Successful ER on 25% of pre-retirement income?

[daylatedollarshort]

One factor is also how frugal you are currently living now. When we both worked crazy hours we really didn't have time to analyze the electric bill or renegotiate the cable rates every 6 months. We would get carry out at least a few days a week because we didn't have time to cook, not because we liked it or it was in any way healthy for us.

We cut over 40K from our budget just by eliminating work related costs (extra vacation week buys, work clothes, lunches out, commute costs), cutting our energy bills in half (LED bulbs, eliminating power hog appliances, weather stripping), dropping life and disability insurance, upping our house insurance deductible, dropping collision on older cars, not getting carry out food, getting rid of the land line, dropping an online subscription service, shopping at warehouse stores, dropping cable channels we never watched and a bunch of other cuts like that.

None of these changes really impacted our lifestyle. It has been kind of a fun hobby these days to see what we can cut and still have the same (or better) basic lifestyle.

 

[rkser]

Shanky,

I would not pull the plug before documenting 2 years of expenses, this will prevent major grief. After 2 years the numbers will tell you, if you can or cannot. Midpack has it right.

 

[walkinwood]

Find a place that you would like to move to in the southeast (even if that's not your final decision) and then find out what the big "automatic" expense reductions will be. You can find out property taxes, insurance amounts (car, home, health), sales & income tax differences & and real-estate purchase costs.

 

[GolfingDuo]

I calculate it would take 140K a year to continue current lifestyle in California (Excludes current savings rate and lower tax bill and lower charity $ upon retirement, so 90K would still be a significant reduction from that. My hope is we could have a scaled down, yet comfortable lifestyle in the Southeast US for 90K. All I was really looking for are any examples where someone actually retired with that much of an income step down. Otherwise, I will need to work about 8 - 10 more years to keep current spending assuming a 3% SWR. My other assumption is most folks scale down $$$ donations to charity in retirement and donate more time instead.

Shanky,

I would not pull the plug before documenting 2 years of expenses, this will prevent major grief. After 2 years the numbers will tell you, if you can or cannot. Midpack has it right.

I agree as well.

Find a place that you would like to move to in the southeast (even if that's not your final decision) and then find out what the big "automatic" expense reductions will be. You can find out property taxes, insurance amounts (car, home, health), sales & income tax differences & and real-estate purchase costs.

Here are two sites that can help.

Taxes by State

Tax Foundation

 

[Shanky]

Thank you all for the input, and my question was answered. There are folks on this board who have retired on less then 25% and others who intend to. I agree with most of the guidance offered and it is in line with our thoughts. It is less of question of is it possible and more a question of do we want to make the trade-offs needed.

The success stories of others are useful, but first hand stories of failure would be even better, but not as likely on this forum.

 

[MDJO]

I am planning to retire on about 30% of current gross income of $320,000. Got EXTREMELY lucky and have been making that much for the past few years. Before then, I made much less. Never increased my spending when I got lucky (except I did splurge and buy my dream car. Ya gotta live a little). I actually live now on about 30% of that income....have always LBMM.

 

[obgyn65]

Never got to do this, but I love my Subaru.

(except I did splurge and buy my dream car. Ya gotta live a little). I actually live now on about 30% of that income....have always LBMM.