Who needs a million $ cash to retire

[RetireBy90]

What we have here is a failure to communicate. Hahaha

Seems half are answering question “Is it possible to retire with less than $1M ?”
Other half are answering “Would I retire early with less than $1M ?”

I would say you can survive depending on where you live (and with limited income you should be open to moving if you live in higher cost area.) and your housing situation. House payment can be a budget buster without income to cover it.

 

[NW-Bound]

^^^ What's new?

A poster would state "2+2 = 4".

Another would reply "But 2x2 = 4".

Then, both maintain that they are right.

 

[Music Lover]

No costs for healthcare??

About $50 a month, I live in Canada.

 

[MarieIG]

We have 2 military pensions, 2 401k's, 2 SS, 1 ESOP and my wife currently has 29 years with the federal government. I think we should be just fine once we decide to retire.

Mike

I think you will too! Thank you for your service.

 

[MarieIG]

In case you didn't catch it, I was joking about Hawaii being low cost of living...partly! My point was, that to have a $13K annual property tax bill means either you live in a super high property tax state, or you have a mansion worth millions.


Well I have the property tax, but the house is 1750 square foot, three bedroom, 1 1/2 baths. Doesn't exactly feel like a mansion although it beats living under a bridge and I am grateful to have a roof over my head. No one is paying millions for it either. Property taxes in the State, however, are not uniform.

 

[ncbill]

Yep, as I pointed out on the "HCOL vs. MCOL vs LCOL" thread there are serious disadvantages to retiring in HCOL areas...often your required annual 'spend' simply to cover high property taxes/home maintenance costs means you can't qualify for generous ACA subsidies.

Here in our MCOL area $40,000 withdrawn from a $1 million portfolio, even if it all counts as mAGI, still would allow us to receive 90% subsidies on a silver-level ACA plan ($2600 maximum OOP)...drop that to $30,000 and it's a 95% subsidized premium.

Also, once you're over 65, $30k or less in annual income cuts property taxes in half here.

 

[Octogirl]

Good thread...I was calculating our living expenses for first 6 months of year this weekend.

Our property taxes - MCOL area - $7600/ year

Donations/gifts - $5000
Utilities $ 3600
Traveling is the flex amount - $5000 to 15,000 (and I 'd love to spend more! )

Health care about $4000 - lucky that we are healthy

 

[jkern]

Essentials: $2,400
Housing
Utilities
Food
Medical/Dental
Transportation

Routine spending $ 1,250
Clothes
Travel
Gifts
Recreation
Entertainment
Miscellaneous

Irregular Spending $ 1,250
Car replacement
Appliance Replacement
Major home maintenance
Home upgrades
Buying new stuff
All other stuff

Total for living standard: $ 4,900 or $ 58,800 per year

Whether I needed a $1M or not depends on my income sources. For me, rental income and SS will pretty much cover me. My IRA will be my emergency reserve.

 

[Nature Lover]

+1. Depends on other income/resources. The "old fashioned" approach was the 3-legged stool, that is: pensions, ss and investments. Today we refer to "multiple streams of income". So, whether we need a larger portfolio or a smaller one depends in large part on whether we have more non-portfolio income/resources or less; and of course, how those income streams/resources compare to our retirement lifestyle living expenses over the course of our planned retirement.

 

[NW-Bound]

Don't know if you need a million dollars to retire but sure is nice to have it.

Yes. More than 1 million is even nicer, even though many die before spending it all.

It's like the concurrent thread about a new $25K car vs. a $45K car. Some can pay $45K but do not care to. Just knowing that they can is good enough.

 

[RobbieB]

I need more than a mill because I bought the 45,000 dollar car.

 

[CardsFan]

I need more than a mill because I bought the 45,000 dollar car.

And Wagu beef, and king crab, and Maine lobster (but I can forgive you for this one, they are the best).

Actually, you are an inspiration.

 

[Karloff]

In case you didn't catch it, I was joking about Hawaii being low cost of living...partly! My point was, that to have a $13K annual property tax bill means either you live in a super high property tax state, or you have a mansion worth millions.


Well I have the property tax, but the house is 1750 square foot, three bedroom, 1 1/2 baths. Doesn't exactly feel like a mansion although it beats living under a bridge and I am grateful to have a roof over my head. No one is paying millions for it either. Property taxes in the State, however, are not uniform.

I hear you. Almost $8K/year here in SE FL, and we live in a 1500 sq/f 2/2 Condo... The unit costs about $20K/year between property taxes, HOA fees and insurance, and *without* a mortgage. I think it's crazy and these rates are not justifiable, at least not for a non-luxury condo. We are seriously considering moving out of state, mainly for this reason.

 

[Dtail]

I hear you. Almost $8K/year here in SE FL, and we live in a 1500 sq/f 2/2 Condo... The unit costs about $20K/year between property taxes, HOA fees and insurance, and *without* a mortgage. I think it's crazy and these rates are not justifiable, at least not for a non-luxury condo. We are seriously considering moving out of state, mainly for this reason.

That is high. We are around 9-10k for the items you mentioned above for a ~2,800 SFH in FLA. Perhaps look into other parts of FLA.

 

[NW-Bound]

I need more than a mill because I bought the 45,000 dollar car.

There have to be other things, because if it is just the car, you are still left with $955,000.

 

[Karloff]

In case you didn't catch it, I was joking about Hawaii being low cost of living...partly! My point was, that to have a $13K annual property tax bill means either you live in a super high property tax state, or you have a mansion worth millions.


Well I have the property tax, but the house is 1750 square foot, three bedroom, 1 1/2 baths. Doesn't exactly feel like a mansion although it beats living under a bridge and I am grateful to have a roof over my head. No one is paying millions for it either. Property taxes in the State, however, are not uniform.

That is high. We are around 9-10k for the items you mentioned above for a ~2,800 SFH in FLA. Perhaps look into other parts of FLA.

Our condo is on the beach on a very popular area (Hallandalle Beach / Hollywood), but our unit does *not* face the ocean. I agree: the numbers do not make sense. I have been disputing the total with the County Office every year, with no luck. We put the condo on the market after deciding that we could be saving a fortune even if we "up-sized" to a 3 or 4 bedroom house in a less crowded area (peace and quiet are my top priority, and we have neither here), and have not received a single offer in 4 months. The market for condos, contrary to popular belief, is deplorable at the moment. It is a buyer's market, no question. A recent story in the Wall Street Journal discussed this, and everything they mention and describe is what I see first-hand. We lowered the price of the condo twice and still nothing. The units that are selling are closing for numbers that are about $50 to $75K *lower* than they would have a few years ago. We are done with the area and are looking into Central FL at the moment, or even out of state. Biggest obstacle is the fact that the condo is simply not selling.

 

[PartIrish]

Our condo is on the beach on a very popular area (Hallandalle Beach / Hollywood), but our unit does *not* face the ocean. I agree: the numbers do not make sense. I have been disputing the total with the County Office every year, with no luck. We put the condo on the market after deciding that we could be saving a fortune even if we "up-sized" to a 3 or 4 bedroom house in a less crowded area (peace and quiet are my top priority, and we have neither here), and have not received a single offer in 4 months. The market for condos, contrary to popular belief, is deplorable at the moment. It is a buyer's market, no question. A recent story in the Wall Street Journal discussed this, and everything they mention and describe is what I see first-hand. We lowered the price of the condo twice and still nothing. The units that are selling are closing for numbers that are about $50 to $75K *lower* than they would have a few years ago. We are done with the area and are looking into Central FL at the moment, or even out of state. Biggest obstacle is the fact that the condo is simply not selling.

Karloff, I just did a search and it looks like there are a couple of hundred condo units for sale in that area below $150K. To what extent do you think potential buyers (or existing owners for that matter) are worried about that part of the Florida coastline and climate change? The prospects for Miami Beach properties don't sound good.

 

[Badger]

I hear you. Almost $8K/year here in SE FL, and we live in a 1500 sq/f 2/2 Condo... The unit costs about $20K/year between property taxes, HOA fees and insurance, and *without* a mortgage. I think it's crazy and these rates are not justifiable, at least not for a non-luxury condo. We are seriously considering moving out of state, mainly for this reason.

WOW! Sorry to hear the difficulty selling your condo. We live in a house the same size on a large lot in the most desirable neighborhood in the town and only a 3 minute walk to an uncrowded beach in NE Fl and our property tax in about $2.5k.

Since you are already in Fl maybe a few drives around central Fl (north of Orlando) will help you find what you want while you sell your condo.


Cheers!

 

[ShokWaveRider]

WOW! Sorry to hear the difficulty selling your condo. We live in a house the same size on a large lot in the most desirable neighborhood in the town and only a 3 minute walk to an uncrowded beach in NE Fl and our property tax in about $2.5k.

Shhhhh! we are beginning to get popular up here, probably for the not so brutal summers, nice breezes, somewhat lesser traffic crowds and uncrowded beaches. We went for a walk on our local beach the other day and it was far from crowded. Just wonderful, and we hope it stays that way. Although this week and W/E there may be more folk enjoying it.

 

[IrishMoss]

My plan needs >$1MM, not including SS, to sustain a retirement horizon of (hopefully) 38 years.

 

[Rianne]

DH/me 62 yrs. old. Expenses or what we spend (we could easily scale down) $60K. Portfolio > $1M and will collect pension at 65, not sure when we'll collect SS but pension + SS covers our expenses for the most part. ACA, so we keep our income < $61K, but have some cash if needed, CD's if needed.

This is a great discussion. IMHO, health matters more than $$. A healthy person with a good attitude/less stress/comfortable life out weighs any dollar amount. Those who were alive at or near the great depression can survive on much less than many baby boomers. I would never go back to mega-corp lifestyle for me or DH. If anything aged us, that did. The 60+ work days, weekends...we could have ER earlier but kept thinking, we need more $$ to be happy. Not true and we now know that.

Luckily, both of us healthy and can enjoy travel and hobbies (for the most part are free hobbies). And honestly, we could spend much more but don't. I'm sad for those I know who keep reaching for more, more, more. Some are family members who just cannot be satisfied. So they keep working and complaining.

 

[calmloki]

So much is dependent on situation: neither of us worked for organizations that provided any pension or retirement plan. Instead we spent decades building up our collection of rentals. Our incomes per IRS were small, so while she (more dedicated to working for others) gets just over $600/month social security after her Medicare deduction I get just over $200. The fact that we get Medicare is very very gratifying, but supporting ourselves in retirement is something we are used to doing from our working years. We count on us. So now I'm pushing 70 and off to work on the rentals this morning. Trying to sell a place but it is difficult: while my brain says we have way more than enough and we don't have kids to leave $$ to I just am not wired to have faith that all will be well if we just plunk the money in stock funds like everyone else. I don't even trust that cash will stay good and can easily imagine our property being taxed or confiscated away. So we keep piling up redundant safety nets. A million cash? Doesn't fill me with a safe feeling.

 

[Spanky]

We have retired friends (single) who live on around $30K a year in nice houses in a HCOL area. (Full disclosure - one has since sold her house for a retirement community condo and I don't know how that changed her budget). Both have or had mortgage free homes they bought when prices were lower and fixed up before they retired, Prop13 here in California keeps their property taxes low and they are on Medicare. So say $2K property taxes and $5K for premiums and out of pocket health care, that leaves $23K for other expenses like groceries, utilities, transportation and travel. They seem comfortable.

The Consumer Expenditure Report shows average spending of around $80K for San Francisco-Oakland-Hayward and over 40% of that is housing. Adjusting the $80K downward for a retiree household of just one person and very low housing costs, then their $30K budgets seem to not be too far off from the CES numbers.

Unfortunately, for others who are considering to move to the SF Bay Area, the cost of housing will be exorbitant. Rent for a two-bedroom appointment is over $3K a month. A two-bedroom townhouse (~1,200 sq. ft) is more than $1M. Our in-laws, on the hand, own a house (in Silicon Valley) bought more than 30 years ago. They pay very little property tax, collect social security and are on medical care. They have no mortgage, a generous pension, and a healthy portfolio (mid 7-figures). The house is worth over $2.5M. They could easily sell their house for a big profit and move to a lower-cost living area (e.g., CA Central Valley) but choose to stay because of friends, family and the weather and the cost of living is not a factor. They might be able live on a $30K budget if they do not travel overseas every year.

 

[daylatedollarshort]

Unfortunately, for others who are considering to move to the SF Bay Area, the cost of housing will be exorbitant. Rent for a two-bedroom appointment is over $3K a month. A two-bedroom townhouse (~1,200 sq. ft) is more than $1M. Our in-laws, on the hand, own a house (in Silicon Valley) bought more than 30 years ago. They pay very little property tax, collect social security and are on medical care. They have no mortgage, a generous pension, and a healthy portfolio (mid 7-figures). The house is worth over $2.5M. They could easily sell their house for a big profit and move to a lower-cost living area (e.g., CA Central Valley) but choose to stay because of friends, family and the weather and the cost of living is not a factor. They might be able live on a $30K budget if they do not travel overseas every year.

Most of the people we know who moved here in retirement are either very rich, they bought small condos, or both. The small condo people seem to spend much of their time in club activities, travel or local sight seeing, so they aren't home that much anyway.

 

[NW-Bound]

I have a brother-in-law who just moved from the Phoenix area to San Diego after he finally retired at the age of 70.

He said when he told a new neighbor where he came from, the neighbor said "You are moving in the wrong direction. Most retirees move out of CA.".