120K year Lifestyle

[ShokWaveRider]

We live VERY well in N.E. Florida on $120k. Lots of money to spare. We could spend a lot more, but do not need to and choose to leave it invested. Often we spend a lot less. We eat very well and do not cut any corners. We spent $25k so far this year on home remodeling, and probably still will not break $120k in 2025, although we are trying to spend more. We are anticipating $25k on travel.

No mortgage is the key for us. 2024 total mandatory home running costs, all taxes, all insurances inc. umbrella, a new main AC etc., was ~$30k.

2024 Total (including previously mentioned $30k) without Travel including car lease & car insurance, Medical, Dental, all Food and Beverages, Eating out, incidentals etc. was ~$73k

2024 Travel was ~$30k.

 

[DrRoy]

I would say doable if your overhead is reasonable. FL may not be the place. In addition to the prop tax issue, many insurers have left the state and rates are high. We spend ~150K in MI but are lavish with travel for now and other BTD. We could scale back and be comfortable at $120.

 

[Dtail]

Thank you all for the replies i took alot in.

Alot of people mentioned lifestyle and that was my question what would the lifestlye look like in a low COL state with no income tax and a major urban setting like central florida.

Central Florida is a wide area. Some of it is rural and some like downtown Tampa is very urban.
The costs in FLA can be much higher than anticipated, so you must do your homework.

 

[Taco]

In a LCOL area and state with no Income tax, $120k/year will be high cotton! Enjoy!

^ This!
Very location dependent.

Zillow says our home is worth $770K. ~3350 sq ft.
Property taxes are $2K. Home insurance $1.4K. Utilities run around $3.6K.
So, "keep the lights on" money for the house is about $7K a year.

Car insurance on 2 pretty new vehicles is around $2K.
Health insurance premiums are around $2.4K. (Fortunate to have retiree medical coverage...)

That's a lot of the biggies, and I'm not even to 10% of that 120K a year...

 

[street]

^ This!
Very location dependent.

Zillow says our home is worth $770K. ~3350 sq ft.
Property taxes are $2K. Home insurance $1.4K. Utilities run around $3.6K.
So, "keep the lights on" money for the house is about $7K a year.

Car insurance on 2 pretty new vehicles is around $2K.
Health insurance premiums are around $2.4K. (Fortunate to have retiree medical coverage...)

That's a lot of the biggies, and I'm not even to 10% of that 120K a year...

Wow! Your yearly expenses are ~12K a year. That is pretty good and still living the dream of ER.

 

[Taco]

Wow! Your yearly expenses are ~12K a year. That is pretty good and still living the dream of ER.

Well, I didn't list ALL our expenses, just some of the biggies. We do also eat!

And we travel, do some home improvements, budget for lumpy expenses, etc.

I'm was just pointing out that in our low cost area, it doesn't take too much to keep the lights on and food in our bellies - and 120K leaves a lot to play with above the basic expenses.

 

[Surewhitey]

Same here. Our spending is ~$70-75k, except for HI (still on the company dole). If we didn't w*rk, 80-90% would be covered by interest & distribution income, so minimal taxes.

I'd anticipate maybe another $20k annually for travel when that time comes.

Property tax & insurance (home,life, car and umbrella) are our second largest expenses @$11-12k. Travel is the largest @ $18-20k. Food is a close second...

 

[RetiredHappy]

^ This!
Very location dependent.

Zillow says our home is worth $770K. ~3350 sq ft.
Property taxes are $2K. Home insurance $1.4K. Utilities run around $3.6K.
So, "keep the lights on" money for the house is about $7K a year.

Car insurance on 2 pretty new vehicles is around $2K.
Health insurance premiums are around $2.4K. (Fortunate to have retiree medical coverage...)

That's a lot of the biggies, and I'm not even to 10% of that 120K a year...

If you don't mind sharing, where do you live? Thanks. We are pretty much double your amount for property tax and triple that for utilities.

 

[Taco]

If you don't mind sharing, where do you live? Thanks. We are pretty much double your amount for property tax and triple that for utilities.

We are in East TN.

There is both a city and a county property tax in this area. The city taxes are higher. We are outside the city limits. If we were in the city limits, there would be another ~$2.7K in property taxes. We are in a suburb - county doesn't mean rural in this case. You would not know you drove from city to county if there wasn't a city limits sign. The city does provide some services that the county doesn't, like garbage pickup.

 

[Taco]

If you don't mind sharing, where do you live? Thanks. We are pretty much double your amount for property tax and triple that for utilities.

Oh - and utilities for those that like details... Last month:

Electric: 684 KWH, $99
Water/sewer: 3,300 gallons, $72
Gas: 30 Therms, $47

That's a low month - summer/winter months are higher.

 

[Montecfo]

So what?
Donate more from your tIRA with QCDs.
I'm getting a little bit tired of Rich People WHINING about their tax rates.
I'm at the boundary of the 24% and 32% federal tax brackets and not complaining.
If you're going to be rich, you have to cope with the details.
Deal with it...

Don't shoot the messenger. I was simply explaining how this could happen as suggested by another poster. I lodged no complaints.

 

[Koolau]

So what?
Donate more from your tIRA with QCDs.
I'm getting a little bit tired of Rich People WHINING about their tax rates.
I'm at the boundary of the 24% and 32% federal tax brackets and not complaining.
If you're going to be rich, you have to cope with the details.
Deal with it...

We have few actual "rights" when it comes to taxes. We follow the tax laws or we pay penalties. We may play all the games to keep our taxes low as possible - but it's all within the law. BUT, so far, WHINING about paying taxes has not been outlawed. Let's not outlaw it here.

 

[old medic]

I couldn't tell you.... Have never made that much in a year.

 

[Drifter]

You should be happy wherever you choose to land. We are returning in a couple weeks to sell our Vero Beach home. Yeah weather is nice in Florida but the traffic and people are not my cup of tea anymore. I will take the midwest folks and lifestyle anyday over that mess.

 

[Dtail]

You should be happy wherever you choose to land. We are returning in a couple weeks to sell our Vero Beach home. Yeah weather is nice in Florida but the traffic and people are not my cup of tea anymore. I will take the midwest folks and lifestyle anyday over that mess.

On the central/west side of Florida, many retirees or snowbirders come from the Midwest.

 

[Drifter]

I know. Son lived in Lakeland and have friends in Bradenton.

 

[jollystomper]

For what it is worth, in 6 full years of retirement we have averaged about $117K in annual spending (against an average of $115K in pension/ss/interest/dividend/other income). A picture might be worth a thousand words (or start the screams of "NERD!" throughout the forum ):

The black line is income. The biggest variants are vacation and travel, and charity and gifts. Those we can control and are the biggest influence on our overall spending. Without those two we could choose to spend in the 70K-80K range, but we would not be having as much fun . Taxes is also inflated a bit due to Roth conversions, but will be worth it in the long run.

 

[TickTock]

These "rich people" weren't born rich. They spent a lifetime being frugal and investing as much as possible. Compounding led to their wealth.

This is DW and I. And many other folks on these boards as well.

Now they're being penalized (via taxes), whereas their counterparts, who spent every penny, aren't thus being penalized.

I don't see it. They're paying either the same taxes as the zero NW folks who have the same AGI (for example, all income is ordinary income from a 401k/IRA) or less (if some income is LTCGs/qualified divvies). Where's the penalty?

Call me a whiner - or more bluntly, just plainly stupid - but had I realized 20 or 30 years ago, how expensive it is to be "rich", I'd not ever have gone to the trouble.

Given your single-pointed focus on never making a withdrawal from your accounts I doubt that. But I could be wrong; if you have zero account balances then you never have a withdrawal. So you could have gone the other way and focused on spending all your income.

 

[AZsniper]

This is very interesting to read through. I figured that each year of additional work could equate to an additional 7-10k per year spending in retirement. I am retiring later this year and plan to spend around 120k also. I currently average 85k per year in AZ, so we want to increase it for retirement.

 

[Out of Steam]

I don't see it. They're paying either the same taxes as the zero NW folks who have the same AGI (for example, all income is ordinary income from a 401k/IRA) or less (if some income is LTCGs/qualified divvies). Where's the penalty?

We earned our income through W-2 jobs, and there's no practical way (besides a side business) to avoid income taxes. I can't get worked up over our overall Federal tax rate of less than 10% and overall state rate of under 4%, and don't feel singled out by having saved for retirement.

 

[Fermion]

We live on half of that in eastern Washington state. We have two pretty new snowmobiles, 3 sailboats, take long road trips. We do cook A LOT at home and rarely eat out, plus we almost never fly (I detest it at 6'7").

I guess I will never live in California lol.

 

[medved]

There is no question that one "can" live on $120k per year. Or, for that matter, on half of that amount. Most people do that. The question is what are your fixed expenses -- and what is the amount of the non-fixed (discretionary) expenses that are important to you. That is a very individual thing.

I am a recent retiree. My monthly expenses, thus far, are higher than they were when I was working -- and higher than I predicted they would be. I have more free time and that has led to more spending. And then there are just some other things that have come up, which I did not predict. I am not at all concerned about it. But it does show that one's predictions may turn out to be wrong -- because you don't accurately predict what you will need, or what you will want (or what your spouse will want!!)

 

[Alex The Great]

For what it is worth, in 6 full years of retirement we have averaged about $117K in annual spending (against an average of $115K in pension/ss/interest/dividend/other income). A picture might be worth a thousand words (or start the screams of "NERD!" throughout the forum ):

View attachment 55536

The black line is income. The biggest variants are vacation and travel, and charity and gifts. Those we can control and are the biggest influence on our overall spending. Without those two we could choose to spend in the 70K-80K range, but we would not be having as much fun . Taxes is also inflated a bit due to Roth conversions, but will be worth it in the long run.

Thanks this is a very informative chart. It looks like with elimination of mortgage, vacation and travel, charity and gifts, and all others (not sure what it is) one can easy exist on $50K. Also the tax part can be substantially reduced if taken care well in advance.

 

[Fermion]

one can easy exist on $50K. Also the tax part can be substantially reduced if taken care well in advance.

If you are talking about a married couple filing jointly, there is very little tax if you are living on $50k.

 

[Alex The Great]

If you are talking about a married couple filing jointly, there is very little tax if you are living on $50k.

Yes you're correct. But my point is that the tax is primarily determined by the income/expenses, not the amount you can live on. Also there is a property tax which can be reduced regardless of what you actually spend.