Ronnieboy
Full time employment: Posting here.
- Joined
- Feb 14, 2008
- Messages
- 748
I know the mantra about retiring early is to know your expenses. I have never been good at tracking our expenses down to the penny or even having a budget. It has always been ball park figures.
So I thought of two ways to to get a rough figure of what we spend or what we would need to replace to be as comfortable in retirement as we are now.
One was to just calculate our net pay from all w*rk. If we were to copy that number on an annual basis we would be golden as it is working for us now and would have a cushion as far as anything extra we are saving beyond what is taken out of our checks (401(k)) etc.
Just using a round figure lets say that total is $100k. That would mean that the general 4% rule of thumb would be a nest egg of $2.5M which seems high to me and more than what my ball park 'retirement' number was to begin with.
The second way to estimate spending was to basically add up our mortgage payments, utilities and add that to what we spend on our charge card for the year as we charge everything that can be charged for the rewards available on our card. Of course there is a few cash purchases but I would estimate those are less than 1% of the total.
This round figure was approximately $75k, meaning a nest egg of 1.875M, which was closer to my ball park 'retirement' number.
The benefit of either method is that the house is expected to be paid off and if all goes according to plan a downsize will occur with saving(s) on property taxes, utilities and the like.
Those of you who didn't track every penny, how did you come up with your magic number for retirement and replacement income?
So I thought of two ways to to get a rough figure of what we spend or what we would need to replace to be as comfortable in retirement as we are now.
One was to just calculate our net pay from all w*rk. If we were to copy that number on an annual basis we would be golden as it is working for us now and would have a cushion as far as anything extra we are saving beyond what is taken out of our checks (401(k)) etc.
Just using a round figure lets say that total is $100k. That would mean that the general 4% rule of thumb would be a nest egg of $2.5M which seems high to me and more than what my ball park 'retirement' number was to begin with.
The second way to estimate spending was to basically add up our mortgage payments, utilities and add that to what we spend on our charge card for the year as we charge everything that can be charged for the rewards available on our card. Of course there is a few cash purchases but I would estimate those are less than 1% of the total.
This round figure was approximately $75k, meaning a nest egg of 1.875M, which was closer to my ball park 'retirement' number.
The benefit of either method is that the house is expected to be paid off and if all goes according to plan a downsize will occur with saving(s) on property taxes, utilities and the like.
Those of you who didn't track every penny, how did you come up with your magic number for retirement and replacement income?