Major Tom
Thinks s/he gets paid by the post
I still feel jilted that an under 25K option wasn't included. It's tough for a poor boy to get any respect around these parts
FWIW, except for the healthcare, we'd have no problem getting down below $25K (for 2) if it were necessary. Our early planning back in 1989, was well below that.I still feel jilted that an under 25K option wasn't included. It's tough for a poor boy to get any respect around these parts
OK, see a theoretical breakout below. A $200K limit is really going to reign in some of the luxuries. A 'problem' for $5MM+ asset folks is that taxes are still a major expense category as you will be depending on your portfolio to throw off 5% or so in capital gains / dividends per year and most of these will be taxed at the higher marginal federal, state + ACA rates. And the tax situation may indeed be even worse if a good percentage of your assets are in non Roth IRA's and you are making RMD's.
All expenses are annualized:
Capital Gains Tax on 5% portfolio appreciation @ $5MM @ 25% $62,500
Real Estate Tax $22,000 for both properties? Do you really need the second home?
Upkeep, $1MM house at 3% per year $30,000 your choice
Second home / condo - assoc fees $12,000 this is an extravagance.
Maid @$1500 per month $18,000 not a lot if she has to clean a huge house!
Grounds keeper @$1000 per month $12,000 consider xeriscaping
Power @ $500 per month $6,000
Medical @ $3000 per month $36,000
Salon/Massage $5,000 stop coloring your hair, see if massages can be covered by a health insurance plan
Health Club / Trainer $4,800
Food @ $1200 per month $14,400 eat less, save on the trainer too
Dining Out - Once per week @ $150 $7,800 you choose to eat regularly at places that most people save for very special occasions
New Car @ $50,000 every three years $16,667 I just had an offer to replace my 2.5 year old vehicle with a new model for $7700
Upkeep on sailboat/power boat $12,000 extravagance
Gas / Diesel $5,000
Telephone/Cell $3,500 how many phones does one person need?
Internet / Cable $2,500
New laptop & ipad every two years $3,000
Gifts / Charitable $5,000 I'm surprised this category is not higher. Are there opportunities for tax deductible charitable giving?
Clothes / Misc @ $3000 per month $36,000 last year I spent $200 on clothes
Three vacations per year, business class tickets + $15000 spend money (each) $72,000 what is the second home for?
Annual Spend $323,667
Amount Available $200,000
Where do you cut from here ? $200K could almost be consider poor folk ?
That is us too. Most years we go to Europe for a month and Mexico for 6 months. Some years we buy a newer car. Other years we buy newer furniture. We seldom buy clothes or baubles or gadgets.Need or want?
While I could find a way to live on about $25K (for 2), it's not the way we want to live. My vote went with to the $100K+ option because that's what we have and we like the option of spending it all. Some years we do, some we don't.
I personally don't see anything wrong with $200K per year. If you have $5MM+ in assets - why not ? A few toys, a few upgrades, a few international vacations, a CC membership - $200K can go very quickly.
Sent from my iPad using Early Retirement Forum
US average spending for
Couples, both over 60: $55,800 + income tax
Singles, ages 60-79: .. $30,600 + income tax
People answering this Early Retirement Forum survey seem to be skewed toward spending levels above the national average.
When you meet Mr. Most People, say hi for me. I have never met him.I am not saying that it is not possible. I am not saying there is anything "wrong" with $200k per year. I will say it seems a bit extravagant for most people.
After seeing these numbers I feel like a pauper. Under 25k not even a choice.
When you meet Mr. Most People, say hi for me. I have never met him.
Yes, somewhat curious, but only because seeing details of others' spending helps to paint a picture of the variety of different lifestyles our members have. As MichaelB commented, the OP asked how much we felt we needed for retirement, and not how much we felt others should need. ER1970 estimated that he needed 200K, so why should we question that?Is no one else curious about this $200+ annual expenses?
Can we see a rough breakdown of this?
What are these expenses of over $16,000 a month?
Country club dues?
To quote the White Coat Investor- “If you can’t live on $200,000 a year, you have a spending problem, not an earning problem."
US average spending for
Couples, both over 60: $55,800 + income tax
Singles, ages 60-79: .. $30,600 + income tax
People answering this Early Retirement Forum survey seem to be skewed toward spending levels above the national average.
I think I can reconcile your number with my numbers.Couples (family = 1.8 persons) age 65 and older the expenditures drop to $41,000
http://www.bls.gov/cex/2013/combined/age.pdf
....
Personally, I like the fact that here, I get to rub shoulders with a few people who spend as little as I do, along with many who spend a bit more, and a few who spend considerably more. It makes the place more interesting - not so much because of the dollar amounts, but because of the variety of different lifestyles that are represented.
I suppose I'm starting to sound a bit like a mod but I feel very strongly that we should all strive to be inclusive, and not to pick on someone simply because their income requirements in retirement differ widely from ours.
Viva la différence!
Y
I suppose I'm starting to sound a bit like a mod but I feel very strongly that we should all strive to be inclusive, and not to pick on someone simply because their income requirements in retirement differ widely from ours.
Viva la différence!
I agree that it is unfair to criticize someone's spending levels just because they aren't like yours. That would be like calling someone else's beautiful home a "McMansion" just because you don't need that much space, or someone's much younger spouse a "trophy" because of their age. In other words, it smacks of jealousy.