Can retire, but what will it be like?

[Jerry1]

I'm 56 and DW is 62. DW no longer works and I'm working part time. My planning suggests that $75K is a good plan for expenses (including the taxes). I'm hoping to find some people who live on a withdraw of between $50K and $75K who'd be willing to discuss what life is like.

Anything that would help me picture what it might be like. Fortunately or unfortunately, as the case may be, I've been blessed with a good job and when you're bringing in good money, it's a lot easier to "live below your means". $75K is about a 1/3 of my annual gross but about 10 to 15 percent less than I'm currently spending.

What's it like? Do you travel or are you a homebody? Out to eat much or almost exclusively eat at home? Have other hobbies - like golf? Handle things around the house (minor repairs, lawn and snow . . .) or hire things out? House (large or small) or condo or even rent.

For me, I'm thinking at this level, I'll need to continue with a LBYM lifestyle. Trips will likely be continental U.S. car trips a few times a year and when not staying with a family member, a mid-range hotel. Primarily a homebody, doing the zen thing (eating well on my own cooking, getting some exercise and enjoying the day with a book). Probably get out to golf once a week. Not likely to be able to be a snowbird (I live in Michigan - we dream of Florida or Arizona in the winter). A good life, but I'm just wondering if I'm thinking a little too lean. It's hard for me to take the detail of a budget and actually see a vision. Hoping to hear from a few who live in this $$ range to get a better idea of the possibilities.

 

[bearkeley]

I'm 56 and DW is 62. DW no longer works and I'm working part time. My planning suggests that $75K is a good plan for expenses (including the taxes). I'm hoping to find some people who live on a withdraw of between $50K and $75K who'd be willing to discuss what life is like.



Anything that would help me picture what it might be like. Fortunately or unfortunately, as the case may be, I've been blessed with a good job and when you're bringing in good money, it's a lot easier to "live below your means". $75K is about a 1/3 of my annual gross but about 10 to 15 percent less than I'm currently spending.



What's it like? Do you travel or are you a homebody? Out to eat much or almost exclusively eat at home? Have other hobbies - like golf? Handle things around the house (minor repairs, lawn and snow . . .) or hire things out? House (large or small) or condo or even rent.



For me, I'm thinking at this level, I'll need to continue with a LBYM lifestyle. Trips will likely be continental U.S. car trips a few times a year and when not staying with a family member, a mid-range hotel. Primarily a homebody, doing the zen thing (eating well on my own cooking, getting some exercise and enjoying the day with a book). Probably get out to golf once a week. Not likely to be able to be a snowbird (I live in Michigan - we dream of Florida or Arizona in the winter). A good life, but I'm just wondering if I'm thinking a little too lean. It's hard for me to take the detail of a budget and actually see a vision. Hoping to hear from a few who live in this $$ range to get a better idea of the possibilities.

It will be what you make of It. You will certainly have more income than most Americans live on. We budget about $8,000 a month for expenses (could be higher for SWR but we don't need more) but that includes a mortgage $2,200 so we are in the same ball park. We stay in VA 7 months year (spring, summer,fall) and travel internationally the other 5 months. Last year we spent 4 months in Australia an one in the Philippines. This year we are spending 3 months in Australia (we like Australia) a month between Vietnam, Cambodia and Indonesia and a month in the Philippines. We travel fairly cheap and budget $150 a day while out of the country. Not a lot of time at Club Med but we do not feel deprived either. While traveling we have learned to sail, stayed at nice hotels and some not so nice campgrounds. We have gone scuba diving over a 100 times and in Asia we get massages 3or 4 times a week and eat out everyday.

House sitting, campervans, and mid priced hotels really extend the travel budget as does learning the ins and outs of the travel card/frequent flyer programs.

At home we go boating, camping and travel locally. We don't eat out much but that's because there are not a lot of options nearby and our money goes farther in Asia. Next winter hopefully we are going take the ICW down to FLA and winter in the Abacos. But who knows it's up to us and we can change our minds.

We are having the time of our lives, living a dream. There is no reason you couldn't do the same as long as you watch the budget and plan accordingly. One thing we did that really helped was go through the expenses and eliminate unnecessary things. No cable TV, no house phone (we use Ooma,) only one shared cell phone and no recurring charges on the credit cards.

If being a snow bird is what you want look for house sitting or free economy gigs like campground hosting at state parks. But honestly we spend about the same whether we are traveling or at home.

Congratulations on your FIRE.

 

[Ronnieboy]

Hi Jerry1,

I don't have an answer for you but am interested in the responses you get. I am trying to figure out the same type of situation. I am shooting for a $70k/yr retirement budget too, but the big problem for me is, I don't have a current budget and no matter how many times I have tried, I cannot seem to get on board with one. I just make sure we pay ourselves first and don't spend more than we make.

The challenge that presents is that the 'budget' I made for our anticipated $70k retirement might not even be in the ballpark. I made it in 2012 and can already see some issues

I also see a few changes from how we are living now to how we'll live when retired...some travel, some more eating at home (since we'll have the time) and more (any) exercise. I've got some weird ideas and want to try them all....spend a month in Alaska (through VRBO?), do some random car travelling in the U.S. visiting places we happen upon with no time constraints, maybe even checking out a few Diners, Drive ins, and Dives that we have seen and thought looked interesting. Who knows as long as we have the time and the funds to do it.

 

[EastWest Gal]

I'm not good with budgeting either. What I did do is create a spreadsheet and go through the bank statements for the past two years, along with credit card records, and look back on our spending. That took a couple of days. Then I looked at ways to cut back spending. It turns out that our basic spending plus taxes was about what I anticipated we could spend. Then, I used Firecalc and other retirement calculators to figure out SWR. Since what we spend is much less than our SWR, we should be fine. Don't forget to include health insurance, which can be a huge expense.

The very process of looking at spending makes you see ways to cut it back.

Two ways to easily cut expenses: reduce unnecessary expenses especially subscription services like phone (we use OOMA) and cable, and cook at home. We've mostly lost interest in eating out. When the cook doesn't have to work, making great meals is play.

 

[davismills]

Before I retired, we paid off the house, paid off the motor home, switched to OOMA, dropped cable for Netflix/OTA antenna, switched to pay-as-you-go mobile plans, switched to box wine, 20 bucks a month for Planet Fitness and resolved to live on 50K per year.

After four years we're spot on budget. We could have spent much more, but are somewhat restricted in travel because of one remaining 91 year old parent that we care for almost daily.

No regrets and I love waking up to my life everyday. Net worth is well entrenched into 7 figures, so I suspect we'll spend much more in the future. I do have a pension and healthcare costs are reasonable at this time.

 

[Nemo2]

"Your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma - which is living with the results of other people's thinking. Don't let the noise of others' opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition."

Steve Jobs

 

[Dawg52]

I'm at the low end of your $$$ question and I live fine. But I am single and live in an area that is fairly cheap as compared to other areas of the country. I belong to a golf club and play golf 3 times a week when here and stay at my condo on the AL coast 1 week per month. Not much travel outside of that but plan to take a longish road trip once a year. I eat out 2-3 times a week, but again.....I'm paying just for one not two like couples. Obviously it makes a difference.

I'm sure you will be fine. Just try living within a reasonable budget for a couple of years. If your numbers still look good you will feel more comfortable in spending more. I've been retired for almost 10 years and I certainly spend more than when I first retired. And feel comfortable doing so.

 

[Aiming_4_55]

Jerry - It depends on you and DW. If you are currently in the $75k range for current spend, just imagine more time to do as you please. This may reduce or increase your budget expenses depending on what YOU want or like to do.

If you don't have good spreadsheets where your spend is going now, if you charge most items on a credit card, you may have access to the annual summary which will plug purchases in various categories.

After your fixed expenses like mortgage/rent/taxes/insurance, utilities, food, cars, etc. like life, spend on things you enjoy and cut back in areas that don't matter much.

My budget pre-retirement is in the $75k range with 2 young kids. We generally take 2 - 3 weeks of vacation away now along with several weekend trips. I'm considering RE in the next few years, so I think what you have is possible.

 

[Ronstar]

I've been tracking spending for more than 10 years, the last 3 while retired. DW and I keep separate accounts - she pays for insurance and electric - I pay the rest. I normally spend around $65k per year.

I thought I would spend less in retirement, but I don't. The increase in travel and hobby spending more than offsets the $ I spent on work related expenses.

Travel for us is one or two week long trips a year and the winters in Arizona. Mostly US road trips. I have a lot of hobbies that take a lot of time and $. Also do my own home maintenance on primary home - nothing at Az condo.

A typical day is spent online surfing, exercise, hobbies, and yard/house work. Travel days are mostly driving and sightseeing.

I've found as one gets further into retirement, it becomes more difficult to accomplish a list or schedule of things to get done in a set time frame. Sometimes it's more fun just to sit around doing nothing.

 

[Midpack]

I've always kept a budget, and still do. We gradually reduced our spending before I retired, and lived on our projected spending for at least two years before I retired to be sure we would be happy/not feel deprived at that spending level. I would highly recommend it to anyone! Why guess, you might guess wrong?

Asking others what retired life is like might be misleading. Just as people are different in your current workaday world, so will other retirees when you pull the plug. My experience may be instructive, but it might not reflect what you should expect at all.

Remember this is a very small niche community of relatively happy early retirees, mostly LBYM INTJ types. You're sampling a narrow group FWIW.

 

[ls99]

As Bill Nye the science guy used to say: you'll just have to try it!

 

[ER Eddie]

Yeah, I agree with Midpack and Is99. There's no way to know how you will experience living on 10 to 15% less, until you try it.

I think you'd have to do it for at least a year, before you had a decent sense of it.

 

[NW-Bound]

I'm hoping to find some people who live on a withdraw of between $50K and $75K who'd be willing to discuss what life is like.

I retired in 2012, and have been spending more than I thought I would. There's always something, like home repair and improvements, large deductibles for health care, daughter's wedding, etc... Yet, I thought of myself as frugal. Hah!

But quite a bit of my expenses are really discretionary. Other than healthcare, I did not have to spend money on these extraneous items. I could have told my daughter to elope as they originally planned, but I was the one who wanted to have a nice wedding to invite the extended family. I do not need the 2nd home, as another example. Some home improvements are not mandatory, nor are large charity donations, etc...

It seems wasteful at first to my ingrained frugal nature. But then I don't think both of us are going to live much beyond 80, and FIRECalc says we can spend more even if we were to live to 90. And after that health scare that could put me 6 ft under, I am not going to sweat it anymore.

$75K is about a 1/3 of my annual gross but about 10 to 15 percent less than I'm currently spending.

You need to examine your existing spending pattern. You need to start from there. You can modify your lifestyle to suit. It's too tough to work from somebody else's budget, as they may or may not have hobbies that you do, different tastes in travel and spending, number of dependents, etc...

Though I have not done it, I believe I can spend less than $75K easily if time is tough. You need to have some fat in the budget to cut out if necessary. I looked at the Quicken summary screen all the time to see what my housing costs, RE taxes, my food cost, utilities, etc..., are. They add up to much less than $75K. No problem!

 

[Lcountz]

Agree with Midpack.....Before I pulled the plug, I lived on my expected pension amount for three years to make sure I could do it...

What better time to "live on a pension" than when you have a full time job?!?!?!??

It worked, so I bailed from 33 years at Megacorp, at 57...Single, no kids, cared for 90's YO Mom before she passed......

I would/will NEVER return to W***k. There has not been ONE DAY when I thought I made a mistake in leaving.

(I do have fully paid retiree health benefits, so that helps tremendously, I think, as I have knock on wood been healthy and have not had to "test" it.)

 

[RetiredGypsy]

So, here's something to consider. I've been living on a fraction of $75k for a long, long time. Even when I was working and at point when I was making close to that, I still spent far less than that.

I ate out whenever I wanted. The local Polish place had amazing food for $4. The crab shacks and pubs and sports bars had happy hour for like 2-4 hours a day. Seafood places had 12 whatever for $x, or $0.50 wings. Or $10 burgers with $7 fancy drinks and the occasional $25-35 steak and lobster combo. All you can eat buffets with Sunday deals. Awesome Mexican joints that had Taco Tuesday specials and margarita specials every day. Free all kinds of treats on your birthday. And so, so much sushi. I tended to split a meal going out because the portion sizes eating out just about anywhere are insanely huge in volume, not to even consider the calorie count.

Just as easily I can spend as little or as much a month on cooking and eating at home. Quality ingredients, expensive initial investments into cookware and spices, whatever. Unfortunately as much as I love fancy and delicious food that requires effort and a higher expense, I freaking love cheap Mexican food and eggs and burgers. I could live on breakfast burritos and lunch burritos and dinner burritos followed by a midnight cheeseburger snack. Every day. Forever and ever.

I really like microbrewed beers, good but cheap wine, and interesting scotch, or bourbon, or whisky. I probably have a dozen six packs of beer and a few bottles of everything else throughout the year.

I traveled constantly. Every couple months I flew across the country. Every weekend I was at the beach, out in the mountains, among the dunes. I put 400-800 miles on my motorcycle every weekend once for 6 months straight. I rented kayaks, sailboats, chartered boats, went to parks, museums, wine tastings, wineries, historic midnight downtown strolls, car shows, conventions, races, had a gym membership, went out at least once a month on huge motorcycle rides with friends. Developed an embarrassingly large library of movies and books. Spent quite a few nights in hotels that ranged from $80-150/night.

I'll tell you what, quality motorcycle gear and customizing a bike, especially one of the European brands, ain't cheap.

So now that I'm getting comfortable with spending toward the low end of your budget, everything simply scales up if I want it to, and nothing has to be so routine as to need to spend the same on hobbies and outings every month. Though it's surprisingly easy to do once you ditch cable and go with a smaller phone provider that piggy backs off the larger companies and offers comparable quality.

So, potentially you could be very, very happy and have all kinds of crazy awesome adventures and quite a high quality of life on $75k. Or you could be miserable if always chasing higher quality items or wanting to do X more often, or if suddenly adding Y into your life while still wanting to do X means having to tighten the belt.

Life's variables are entirely too fluid and personalized.

 

[Beldar]

A good life, but I'm just wondering if I'm thinking a little too lean. It's hard for me to take the detail of a budget and actually see a vision. Hoping to hear from a few who live in this $$ range to get a better idea of the possibilities.

Hi Jerry1

I found this tool very helpful in estimating my financial NEEDS in ER (down to the the monthly level), and envisioning my lifestyle based on those needs.

otar retirement calculator

Maybe you already have. HTH

_B

 

[Meadbh]

I'm single, but I live within the financial parameters you mentioned. For many years during my career, I had a small salary, plus contracted payments that went straight to my corporation. Other than corporate expenses, I never took dividends from those corporate retained earnings, until the small salary no longer covered my personal expenses. So I had a pretty good idea what my total expenses were. About two years prior to ER I did a complete analysis of all expenses for the previous two years, then developed a detailed retirement budget that eliminated work related expenses and bumped up the travel category. I tweaked that budget based on the first few years of ER but the total was amazingly predictive of actual expenses. In particular, I bumped up my travel budget by $2000, but spent less than expected on restaurants, clothes and entertainment......because I had the time and interest to learn to be a better cook. My learning has included a cooking course in Tuscany, which was an expensive bucket list item that was worth every penny! I play golf twice weekly during the season and have figured out how to do it cost effectively. After 3.5 years of detailed expense documentation, I am comfortable with my spending, which remains stable at less than 3.5% of my initial portfolio. My net worth has increased slightly, which makes me feel more comfortable with spending on things that I really want. I will never buy a mega mansion or a yacht, but I don't need those things to be happy.

I agree with those who recommend developing a budget prior to retirement. The fewer surprises, the better.

 

[kcowan]

I agree with those who recommend developing a budget prior to retirement. The fewer surprises, the better.

Yes I agree. We were wrong on the detail but, surprisingly, pretty close on the total. Since then, we have managed it down significantly.

There is nothing like having a budget to help you make tradeoffs.

 

[DrRoy]

The RE plan starts in a few weeks. About 20% more spending than your figure. Not a lot of eating out and we do most of the yard/house chores. Hobby is photography, and travel. Plenty of travel. Split car and airline, US and international.

 

[jollystomper]

Hi Jerry1,

I am not yet retired but planning to later this year (if my courage level stays where it is. ). DW and I have a larger targeted budget that you but that is mostly due to expecting our health insurance and medical costs (we may have one child on it for up to 4 more years) to be around $25K per year. I track our expenses with quicken and we have averaged around $80K a year over the last 10 years, exclusive of college costs (which are 99% behind us). I am also fortunate to have a very good salary (the biggest temptation to keep working) and we practice LBYM.

From observing others around me, others the main thing I learned was to "practice" retirement activities before you retire. Last year we "practiced" with the type of travel we planned to do, the hobbies and activities we planned to spend money on, our level of eating out, socializing, etc. This has helped us see how close our estimates are to reality.

 

[exnavynuke]

I think any "what's it like" will vary widely based on individual circumstances. When my house is paid off, I'll live "quite well" imo with quite a bit less than $75k/year to spend. I spend right at $50k/year right now but that includes $900/month to the mortgage, so about $40k/year will cover all my current spending while I'm working. Someone who's utilities cost them twice what mine do or who's property tax is $1,000/month instead of my $120/month would likely find the same income significantly less comfortable.

 

[Walt34]

I'm hoping to find some people who live on a withdraw of between $50K and $75K who'd be willing to discuss what life is like.

We're doing fine in that range and are still putting away ~$1k/month for "lumpy" expenses like a new roof, car, property taxes, etc. The main income is a COLA'd pension and SS, and we have no debt other than the credit cards that we pay off every month.

We rarely travel, but that's because we don't want to. The last four vehicles we bought new and we paid cash, then keep them "till the wheels fall off". Well, except for the motorcycle that I sold because of some health issues. We usually eat out maybe 3 or 4 times a month. We normally go to the gym 3 or 4 times a week.

There are many on the forum living on half that amount and they're doing just fine.

 

[Jerry1]

Thank you for the responses. A couple of comments:

I do have a budget. The problem I have with the budget is that it's hard to believe. According to the budget, my needs are met with the lower end of my range. I had to throw in a bunch of discretionary spending in order to get my retirement planner to fail and that was using a bad market and conservative allocation assumptions. It's hard to look at my current spending because I do work and spend money on work and because I work I spend freely. It's also hard because we just moved into our current home so I don't have a good track record of actual expenses. Note that we own our home so just need to cover taxes, utilities and maintenance.

Also, I appreciate all feedback, but the most helpful comments are the ones that explain how someone lives in this price range. I'm not at all worried about not being able to eat and keep a roof over my head, but I was wanting to hear from real examples how one can actually live on this range of money. It does seem clear that a little creativity goes a long way. I was also keen on the idea of golfing at off times to keep that cost lower.

I guess I'm looking for a reality check. I'm very confident I have the needs met and I'm almost convinced that I could golf and snowbird, however, I think the snowbirding is a stretch to maybe not even realistic. Most of all, I appreciate the input and advise.

 

[NW-Bound]

I do have a budget. The problem I have with the budget is that it's hard to believe. According to the budget, my needs are met with the lower end of my range.

That was what I thought, until I had large non-recurrent expenses. I could manage by scrimping a bit, but then it would not be fun. Good thing I did not have to. The point is that I did not think about those at all, and being non-recurrent, these expenses are erratic by definition, and a bit more difficult to plan for. The only thing I know to do is to have some headroom for surprises.

... I think the snowbirding is a stretch to maybe not even realistic.

Snowbirding is less expensive with an RV or by Airbnb or VRBO. My 2nd home is only 2-1/2 hour drive away, else taking care of it would be more expensive.

 

[Cassius King]

Congrats on your ER plans.

My one takeaway from this thread is that there are many on this forum with extraordinary incomes! Most of your expenses in retirement are more than my current salary.