there is some place in America where there are no drugs, no section 8, no illegals living 8 to an apartment, no street crime or break-ins in cheap neighborhoods, etc- then this stuff is mostly fantasy.

Most people living on very little are not former college professors who got tired of working, but read Wittgenstein in their cherished leisure. On very little money, a formerly middle class person is at a great disadvantage to people to have entire communities of information sharing (often in languages that the fallen middle class person will not even understand), entire bureaucracies devoted to keeping these communities pacified, schools that will not even begin to be safe, let alone give an adequate education to any children that one might have, no acceptance by neighbors, etc.etc.

One does what he has to do, but IMO to elect this situation reflects desperation for which there must be better answers.

There is enough happytalk BS out there to make it wise to stop, look, and listen very carefully.

Ha

+1

Excellent point Ha. I agree, much of the low income community is made up of folks who wouldn't necessarily share the values of a previously middle class, now income-challenged, early retiree. Finding a community of kindred spirits amongst the poor with whom to dwell would be one of the biggest challenges. I'm sure it's possible and I know how I'd go about it. But I'd be darn sure where and amongst who I was going to dwell before I permanently pulled the switch and began a life of low income survival.

 

[Independent]

This is a post from someone who knows what he is talking about. I often have this-"where could they possibly be talking about feeling" when members post about how to live very cheaply. Unless there is some place in America where there are no drugs, no section 8, no illegals living 8 to an apartment, no street crime or break-ins in cheap neighborhoods, etc- then this stuff is mostly fantasy.
Ha

I live in an Iowa college town and county seat with a population around 10,000. I've probably ridden my bike on every block in town, I can't think of any place where I would worry about street crime. I'm sure we have drugs and section 8 users, but there isn't a neighborhood that feels dangerous.

There are a couple houses in the the paper listed at $100k, I'm not sure what that converts to in rent.

 

[plex]

Oh come on now, lets not get ridiculous, it isn't that hard to find affordable housing in a good area. My parents live in one of the most affluent areas in the country, and there are town houses (1500 sq ft) a couple blocks away that buy/sell in the low 100k range. I actually saw some of my former engineering college graduates living over there.

Sure, you won't necessarily get a 3,000+ sq ft house for anywhere near that amount (or if you live on the California coast), but you certainly don't need to be living with the lower class either.

 

[RonBoyd]

I live in an Iowa college town and county seat with a population around 10,000. I've probably ridden my bike on every block in town, I can't think of any place where I would worry about street crime. I'm sure we have drugs and section 8 users, but there isn't a neighborhood that feels dangerous.

I have been to Topeka, Kansas (many times) and that pretty well describes that town, also.

 

[youbet]

Oh come on now, lets not get ridiculous, it isn't that hard to find affordable housing in a good area. My parents live in one of the most affluent areas in the country, and there are town houses (1500 sq ft) a couple blocks away that buy/sell in the low 100k range. I actually saw some of my former engineering college graduates living over there.

Sure, you won't necessarily get a 3,000+ sq ft house for anywhere near that amount (or if you live on the California coast), but you certainly don't need to be living with the lower class either.

I think your definition of "affordable" housing and mine are different. Just saving the downpayment for a $120k townhouse would be a challenge on a $20k/yr pre-tax income. Then the PITI, association fees and utilities would need to be paid. Kind of a stretch on $20k pre-tax.

Given you're paying rent, med insurance and all other support for yourself, you'd have to research your situation carefully to avoid "living with the lower class" (as you put it). You'd be in the equivalent situation to someone who was working for $10/hour with no benefits. And that's not middle class.

In any case, my position is not that it can't be done. I'd just be darn sure of what my surrounding would be like before I jumped in. Here in the Chicago area there are some accomodations available in the $600 - $700 range. But I'd spend a lot of time hanging around those buildings before signing a lease to ensure I'd be a happy camper while living there. I think it would be hard to find a community where my middle class values would be commonly shared in that price range.