Author Topic: How much do you really need in retirement?  (Read 6426 times)

merlin7676

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How much do you really need in retirement?
« on: August 10, 2017, 08:07:57 AM »
I see a lot of people post on here about needing a lot of money in retirement but I just don't see how.

My target is 750K which at 4% is 30K a year or $2500 a month.

Assuming no mortgage (which is typically the biggest expense during your working years), wouldn't $2500 a month be enough to live on?

I know it depends on a lot of factors such as where you live, what you plan on spending, taxes,  healthcare, vacations, ect.....but it seems to me that most of the people on here (myself included) already practice some form of minimalism, frugalism, ect.  I just don't see how I could possibly spend that much money each month consistently (yes I will for vacations, medical care ect some months more than others) but overall I don't see it.

My spouse thinks that I'm nuts and that's not enough.  But that's only my share too. He'll also be contributing money from his pension/retirement accounts so even if we match it, that $5000 a month.

Am I missing something?  Or is it really this simple?

 

prognastat

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Re: How much do you really need in retirement?
« Reply #1 on: August 10, 2017, 08:20:29 AM »
I see a lot of people post on here about needing a lot of money in retirement but I just don't see how.

My target is 750K which at 4% is 30K a year or $2500 a month.

Assuming no mortgage (which is typically the biggest expense during your working years), wouldn't $2500 a month be enough to live on?

I know it depends on a lot of factors such as where you live, what you plan on spending, taxes,  healthcare, vacations, ect.....but it seems to me that most of the people on here (myself included) already practice some form of minimalism, frugalism, ect.  I just don't see how I could possibly spend that much money each month consistently (yes I will for vacations, medical care ect some months more than others) but overall I don't see it.

My spouse thinks that I'm nuts and that's not enough.  But that's only my share too. He'll also be contributing money from his pension/retirement accounts so even if we match it, that $5000 a month.

Am I missing something?  Or is it really this simple?

It depends on a lot of factors. Can it be done somewhere in the US if you are willing to remain or move somewhere LCOL, of course.

If you want to live somewhere specific it might become much more expensive.

What size of family do you want? If you are going to have more than 2 parents and up to 2 kids then it is likely going to get quite tight financially.

Healthcare is a concern for many.

For many though they just don't want to be that frugal and for plenty of those that do their spouse doesn't which means compromise.

trashmanz

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Re: How much do you really need in retirement?
« Reply #2 on: August 10, 2017, 08:29:20 AM »

BTDretire

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Re: How much do you really need in retirement?
« Reply #3 on: August 10, 2017, 08:29:45 AM »
$5000 a month is $60,000 a year, above the US median income, that's great.
 It's when you have two trying to live on $750,000 or $30,000 a year that things
could get tight.
 It always comes down to, "are you living on that amount now?"
If not, why not, maybe because you don't want to live on that minimal amount.

Raenia

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Re: How much do you really need in retirement?
« Reply #4 on: August 10, 2017, 08:35:17 AM »
It certainly can be that simple, if you genuinely want it to be.  My base FIRE number (based on my current expenses) is 750k, just like you calculated.  With a paid off house, that could be even lower (I rent currently).  For myself, I rounded up to an even 1mil, to account for future kids.  My SO has some spendy hobbies he wants to put more time into once we RE, so our combined number is more like 1.5mil.

If you're happy living on that amount, then that's all there is to it :)

PizzaSteve

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Re: How much do you really need in retirement?
« Reply #5 on: August 10, 2017, 08:37:18 AM »
Some folks dont want a sustenance level lifestyle, when a few more years of high savings provide a nice safety margin for unexpected expenses.  Worst case the extra money gives us the ability to enjoy some of the more expensive things in life (like living in a HCOL city we prefer). 

My wife and I, personally, are pretty rediculously overfunded.  The reason is that we were able to find pretty satisfying/fun jobs, so we kept working.  Our compromise was to work for about half our market value, but under less responsibility, for an extra 5-10 years after achieving FI (we also took several years off from working, but returned back to work, which topped-up our retirement wealth).  We have no kids, so we found that working during our prime earning years, especially when we didnt have to, was a reasonably satisfying way to spend our time.  No lost time with kids, etc.  Plenty of interesting people at our employers.  Work is less stressfull when you dont give a hoot whether you get fired or laid off.

The goal is to have a fun, enjoyable life, not to race to a retirement finish line.  Having the goal is great, but once you reach FI it is important to be thoughtful about what you want to do with your time.  Working for money is a perfectly reasonable thing to do.  Can always give money to charity too.

PS.  We like living frugally, and probably could live on 30k (excluding property taxes on home and rental property).
« Last Edit: August 10, 2017, 10:10:27 AM by PizzaSteve »
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Cranky

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Re: How much do you really need in retirement?
« Reply #6 on: August 10, 2017, 08:39:27 AM »
What are you living on now? Start from there, and add on some completely unknown number for health insurance/healthcare.

I'm more amazed by people who spend a lot now, but somehow think they will only spend $20,000/year when they retire.

BeanCounter

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Re: How much do you really need in retirement?
« Reply #7 on: August 10, 2017, 08:41:27 AM »
Healthcare for early retirees in the US can be a mortgage.
And kids. Kids are cheap when they are little (other than daycare which you wouldn't need if your FIRE), but man school age through college is rough. I don't want to give mine the world, but I don't want to raise them at the poverty line. It would mean saying no to a lot for them, when I know damn well I can go out and work for it. I'm not okay with that.
Propery taxes and maintenance don't go away just because your mortgage does. Our property taxes are close to $10k annually. This is because we choose to live in a good school district.
Travel. If I'm not working, I'd like funds to travel.

Maybe the above are different for you. Maybe you hate working so much that you're ok with living on less? Everyone's numbers and priorities are different. But don't just assume that it's because some of us are exorbitant spendy pants.


alexpkeaton

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Re: How much do you really need in retirement?
« Reply #8 on: August 10, 2017, 08:42:21 AM »
I want to travel and go to nice (read: expensive) restaurants. I also live in NYC where the maintenance payment on my apartment is near $1,000, which won't go away like my mortgage. I'd like to have about $100k/year in retirement.

Fishindude

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Re: How much do you really need in retirement?
« Reply #9 on: August 10, 2017, 08:43:11 AM »
I wouldn't want to live on that little, but many people do and seem to be fine with it.
You won't be taking many vacations or buying any new cars.

BeanCounter

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Re: How much do you really need in retirement?
« Reply #10 on: August 10, 2017, 08:46:07 AM »
I'm more amazed by people who spend a lot now, but somehow think they will only spend $20,000/year when they retire.
+1 especially if they think they can do it for 30 years. Sounds pretty depressing to me.

talltexan

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Re: How much do you really need in retirement?
« Reply #11 on: August 10, 2017, 08:47:20 AM »
I see certain expenses as conserving time. But when you retire, the need to conserve time goes wayyyy down.

My parents (age 66 and 70) have not retired. Because they work as teachers, we are limited to travelling with them when the academic calendar permits. Prices go wayyy up during these times.

merlin7676

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Re: How much do you really need in retirement?
« Reply #12 on: August 10, 2017, 08:47:33 AM »
Okay that's what I thought.  Thanks for the info.

Yes my husband and I (both men so no kids and both in our 40s so don't want any) don't spend $5K a month now as it is (excluding the mortgage) so I think that's very doable w/out living like misers.  He's really come around to my way of thinking (well our way now of being mindful of our purchases and saving, not spending). Not a full mustachian like me but he's come a long way after seeing how much I've been able to cut back/save/pay off all my debts.

All of our left over money after we pass will go towards charities so don't need any extra to give to kids or other family.

We're pretty low key people as it is. Don't bother with getting the newest gadget or keeping up with the joneses. Enjoy working in the yard, watching netflix, gaming, working out and doing activities at the community center, and working on our low cost hobbies so I think we'll be okay.

At some point after retirement I may get a part time "junk" job just to get some time outta the house and for a few bucks of spending money or maybe volunteer at an animal shelter.

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Re: How much do you really need in retirement?
« Reply #13 on: August 10, 2017, 08:47:53 AM »
I see a lot of people post on here about needing a lot of money in retirement but I just don't see how.

I believe there are just multiple contextual definitions of the word 'need'.

DW and I have lived several years on $30k.  They were EXTREMELY happy times.  We live on more now.  We don't *need* to.  But we designed our FIRE with a lifestyle > $30k a year.  Hence, to reach that number, we "needed" more money.

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merlin7676

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Re: How much do you really need in retirement?
« Reply #14 on: August 10, 2017, 08:53:59 AM »
I see a lot of people post on here about needing a lot of money in retirement but I just don't see how.

I believe there are just multiple contextual definitions of the word 'need'.

DW and I have lived several years on $30k.  They were EXTREMELY happy times.  We live on more now.  We don't *need* to.  But we designed our FIRE with a lifestyle > $30k a year.  Hence, to reach that number, we "needed" more money.

well like I said in my OP, it's 30K for me...30K for DH together is 60K total per year.

Capt j-rod

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Re: How much do you really need in retirement?
« Reply #15 on: August 10, 2017, 08:54:04 AM »
It comes down to lifestyle and location. I think what everyone leaves out is part time employment. You can supplement your retirement pretty easy. Want to retire to $75k/ year in today's dollar.  I figure the $60k from investing and another 15 from side work. If I eliminate all debt we can easily get by on 60... but I don't live in California or New York. The worst possible case scenario is you have to work to supplement. The difference is you can work under your terms. Mow grass, clean gutters, mulch, detail cars... I do hvac and plumbing. As long as I'm healthy I can make money.

andy85

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Re: How much do you really need in retirement?
« Reply #16 on: August 10, 2017, 09:07:33 AM »
My actual normal* spending this year:
jan   1474.16
feb   1688.08
mar   1779.75
apr   2261.62
may   1990.18
jun   2949.98
jul   1712.43

*does not include a ~$9000 kitchen reno...but that is like a once every 20 years type of expense...so i do not consider that normal.

My mortgage principal and interest is $450/month, so in theory, you could take that off if you are looking at post-fire/paid off house expenses (assuming it will be paid off). My biggest spending month was june when we did 3 days in oregon and 4 days in seattle. All airfare and hotels were done with CC points, which could in theory continue being done during retirement. The biggest 'scare/unknown' factor for me, would be health insurance. I guess i could build that $450/month back into the post-fire budget to cover that. But yea...i could live on 2500/month pretty easily.

My target is 750k, although i'd feel more comfortable at 900k. I have a feeling when i hit 500-600k then i may re-evaluate things and think about a semi-fire type setup. only time will tell...

tipster350

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Re: How much do you really need in retirement?
« Reply #17 on: August 10, 2017, 09:24:50 AM »
$750k with a paid off house could work in some areas for one person.

For a lot of us, we want to have more set aside for future needs/wants. Circumstances change. It's easier to go back to work if the stache needs bolstering when you are young and healthy, not so much when you age or your health takes a turn for the worse, or other some other unexpected events occur.


wenchsenior

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Re: How much do you really need in retirement?
« Reply #18 on: August 10, 2017, 09:28:53 AM »
I think it is very dependent on individual circumstance.  It FEELS like we should be 'happy' living on 35K/year, because we were mostly happy living on that in college/grad school.  Of course, in grad school, we were

1) in a fantastic location with tons of outdoor activities,
2) we were INSANELY busy so we didn't do a lot of 'bored' spending,
3) we had few assets, so didn't have to worry about ongoing costs to maintain a house, etc.
4) our cars were beaters (sure, they broke down regularly, we despised them, and they caused us unending stress, but they were ultra cheap)
5) we were in the bloom of youth and had almost no health care needs,
6) we ate a lot of nutrient poor cheap food, and
7) we lived for almost ten years in a crammed studio apt, which was incredibly cheap.

Now in middle age, we

1)  have lived for years in a city and region that sucks balls so it costs us travel money to do almost anything we really love
2) the city is cheap, but we sure don't want to stay here in retirement (see 1), so we have to anticipate higher rather than lower housing costs in retirement, even if we downsize from a 3/2/2 house
3) we work constantly and almost never recreate. If we had more free time, we'd spend more money
4) we drive a better more expensive car, and own two houses (we need extra house because of supporting a relative, and that could continue at least 15 more years)
5) our health care costs are now a real expense, and could very likely go much higher over time
6) we eat more expensive, nutrient dense food
7) we are helping to support family members (adds about 10K/yr of cost)

We currently spend 50-60K/year, spread across two households.  So we anticipate needing at least that much to get by comfortably in retirement, but we expect to need more than that if we want housing in a better location, fun money, and most importantly, cash for health care costs as they increase.

So we are aiming for 70-80K/year income minimum.  Pretty straightforward math for our situation, seems to me.


GenXbiker

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Re: How much do you really need in retirement?
« Reply #19 on: August 10, 2017, 09:31:04 AM »
OP starts out saying just $2500/mo, then later in the same post, adds that spouse will add another $2500/mo.  That's doubling what originally is stated and makes a huge difference.

My bare bones FIRE budget is expected to be under $1500/mo if I don't relocate, but I'm planning for about $3700/mo total to allow a cushion so that I will have $2200+/mo on average left over to spend at my discretion to enjoy life, cover a difference in expenses for potentially relocating, and worst case, to allow me more flexibility to cut back back on my WR% in the future in a down market.

My bare bones includes expected long term housing maintenance averaged out monthly so as to absorb those costs over time as part of my bare bones without having to tap into my stache or discretionary spending allowance.
« Last Edit: August 10, 2017, 11:26:52 AM by GenXbiker »

Spitfire

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Re: How much do you really need in retirement?
« Reply #20 on: August 10, 2017, 09:58:16 AM »
If $750k is only your half and your spouse is adding the same, with a paid off house, you are likely fine unless you have outrageous property taxes or other recurring expense. Health care would probably be my biggest concern if it were me. I don't think 5k a month for 2 people with no mortgage is a bare-bones life.

VoteCthulu

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Re: How much do you really need in retirement?
« Reply #21 on: August 10, 2017, 10:22:05 AM »
I currently spend about $14k per year (excluding my mortgage), and plan to spend about $20k in retirement after my house is paid off. That's on the low side around here, but on the high side at ERE.

prognastat

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Re: How much do you really need in retirement?
« Reply #22 on: August 10, 2017, 10:33:54 AM »
I see a lot of people post on here about needing a lot of money in retirement but I just don't see how.

I believe there are just multiple contextual definitions of the word 'need'.

DW and I have lived several years on $30k.  They were EXTREMELY happy times.  We live on more now.  We don't *need* to.  But we designed our FIRE with a lifestyle > $30k a year.  Hence, to reach that number, we "needed" more money.

well like I said in my OP, it's 30K for me...30K for DH together is 60K total per year.

Slight difference there, 30k per person with a paid off mortage would likely cover a very comfortable life in all but the most HCOL areas.

2Birds1Stone

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Re: How much do you really need in retirement?
« Reply #23 on: August 10, 2017, 11:06:05 AM »
Our current annual spending is $48k/yr in a very HCOL area.

That includes employer subsidized health care @ $100/month for two people and dental for $30/month.

If we had to pay for equivalent health care, and the ACA was not in place....We would need to budget $1-2k/month for medical.
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Zikoris

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Re: How much do you really need in retirement?
« Reply #24 on: August 10, 2017, 11:08:46 AM »
Totally. We've spent around 27K/year for ages, and that includes living in beautiful downtown Vancouver, having tons of hobbies and activities, and traveling to five or six new countries every year. I don't know what we'd even do with the extra $3,000 to make it up to 30K - maybe throw in an extra vacation and bump it up to eight countries a year?
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Valhalla

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Re: How much do you really need in retirement?
« Reply #25 on: August 10, 2017, 11:20:41 AM »
Totally. We've spent around 27K/year for ages, and that includes living in beautiful downtown Vancouver, having tons of hobbies and activities, and traveling to five or six new countries every year. I don't know what we'd even do with the extra $3,000 to make it up to 30K - maybe throw in an extra vacation and bump it up to eight countries a year?
Isn't Vancouver outrageously expensive now, especially from a real estate perspective?  Congrats for such cheap living in Vancouver.
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2lazy2retire

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Re: How much do you really need in retirement?
« Reply #26 on: August 10, 2017, 11:21:37 AM »
I see a lot of people post on here about needing a lot of money in retirement but I just don't see how.

I believe there are just multiple contextual definitions of the word 'need'.

DW and I have lived several years on $30k.  They were EXTREMELY happy times.  We live on more now.  We don't *need* to.  But we designed our FIRE with a lifestyle > $30k a year.  Hence, to reach that number, we "needed" more money.

well like I said in my OP, it's 30K for me...30K for DH together is 60K total per year.

Slight difference there, 30k per person with a paid off mortage would likely cover a very comfortable life in all but the most HCOL areas.
I'm curious what people consider to be HCOL areas if housing is paid off? I live in coastal SoCal and things like property taxes, utilities, and food are all pretty inexpensive - much less than many LCOL areas. Sales tax is high (8-9%) but food isn't taxed and income tax is high but not an issue for a low-taxable-income mustachian. I think health insurance and most other expenses are on par with most other places. My housing expenses - prop tax, insurance and utilities - are only about $300/month. So if you have housing set up so its affordable then many HCOL places can be as low as or lower cost then many LCOL areas.

I agree HCOL = housing, its not like it costs more to ride a bike around NY than Idaho.

Laura33

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Re: How much do you really need in retirement?
« Reply #27 on: August 10, 2017, 11:37:39 AM »
Well, right now we pay @$1100+/mo. for employer-subsidized health insurance.  So there's that.  And we have two kids whom we want to put through college -- it's a want, not a need, but it matters to us, so that either increases the necessary 'stache size or postpones the RE date.  State/local taxes/fees can vary, too (NJ in particular seems to have ridiculous property taxes).  But the rest of it is pretty much down to how fancy you want your lifestyle to be.

Re: HCOL vs. LCOL, beyond the housing cost question:

- All states and localities have to pay their bills; what differs is the size of the bill and how they allocate those costs.  So states that have no income tax frequently have high sales taxes and high fees for things like registering your car.  If you are willing to move to FIRE, it makes sense to evaluate how the individual taxes and fees break down in your target locations, and compare that to how you plan to receive income and what expenses you will have (e.g., will a no-income-tax state actually be that beneficial once your income drops very low, or will you end up paying more in the end because your sales tax is 2% higher, it costs $400/yr to register your car, and your property tax is twice as big?). 
- And of course the services you get for those fees also vary; if I want to live in NY or DC, for ex., housing is horrendous, but at least the public transit means I wouldn't need a car.  OTOH, if that is your version of hell, then you may happily trade fewer services for lower taxes.
- Finally, some parts of the country have much higher or lower costs on specific things -- e.g., HI has very high utility costs; CA has very low fruit/veg costs; my travel costs are a lot lower here than where I lived before because my airport is a Southwest hub; etc.  Again, makes sense to look at the whole picture.
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John123

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Re: How much do you really need in retirement?
« Reply #28 on: August 10, 2017, 01:01:48 PM »
I see a lot of people post on here about needing a lot of money in retirement but I just don't see how.

I know, right? 

My target is 750K which at 4% is 30K a year or $2500 a month.

Awesome!!  I plan on about the same.  All those guys on bogleheads with there $5000 per month FATFIRE make me want to puke!


well like I said in my OP, it's 30K for me...30K for DH together is 60K total per year.

Wait...


Livingthedream55

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Re: How much do you really need in retirement?
« Reply #29 on: August 10, 2017, 01:18:19 PM »
I will have $36,000 a year to live off of - increasing every year with inflation - plus I plan to set aside 15% of that  annually to add to my emergency cash cushion for things like home repairs, unplanned medical expenses.

My starting emergency cash buffer will be the equivalent of two years of spending. Five years in will draw social security which will be fun money. Plus, like others, I am very open to side gigs. So, multiple redundancies.

Housing costs will be moderate (downsized last year) and kids will be young adults so can live with me if they like but will have to pay for their own cell phone, transportation, medical, etc.



travelawyer

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Re: How much do you really need in retirement?
« Reply #30 on: August 10, 2017, 01:22:36 PM »
I see a lot of people post on here about needing a lot of money in retirement but I just don't see how.

I know, right? 

My target is 750K which at 4% is 30K a year or $2500 a month.

Awesome!!  I plan on about the same.  All those guys on bogleheads with there $5000 per month FATFIRE make me want to puke!


well like I said in my OP, it's 30K for me...30K for DH together is 60K total per year.

Wait...

HAHA--came here to say this but wouldn't have been as eloquent.  I think $1.5 MM is considered a pretty high FIRE number for a couple with no kids.  Those other people judged by OP are generally stating the number their whole family needs.

Zikoris

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Re: How much do you really need in retirement?
« Reply #31 on: August 10, 2017, 01:29:30 PM »
Totally. We've spent around 27K/year for ages, and that includes living in beautiful downtown Vancouver, having tons of hobbies and activities, and traveling to five or six new countries every year. I don't know what we'd even do with the extra $3,000 to make it up to 30K - maybe throw in an extra vacation and bump it up to eight countries a year?
Isn't Vancouver outrageously expensive now, especially from a real estate perspective?  Congrats for such cheap living in Vancouver.

My experience so far has been that any city costs exactly as much as you choose to spend. I've just never had trouble keeping my spending low - it seems to be location independent.
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farmecologist

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Re: How much do you really need in retirement?
« Reply #32 on: August 10, 2017, 01:33:37 PM »
Propery taxes and maintenance don't go away just because your mortgage does. Our property taxes are close to $10k annually. This is because we choose to live in a good school district.

Holy $H$T...10K in property taxes?   That is insane.  Do you live in the Northeast?  I've heard that taxes are nuts there.


GenXbiker

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Re: How much do you really need in retirement?
« Reply #33 on: August 10, 2017, 01:40:27 PM »
Well, right now we pay @$1100+/mo. for employer-subsidized health insurance.  So there's that.

Yikes!  I'm paying less than $50 net per month for my employer subsidized health insurance.  Of course, I do have a $100 deductible per year for in-network healthcare and some pharmaceutical and other co-pays like $20 office visit.

I'm curious what people consider to be HCOL areas if housing is paid off? I live in coastal SoCal and things like property taxes, utilities, and food are all pretty inexpensive - much less than many LCOL areas. Sales tax is high (8-9%) but food isn't taxed and income tax is high but not an issue for a low-taxable-income mustachian. I think health insurance and most other expenses are on par with most other places. My housing expenses - prop tax, insurance and utilities - are only about $300/month. So if you have housing set up so its affordable then many HCOL places can be as low as or lower cost then many LCOL areas.

I'm living in what is considered a LCOL area in the midwest in a mid-range middle class home with an attached two-car garage in a very nice neighborhood, and my total housing expenses with utilities average around $570/mo, and that's excluding maintenance.  If I had stayed in the ~930 Sq.ft. home with a detached single-car garage that I used to have in a decent but less desirable neighborhood, I think those costs would be a little under $300/mo today.  In both cases, the home is paid for.  I can't say I regret it despite the higher cost even today, but that move coincided with a new job in a different city and a significant pay increase as well at the time.

For FIRE in a couple years, I'm looking at the possibility of relocating, and housing is the big factor from a financial perspective.  In some areas I've looked at, houses similar to mine in decent neighborhoods are twice as expensive, but if I dip into my stache for the difference, that reduces the $ I get from a 4% WR.  Of course, the option is there to scale back if I move to a HCOL area, but that all has to be factored in to make the decision, and there are other destinations where the difference in housing costs are much less significant.  If I do decide sell my house when I FIRE, I might spend some time doing some slow travel RVing before relocating....  so undecided but with time to think about it.

Retire-Canada

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Re: How much do you really need in retirement?
« Reply #34 on: August 10, 2017, 01:49:59 PM »
Am I missing something?  Or is it really this simple?

$30K/yr for one person seems like a reasonable post mortgage target given you are living as a couple and able to share expenses.

skip207

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Re: How much do you really need in retirement?
« Reply #35 on: August 10, 2017, 02:10:46 PM »
I have been tracking our spending recently.  Excluding ents and mortgage we are at roughly 2.2k per month, 26k PA.
From what I have read on here that's pretty much par for the course.
My goal is c.35k / 850k NW @ 4%SWR.  The additional would be entertainment and travel.


BTDretire

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Re: How much do you really need in retirement?
« Reply #36 on: August 10, 2017, 02:21:03 PM »
 I think many are skipping rare large expenses.
Sure they can be ammortized over many years, but they need to be
added into the yearly expenses.
New Roof (25yr), new carpet (20yr) new water heater (18yr)
Furnace, air conditioner, remodel bath, kitchen, furniture,
new lawnmower, sprinkler system, TV replacement, matress,
dishwasher, washer/dryer wooden fence replacement Auto replacement, etc.

 I haven't calculated but these could add $200 to $500 a month.

prognastat

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Re: How much do you really need in retirement?
« Reply #37 on: August 10, 2017, 02:26:05 PM »
I see a lot of people post on here about needing a lot of money in retirement but I just don't see how.

I believe there are just multiple contextual definitions of the word 'need'.

DW and I have lived several years on $30k.  They were EXTREMELY happy times.  We live on more now.  We don't *need* to.  But we designed our FIRE with a lifestyle > $30k a year.  Hence, to reach that number, we "needed" more money.

well like I said in my OP, it's 30K for me...30K for DH together is 60K total per year.

Slight difference there, 30k per person with a paid off mortage would likely cover a very comfortable life in all but the most HCOL areas.
I'm curious what people consider to be HCOL areas if housing is paid off? I live in coastal SoCal and things like property taxes, utilities, and food are all pretty inexpensive - much less than many LCOL areas. Sales tax is high (8-9%) but food isn't taxed and income tax is high but not an issue for a low-taxable-income mustachian. I think health insurance and most other expenses are on par with most other places. My housing expenses - prop tax, insurance and utilities - are only about $300/month. So if you have housing set up so its affordable then many HCOL places can be as low as or lower cost then many LCOL areas.

I agree HCOL = housing, its not like it costs more to ride a bike around NY than Idaho.

Even if you aren't paying a mortgage you are likely still paying property taxes which will rise with the costs and more importantly most other people are paying those costs which in turn means they require higher pay which in turn raises the cost of products and services.

Much of this can be mitigated by being mustachian/minimalism, but it does have an effect.

GenXbiker

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Re: How much do you really need in retirement?
« Reply #38 on: August 10, 2017, 03:29:16 PM »
I think many are skipping rare large expenses.
Sure they can be ammortized over many years, but they need to be
added into the yearly expenses.
New Roof (25yr), new carpet (20yr) new water heater (18yr)
Furnace, air conditioner, remodel bath, kitchen, furniture,
new lawnmower, sprinkler system, TV replacement, matress,
dishwasher, washer/dryer wooden fence replacement Auto replacement, etc.

 I haven't calculated but these could add $200 to $500 a month.

Indeed.  I've had it in my budget for decades.  There was a thread specifically on that topic earlier this month.

https://forum.mrmoneymustache.com/welcome-to-the-forum/budgeting-home-maintenance-costs

Zikoris

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Re: How much do you really need in retirement?
« Reply #39 on: August 10, 2017, 03:33:06 PM »
I think many are skipping rare large expenses.
Sure they can be ammortized over many years, but they need to be
added into the yearly expenses.
New Roof (25yr), new carpet (20yr) new water heater (18yr)
Furnace, air conditioner, remodel bath, kitchen, furniture,
new lawnmower, sprinkler system, TV replacement, matress,
dishwasher, washer/dryer wooden fence replacement Auto replacement, etc.

 I haven't calculated but these could add $200 to $500 a month.

I think the people skipping it are the people who don't have it. Personally, I live a mostly rare-large-expense-free lifestyle.
Blogging about frugality, travel, and Vancouver life - www.incomingassets.wordpress.com

I also have a journal! http://forum.mrmoneymustache.com/journals/the-zikoris-diaries/

jezebel

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Re: How much do you really need in retirement?
« Reply #40 on: August 10, 2017, 04:15:53 PM »
Yeah, we pay almost 6k in taxes on a 150k house so a paid off house isn't actually that freeing.

gluskap

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Re: How much do you really need in retirement?
« Reply #41 on: August 10, 2017, 04:24:13 PM »
Yeah if you're talking about 750k each so then 1.5 mil for 2 that is totally doable and that's give or take our number now too.  But that probably includes our house value too.  So since we bout our house for $585k, I'm thinking it'll be 1 mil in liquid investments which will give us spending of $40k for 2.  This will probably be enough for bare bones spending and the plan is if investments do well then to do more traveling.

Dave1442397

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Re: How much do you really need in retirement?
« Reply #42 on: August 10, 2017, 05:48:34 PM »
Propery taxes and maintenance don't go away just because your mortgage does. Our property taxes are close to $10k annually. This is because we choose to live in a good school district.

Holy $H$T...10K in property taxes?   That is insane.  Do you live in the Northeast?  I've heard that taxes are nuts there.

Our taxes (NJ) are $11,765 for 2017. That's not even much compared to what we'd pay if we lived in North Jersey. I don't plan on staying here once we retire :)

Retire-Canada

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Re: How much do you really need in retirement?
« Reply #43 on: August 10, 2017, 06:01:00 PM »
In our HCOL Canadian city we pay $1750CDN/yr property taxes on a $500K home. That's like $1375USD.
« Last Edit: August 10, 2017, 06:18:07 PM by Retire-Canada »

Altons Bobs

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Re: How much do you really need in retirement?
« Reply #44 on: August 10, 2017, 06:11:49 PM »
Propery taxes and maintenance don't go away just because your mortgage does. Our property taxes are close to $10k annually. This is because we choose to live in a good school district.

Holy $H$T...10K in property taxes?   That is insane.  Do you live in the Northeast?  I've heard that taxes are nuts there.

Our taxes (NJ) are $11,765 for 2017. That's not even much compared to what we'd pay if we lived in North Jersey. I don't plan on staying here once we retire :)

Ours is a little more than yours at $16k+ this year, but not as much as some of our neighbors at more than double of ours. We built this house to retire in, won't be moving again.

Alf91

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Re: How much do you really need in retirement?
« Reply #45 on: August 10, 2017, 06:22:10 PM »
I'm aiming for $500-750K (single person). That will satisfy my 'needs' - if it ends up being more, that just means more fun!

Bateaux

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Re: How much do you really need in retirement?
« Reply #46 on: August 10, 2017, 09:56:11 PM »
I took a 20k loss this week from the recent high.  You want to live on that loss amount all year.
Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.
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Livingthedream55

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Re: How much do you really need in retirement?
« Reply #47 on: August 11, 2017, 08:31:12 AM »
Am I missing something?  Or is it really this simple?

Pretty much - if you have a couple of years of tracking expenses - and build in some buffers (such as a healthy stache for emergencies or market downturns, etc.) - yes, you can estimate with some confidence what you will need in FIRE.
« Last Edit: August 11, 2017, 08:35:02 AM by Livingthedream55 »



2lazy2retire

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Re: How much do you really need in retirement?
« Reply #48 on: August 11, 2017, 10:11:43 AM »
Propery taxes and maintenance don't go away just because your mortgage does. Our property taxes are close to $10k annually. This is because we choose to live in a good school district.

Holy $H$T...10K in property taxes?   That is insane.  Do you live in the Northeast?  I've heard that taxes are nuts there.

Good schools does not always equate to high property taxes as a percentage of the value of the home. In many cases poorer districts are forced to charge higher taxes as the have less valuable property available. So someone with a 1 million dollar home could be paying 1% - or 10k and a 300k house in a less well off district would be forced to pay 3% to raise the same 10k.
The mustachian thing to do is find the cheapest house in the best district

Spork

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Re: How much do you really need in retirement?
« Reply #49 on: August 11, 2017, 10:28:49 AM »
Propery taxes and maintenance don't go away just because your mortgage does. Our property taxes are close to $10k annually. This is because we choose to live in a good school district.

Holy $H$T...10K in property taxes?   That is insane.  Do you live in the Northeast?  I've heard that taxes are nuts there.

Good schools does not always equate to high property taxes as a percentage of the value of the home. In many cases poorer districts are forced to charge higher taxes as the have less valuable property available. So someone with a 1 million dollar home could be paying 1% - or 10k and a 300k house in a less well off district would be forced to pay 3% to raise the same 10k.
The mustachian thing to do is find the cheapest house in the best district

Very true.  I moved from a very small suburb with very little commercial interest and mediocre schools to a large suburb with lots of commercial property and excellent schools.  Distance moved was about 10 miles.  My property taxes were cut in half, while the value of the home almost doubled.
Some will sell their dreams for small desires
Or lose the race to rats
Get caught in ticking traps
And start to dream of somewhere
To relax their restless flight