Is $1million enough

[Sam]

The flexibility is the (*2) part!

Isn't that too much flexibility? 8)

 

[Cut-Throat]

Isn't that too much flexibility? 8)

I don't think so. - The expenses portion is truly bare bones. No entertainment, travel, eating out etc. - You have got to allow for that. And it if you don't have excess built into your budget, you cannot pare back in market downturns or if unplanned expenses occur.

What multiplier would you use?

 

[free4now]

For more than a half a year I've been living off about a million after taxes. Living in the SF Bay Area is expensive, and after trying to make it work on about 40k a year for a few months I decided that was too bare bones for me... didn't include enough budget for getting out of the house and doing things. So I'm now spending at a burn rate of about 50-55k/year, recognizing that this is not sustainably safe, and exploring my options for moving to a cheaper location or taking on some work to bring in more income.

 

[Sam]

And it if you don't have excess built into your budget, you cannot pare back in market downturns

Market downturn is already included in your "25", or 4% withdrawal rate.

What multiplier would you use?

If I were to use your formula, I would use 1.5 (150%).

 

[haha]

For me the advice to quit now and look for a cheap place to live would be the deal breaker. I don’t mean a fancy house- mine is anything but- but a decent neighborhood in a the city or town where you like to be, where you like or least don’t hate the weather, where your friends and family are, where you can walk to interesting places and events if you enjoy that.

I would far rather find an ok job and stay where I wanted to stay than go looking for cheap. It’s like buying an ugly suit, because no one else wants it so it is cheap.

People who mention small southern towns- I sure hope they know what small Southern towns are like before they head off to one. The Bible Belt would not be everyone’s cup of tea.

I was eating at a Cracker Barrel Restaurant with a friend and her parents, sibs, etc not too far outside Nashville. Suddenly I thought I was having a heart attack. Turns out I was on the verge of panic, merely at the idea that I might have to listen to these people for another hour or so.

I should add that my family is from the South, and has been for a couple hundred years at least, so I am not complaining about something I know nothing about.
Ha

 

[wabmester]

If I were to use your formula, I would use 1.5 (150%).

Why not just use your actual ratio? For example, if half of your expenses are discretionary, then 2.0 would be the right multiplier.

 

[Nords]

Why not just use your actual ratio? For example, if half of your expenses are discretionary, then 2.0 would be the right multiplier.

I'd say that 2.0 gives enough flexibility to avoid risking your life by saying "Sorry, honey, but that's a discretionary expense!"

 

[SecondCor521]

My ratio of (budgeted/barebones) is 1.42, but I've already cut back on a lot, so I think a higher number like 1.75 would be more reasonable.

2Cor521

 

[Sam]

Do me a favor and look at your spending and weed out all of the discretionary items (Dining out, cable TV, Travel, vacations, Hobbies,) - I'm betting your budget could be cut in half.

What? You actually want me to work?

Seriously, the difference here might be in the definition of discretionary. What I might consider absolute neccessity might be different from yours, and vice versa.

 

[Sam]

I'd say that 2.0 gives enough flexibility to avoid risking your life by saying "Sorry, honey, but that's a discretionary expense!"

Chicken!

 

[Cut-Throat]

Seriously, the difference here might be in the definition of discretionary. What I might consider absolute neccessity might be different from yours, and vice versa.

Well, my formula said "Bare Bones" - Not "Non discretionary". 8)

 

[Sam]

A rose by any other name...

Why not just use your actual ratio? For example, if half of your expenses are discretionary, then 2.0 would be the right multiplier.

1.5 it is.

 

[unclemick]

2.0

CT must have read my mind.

heh heh heh

 

[Nords]

Chicken!

Buk buk buk buk-awk!

We didn't make it to 20 years of marriage by taking stupid chances...

 

[Zoocat]

For me the advice to quit now and look for a cheap place to live would be the deal breaker. I don’t mean a fancy house- mine is anything but- but a decent neighborhood in a the city or town where you like to be, where you like or least don’t hate the weather, where your friends and family are, where you can walk to interesting places and events if you enjoy that.

I would far rather find an ok job and stay where I wanted to stay than go looking for cheap. It’s like buying an ugly suit, because no one else wants it so it is cheap.

People who mention small southern towns- I sure hope they know what small Southern towns are like before they head off to one. The Bible Belt would not be everyone’s cup of tea.

.
Ha

I agree with Ha, having lived in the Bible Belt for six long years, and I'd rather work full time at Wal Mart than go back, no matter how cheap it is. Living in a compatible community where you can make friends and, above all, make a HOME is more important than almost anything else, for me anyway. I would rather live in a cheap apartment in a community I love than a nice house in some out of the way place. Also, if you have never lived overseas, then a test run is in order before making any important decision about that. Good luck!

 

[shiny]

I agree with Ha, having lived in the Bible Belt for six long years, and I'd rather work full time at Wal Mart than go back, no matter how cheap it is.

Me too (not Walmart though, maybe Costco ), I grew up in the south, didn't move away until I was 30. Lots of people love it, so I don't want to disparage it, I'd just suggest knowing what you are getting into before you plan your retirement around it. That really goes for any place that is different though - there was a recent thread on foreign places too.

 

[obryanjf]

Perhaps I missed it but nun how old are you and how long are you expecting to live.

If you are going to live 30 to 40 years then the SWR of 4% => 40k per year and thats not a bad lifestyle in the vast majority of this country. With a little flexibility, you could do 5.5% and a variable withdrawl plan. Have a bit of flexibility and perhaps work some PT to ride thru the rough patches. With SS raise these SWR's by about .5% and with Ty Bernicke raise them again by about .5 to 1%.

good luck

job

 

[Mr._johngalt]

On an old thread I proposed defining generic ER for a couple 50 yrs of age as $1MM liquid, plus cars and a house all paid for.

FWIW there weren't too many takers at that time though it still seems doable.

"doable"? I would like to think you jest but I did not see a "smiley".

JG

 

[Mr._johngalt]

1993 - 300k his and her's plus a duplex cranking out 6k/yr rent. No health insurance.

Really really cheap bastardhood and 0ne yr temp work AND Mr Market in the 90's allowed crossing 1mil around 1998,99, 2000 - not exactly sure.

Wouldn't look pretty on a spreadsheet in hindsight - but compared to work - ER was more better.

Post Katrina - right at 1 mil plus small pension plus early SS. Yes - and BC/BS health insurance.

Sort of miss the good old days when I was really cheap. Salvation Army is still my favorite clothing store - Walmart is second.

heh heh heh heh heh heh - more than one way to skin a cat.

1993, 500K his and hers. No duplex. Crappy health insurance.

Net worth cut in 2 with divorce no. one. Never got back to the 500K. No pension.

Farm and Fleet is my fav. store. I was at Walmart yesterday and shopped
the Goodwill Store today. I am trained to think of resale stores
first.

Early SS and everything worked out just fine. Most of what I was
worried about never happened.

JG

 

[Khan]

Yeah, I know that market downturn is already built into the 4% - But, I'm guessing that if we have one, we'd all like to cut our spending a bit for a cushion - It might take away any notion to get a job.

A multiplier of 1.5 would probably work, but before I tell anyone that they can quit their jobs I use 2. Do me a favor and look at your spending and weed out all of the discretionary items (Dining out, cable TV, Travel, vacations, Hobbies,) - I'm betting your budget could be cut in half. I know I spend at least twice of what I have to.

I've been living on a pension of under $30K gross (and saving).

If absolutely necessary, I could probably cut down to $15K or less.

 

[Corporateburnout]

I've been living on a pension of under $30K gross (and saving).

If absolutely necessary, I could probably cut down to $15K or less.

Where do you live? Are you single? I find it hard to believe that somone could make it on 15K/year.

 

[Khan]

Where do you live? Are you single? I find it hard to believe that somone could make it on 15K/year.

Single.

SW Ohio.

Small paid for house.

1989 Ford Festiva less than 2000 miles per year.

Don't go to restaurants or movies.

Could drop DSL, Cell phone, cable TV, water softener.

Am currently paying people for yard work & house cleaning.

 

[nun]

I've been living on a pension of under $30K gross (and saving).

If absolutely necessary, I could probably cut down to $15K or less.

OP here and I like what you are saying. I'll probably be moving back to a small town in Northarn England, which is pertty similar to the Southern USA wrt cost and culture. I figure that as I live off $24k per annum in NE USA (without housing costs) if I can buy a place in NE England and get $24k/year from remaining investments I should be ok. If things are tight I don't think it will be too tough to work part time and get $10k/year to supplement my income.

 

[bpp]

I'll probably be moving back to a small town in Northarn England, which is pertty similar to the Southern USA wrt cost and culture.

As The Fall sang, "The North will rise again."

 

[RockMiner]

I agree with Ha, having lived in the Bible Belt for six long years, and I'd rather work full time at Wal Mart than go back, no matter how cheap it is. Living in a compatible community where you can make friends and, above all, make a HOME is more important than almost anything else, for me anyway. I would rather live in a cheap apartment in a community I love than a nice house in some out of the way place.

I was raised in New England but have lived in TX for many yrs and now TN...I have never quite gotten over the feeling of being a stranger in a strange land. I used to think TX was over the top with the "God, guns, and football" orientation but hey, it was just a warmup for TN. Plenty of wonderful people in both states but I'm not sure it will ever feel like home.