Author Topic: How much will you retire on when you FIRE?  (Read 18140 times)

Jon_Snow

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Re: How much will you retire on when you FIRE?
« Reply #50 on: January 11, 2015, 12:39:18 AM »
25k to 30k seems to be our spending level which allows us to live the lifestyle we want. Of course, once my wife joins me in ER (in about 5 years) we like that we have a large enough Stache that in certain years, if we want to do some "big things", our spending may be double this amount.


BPA

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Re: How much will you retire on when you FIRE?
« Reply #51 on: January 11, 2015, 07:20:53 AM »
Canada is currently a ripoff, it's true. It hardly matters that you're getting "free health care" when everything else is grossly overpriced.

I think I'd consider Canada a good place to retire if CAD/USD starts to approach 0.6.

I guess it depends on what you are spending your money on.  I spend very little and have a nice life here.  I'm happy to pay taxes to have what we have here and that includes a health care system that is better for early retirement.  It also means that I don't worry about my mother's retirement like a lot of the Americans here do for their parents. 

Also and this doesn't matter much when it comes to RE but I'm a teacher and get paid a decent salary compared to American teachers.

Admittedly all the consumer sukkas I know take the day off to go Black Friday shopping over the border.  Fortunately I buy a lot of my stuff second hand so I get even better deals than they do.

Health care and not worrying about my mom's retirement situation vs buying consumer goods that cost somewhat more here than in the States?  Making far less money than I do now?  No question at all for me where I prefer to live.

Metta

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Re: How much will you retire on when you FIRE?
« Reply #52 on: January 11, 2015, 07:45:06 AM »

We estimate our tight budget at $36,000 (if we have to tighten our belts because the market crashes) and our firehose-of-wasteful-spending budget as $55,000 a year. We figure a normal year will hover between $45,00 and $50,000. This is for two of us. We plan to cuddle into the magnificent high desert in New Mexico and write our little hearts out while feasting on homemade gourmet food. Occasionally we will emerge from our hermitage to hike.

This sounds FANTASTIC. Can I join you? :)

The desert is large and amazingly open, so yes. It does sound fantastic, doesn't it? Every day that I am not there I am dreaming of it.  :)

morning owl

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Re: How much will you retire on when you FIRE?
« Reply #53 on: January 11, 2015, 07:55:21 AM »
@BPA: it's true, we do have a lot of great benefits in Canada, and I'm also happy to pay a little more in taxes to have health care and quality public services. (As I type this I instantly think of some of the public services that are lacking in quality, but overall it's pretty good...) BTW it's impossible to say that canada is a ripoff, as a whole, because there are definitely HCOL areas and LCOL areas. It's like looking at NYC housing prices and saying the US is a total ripoff, because I could never afford $3000 a month rent for a one bedroom apartment! The costs are not universal. There are lots of reasonably priced places to live here.

@Metta: it's great to have such a fun and beautiful dream to encourage and motivate you on your path. I just might borrow this idea and picture myself writing a novel with my DH there to go hiking with every day, in a beautiful setting :)

Metta

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Re: How much will you retire on when you FIRE?
« Reply #54 on: January 11, 2015, 09:39:54 AM »
@Metta: it's great to have such a fun and beautiful dream to encourage and motivate you on your path. I just might borrow this idea and picture myself writing a novel with my DH there to go hiking with every day, in a beautiful setting :)

I think it is good to have a North Star to guide one. It means that I look up at the stars instead of at the muck that I sometimes need to tread through to get to my destination. It brings joy as I think of the future and the steps I'm taking to get there instead of frustrated with current difficulties. So I think a happy visualization coupled with practical steps to get there is very helpful.

h2ogal

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Re: How much will you retire on when you FIRE?
« Reply #55 on: January 11, 2015, 01:37:13 PM »
I would like to have $750K in my personal financial accounts when I "retire" in 898 days!  I expect to be able to contribute $3200 per month to our total household expenses, including my personal expenses, after I'm retired.

DH owns a couple of businesses and this figure doesn't include his accounts, or business worth, nor our house.   

Before I started reading MMM I planned on having $1.3 M before I retired, and I was planning on having to work for another 10 years.  After reading all your stories, especially those who were already FIRED, I realized I was being overly conservative, and not accounting for my tax and other savings once I'm no longer employed.

Since I've been reading MMM I realized I can afford to switch from Full-Time work to Part-Time work in the near future. 


Zikoris

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Re: How much will you retire on when you FIRE?
« Reply #56 on: January 11, 2015, 03:13:22 PM »
By the way, one interesting thing about Canada is that rents tend to be much cheaper than the US for the same price of property. So if you were prepared to spend your retirement renting in Canada, the real estate issue might not be so bad.

However, I don't think renting can be relied on for early retirement because (a) it might be hard to rent when you are 30 years old and your method of supporting yourself is all in the form of investment returns and/or savings (landlords like to see a job), and (b) in most provinces, including my home province, the rent can be arbitrarily raised at any time (that's not the case in Ontario though).

Since (b) is avoidable by living in Ontario, (a) would be the main problem, but it's a major problem. I don't want to spend my retirement convincing other people I can be trusted to pay the rent. That would be degrading and unpleasant. So I'm basing my assessment on property prices rather than renting.

Is there anybody who plans to rent for the rest of their lives as a retirement plan?

We definitely plan to rent, though won't be in Vancouver full time anymore since we plan to do pretty extensive slow travel. I would have no problem providing documents showing my financial situation and investment income to landlords and convincing them to rent to me. I already have to do it now, so why would it be a problem later in life? Most provinces have some sort of restrictions on rent increases - in BC it's something like 2.5% per year maximum, with ample notice. But even i they try to screw you, you can just leave - it's not like you don't have any money to pay for a moving truck.

I actually think living in Canada's major cities is a great option for ER-pursuers. You can find good deals on rent anywhere if you're intelligent, and the benefits of living in a large Canadian city are HUGE - no need for a car, bike-friendly, cheap ethnic grocery markets, lots of free entertainment. To have all that and also never have to worry about medical bankruptcy? Puts you in GREAT shape for ER!

goodlife

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Re: How much will you retire on when you FIRE?
« Reply #57 on: January 11, 2015, 08:42:15 PM »
We are planning on 30,000 per year, so I will FIRE when I have 750,000 saved plus a paid off house. My husband will always want to continue working because he turned his hobby into a career and should always be able to bring in 20k per year at least, so if I really can't take my job anymore, I might consider FIREing a bit earlier. But anyhow, I should be there in 3 years time...at the young age of 33, so it should all work out.

MooseOutFront

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Re: How much will you retire on when you FIRE?
« Reply #58 on: January 12, 2015, 09:24:29 AM »
I go back and forth on this. Current plans call for quitting at a certain date and then just depending on the stache at that time, part time work will be required to varying degrees. Annual expenses are currently $51k, which is disheartening because after significant progress up to now, getting much lower will be a struggle. So I'll plan for $60k in expenses.

All that said, our plan is to pull the plug with about $600-700k and then work just enough to cover expenses without pulling from the stache on purpose for the 1st 5 years or so of FIRE.

Disclaimer: budget includes 4 humans
« Last Edit: January 12, 2015, 10:01:09 AM by MooseOutFront »

ShortInSeattle

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Re: How much will you retire on when you FIRE?
« Reply #59 on: January 12, 2015, 09:39:17 AM »
We're actively working on our ER budget - as we're about 3 years from FI - if the Gods are kind. :)  We like a lot of flexibility, so we have some options:

Basic Budget: No frills, just housing, food, insurance, and medical. Free entertainment only.
$30,000/year

Preferred Budget: Moderate frills. Fun money, a little travel, and restaurants included.
$45,000/year

Travel Budget: Full Frills. Preferred budget plus significant travel each year.
$65,000/year

We'll probably bounce around between our preferred and travel budget for a while after we ER. If the market tanks and we want to preserve capital, we can tighten down to the basic budget without too much trouble. We wanted to have a large discretionary allowance, not only for travel, but also as a buffer against high health care costs as we age, and to enable us to flex with the market.

I half-suspect that we are over-estimating our expenses in some areas, but we are cautious by nature. :) You fine frugal folks make us look like total hedonists!

SIS

epipenguin

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Re: How much will you retire on when you FIRE?
« Reply #60 on: January 12, 2015, 10:13:31 AM »
We waste a lot of money (still) on eating lunches out, and I still waste a lot of money on the house and frivolous girly spending. We also need to move to a more cost effective living situation (for example, in our area, houses within certain city limits have a much higher property tax than similar properties just a couple of miles away, also we need NO POOL - what a waste of money). Moving will probably not happen until 2016 at the earliest though, for various reasons.

So it's hard for me to estimate while I'm still ratcheting the spending down. Even so, if the current house was paid off, we could live well on $30k. I am planning for a portfolio that will support $36k-$40k as a buffer. I hope that when the dust settles in 3-5 years, I'll find that we can live well on much less money and we'll be able to move sooner to the plan of part time and additional seasonal work - we have discussed FIRE but worry that we will be bored so a flexible work situation seems to be the best of both worlds for us, and would allow additional money to come in to pay for travel.

MrMoogle

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Re: How much will you retire on when you FIRE?
« Reply #61 on: January 12, 2015, 01:43:10 PM »
I'm a few years from FI, and probably a few more from RE.  I'm currently in a different situation than when I will be when I RE, so I'm guessing somewhere ~20k, for just me, without a house.  But I would like to have a DW and kids, and my family has a history of health issues that haven't hit me yet, so my expenses could go up significantly.  I want to RE with around 750k (<3% swr), but maybe more if some of these other things happen before then.  I'm also 29, and plan to live another 70 years (lots of relatives made it to 90+), so I'm trying to stay conservative.

Ozstache

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Re: How much will you retire on when you FIRE?
« Reply #62 on: January 12, 2015, 02:59:53 PM »
We spent $22K on core living expenses (accommodation, groceries, amenities, medical, transport) and another $17K on discretionary expenses (holidays, clothing, alcohol, dining out, entertainment, miscellaneous spending, gadgets, gifts)  for a total of $39K for our first year of ER last year. As this was below our worst-case ER income, we directed the excess towards helping out family in genuine need and charity.

We have a separate major purchase budget that averages just over $10K per year, which covers vehicle replacement, special events (weddings, major birthdays), supplemental holidays, major house projects and maintenance, self-improvement, furniture and appliance replacement. This year's feature expense is more holidays.

In summary, my wife and I plan on spending about $50K per year on average in ER living in Canberra, Australia's capital city, which has a reasonably high COL.


Roland of Gilead

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Re: How much will you retire on when you FIRE?
« Reply #63 on: January 12, 2015, 03:07:59 PM »
I wasn't really calling them out.  I totally respect someone saying they want to spend $60k a year in retirement if they want to take trips and such.   I said we plan on spending $70k or so when sailing (a guess).

We haven't started camping yet, so I can't say anything but "might be" for our budget.

I do understand that tax dollars are subsidizing our lifestyle.   The past several years we have been paying around $60,000 in federal tax while living on about $30,000 (saving over $120,000 a year in 401K, IRA, HSA and everywhere else I can tuck it).  I figure we have prepaid for our future lifestyle subsidy by taxpayers.  :-)

You don't have to sail a 17 foot boat near the coast, a large lake will do.  We have sailed Lake Chelan in WA state many times and there are BLM lands all around there.   Our boat has wheels.
Roland - I have many friends who do the free camping (boondocking) thing on BLM land. Most live on a tiny budget by parking the Behemoth RV for months at a time and riding their bike, motorcycles or small compact car. So other than food, which as we all know here can be very inexpensive, fuel for the car or motorcycle (or nothing if bicycling) and RV gen., and whatever insurances they carry they have no other expenses. Uber cheap. Even I myself, who stays at regular tent campsites that cost anywhere from $5/night to $25/night at max., can live very frugally with my only other expense being gas for the 4 cylinder vehicle and food (have health insurance paid for and an passive income low enough I pay no taxes).  Even doing this with a paid for house as I have the last 10 plus years since ER'd, I still keep my budget below $20K/year - and that includes some things like budget motels and even off season vacation rentals. Once I sell my house this spring and am travelling full time I expect my expenses can be as low, or high, as I want. I already posted my sailboat expenses above.

Spartana,

Yes thanks.  I think the earlier poster misunderstood our budget plans.  What I meant was we were going to camp on BLM land in our home built RV (built to such high standards that it doesn't need much maintenance) BEFORE we buy a blue water sailboat.  Thus there will be no storage for the sailboat as we won't have one (well, just our little 17 foot trailer pull sailboat which can be stored as cheap as $60 a month or so if we don't want to haul it to the desert).   $20K is the low end...probably will be $25k to $30k.

When we are finished touring the USA, estimated at 5 to 6 years, THEN we will buy a big sailboat and outfit it for world cruising.  That is when our budget likely will jump to $70K.   We will most likely sell our RV, which will be a sad day indeed.