Author Topic: I spend ALMOST NOTHING - so how much to save for Retirement?  (Read 7773 times)

heybro

  • Stubble
  • **
  • Posts: 194
I spend ALMOST NOTHING - so how much to save for Retirement?
« on: October 03, 2015, 02:41:50 AM »
edit to post

« Last Edit: October 09, 2015, 11:14:03 PM by heybro »

john c

  • 5 O'Clock Shadow
  • *
  • Posts: 80
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #1 on: October 03, 2015, 03:04:42 AM »
I think the answer is "all of it".  All of what?  You didn't really tell us. 

At a 4% withdrawal rate, $5k per year is $125,000.  You didn't tell us how old you are, so this withdrawal rate doesn't factor in principle drawdown. 

The point of Mustachianism is to work until you have your FI money, then you're free to do what you want to do.  If that's working part time, then do it and don't worry about withdrawing.  If not, then don't and pursue other interests.  The point is that it's YOUR choice, not the choice of your credit card companies that keep you at it, paying off the debts you accumulated.

So, pay off your mortgage in 4 years, and when you have $125k in the markets, you will be FI.  Whether you want to RE is up to you.

firewalker

  • Bristles
  • ***
  • Posts: 308
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #2 on: October 03, 2015, 04:01:15 AM »
Also, make sure about that 5k a year. Property taxes, health care and related unforseeable needs, auto breakdowns, house disasters and major repair possibilities and more need to be considered.

Retire-Canada

  • Walrus Stache
  • *******
  • Posts: 6742
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #3 on: October 03, 2015, 06:29:51 AM »
Forcing yourself to do fun stuff sounds stupid. You should do fun stuff because you want to. If you don't want to do those things than it seems silly to do them.

Your current expenses are $5K/yr. How long has that been the case and how likely is it that it will stay that way?

Are you single? Do you have kids? Do you plan to have kids?

There are a number of life events that can change how much you need to spend/yr.

Ultimately if you are able to live on $5K/yr and want to work all your life until your health doesn't allow it just save the extra money and invest it. You'll either leave behind a nice inheritance for some relatives or you'll be able to donate to a charity you believe in.

Just one thing from my own life. I have many interests. If You gave me $1M today I would never work another day in my life, but I would still be very busy doing lots of different things. They just wouldn't earn me money. So I would not equate wanting to have something(s) to do with needing to work.

wwweb

  • 5 O'Clock Shadow
  • *
  • Posts: 52
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #4 on: October 03, 2015, 07:07:57 AM »
I do not want to become Financially Independent (such as having enough in the stock market to never have to work again).  Why?  Because I get too bored if I don't have at least something to go do in such as working like part time.

Being Financially Independent (FI) doesn't mean never working again. No one looks at your investment accounts and decides if you are allowed to work.  Being FI does mean that if you are for some reason unable to work (e.g. medical issues) or you decide you want to take a break, you don't have to worry about where your next meal comes from.  It also means being able to make choices in line with your priorities - if you'd like to spend more time with your spouse / children / friends and less time working, you can do that with financial worry.


AlwaysBeenASaver

  • Bristles
  • ***
  • Posts: 444
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #5 on: October 03, 2015, 12:49:05 PM »
I'm curious about the 5000/year, especially since you mentioned owning a house. I'm guessing you live in a very low cost of living area, but still dont' you have:

property taxes
occasionally repairs
homeowners insurance
food
utilities

It seems like those things along would be more than 5K/year?

Another comment, be careful about increasing your spending just because you feel you don't need to save it all - this will slowly creep your 5K/year expenses up higher as you get used to more "things" and "experiences."

My recommendation is you put away however much you comfortably can for retirement, meanwhile carefully tracking your expenses over the next 4 years until your house is paid off. Once you reach that goal, you'll have more information and can determine whether you're putting away too much as you fear you might be.

braje

  • 5 O'Clock Shadow
  • *
  • Posts: 67
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #6 on: October 03, 2015, 07:21:23 PM »
5000/year wow.  My Property taxes and Home owner insurance is more then that.

heybro

  • Stubble
  • **
  • Posts: 194
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #7 on: October 04, 2015, 12:31:10 AM »
edit to post
« Last Edit: October 09, 2015, 11:13:24 PM by heybro »

firewalker

  • Bristles
  • ***
  • Posts: 308
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #8 on: October 04, 2015, 05:55:00 AM »
At 27, you will witness a lot of inflation and devaluation. Ten thousand wont be worth 10k as it is today. When you are 50, you may have to double that to $20,000.

former player

  • Magnum Stache
  • ******
  • Posts: 4250
  • Location: Avalon
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #9 on: October 04, 2015, 06:36:45 AM »
You are an unconventional person, so need to think unconventionally about your future.  Don't think about "retirement" in the abstract, think about how you want your life to go, and what resources you need to keep it on that track.

For you, that probably doesn't mean "work until X date and never work again".  It may mean "Being young and healthy with no dependents, I've made a life for myself I'm happy with.  I've also put myself in the position where I can make myself a financial safety net for when one or more of those things is no longer true."  Because at some point in your life (hopefully a long way ) you may not be as capable of paid employment as you currently are, or you may need money to retrain into something to fit your future capabilities or which will give you an income when what you are currently doing no longer provides an income because of economic changes in society.  If you become less physically and mentally capable, you may need to be able to pay someone to do things you currently do for yourself.

Given that you have a low baseline for current spending, and will in a few years own your own house free of debt, I think you are right that the standard calculations for saving percentages and income in retirement don't apply.  For the time being, carry on as you are until your mortgage is paid off.  After that,  I would suggest that for as long as you are happy with your life as it is, you carry on with your current earnings and spending, putting your mortgage money into a "rainy day account".  Given your age, your probable savings rate and the likelihood that your rainy day account won't be needed for a long time, you'll probably have a decent amount in that account pretty quickly.  Whenever you are no longer happy with your current working lifestyle, do something else - for you, this has nothing to do with money and everything to do with living your life the way you want to.

Remember, if you think at some point there is too much in your rainy day account, you can always turn philanthropist and start giving it away.  There is no need to feel bad about having it: it's more a function of the capitalist society you live in than your personal values.  Your trick will be not to let money matter to you too much: no need to unnecessarily deprive yourself now, no need to make yourself throw it away in the future.

Good luck.

YoungInvestor

  • Bristles
  • ***
  • Posts: 396
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #10 on: October 04, 2015, 07:10:55 AM »
It's hard to answer without having an idea of your salary or of the projects you have. Here's my stab at the question.

You could consider accumulating the 125k in, say, 3 years after your mortgage is paid. After that, work (full or part-time) and use the excedent to fund these projects.

Sibley

  • Magnum Stache
  • ******
  • Posts: 3449
  • Location: Chicago, IL
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #11 on: October 04, 2015, 11:59:44 AM »
I'm about 2 years older than you. I can tell you that even in 2 years, my goals for life have changed. In your place, I'd invest whatever I wasn't spending. If something changes, you'll have options. If nothing changes, just keep on trucking.

Exflyboy

  • Walrus Stache
  • *******
  • Posts: 6160
  • Age: 57
  • Location: Corvallis, Oregon
  • Expat Brit living in the New World..:)
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #12 on: October 04, 2015, 12:59:08 PM »
The obvious answer to "how much to save" is a pretty obvious one.

I.e whatever you don't spend you will save.. saving is unavoidable if you spend less than you take home.

As your saving it.. you might as well invest it

And while your saving you might as well do it in  a tax efficient manner.. i.e max out your 401k and IRA contributions.

If someday you don't want to work (or can't).. well then quit.. bingo you'll probably have close to $1M after you paid off your house of course.

Villanelle

  • Magnum Stache
  • ******
  • Posts: 2632
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #13 on: October 04, 2015, 01:20:35 PM »
Given that you "forgot" $3,000 per year, which is an increase of more than 50%, I would do nothing until you actually track your expenses and practice living in your target amount.  Set up a separate account.  Spend money *only* from that account.  Every single penny you spend needs to come out of that account.  Transfer in $10,000 over the course of a year.  Make sure you transfer out the interest.  You want only $10k to be available in that account over the course of a full year.  Also, make sure expenses that don't occur every year are included, like a reasonable amount for home maintenance, car repair/replacement (if you have a car), perhaps things like emergency travel to visit aging family, etc. Your life is going to change a lot in the next 4-5 decades. 

Can you do it comfortably?  If so they that makes a reasonable FIRE goal for you.  As others have pointed out "FIRE" doesn't mean you have to stop working and earning.  It just means you don't have to worry about those things.  If you are laid off, you shrug indifferently.  If you grow to hate your job, you quit without worry, and take your time finding something else. 

Also, you say you'll "always" be able to work and make $5k.  What about when you are old?  What about when the economy is abysmal?    If that $5k is simply your fun money, those scenarios are no big deal.  But with such a tight budget, you are going to actually *need* that $5k, which to me would force me to be much more conservative. 

I'd likely work until the house was paid off and I had enough to give me nearly the full $10,000 (assuming your test reveals that to be a truly accurate number, about which I'm doubtful).  So I'd probably get to at least $200k, and the commit to trying to bring in $10k per year, rather than $5k, until I was at $250k.  After that I'd let my expected $5k/y income be that fun money, plus a hedge against unforeseen changes in life.  I wouldn't be comfortable committing to such a very tight budget for such a very long time, given that life is unpredictable.

If you have side projects you want to start now, do it.  To me it would be worth it to work an extra 6 months if it meant 3 years of doing something that truly interested me.  If it is going to take you 4 years to pay the house and then another 5 (wild guess) to save up your $250k), rather than wait a decade, start one of those side projects now and work an extra 6 months.  Wouldn't it be worth it?

Also, if your timeline is too long, consider ways to increase your income now.   

HAPPYINAZ

  • Bristles
  • ***
  • Posts: 381
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #14 on: October 04, 2015, 01:25:55 PM »


I just don't want to be someone who has like a million dollars in retirement and will never spend it so why do that?  Why not say, 'hey, i need 250k' and once i have that, then start throwing money away to things that I normally wouldn't 'need' to but will do to be more in balance instead of one sided.

thank you!
[/quote]


You can do a ton of great things with extra money.  Why not find a charity you like and work toward making a large donation to them in the future?  Or if you have other family members in need you could save money to give to them.  Set up a trust for nieces or nephews to help them in the future.  If you really don't want the money for yourself, just decide who you want to give it to.  Then you can improve the world and keep your money in balance. 

nereo

  • Senior Mustachian
  • ********
  • Posts: 10309
  • Location: la belle province
    • Here's how you can support science today:
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #15 on: October 04, 2015, 02:28:36 PM »
Heybro - what is important isn't how much you spend now, but how much you plan on spending in the future.  This admittedly is a difficult number to pin down, but you can get some ideas based on your current expenses, whether you will have a family, what health-care, travel and hobby budgets might be.

Also, as pointed out earlier just because you are FI doesn't mean you have to stop working.  FI gives you the choice to do what you like independent of the paycheck.  For example, if there's a business startup or a not-for-profit you can choose to work for no pay/low-pay because it's what you really want to do.  Likewise, if conditions change with your current job you can quit without ever worrying how long it will be until you find a new job.  Likewise, people get injured and sick - being FI allows you to deal with a personal illness or the illness of another.

As for retirement savings, you mentioned $5500 as the 'maximum' you can save for retirement.  This is completely untrue.  While $5500 is the max you can put in an IRA (until you get to catch-up age) there's a variety of tax-advantaged and taxable accounts that can help get with your savings.  There is effectively no limit on how much you can save.

You shouldn't "force" yourself to spend money.  SPend money on things that genuinely add value to your life - otherwise save them, and in the future you'll have those savings to enrich your life or someone else's.

Quote
At 27, you will witness a lot of inflation and devaluation. Ten thousand wont be worth 10k as it is today. When you are 50, you may have to double that to $20,000.
This is inherently accounted for in typical withdraw rates.  For example, if you follow the "4% WR" it assumes an increase in withdraws each year equal to inflation. 

« Last Edit: October 04, 2015, 02:30:23 PM by nereo »

heybro

  • Stubble
  • **
  • Posts: 194
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #16 on: October 05, 2015, 01:03:35 AM »
edit to post
« Last Edit: October 09, 2015, 11:13:44 PM by heybro »

nereo

  • Senior Mustachian
  • ********
  • Posts: 10309
  • Location: la belle province
    • Here's how you can support science today:
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #17 on: October 05, 2015, 05:48:43 AM »

So, I'm on this 'rat-race' of working to pay for a home and to pay for retirement.  My question is 'when can i get off this ride?' So far, your answer is 'never.'  But I want to be able to get off the ride at some point.  And, I don't want to have a million dollars when I do so.

In other words, when can I finally say 'phew, i'm glad THATS over.'  Meaning, when I can look for a part time job instead?  When can I spend money on a trip somewhere that will cost a lot?  When can I finally say, 'i don't have to keep living like i need a million in the bank anymore.' hehe.

I guess maybe I'm asking for something that hasn't been created yet.  I just don't like the current race of save 'everything you can for retirement!' because I don't believe in working forever like that. 

I believe there's a bit of a disconnect between what people are saying and what you are asking.  I don't believe anyone here things the answer is "never" - rather they're just concerned about a few of the things you've said (for example "forcing" yourself to spend money).

The very easy, simple answer of when you can retire and never work again is "when you have 25x* of your future annual spending"  Suppose that you expect to spend $8k/year for the rest of your life... that means you need $200k in investments.   Pretty simple.
The complexities exist because, at that very low level of spending, there may be some years when you have extraordinary expenses and need a bit more money... like if you want to take that long expensive vacation you hinted at, or if you need a major surgery and have a high deductable insurance plan.  To cover those infrequent expenses you might want to have a bit more than $200k... maybe $220k.  How much more depends on what you are comfortable with.

Now the good news - because you have ultra-low expenses and you seem ok with getting a part time (even low-paying) job you have an extraordinary safety net.  For example, even paid minimum wage ($7.25) you'd need to hold a job just 27 weeks to earn enough to meet your expenses.  In that sense, you would need exactly $0 in retirement savings if you were willing to work about half the year. If you can get part-time gig that paid, say, $15 you could work just 3 months a year.

The variabilities exist because it's up to you to decide how much you'd be willing to work each year.  If you never want to have to work again, you'll need about $200k saved up in low-cost index funds.  If you're a bit short of that you could quit your job now, earn just enough each year through part-time gigs to meet expenses and allow your savings to grow (through compounding) until you hit that $200k target.  Or you can decide that you really would like a $15k/year budget that allows you to take a couple of international trips/year, which might require a 'stach closer to $400k.  It's all up to you - if you give hard and fast numbers about what you want, people here will be more than happy to show you what you need to get there and how you can make it work.


*the 25x spending assumes a 4% WR.  A good explanation of why it works the vast majority of the time is here: http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-retirement/

EDIT: fixed typo - thanks dandarc!
« Last Edit: October 05, 2015, 03:41:29 PM by nereo »

Mmm_Donuts

  • Bristles
  • ***
  • Posts: 358
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #18 on: October 05, 2015, 05:57:00 AM »
Once you have the 25x expenses saved, you can forget about money. You can make choices based on other criteria. So it won't matter if a job pays 15k a year or 5k a year or 50k a year -- at the FI point, you can choose the job that interests you the most.

As for not wanting a million dollars, people have answered this for you already. If you get to the point where you feel you have "enough," then there are plenty of charities who would happily take your extra money. And as long as you're working part time and earning a little extra, you can use that money for vacations or whatever extravagances you want.

fa

  • Stubble
  • **
  • Posts: 233
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #19 on: October 05, 2015, 06:11:19 AM »
Furthermore, the difference between 5k and 8k is very small and for the point of this post, I am trying to tell you that I don't spend hardly any money.

The difference is 60%.  Not small by any stretch of the imagination.

Don't forget that at 27 you will change a ton, including you outlook on life, your perception of work, and maybe even your view on kids.  You may not like working even 5 years from now.  There is no way a 27 y/o really knows what he will be like in 10 years or even beyond.  You have much growing to do before you can even remotely claim to know who you will be a decade from now.  So the answer is:  invest everything you are not currently spending.  You don't know when you will need it.  Your low spending rate right now is an opportunity, not a problem.

BPA

  • Handlebar Stache
  • *****
  • Posts: 1191
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #20 on: October 05, 2015, 06:19:36 AM »
Usually when people ask me questions like yours, I give them the link to MMM's blog and tell them to read it.  If they are willing to be even more frugal, I'll direct them to ERE at http://earlyretirementextreme.com/.

So, read the blogs.  That is my suggestion.

Retire-Canada

  • Walrus Stache
  • *******
  • Posts: 6742
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #21 on: October 05, 2015, 07:11:50 AM »

So, many of you are saying it doesn't matter if I have a million dollars.  Well, to me it does.  I do not want to have more than I need.  To me, the point of my mustache is that I know when 'enough' is enough.  I am not going after an expensive house.  I am not trying to have a million dollars one day.  I don't want a million dollars. 

Your questions are not clear.

You say you never want to stop working and only need $5K - $8K to live off and can always find part-time work for at least $10K/yr. 

If your expected retirement benefits from the Gov't exceed $10K/yr than you answer is you can "retire" to part-time work as soon as your house is paid off and you need to save $0. Just work until your benefits kick in.

boarder42

  • Walrus Stache
  • *******
  • Posts: 7849
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #22 on: October 05, 2015, 07:51:20 AM »
yeah OP unless you want to throw down your actual numbers and have some facts we can't help you a whole lot

but if you need 10k a year after your house is paid, and you know you can have a job that will be secure and you will always have 10k coming in.. .then you have 4 years left.  its pretty simple. 

Mntngoat

  • 5 O'Clock Shadow
  • *
  • Posts: 51
  • Location: Southern California
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #23 on: October 05, 2015, 08:18:39 AM »
$5K/ year  only pays  2/3rd of my property tax.   I envy you.

ML

James

  • Handlebar Stache
  • *****
  • Posts: 1680
  • Age: 46
  • Location: Rice Lake, WI
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #24 on: October 05, 2015, 09:48:47 AM »
You are young. Your questions are vague. You don't really know what you want yet, you mostly talk about what you don't want. I think your focus is wrong. Stop worrying about money and just enjoy life. Keep paying off your house, keep saving most of what you make. Try to build up to a 200-300k over the next decade and then coast. Take lots of time off to do what you really enjoy during that decade, don't make it a race if you don't want to. But nobody here knows what you will want in ten years, not even you. So don't worry about what to do with extra money, deal with that when you get there, not now. Certainly don't work full time or at jobs you don't like, you spend little enough you can build up what you need over time while enjoying life and enjoying your job. But don't fixate on a certain number of spending or saving, just spend what you need to in order to enjoy life, and not more, and save what you need to in order to become FI over the next decade. And over that time just consider what direction you would point any extra money either when FI or when you die. It doesn't need to be all fixed and determined ahead of time unless you want it to be, and why would you want it to be, it doesn't sound like it matters that much so just let the specifics go.

Rosy

  • Handlebar Stache
  • *****
  • Posts: 2029
  • Location: Florida
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #25 on: October 05, 2015, 11:30:05 AM »
^^^   James makes a lot of sense  ^^^ 

Quote
Hey!

I am asking how much I should save for retirement.

The answer is ..... it depends:)

You are single, 27, with no dependents and own a house.

1. First, you said you live on $5K (excluding the mortgage payment).
2. Then you said, actually it is $8K including the taxes and insurance for your home.
3. Now you say, let's make it $10K just for the hell of it or in case something comes up.

LOL - really? I'm not particularly good at numbers myself, but you just doubled your annual expenses from $5K to $10K - that spells trouble in real life!

So let's play this game to the next level. You need 10K to live on - so consider Villanelle's advice to put $10K in your checking and live on it for a year. That would be a good start and confirm, without hurting you in any way, whether $10K is realistic.
Of course, if you already have exact figures on all of your expenditures and income last year - then post your numbers for better input.

If I read in between the lines correctly, your entire question is really geared toward
1. what is the minimum I need to do to retire, while still working part time?
2. how quickly can I drop my current full time job and change to a part time job, until I die?:)

Don't turn it into a race, you are still young and have time enough so that there is no reason to ride hell for leather, enjoy your life by living in the present. Pay off your house and give yourself an allowance to pursue your interests. Once your house is paid off - re-evaluate - everything.
 

dandarc

  • Magnum Stache
  • ******
  • Posts: 3394
  • Age: 36
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #26 on: October 05, 2015, 11:45:24 AM »
If you can get part-time gig that paid, say, $15 you could work just 3 months a week.
Not trying to be dick pointing out a typo, but - I want to hit FI mostly because it feels like I am working 3 months a week.

Rosy

  • Handlebar Stache
  • *****
  • Posts: 2029
  • Location: Florida
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #27 on: October 05, 2015, 12:10:30 PM »
Quote
I could easily save A LOT of money for retirement.  The question isn't 'how can I put the maximum I have for retirement.'  No, the question is 'at what point should I force myself to do more fun things. If I put the 5,500 a year that you are allowed put in retirement funds, it seems like I'd have way too much money in retirement for someone who lives off 5k a year.

If you put in $5500 max a year? Do you mean a Roth IRA? Are you saying that you have no 401K and you have no investments or cash of any kind?


nereo

  • Senior Mustachian
  • ********
  • Posts: 10309
  • Location: la belle province
    • Here's how you can support science today:
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #28 on: October 05, 2015, 03:42:42 PM »
If you can get part-time gig that paid, say, $15 you could work just 3 months a week.
Not trying to be dick pointing out a typo, but - I want to hit FI mostly because it feels like I am working 3 months a week.
Typo corrected.  Not sure i've ever felt like I've worked 3 months in a week, but I've certainly hit 2.5 weeks in one.  Pleh.

Villanelle

  • Magnum Stache
  • ******
  • Posts: 2632
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #29 on: October 05, 2015, 07:26:21 PM »
If you are confident that your numbers are accurate, your goals won't change, you will be able and willing to work until you die and able to find work until that day, your outlook for life is set, then retire as soon as the house is paid off, it not slightly before.  Your expenses are $5k and you claim you can easily make that reliably every year.  You make $5k, you spend $5k.  Congratulations.  Once the house is paid off, you are there, if you feel confident in those numbers.  Even that has wiggle room.  If you want the house paid off ASAP, keep working full time until it is done.  If you would rather find a different job that pays less but is more enjoyable, has fewer hours, or seems better in some way, go ahead, but do so knowing that it adds time until the point that you are free to quit and live off the $5000.  Or $8k or $10k.

So what are you asking? 

What people are trying to tell you is that many things can change.  Your roof could go on your house.  Or your condo association could have a $7500 assessment.  Or you could develop a taste for expensive wine or skydiving. 

And if the question is "at what point should you force yourself to do more fin things", the answer is "never".  It's not something you should ever force.  It should happen organically.  That's why most people have a budget.  They decide that $x per year in fun money is worth it, even if, upon doing the math, that leads to another Y months (or years) of work, or a need to work part time a bit longer after major retirement.  So run those numbers.  If you feel comfortable retiring with $125k in savings (which I personally think is crazy), then look at your income and current expenses (all of them, including things like projected home maintenance, because even in a condo the fridge goes out).  Figure out how long it will take you to get there.  Then figure out how much longer it will take if you give yourself $500, $1000, $2000 in fun money.  Pick what works for you, and set that as your budget.  If you don't spend it all, you can either add it to the next year's budget or you can keep it in the stash and subtract a week or two from your projected FIRE date.
« Last Edit: October 05, 2015, 07:38:46 PM by Villanelle »

Bob W

  • Magnum Stache
  • ******
  • Posts: 2947
  • Age: 60
  • Location: Missouri
  • Live on minimum wage, earn on maximum
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #30 on: October 05, 2015, 07:34:59 PM »
$251,287.37 and not a penny less.

heybro

  • Stubble
  • **
  • Posts: 194
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #31 on: October 06, 2015, 12:14:22 AM »
edit to post

« Last Edit: October 09, 2015, 11:14:31 PM by heybro »

MoonShadow

  • Magnum Stache
  • ******
  • Posts: 2542
  • Location: Louisville, Ky.
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #32 on: October 06, 2015, 12:43:26 AM »

2.  I was thinking of trying to have that 25x number once I am 65 years old.  So, setting a goal to have 25x at 65.  That puts pressure off of me now to try to get that number, even if I do end up getting that number sooner.  Also, I believe that number is 25 x expenses in retirement.  So it would have to be in tomorrows dollars.


Also, you might want to assume you will need about a quarter million just for health care expenses late in life, because that is the average in the USA after age 60.  I'm surprised no one has already mentioned it, but as young as you are, medical expenses are the only class of expenses I can promise will be greater than you expect.  Don't count on single payer national health care reform to fix things.  I'm sorry that I just doubled your target yet again, but you're still about half of mine.

And please don't shoot for 65.  Shoot for 50 to 55 as your 'minimalist' target number, and if you still like working when you get there, just keep working till something changes.

Villanelle

  • Magnum Stache
  • ******
  • Posts: 2632
Re: I spend ALMOST NOTHING - so how much to save for Retirement?
« Reply #33 on: October 06, 2015, 01:47:10 AM »
Are you someone who will start randomly blowing cash if you have no specific goal?  If not, why not just have your post-mortgage goal be "save a whole lot, while having $1000 (or whatever) per year with which to play, with no guilt"?  Or perhaps slightly more specific like "keep annual spending, including all house costs, under $12,000".

I think setting a goal for nearly 30 years out will really put you behind the curve if something comes up and expenses rise, or you get sick or injured and can't work or can't work comfortably, etc.  You are so close that it seems like an absolute shame to pull back so much that you don't have the security of FIRE, even if you choose to keep working, before 65. 

It seems to make much more sense to get at least close to your bare minimum FIRE number ($250k) before doing any major pulling back. That buys you so much more flexibility and security, and it's such a relatively small number that it shouldn't take you that long once you have no mortgage payments.