Poll: How much income do you need to retire?

[NW-Bound]

Forgot to add that Quicken said that my medical expenses for the last 12 months ran $19,282.

The above includes $10K deductible, which I hope I will not have to incur next year. However, we incurred minimal dental expenses. That may catch up with us next year.

PS. The exact amount is $19,282.82. Some people here like to count to the pennies, and Quicken does keep track of that.

 

[Sunset]

Prior to Retiring, I tried to calculate our expenses for a 12 month period. I took our bank account and added up all the withdrawls/payments from it.
Fortunately it allows a person to download it based on selected time period.
I found from that we spent about 50K on everything, since we are now retired and travelling a bit, I estimate we need 76K - 100K for retirement spending as we are looking to enjoy the remaining years.

 

[RobLJ]

We can get in comfort on 50-60k, if we sold the cabin. With cabin and a lot of travel, then 75k+.

 

[Gumby]

We divide our expected retirement budget into: (A) dollars to live our life exactly as we do now (except for travel/vacations) - it will be smaller than our current operating budget because our mortgage will be paid off and we won't have commuting and other work expenses; and (B) dollars to travel around. It is our expectation that our two pensions will completely cover category A, and social security will come along after about two years to give us an additional cushion of more than 25%. The amount we spend for category B - travel - will depend on the state of our nest egg. If things go well over the next four years, I expect our annual spending on travel could be about 1.5 times what we spend on our everyday living (if we don't get tired out first). FIRECalc still gives us 100% at that level of spending. If the market crashes, we'll travel less.

 

[Meadbh]

If things go well over the next four years, I expect our annual spending on travel could be about 1.5 times what we spend on our everyday living (if we don't get tired out first). FIRECalc still gives us 100% at that level of spending. If the market crashes, we'll travel less.

When I travel, my total expenses that month don't increase as much as expected, because my grocery, utility and entertainment expenses are much lower, or nonexistent if I am away for the whole month. Of course, fixed costs such as housing remain unchanged while traveling. One more reason to avoid being house poor.

A lot of my friends have pets. Organizing house sitting or kenneling for the pets is an expensive hassle which may limit their travel. One friend flies a dog to another city to board with a relative. This is one reason why I don't have pets.

 

[Gumby]

When I travel, my total expenses that month don't increase as much as expected, because my grocery, utility and entertainment expenses are much lower, or nonexistent if I am away for the whole month. Of course, fixed costs such as housing remain unchanged while traveling. One more reason to avoid being house poor.

Both good points. Our single biggest fixed budget item in retirement will be property taxes.

 

[Surewhitey]

Here's 2013 spending...a little skewed due to our living in LA for a few months and the transition to Mexico.
Taken from Mint

Spending
$36,128 spent

Home: Mortgage & Rent
$5,687 Food & Dining: Groceries
$4,933 Home: Home Improvement
$3,396 Health & Fitness: Health Insurance
$2,932 Auto & Transport: Gas & Fuel
$2,207 Food & Dining: Restaurants
$2,178 Bills & Utilities: Mobile Phone
$1,451 Gifts & Donations: JW Donation
$1,074 Financial: Life Insurance
$640 Bills & Utilities: Utilities
$530 Shopping: Clothing
$162 Travel: Vacation
$145 Food & Dining: Fast Food
$133 Pets
$81 Bills & Utilities: Internet
$45 Entertainment

 

[Surewhitey]

Here's 2014 (so far) from Mint. Living on the Caribbean coast. Traveled to Cali, TX x2, AR, Cozumel, Isla Mujeres and Belize.

Spending
$27,952 spent

Home: Mortgage & Rent
$5,340
Food & Dining: Groceries
$4,625
Health & Fitness: Health Insurance
$3,136
Auto & Transport: Gas & Fuel
$2,207
Travel
$2,194
Food & Dining: Restaurants
$2,017
Shopping
$1,880
Travel: Vacation
$1,740
Financial: Life Insurance
$1,104
Bills & Utilities: Mobile Phone
$806
Auto & Transport: Auto Insurance
$597
Gifts & Donations: JW Donation
$518
Bills & Utilities: Internet
$414
Shopping: Clothing
$378
Auto & Transport: Service & Parts
$202
Personal Care
$202
Entertainment: Movies & DVDs
$119
Gifts & Donations: Gift
$133
Misc Expenses
$115
Bills & Utilities: Home Phone
$100
Health & Fitness: Gym
$40
Bills & Utilities: Utilities
$69
Food & Dining: Fast Food
$58
Fees & Charges: Trade Commissions
$56
Pets: Pet Food & Supplies
$35
Business Services: Office Supplies
$35
Home: Home Improvement
$34
Health & Fitness: Pharmacy
$29
Entertainment
$20
Taxes
$18
Business Services: Shipping
$18
Shopping: Books
$4
Shopping: Electronics & Software
$3

 

[FANOFJESUS]

That's pretty impressive for 2 people. (small correction - the category is actually 25-50).

I checked that category too, but am actually below the low end of it (just like you). I'm a single, ESR'ed, and living in the SF Bay Area on 17K/yr. I'm comfortable but then, it takes very little to keep me amused. An increase to 20-25K may well be on the cards at some point, and that will allow me to either fund my full-time RV'ing dream, or move into another apartment at the pricier current market rates.

Thanks we are in the Midwest with no debt. We kind of make a game out of it to see how low we can go. In the late 90's we lived on 10.3k but things have just gone up. You are doing great for the Bay area I know it is very expensive out there.

 

[FUEGO]

I figure about $24k is our "need" number that would be hard to reduce much without selling the house (and move to a much cheaper apartment/condo/townhouse/smaller house) and economizing in other ways.

$32k is what we are planning on and includes the standard long term costs like replacing cars, major house repairs/replacements over time, and a fat vacation fund. I guess we get by pretty cheap compared to many here. Simple tastes and all that.

$38,000 is 3% of our dedicated FIRE portfolio, so we still have a little fat in the budget between our "ideal" budget and what we can realistically spend. And now that I've played with the Variable Percentage Withdrawal calculator, I'm 95% certain we can spend $32-34k with the possibility that we can spend closer to $60-70k in many years (depending on portfolio performance).

 

[martyb]

We're feeling comfortable at about $50,000 net. Net to us means after taxes, health & life insurance and also after a survivors benefit for.my wife. None for me, since I'm the one with the pensions. My 2 pensions will provide $46,000 of the net amount mentioned, so any withdrawals will be pretty much discretionary. We'll make withdrawals, but not sure how much yet or when. Guess we'll cross that bridge when we need or want to.

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[ksr]

I live in a relatively high COL area, but have no problem keeping spending within the first category ($25-50K). Like many here, I have a paid-off house and car. I also have simple tastes and fairly low-cost hobbies. But I think the two biggest factors in keeping my budget low are my dislike of travel, and not having children. When I retired, I happily declared that nobody could ever make me fly again.

 

[Samething]

Wow glad to see more responses in the 25-50k category. I was the first to answer in that range and when I went to bed I was the only one. My have to # was just under 17k for the last 2 years. I will not be able to manage my taxable income next year when I retire (selling company stock in retirement plan) so I will pay just under 5k for insurance. Should be able to reduce insurance cost in 2016 with subsidy. I COULD have another 28k discretionary income so I have some wiggle room. I own my humble but comphy home. Taxes $750 per year. New AC and roof. One year old car paid in cash. Yes I have been planing for awhile.

 

[Lucantes]

Both good points. Our single biggest fixed budget item in retirement will be property taxes.

Property taxes and insurance are our #1, 2's, 3's etc.

 

[scrabbler1]

I live in a relatively high COL area, but have no problem keeping spending within the first category ($25-50K). Like many here, I have a paid-off house and car. I also have simple tastes and fairly low-cost hobbies. But I think the two biggest factors in keeping my budget low are my dislike of travel, and not having children. When I retired, I happily declared that nobody could ever make me fly again.

You are a lot like me. I have no real desire to ever fly again, the last time I flew was in 2003 (the longest stretch I have ever gone without flying, including as a kid).The only small difference for me is I live in a paid-off co-op apartment, not a house.

 

[rbmrtn]

I have used 30k/yr for planning, but actual spending has been less than 20K. Of the actual expenses, almost 40% is tied up with property tax and insurances ( auto/health/home),

 

[Walt34]

We're in what I'd call a lower-cost-of-living area but not anywhere near the lowest, even though it is in WV. When SS starts in a year or two we'll be about $73k/year which we regard as "very comfortable but not luxurious". Everything is paid for so no debt and slowly drawing down on some savings until starting SS rather than make a stretch, but we could if we had to.

We know people who are doing fine on half of our income so we know we could too if we had to so we feel lucky to be in the position we are.

 

[nuke_diver]

I went with 75-100K as a comfortable number. The reality is a lot less but that number would include taxes and travel. Travel would be reduced/eliminated in bad times and I imagine taxes would as well. In fact taxes are the thing that makes the range hardest to figure out

 

[FIREd]

It is hard to come up with a number for us because we don't really know what we will do once DW retires. If we decide to continue renting in or near San Francisco, I think that $125K-150K would be a good target. If we move elsewhere in the US (somewhere in the southeast probably) and purchase a cheap home, $75K-$100K might be sufficient. And if we move back to Europe, $50K-$75K might be plenty comfortable. Right now we are shooting for $120K-$150K in order to keep our options open.

 

[38Chevy454]

Still working for now, but I figure about $60K/year total, after taxes will give plenty for the discretionary portion to cover travel and extras. Minimum fixed expenses is about $24K/year, but that does not allow for any real extras. $3K/mo gives a lot of flexibility on discretionary side of the budgeting.

Assumptions in my numbers are no mortgage or car debt.

 

[Rustic23]

Lots of good answers.

As I said there have been lots of threads on how much we spend on retirement. I believe that the primary number one must know is 'how much you must spend'. Close to that may be how much you want to spend. In our case I know the number, day to day, we must spend to maintain our lifestyle. I also know what could be cut, and what I might like to add. Our 'secure' income stream is twice our 'must' spend amount. That puts us in the $50 to $75 thousand dollar range. And while intrinsically I know this is enough, my real feel safe number is one step higher.

Good points that people in higher COL regions would need a higher number, and may bump a category. However, I think the risk tolerance factor might also bump a category or two. It's hard to structure a poll that evaluates a subjective matter with an objective tool. That's where comments come in. A better poll might have been percentage above expenses. In our case it is 44% more than our total expected annual spending.

 

[Cobra9777]

I answered $100-125K, based on the OP's description. I was a bit surprised to see only 9% in that category. The reality for us is $80-100K, excluding income taxes. And that's fairly comprehensive, with decent allowances for travel, entertainment, hobbies, and periodic one-shots, like car replacements and home improvements/repairs. We'd like to go a little higher on travel, which is the only reason I rounded up. But we're in that early stage of retirement (53-54) where we want to travel extensively, but are also nervous about spending too much too soon, and potentially screwing up the whole plan.

I'm also surprised and impressed by the large number who answered $25-50K. I sometimes wonder if those numbers are truly comprehensive, especially in the area of periodic one-shots. But more importantly, it always makes me pause to think about our lifestyle and expenses. With the possible exception of our house (which will be downsized at some point), I don't consider our lifestyle to be out of the ordinary at all, and certainly not luxurious. We are seasoned scrimpers on recurring expenses, like cars, TV, phones, utilities, groceries. But, in addition to travel and hobbies, we do enjoy concerts, sporting events, a decent bottle of wine now and then, eating out with friends and family a couple times a week, and helping the kids in small ways. Subtract all that... and the result is not really what I had in mind for retirement.

 

[W2R]

Lots of good answers.

As I said there have been lots of threads on how much we spend on retirement. I believe that the primary number one must know is 'how much you must spend'. Close to that may be how much you want to spend. In our case I know the number, day to day, we must spend to maintain our lifestyle. I also know what could be cut, and what I might like to add. Our 'secure' income stream is twice our 'must' spend amount. That puts us in the $50 to $75 thousand dollar range. And while intrinsically I know this is enough, my real feel safe number is one step higher.

Good points that people in higher COL regions would need a higher number, and may bump a category. However, I think the risk tolerance factor might also bump a category or two. It's hard to structure a poll that evaluates a subjective matter with an objective tool. That's where comments come in. A better poll might have been percentage above expenses. In our case it is 44% more than our total expected annual spending.

Using last year's data, I added up my present spending for these categories:

utilities
car/gasoline
house maintenance and upkeep
medical
clothing
insurance
tax, and
1.5 times my grocery expenses, in an attempt to model grocery costs if we didn't eat lunch at restaurants every day.

(The result hasn't been a bare bones budget, because I could cut back in each category if I needed to.)

My maximum spending so far in my first five years of retirement, has been 26% higher than that. But that doesn't count the rare expenses like replacing a roof or car. Your estimate of 44% higher would definitely cover that type of unusual expense, at least for me. Like some other single retirees who live in low COL areas and who don't want to travel much, I would still be in the lowest category even if I spent 44% higher.

 

[NW-Bound]

... The reality for us is $80-100K, excluding income taxes. And that's fairly comprehensive, with decent allowances for travel, entertainment, hobbies, and periodic one-shots, like car replacements and home improvements/repairs...

I certainly hope that my recent one-shot expenses will not turn into machine gun fire!

Well, at least I hope to pay for my daughter's upcoming wedding only once. And the new siding on the mountain home is guaranteed for so many years.

But then, the big deck is looking bad after not quite 10 years. And our cars are getting old. Pool and cool deck may need resurfacing.

"If it's not one thing, it's 'nother".

 

[RetireAge50]

At age 50 if I can conservatively estimate 75k income I'm done.


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