Poll: Target monthly retirement income

[RE2Boys]

When I first retired 17 years ago, I kept track of stuff like this. Stopped about five years ago and I have no such target or concern. Live mostly off of pension, SS, part time keep busy jobs from month to month.

I only track my withdrawals from investment accounts per year. As long as they are under 4% per year, I don't have any concern. Of course, my long ingrained habits of LBYM keep spending comfortably in check.

 

[Perryinva]

$60-$72k per year is considered very frugal?

 

[2017ish]

$60-$72k per year is considered very frugal?

With the typo omitting the "thousand" from $5-6 per month, it would seem pretty frugal!

At least that was my impression of the point Mead was making.

 

[Ed B]

With the typo omitting the "thousand" from $5-6 per month, it would seem pretty frugal!

At least that was my impression of the point Mead was making.

Concur. I read it as tongue in cheek because five to six dollars a month is very frugal indeed. It wouldn't cover my current monthly coffee budget.

 

[AndyS]

Monthly retirement income after retirement is such a fundamental number that I thought it would be interesting to see the histogram for this select population. Based on folk's introduction posts, with items like "130k pension" and "5M nest egg", I suspect I get blown out of the water. Anyway, let's see!

Q: What is your planned, or actual, after-tax monthly income for retirement? This includes everything ... nest egg withdrawals, rentals, part time work, the whole kaboodle.

This means household income.

Both pre and post retirees can reply.

Once you get beyond the basic necessities of food, shelter, health care .... this is really kind of a big psychology thing.

I don't know about the rest of ya'll but my monthly retirement income would have been incrementally higher had I decided to retire at 57, 62, 65, 67 etc than it is since I decided to retire early at 49. I accepted that fact though when I made the decision RE, and suffice it to say ... it's sufficient.

You can ask someone making 25k a year how much would be enough they would be happy with their income and they might say 40k. Ask someone making 100k and they might say $150k. Ask someone making a million and they might say 2 million. Seems to me, regardless of their income level, anyone you might ask the question "How much is enough", the answer always seems to be "just a little bit more." The key, I think ... is to ask how much one needs to be happy/content. That will vary widely based on the person. Wherever the actual number falls on the scale is, therefore, kind of irrelevant.

 

[Gumby]

I expect our spending in retirement will be substantially less than our income.

 

[daylatedollarshort]

Once you get beyond the basic necessities of food, shelter, health care .... this is really kind of a big psychology thing.

I don't know about the rest of ya'll but my monthly retirement income would have been incrementally higher had I decided to retire at 57, 62, 65, 67 etc than it is since I decided to retire early at 49. I accepted that fact though when I made the decision RE, and suffice it to say ... it's sufficient.

You can ask someone making 25k a year how much would be enough they would be happy with their income and they might say 40k. Ask someone making 100k and they might say $150k. Ask someone making a million and they might say 2 million. Seems to me, regardless of their income level, anyone you might ask the question "How much is enough", the answer always seems to be "just a little bit more." The key, I think ... is to ask how much one needs to be happy/content. That will vary widely based on the person. Wherever the actual number falls on the scale is, therefore, kind of irrelevant.

That was one of the points that stuck with me from the Your Money or Your Life book - if more is always better than what you have is never enough.

 

[Danmar]

That was one of the points that stuck with me from the Your Money or Your Life book - if more is always better than what you have is never enough.

I suppose some people may feel this way, but I think one can acknowledge they have “enough” but also that a little more would be better? I can.

 

[mshelburne]

5k per month starting in 2019

 

[retired1]

Highest % shows $8000-$8999. Wow... that's surprising. For me $4k/mo will suffice.

 

[pj.mask]

I’m targeting around $9k/mo as my desired goal (to make an even 10 would push me past my targeted age). Think I could get by on much less but would be nice when traveling to not book one of the cheapest hotels but instead find something nearby.

Food is another expense - you can always buy ground round at Walmart for cheap but if you want marbling in your meat and organic/uncommon fruits and veggies - it add a bit to the bill.

Currently 20% of spending goes to childcare. I believe my budget will adjust a lot between then and now. We will see.

 

[MarieIG]

I would love to see lifestyle details of the $20K/month club. How many homes? How big are they? Which travel/tour companies do you use? What are your indulgences?

None of my business, I know, but it would be fun to know

20K a month is not necessarily an extravagant life style in a HCOLA; and if one spouse has expensive medical, or nursing home needs . . .

However, in a LCOLA, if one kept a handle on their expenses, one could easily fit in a very, very, nice travel budget.

I have several wealthy relatives. The usual for them is two homes (primary and beach home), although one has two beach houses, one closer to his primary home. He has a large boat (I would not call it a yacht) and travels in his own plane. (His businesses own businesses.) The rest travel first class. Only one RE.

As far as I can see, their "indulgences" have included expensive weddings for the children, nice vehicles, nice vacations, and gifting their kiddos with paid for houses. Trusts for the grands. (The kiddos btw, are not bums, they all work.)

 

[Scuba]

I suppose some people may feel this way, but I think one can acknowledge they have “enough” but also that a little more would be better? I can.

+1
I feel we have "enough" but certainly would be OK with more! I don't think I'd ever run out of ideas for what to do with more, but I don't yearn for more as we are happy with our lifestyle "as is."

 

[Scuba]

Highest % shows $8000-$8999. Wow... that's surprising. For me $4k/mo will suffice.

So much depends on where one lives and when one purchased their home. For us, we need about $5K/month just to cover housing costs and state income taxes.

 

[tmm99]

Highest % shows $8000-$8999. Wow... that's surprising. For me $4k/mo will suffice.

Are you a single household? That may explain it.

 

[Danmar]

+1
I feel we have "enough" but certainly would be OK with more! I don't think I'd ever run out of ideas for what to do with more, but I don't yearn for more as we are happy with our lifestyle "as is."

Yes, totally agree.

 

[97guns]

My brother has been divorced for 10 years or so and is retired on a $2400 pension, his total monthly is around $3500, he makes it work. Free and clear house, couple of Harley’s, Chevy truck with a bass boat and a pretty sweet Benz, no loans on anything

 

[Mdlerth]

He doesn't realize how unhappy he is

My brother has been divorced for 10 years or so and is retired on a $2400 pension, his total monthly is around $3500, he makes it work. Free and clear house, couple of Harley’s, Chevy truck with a bass boat and a pretty sweet Benz, no loans on anything

I know a few women who would say about your brother "That poor guy sounds lonely. What he really needs is a wife! I just know my daughter would be a perfect match for him!"

 

[daylatedollarshort]

My brother has been divorced for 10 years or so and is retired on a $2400 pension, his total monthly is around $3500, he makes it work. Free and clear house, couple of Harley’s, Chevy truck with a bass boat and a pretty sweet Benz, no loans on anything

I have a couple of retired, widowed friends like that who do fine on a similar income even in the Bay Area, since they have no mortgage and low property taxes. One said she spoils the grandkids because she doesn't know what else to spend her money on.

 

[NW-Bound]

I would love to see lifestyle details of the $20K/month club. How many homes? How big are they? Which travel/tour companies do you use? What are your indulgences?

None of my business, I know, but it would be fun to know

I don't read People Magazine, but I think they have many articles on how rich and famous people spend their money, and some spend $20K each day.

If I had that much to spend, I would be too busy spending to socialize here.

Anyway, having less than that to spend, I still wonder if I should answer using what I actually spent vs. what I could spend. And what I actually spent vary more than 1.5x between the low and high years. Could have used the average, but I have been retired only for 5 years, and am not sure what the long term will be.

In short, I am still trying to figure this out. Don't want to spend too much, lest I ran short later, nor want to die with too much money. Hence, do not know what my target will be, other than it is definitely not off the poll scale.

 

[Amethyst]

Not taking a swipe at those who truly love to travel, but when we took our one expensive prepaid tour, we got the distinct impression "People (65-75) who have no idea what else to do with their money." Of the two dozen in our group, maybe 6 were excited about going places and seeing things, or wanted to talk about what we'd seen already. The rest just seemed to be along for the ride and mainly interested in what they would be eating/drinking. (Which is part of the fun, but still).

As far as I can see, their "indulgences" have included expensive weddings for the children, nice vehicles, nice vacations, and gifting their kiddos with paid for houses. Trusts for the grands. (The kiddos btw, are not bums, they all work.)

 

[Perryinva]

I read that multiple times and missed that there was no “k” in the number every time!

 

[Danmar]

20K a month is not necessarily an extravagant life style in a HCOLA; and if one spouse has expensive medical, or nursing home needs . . .

However, in a LCOLA, if one kept a handle on their expenses, one could easily fit in a very, very, nice travel budget.

I have several wealthy relatives. The usual for them is two homes (primary and beach home), although one has two beach houses, one closer to his primary home. He has a large boat (I would not call it a yacht) and travels in his own plane. (His businesses own businesses.) The rest travel first class. Only one RE.

As far as I can see, their "indulgences" have included expensive weddings for the children, nice vehicles, nice vacations, and gifting their kiddos with paid for houses. Trusts for the grands. (The kiddos btw, are not bums, they all work.)

I know people who appear to spend multiples of $20K per month. Agree they have expensive multiple homes, expensive trips(private arrangements often with friends/family paid for), luxury cars, maybe boats, designer clothes, expensive tasteful jewelry, very generous with family and charities. The kind of things you would expect really.

 

[kcowan]

I answered the question based on my planning figure before retirement. After 15 years retired, we spend much more on certain things but the total still stays surprisingly close to the original number. Even the extraordinary items seldom exceed the budgeted line.

It seems that old habit remain even when the financial constraints are removed. We are quicker to discard items that no longer meet our standards. But one of the biggest developments is that many items have gotten cheaper. High quality sound systems, for example.

We spend more than we need to on entertainment but it is still a drop in the bucket. Like danmar, we have friends who manage to spend much more, but, ironically, they do not blow a wad on a daily basis. They might drop a business class ticket on their daughter and SIL but that really does not make a dent.

And their Porches and Ferraris sit in the garage while they enjoy PV. We can easily keep up with them and stay within budget.

 

[Major Tom]

My first thought on seeing this thread was, "Yet another thread on how much retirement income we have/desire? Sheesh!" Then in the next breath I realized that this is the stuff which, for some reason, many of us seem to enjoy answering over and over and over again. Very soon, we'll see another "What is your WR?" thread

So I'll play. I voted for the bottom one, as I'm at the bottom of the heap. Living on $1500/month in retirement, which will increase in the future as SS comes along and I loosen up on the 2% WR and/or the portfolio grows.