Poll: What is your basic income need (floor) in retirement?

[free4now]

Let me jest a little...

1) $0/year no mortgage on $2 million paid off apartment, Mercedes car paid for, social security, medicare, eat at soup kitchen, clothes and furnishings from hand me downs, all other expenses paid by barter and trust fund
2) 5
3) New York City
4) FIREd

In case it isn't clear, I agree that many of the estimates here are wildly optimistic. Not because the numbers aren't correct, but because they are not sustainable, relying on expenditures in other years. Or they rely on outside contributions.

I think some people have been treating this exercise as "what is the least that I could withdraw from my checking account in a single year if I have all the resources I have now and didn't have to replace anything". That is an interesting exercise but not at all useful for apples to apples comparison with others.

 

[Alan]

I think some people have been treating this exercise as "what is the least that I could withdraw from my checking account in a single year if I have all the resources I have now and didn't have to replace anything". That is an interesting exercise but not at all useful for apples to apples comparison with others.

I think you may be correct. My bottom floor for RE is $60K/year after tax, but am planning on $70K/year.

 

[unclemick]

I haven't got a clue what my 'floor' would be - after Katrina, I became less bullet proof after moving inland and let my expenses drift up to about 4% plus early SS plus non cola - cause I don't want my money to exceed my time.

New stuff - medical insurance, car payment, mortgage, cable, cell phone, higher taxes - property, federal, state.

All in maybe 60k with maybe another 20 or so on top if I wish to party till I puke, travel harder, or remodel something.

A long long way from 12k(my one time only 90's low) - don't you just love time in the market - the first ten ER years of cheap bastardhood really paid off - but you can't go home again - but it was fun while it lasted.

heh heh heh - .

 

[SecondCor521]

Me too but DW would have to be one of those non-essential needs that I would have to get rid of

Yup, DW's and children are expensive. Cheap b*stardhood is precisely that. Not as much fun, but cheap.

2Cor521

 

[old woman]

I can live on about 25K plus medical. I could probably live on less, no mortgage, private well and septic tank so low utilities, taxes reduced for low income elderly and I could grow a garden so might survive on 10K. We heat with wood.
I will have more income because I will get SS of about 14K and have enough keep about 400K invested so 16K from that and maybe 8K from rental income so will have 38K without dipping into savings. Every year I wait adds about 50K to my nest egg.

Western WA rural
One person to speak of, roommate pays me rent we don't share money so I don't pay his expenses.
I am still working, I don't mind and roommate can't retire yet.

 

[Spanky]

I think Scott Burn's considers the cost of living in a home at 1% of its' value per year.

Should repair/maintenance cost be based on the size of the house as opposed to the market value? For example, the cost of roof replacement is determined by the size, steepness, number of joints of the roof regardless of the value of the house.

 

[HFWR]

Should repair/maintenance cost be based on the size of the house as opposed to the market value? For example, the cost of roof replacement is determined by the size, steepness, number of joints of the roof regardless of the value of the house.

Well, yes... I'd call it a "rule of thumb", or a SWAG...

Maybe this correlates with "market value" closely enough for govt. work...

Any of you spreadsheeters got a fairly long record of the upkeep costs over the course of, say, ten years or more?

Of course, the devil is in the details, but the main point of budgeting some amount each year for major upkeep is still valid.

 

[Alan]

Well, yes... I'd call it a "rule of thumb", or a SWAG...

Maybe this correlates with "market value" closely enough for govt. work...

Any of you spreadsheeters got a fairly long record of the upkeep costs over the course of, say, ten years or more?

Of course, the devil is in the details, but the main point of budgeting some amount each year for major upkeep is still valid.

I had heard a rate of 2-5% depending on age and size of house, including major appliances such as range, fridge, freezer etc. I kept detailed records of the major repairs needed of our last house over the period june 1992 to Dec 2003. the house was quite old, and had a pool, was 3,500 ft with 2 kitchens and 3 bathrooms, and in Louisiana so reasonably priced (sold it for $220,000).

For us it came to about 30% of the final selling price. We spent $70K over 11 years - new roof, new A/C, new furnance, new range, fridge, freezer, re-lined pool, new pool filter, replaced pump twice .....

 

[free4now]

I had heard a rate of 2-5% depending on age and size of house, including major appliances such as range, fridge, freezer etc. I kept detailed records of the major repairs needed of our last house over the period june 1992 to Dec 2003. the house was quite old, and had a pool, was 3,500 ft with 2 kitchens and 3 bathrooms, and in Louisiana so reasonably priced (sold it for $220,000).

For us it came to about 3% of the final selling price. We spent $70K over 11 years - new roof, new A/C, new furnance, new range, fridge, freezer, re-lined pool, new pool filter, replaced pump twice .....

Did you mean 30% of selling price? That seems like a lot. For my $600k california condo I spent perhaps $30k myself over the 10 years I owned it, plus I'd estimate about $25k worth of the HOA assessments went towards maintenance and repairs.

So my rule of thumb is 0.5 to 1%.

Of course with home values having risen so much in the past decade we would expect the rule of thumb percent to have dropped.

 

[Alan]

Did you mean 30% of selling price? That seems like a lot. For my $600k california condo I spent perhaps $30k myself over the 10 years I owned it, plus I'd estimate about $25k worth of the HOA assessments went towards maintenance and repairs.

So my rule of thumb is 0.5 to 1%.

Of course with home values having risen so much in the past decade we would expect the rule of thumb percent to have dropped.

Thanks - I did miss a zero - I'll correct it. Our house was 22 years old when we moved in and on top of the repairs we also made improvements as we replaced old stuff.

 

[retiringby50]

1) pre-tax income minimum floor in today's dollars (identify if this include mortgage or rent)
2) How many people will the income support (e.g. 2 people)
3) area of the country (e.g. midwest, west coast, east coast) plus if you are in a high expense are (e.g. Manhattan)
4) Status retired/working - Are you planning or have actual experience.

1. $40,000, but I can't remember if this was with or without mortgage... I think without (sorry!)
2. 2 people
3. West coast - Northern CA
4. Not planning to work, but will do it for fun if there's the opportunity (gift wrapper at Macy's, cart return person at the supermarket - need the exercise and need to get out of the house!)

 

[Independent]

Lots of data in this thread. I'm going to try to convert some of it into information.

I counted 50 replies that specified "no mortgage" (or gave an amount that could be subtracted from the total), and seemed like they "followed the rules".
When people said "we could live on X, but currently spend Y", I picked X.

16 replies were for 1 person. The spending ranged from $10,000 to $100,000.
There wasn't a material difference between "working" and "retired". The median was $34,500. The middle 8 replies varied from $18,000 to $36,000.

23 replies were for 2 people. The spending ranged from $24,000 to $70,000.
The 7 people currently working had a median of $42,000. The 14 retirees had a median of $32,500.
The 6 middle values for retirees ranged from $30,000 to $35,000.
Apparantly 2 can live almost as cheaply as 1.

There were 3 replies for with 3 people. Two of them were $100,000.

8 replies were for 4-5 people. 3 of them specified they are retired. The range was $30,000 to $80,000.
The median was $46,500. The 4 middle values ranged from $40,000 to $55,000.

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I'll compare this to earnings. The median earnings for a full-time year-round worker is aound $38,000. If you subtract FICA taxes and mortgage/rent, our single posters are picking a median "basic" spending that appears a little above what single workers actually spend.

If I think about two full-time workers living together, then our posters look somewhat thriftier.

The median income for a "family of four" is around $70,000. Our 8 replies specified a "basic" that was something around what this family spends.

 

[obgyn65]

1) minimum yearly need before tax in today's dollars : $30,000, no mtg
2) 1 person
3) Midwest (high expense area)
4) status : working; planning to retire in 2012

What is your minimum income need in retirement in dollars before tax. Please state the expected minimum yearly income need. This would be the floor that covers non-discretionary expenses and the basic discretionary items that would support your basic needs.

Please share the following information:

1) pre-tax income minimum floor in today's dollars (identify if this include mortgage or rent)
2) How many people will the income support (e.g. 2 people)
3) area of the country (e.g. midwest, west coast, east coast) plus if you are in a high expense are (e.g. Manhattan)
4) Status retired/working - Are you planning or have actual experience.


Our Information:

1) Floor income in retirement: $45K pre-tax (no rent or mortgage $ included. We will own a condo)
2) 2 people
3) Midwest City
4) Working

 

[WhoDaresWins]

I will need at least two-thirds of my present earned income to live in a reasonable way in retirement. The magic base number would be $50,000. I am one person in a reasonable COL area near Pittsburgh. No mortgage (I own a second property in FL but won't go into it for reasons of brevity). My biggest fixed expenses will be property taxes and paying half of my health care insurance (currently covered by my employer). I plan to retire no later than 2014 when I will be 60. I keep bumping it up as I like my job and most of my closest friends are co-workers. I told my boss, though, when she leaves, I will go, too. She says she will give me advance warning on the QT.
I would need more than the amount I mention if I planned to travel extensively as the type of trips I am interested in are costly.

 

[FANOFJESUS]

14k
two people
midwest
retired

 

[cloudeleven]

Interesting how everyone has a significant travel budget in retirement, and some seem to consider it part of their "basic necessities." Why is everyone so obsessed with traveling nowadays, particularly international travel? Can't find enough to do at home to keep you entertained?

Newsflash: Spending a week or two in Europe staying at hotels, eating at nice restaurants, and looking at old buildings doesn't tell you anything about the local people or culture.

 

[cho oyu]

Interesting how everyone has a significant travel budget in retirement, and some seem to consider it part of their "basic necessities." Why is everyone so obsessed with traveling nowadays, particularly international travel? Can't find enough to do at home to keep you entertained?

Newsflash: Spending a week or two in Europe staying at hotels, eating at nice restaurants, and looking at old buildings doesn't tell you anything about the local people or culture.

It's a matter of perspective on what travel means.

One of the benefits of retirement is having more time that can be fully allocated to one's desired pursuits. Being a salary-man may mean holidays are limited to a quick two-week jaunt, but the retired person has so many more options.

Rent a small flat in downtown Paris for two months in the spring while exploring the marvels of the Seine? Check.

Leapfrogging 1-star pensiones in Italy on a bicycle and testing out the wide variety of Tuscan wines? And when you find that wonderful little B&B villa outside Florence, staying there for a few extra weeks and learning viticulture? Check.

Deciding to learn Japanese (through complete immersion) in 3 months while checking out the high speed train system centered around Tokyo? Check.

There are so many amazing things to learn with travel; it doesn't have to be the stereotypical all-inclusive whirlwind package tour or a 5-star resort in the Pacific Isles.

(Edit: Check as in that would be a wonderful thing to do. Unfortunately, I don't yet have that type of financial or time freedom.)

 

[rescueme]

Why is everyone so obsessed with traveling nowadays, particularly international travel? Can't find enough to do at home to keep you entertained?

"Those who have not traveled have only turned the first page of life".

If you wish to stay at home and just experience a limited existence, then fine; that's your option and I won't criticize you for that decision.

As for me/DW? We enjoyed taking a train (Glacier Express) from St. Moritz to Zermatt (Matterhorn) entering a tunnel at the base of a mountain in a valley where spring flowers were in bloom, corkscrewing up through the solid granite, and coming out at the top of a pass where it was snowing (with two feet of snow on the side of the tracks).

We've flown over (and dived under) the Great Barrier Reef off of Queensland, had champagne at sunset while viewing the change in colors of Uluru (Ayers Rock), climbed the Sydney Bridge - just a taste of our month down under.

I've taken my DW to dinner at Le Jules Verne Restaurant to celebrate her birthday (and practice her limited French). Yes, the one in France, not Vegas. BTW, France is one of our favorite destinations (since I worked for a French company and spent much time travelling there, I'm very comfortable with the people, food, wine, and all things French (did I mention the wine?)

I could go on and on about traditional trips and even talk about some that were non-traditional (BTW, my DW spent a few weeks in Cairo in November - something I would not recommend these days).

To experience the world, you have to travel. The Travel Channel may give you a view from your armchair, but to participate you really need to get on the road - out of the country, and out of your "comfort zone".

Not to say we don't travel in the CONUS (we do); but I'm specifically answering your question from our POV...

BTW (and I mentioned this before). Travel is our largest budgeted expense and has been for many years. When we can no longer travel due to age/health, at least we won't say "we should have..."

 

[Danmar]

Either you like travel or you don't(we do). If someone doesn't, no amount of explanation will change their minds. Our lifestyle has us on a plane every 2 weeks or so. Love travel but not flying.

 

[haha]

"Those who have not traveled have only turned the first page of life".

If you wish to stay at home and just experience a limited existence, then fine; that's your option and I won't criticize you for that decision.

William Faulkner lived his entire life in or very close to Oxford, MS. He made one short foray to Hollywood to make some money, but hated it and returned home quickly.

Are you seriously going to suggest that William Faulkner lived a limited existence? Maybe compared to God, but certainly not compared to me.

Ha

 

[BunsGettingFirm]

I think traveling and living in different places gave me an expanded view of what is the possible. Yes, seeing the sights all over the US and now the rest of the world makes for great memories, but I see that there is more than one way to shape my life. More importantly when I talk to my co-workers who never travel, for them everything starts with an I can't, an I won't, or an I don't want to. That same self-limiting mentality applies to the rest of their lives as well.

As for how much is the "minimum" one needs. You might as well be asking for penis sizes on the Internet because that's what you'll get. I see that one poster tried to be scientific buy applying some statistics, but the problem with listing budget on a public forum is pride in both directions. Some people take pride listing ridiculously high budgets, and some take pride listing ridiculously low budgets. Hm...I can see why I am not a writer by profession because my penile analogy just broke down there.

 

[travelover]

It might not surprise some that I love to travel. I especially enjoy traveling to poorer nations. When you see people living on a dollar a day with a corrupt government siphoning off what little tax money there is, it gives one a new perspective.

I wouldn't argue that it is part of my basic living expenses, though - a luxury for me.

 

[W2R]

I don't see a problem with either traveling or not, as long as the person in question knows himself, understands the real reasons why he is traveling (or not), can afford his lifestyle, and is happy with his decision.

On the original topic, I found my response from May, 2007:

1) $35K (no mortgage or loans)
2) 1 person
3) small town midwest
4) Still working now, but won't be working after I retire

Right now, I don't spend anywhere near that much but I want to have that much income after I retire.

I find it interesting that despite all that has happened since I wrote that, my response about basic income would not have changed a bit in almost four years.

Reading a post this old is like psychological archaeology, if there is such a thing. I'm sure there must be another name for digging into one's past mindset.

 

[nun]

1) pre-tax income minimum floor today is $60k as I still have a mortgage.
Once the mortgage is paid and I ER pre tax income required will be $36k as I'll have no mortgage payments, but my medical insurance costs will go up once I have to buy that myself.
2) 1 person
3) Boston
4) 49 years old and 2 years from ER

 

[Nords]

I'm sure there must be another name for digging into one's past mindset.

"Self-assessment" sounds so much more lofty than "What was I thinking?!?"