Author Topic: How much do you really need in retirement?  (Read 7822 times)

Asalbeag

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Re: How much do you really need in retirement?
« Reply #50 on: August 14, 2017, 06:22:02 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?

30K per person is a lot, heck that's way more than we spend now including our mortgage. Most people on here talk about that kind of number for a family, you mentioned that both of you will be getting that much so the question actually becomes why do you need so much, sounds like you have a lot of scope to cut back.

Also property taxes and insurance are almost 50% of our monthly mortgage payment and those expenses never really go away they only increase over time.

boarder42

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Re: How much do you really need in retirement?
« Reply #51 on: August 14, 2017, 06:36:11 AM »
i'm sure this has already been mentioned above but you're looking at 750k for a single person or half the share of a couple.  thats not far off from many numbers we see around here b/c we talk about it from a stance of both of us.  My wife and i "need"* around 1.5MM which is double your number for 2 people who will have 2 children. 

* need is a bad word its more a want than a need.  we plan to spend right at the top of the 15% bracket including a mortgage.  my wife thinks we need 2MM and we'll probably end up working til then b/c of some golden handcuffs but its an extra year to get from 1.5ish to 2ish.  and i have to stop working on Jan 2. due to money things with my work setup soooo.  there is no work an extra few months or quit in the middle of a year its jan 2. or the next jan 2.
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afulldeck

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Re: How much do you really need in retirement?
« Reply #52 on: August 14, 2017, 02:22:08 PM »
In our HCOL Canadian city we pay $1750CDN/yr property taxes on a $500K home. That's like $1375USD.

That's unusual, I want to move where you live. 

In Ottawa 500K home will get you 6-8K yearly taxes see http://ottawa.ca/cgi-bin/tax/tax.pl?year=14&property_type=110&tr=1&f=8&sw=6&hyd=Y&rss=Y&assessment=500000&submit=Submit+Query&lang=en

Retire-Canada

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Re: How much do you really need in retirement?
« Reply #53 on: August 14, 2017, 02:34:04 PM »
That's unusual, I want to move where you live. 

Victoria, BC...actually Saanich, BC, but I can throw a frisbee into Victoria from my house.

GuitarStv

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Re: How much do you really need in retirement?
« Reply #54 on: August 14, 2017, 02:36:40 PM »
In our HCOL Canadian city we pay $1750CDN/yr property taxes on a $500K home. That's like $1375USD.

That's unusual, I want to move where you live. 

In Ottawa 500K home will get you 6-8K yearly taxes see http://ottawa.ca/cgi-bin/tax/tax.pl?year=14&property_type=110&tr=1&f=8&sw=6&hyd=Y&rss=Y&assessment=500000&submit=Submit+Query&lang=en

Our home was last appraised in the mid-high 600s, and we pay a bit over 3 grand a year here in Toronto.  Lots of places with cheap property taxes in Canada.

human

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Re: How much do you really need in retirement?
« Reply #55 on: August 14, 2017, 03:29:54 PM »
Ottawa is bad for taxes, we pay almost 5k for a condo. Maybe it's the central folks subsidising the suburbs. They need more roads and more sewage but we have to pay for it or new subdivisions wouldn't get built.

afulldeck

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Re: How much do you really need in retirement?
« Reply #56 on: August 14, 2017, 05:46:28 PM »
In our HCOL Canadian city we pay $1750CDN/yr property taxes on a $500K home. That's like $1375USD.

That's unusual, I want to move where you live. 

In Ottawa 500K home will get you 6-8K yearly taxes see http://ottawa.ca/cgi-bin/tax/tax.pl?year=14&property_type=110&tr=1&f=8&sw=6&hyd=Y&rss=Y&assessment=500000&submit=Submit+Query&lang=en

Our home was last appraised in the mid-high 600s, and we pay a bit over 3 grand a year here in Toronto.  Lots of places with cheap property taxes in Canada.

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moof

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Re: How much do you really need in retirement?
« Reply #57 on: August 14, 2017, 06:08:10 PM »
My budgeting crudely worked as follows:

Current spending:  $70k (including ammortized maintenance, car replacement, typical vacations, and other similar items)
Current mortgage spending: $22k (assumed to be paid off for planning purposes)
Net:  $48k
Healthcare under ACA for silver plan: $5k (major wild card right now)
Target: $53k post tax money
Calculated taxes: $2-4k depending on state we retire to
Final target: $55k

I expect to spend less in retirement by easily 10% lower, but consider that to be cushion not to be counted on yet.  I also will have full SSA benefits 22 years after retirement, and partial spousal benefits in 19 years which in total cover about 85% of our spending past 70.  We can be targeting about a 4.5% SWR due to this.

I also expect that we can attack a lot of spending habits in the short term to lower the target, or increase our margin.

Liberty Stache

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Re: How much do you really need in retirement?
« Reply #58 on: August 17, 2017, 12:04:33 PM »
As most have said, if you roughly double the amount for 2 people ($750K + $750K) plus add in working for a year or three extra to pay for college for kids plus HCOL with good schools plus planning on $20-25K/yr in health care costs (plan for the full amount, not the ACA subsidies) you end up with *needing* more for the entire family: $1.5M-$2M.

On the real estate front, even with a paid off house, most towns in Massachusetts have 1.3-1.5% real estate tax. In an above average town for education you'll end up with a $600K house (with most houses going for $750K-$1MM+) with a $8K-10K+ real estate bill plus maintenance. You could live in a $3-400K condo and pay $4-5K in RE taxes but then you'd end up paying for HOA fees vs. doing the work yourself. In either case, you've just blown through 1/3 of your $30K/yr budget and you haven't touched health care yet.

Now, do I *need* to live in HCOL MA? No, but given we have the best schools in the US, my entire network of friends and family are here, our hospitals are some of the best in the country, and the local economy is one of the best in the world, I would rather stay here and work a few (very easy) extra years to pad the stache to afford it.
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