Sub $1M no pension retirement? Any out there?

[garyt]

I'm looking for people who have retired with a sub $1 million dollar nest egg, no pension.
So many people on this board have huge money that I can't relate . I'm interested from hearing from people who've retired on much less.
Anybody here living on just savings and SS? My wife and I are just average joes, neither of us have ever made over $45K. We have a little north of $800K, will take SS at 62 getting about $30k total. Healthcare is keeping me working.
Just wondering if there are other people in the same boat?
.

 

[Dawg52]

My parents certainly retired on less than $800k. My Dad did receive disability benefits that added to SS. They lived a fugal life and didn't travel the world, but they were happy.

 

[Dash man]

I'm looking for people who have retired with a sub $1 million dollar nest egg, no pension.
So many people on this board have huge money that I can't relate . I'm interested from hearing from people who've retired on much less.
Anybody here living on just savings and SS? My wife and I are just average joes, neither of us have ever made over $45K. We have a little north of $800K, will take SS at 62 getting about $30k total. Healthcare is keeping me working.
Just wondering if there are other people in the same boat?
.

Healthcare is a huge expense. Is there a reason you can't work until 65 so you get Medicare and then start SS? Starting SS at 62 significantly lowers your benefit plus you'll have to pay the going rate for health care, which isn't cheap.

 

[nativenewenglander]

My parents retired in 1994 with around $900,000. They travel a lot the first 8 years or so then week long trips at the lake house was the norm after that. My parents were very generous and gave lots of money away helping various relatives and still had plenty of money to live. Their money had doubled in the years leading to their passing in 2012 and 2016. You'll find a way to make the money you have give the income you need along with SS.

 

[NW-Bound]

I know plenty of people who did not retire with $1M, my parents included. And people were fine, and they traveled internationally too.

The healthcare cost is the only thing scary. The closer one is to 65 for Medicare, the quicker one passes through the hazardous years.

 

[Blueskies123]

I do not think you can count on the market doing as well for the next 10 years as the last 10-20 years. If the market returns 3-4% and health care costs $20K a year with 5% inflation you might consider working a few more years.
If you are dead set retiring with not enough money am option is to find an extremely low cost of living area and relocate. Maybe rural West Virginia, Alabama, or Mississippi.

 

[Maenad]

A lot of folks over on the Mr. Money Mustache forum are doing just that, and much younger too. There have been plenty of arguments about whether it's particularly wise to do so, but that forum can definitely help you with keeping your expenses down!

 

[bmcgonig]

I'm looking for people who have retired with a sub $1 million dollar nest egg, no pension.
So many people on this board have huge money that I can't relate . I'm interested from hearing from people who've retired on much less.
Anybody here living on just savings and SS? My wife and I are just average joes, neither of us have ever made over $45K. We have a little north of $800K, will take SS at 62 getting about $30k total. Healthcare is keeping me working.
Just wondering if there are other people in the same boat?
.

If you've never made more than 45k/yr and you have more than 800k, you're certainly no average joes.

Well done.

 

[cyber888]

It is very doable. I live in the South and so cost of living is nowhere near the big cities. We also cook at home and rarely eat out. I wont retire for another few years, but i did the numbers. $800k is ok. It will be better if you dont have a mortgage. If you have a mortgage, you can refinance so you wont be paying more than $700/month. And keep being healthy too - exercise daily + good nutrition

 

[INTJ10]

I'm looking for people who have retired with a sub $1 million dollar nest egg, no pension.
So many people on this board have huge money that I can't relate . I'm interested from hearing from people who've retired on much less.
Anybody here living on just savings and SS? My wife and I are just average joes, neither of us have ever made over $45K. We have a little north of $800K, will take SS at 62 getting about $30k total. Healthcare is keeping me working.
Just wondering if there are other people in the same boat?
.

It would seem that you would be a good position for subsidized healthcare from the ACA. So, in a way, if you are comfortable with a lower income your advantaged over those who require a higher income. Because the higher income disqualifies you for ACA subsidies.

 

[alaska55]

I do not think you can count on the market doing as well for the next 10 years as the last 10-20 years. If the market returns 3-4% and health care costs $20K a year with 5% inflation you might consider working a few more years.
If you are dead set retiring with not enough money am option is to find an extremely low cost of living area and relocate. Maybe rural West Virginia, Alabama, or Mississippi.

can I borrow your crystal ball. Everbody is predicting slow growth, and with slow growth inflation will mostly likey stay under 3 1/2%( i will lend you my crystal ball). Market returns have been best when inflation is from 2% to 3%.

 

[scrabbler1]

When I ERed in late 2008, I had about $600k in my taxable account which is the only type of account I have been living on for the last 8 years and will keep living on until my "reinforcements" kick in starting in 5 or 6 years. I have a small, frozen company pension I can't tap into until I turn 65. I can begin taking SS at 62 but I plan to wait a few more years unless I am forced to tap into it. (It is also not a huge amount because I worked only 23 years.) I have a tIRA I can gain unfettered access to at 59.5.


And my taxable account (majority bonds) has risen to about $900k since the market lows of late 2008 and early 2009, despite not reinvesting about $20k-$25k of dividends every year to cover my expenses. The IRA has more than doubled since its market lows, to over $500k.


Garyt, maybe you can work until 63.5, then go on COBRA to hold you over until you are 65 and can begin Medicare. That's what my dad did in 1994 to maintain uninterrupted medical insurance.

 

[nash031]

I do not think you can count on the market doing as well for the next 10 years as the last 10-20 years. If the market returns 3-4% and health care costs $20K a year with 5% inflation you might consider working a few more years.
If you are dead set retiring with not enough money am option is to find an extremely low cost of living area and relocate. Maybe rural West Virginia, Alabama, or Mississippi.

Over the last 20 years, the S&P has averaged 3.5% real return (after inflation). With dividends reinvested, it goes up to 5.4%.

In the last 15 years, it's returned 2.8% and 4.9% with dividends after inflation.

In the last 10 years, it ticks up to 3.7% and 5.9% after inflation.

So, not sure what your point is about the market. It seems to perform exactly how you predict it will right now.

 

[Carpediem]

garyt, Have you checked into your ACA costs if you retired before Medicare? Unfortunately we're 'over the cliff' so we'd end up paying around $18k-$20k per year in premiums alone.

 

[alaska55]

Now on to OP question, I retired 3 1/2 years ago with about 425,000 spilt 50/50 betweenn a IRA and taxable account with a very small pension of $257 a month starting at 65. I will start SS in August at 62 of about $1750. I'm single so that's about half of $800k. I topped out in the 50k range late in my working years. I did inherit a certain period annuity of $550 a month that ends at 66. I'm up to 450k and at 3.75% WD rate that give me about 41K a year to live on after 66 which is just fine for me. I can easily live on 30K a year.

 

[LauAnn]

i retired 4 years ago at 55. Spent about $270,000 on a life-time annuity which generates $14,500 each year. I am supplementing the annuity using savings of $12,000 each year until until I take SS at 62 at which point I will still have $150,000 left in savings which will generate $3500 interest that I'll be taking. The remaining principal will be saved for emergencies and a modest car replacement when I am 70.

I have no mortgage on my home. My former employer pays half of my health insurance until I reach 65. My retirement thus far has been great.

 

[IMATERP]

I'm looking for people who have retired with a sub $1 million dollar nest egg, no pension.
So many people on this board have huge money that I can't relate . I'm interested from hearing from people who've retired on much less.
Anybody here living on just savings and SS? My wife and I are just average joes, neither of us have ever made over $45K. We have a little north of $800K, will take SS at 62 getting about $30k total. Healthcare is keeping me working.
Just wondering if there are other people in the same boat?
.

The simplest way for me to look at this would be to take the 800K and place it in the Vanguard Managed Payout fund - which should net you 4% each year (32K.) If you take your 32K and add SS (30K) - you would have 62K a year to live off of.

Can you cover all of your expenses (including healthcare) on $62K a year ?

It really depends on the quality of life that you want to live... My father lived on disability and SS in a small coal town in Western, PA on 25K a year. His rent was 150 a month and beer was .35 cents a glass (in 2002.) He never travellled, didn't own a car, etc. He survived but in my eyes - his quality of life was quite sad.

Thus, the real question isn't how much you've saved, but how much you desire to spend based on hobbies in conjunction with your actual needs.

Michael

 

[Murf2]

I'm no expert but I would think that if you are trying to retire with less than 1M your ACA costs would be way less than 20K. I realize ACA may not be here in the future but I think they will be careful about how they treat us old folks.
We are living off less than 1M total savings. So far so good. We live in a low COLA area and own our home. Our ACA costs, with dental, are less than $100 a month. YMMV.

 

[FIREd]

I know plenty of people who retired on SS and a smaller nest egg, though they all retired past the age of 65, so healthcare was less of a concern for them.

My MIL for example retired with SS, $200K, and a paid-for house in the South. She annuitized most of her $200K (SPIA with cost of living adjustment) and took a reverse mortgage on the house. She now has $2,500 a month to live on, which is sufficient. She is on Medicare, she does not travel much except for taking a few regional road trips with friends. Her friends are all in the same boat.

 

[gerntz]

My parents retired in 1994 with around $900,000. They travel a lot the first 8 years or so then week long trips at the lake house was the norm after that. My parents were very generous and gave lots of money away helping various relatives and still had plenty of money to live. Their money had doubled in the years leading to their passing in 2012 and 2016. You'll find a way to make the money you have give the income you need along with SS.

The CPI increase since 1994 is 64% making $900K = ~$1.5M today.

 

[gerntz]

If you've never made more than 45k/yr and you have more than 800k, you're certainly no average joes.

Well done.

You're exactly right.

 

[brewer12345]

OP, this is just about basic math. You know your expenses better than any stranger on a message board. Will your income streams and assets cover your expenses? If yes, then it is likely you can go out with whatever asset level that implies. The wildcard is healthcare expenses. Whither the ACA and how likely is it not to blow up? The answer is that none of us know, we can only acknowledge it as a risk and plan accordingly. In your shoes, if your resources cover your expenses I would spend some time and effort developing a contingency plan that helps you ideal with health insurance becoming unavailable or unaffordable. Can you possibly land a silly job that pays whatever but offers health insurance (Starbuck's, Costco, etc.)? Can you spend a few years overseas until you are eligible for Medicare? You will likely never have a bullet proof contingency plan, but with enough plausible options sketched out one of them will probably be workable if you need to resort to alternatives.

 

[ivinsfan]

If you've never made more than 45k/yr and you have more than 800k, you're certainly no average joes.

Well done.

I took that as two jobs, neither paying more then 45K..close to 90. it wasn't really clear to me as to annual income. Still a good job saving...

 

[daylatedollarshort]

I'm looking for people who have retired with a sub $1 million dollar nest egg, no pension.
So many people on this board have huge money that I can't relate . I'm interested from hearing from people who've retired on much less.
Anybody here living on just savings and SS? My wife and I are just average joes, neither of us have ever made over $45K. We have a little north of $800K, will take SS at 62 getting about $30k total. Healthcare is keeping me working.
Just wondering if there are other people in the same boat?
.

Most people have no choice but to retire on much less and seem to make do. Mean investment income for households 65 and older is $3.5K a year according to the 2015 Consumer Expenditure Survey - https://www.bls.gov/cex/2015/combined/age.pdf.

Vanguard counts wealthier retirees as those with $100K in investable assets - https://personal.vanguard.com/pdf/CRRRIP.pdf. Median financial wealth in their survey was $395K, so you have twice that.

As other posters noted, retiring before Medicare age and without retiree health insurance is a bit trickier. The ACA made it easier with subsidies and no preexisting conditions clause, but that could all change overnight or at any future date. Under the latest repeal and replace plan, the AARP has stated their age 55+ members would get hammered on premiums alone, plus a lot of individual plans these days have high deductibles and out of pockets costs.

 

[garyt]

Healthcare is a huge expense. Is there a reason you can't work until 65 so you get Medicare and then start SS? Starting SS at 62 significantly lowers your benefit plus you'll have to pay the going rate for health care, which isn't cheap.

I could work till 65 and will if necessary, but I'd rather live modestly and retired if possible.