The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: heybro on May 18, 2016, 11:05:02 PM
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I need this amount per year in retirement!
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50k or less without mortgage. More with but an inflation hedge and I get to fire a year earlier if I don't pay it down.
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"150k or less" will probably fit me just fine regardless of what happens
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$40K after tax with mortgage.
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"150k or less" will probably fit me just fine regardless of what happens
I agree. Even with inflation, that will probably work out fine for my life span.
Though I suppose some of it depends on what happens with my medical bills, and if I'm paying for kids college when I'm retired.
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I need less than $50k.
I want, and am fortunate to be able to earn, much more than that. Will probably retire in the $125k range.
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Current standard of living indicates that I need less than 25k, but between 25k and 50k I have a good cushion. I'm currently in a dual income, no kids situation though - so things can always change.
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I'm aiming for $100K to support the lifestyle I want, so it's what I need to feel safe enough to retire. I like my career, so I'll just keep working until I hit that level. Of course, as I get older, my wife and I will reevaluate the situation to try to avoid the one-more-year syndrome.
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We could live on 30k. 40k is what I'm aiming for, and provides sizable cushion to deal with potential problems.
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Planning on $20,000 in today's dollars, for myself, hopefully no mortgage.
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We spend about 27K/year now, and that includes living in the downtown core of the most expensive city in Canada and traveling overseas frequently in the most inefficient ways possible (peak seasons, expensive short term accommodation, lots of flying). No way in hell would we need more than 25K to retire.
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Considering MMM spends $24,000/yr for his luxurious life, I think you need more levels added on the lower side of the poll!
I'm planning on $24,000. But my happiness at 3 months FIREd? Priceless!
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25K or less. At retirement the house will be paid off and is in a LCOL area. Other than that, don't spend a ton of money. I'd say I could easily get by on less than 1K a month so less than 12K a year.
Of course my spouse will be contributing then too so even if we both kick in 1K each per month it's only 24K a year.
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Need about mid to high forties net. Looking at retiring on around 80-100 gross. I'd Like exactly 104.. I'm anal like that... :o)
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We could live on 30k. 40k is what I'm aiming for, and provides sizable cushion to deal with potential problems.
We're in the same boat. We currently spend somewhere between 30 and 40K in a given year, w/ a mortgage. I make 75K, and we'll add 40K for DW when she goes back to work in a year or so.
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Although our current lifestyle could be supported by about 45k a year, I voted for "less than 25k" because we are planning on moving out of the country to LCOL areas.
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Based on current spending + post-FIRE expenses (mainly Health Care) our anticipated spending is under $48K (inflation adjusted). For security we are budgeting $60K.
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Easily 25k a year. The only unknown would be healthcare but otherwise would be fine with this. We're currently living on $1300 a month expenses right now. No debts. Our full retirement is awhile away so who knows how things may change as it gets closer though.
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How much per family? Per family member? Per adult? All interesting data points.
I'm guessing the <25k is mostly single people, or with families with the house paid off. I had originally thought the buckets were too big, but I have been proven wrong :)
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I "need" a lot less then I could spend, so I don't know what is being asked.
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Assuming I have a reasonable rent/mortgage, I can live on $2000/month, which is $24k/year. If I lived in a house that was fully paid off, you could cut that in half. I am FIRE and paying rent and I live on a $2k budget now. This is with money leftover to spend too. Some months I spend as little as $1400.
Even pre-FIRE this was how much I lived on per month. It wasn't out of necessity either - just this was about how much I've for the most part always lived on. All income above that went into savings. This is for a family of 2 adults, no kids, 1 pet bird who only costs about $60/year to feed.
We live in a LCOL area though. We've lived in super HCOL areas over the years though, and that sometimes made our monthly spending about twice as much as it is now. If you can move to a LCOL area, it is a lot easier to FIRE on a smaller monthly budget.
Easily 25k a year. The only unknown would be healthcare but otherwise would be fine with this. We're currently living on $1300 a month expenses right now. No debts. Our full retirement is awhile away so who knows how things may change as it gets closer though.
It really depends on your income, how much you're willing to pay out of pocket, etc. The amount of passive income I make from stocks/dividends is high enough to make me ineligible for Medicare, but low enough that I get some really nice ACA subsidies. None of my passive income is from property. The healthcare plan I have technically costs $400/month. With ACA subsidies, I only pay $40/month, but at tax time I get money back too from it, so it actually ends up being only $12/month.
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Should differentiate between single and household.
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Operating fine on $1400 / mo now single, with rent.
$2000 per mo married sounds like it should be feasible, I mean, how much could a Mrs. Shor spend in one month? Hahaha.. (don't answer that....)
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I will be barebones FI @ ~$18k/yr and plan to pull the plug on FT work at $30k/yr
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spartana and 2birds1stone,
i also have a yearly cost of living of under 10k, similar to you. that is great. i just never wanted to base retirement on only 10k though even though i can easily live below it. so cool to hear others are living on very little as well. woof.
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I am very curious on how anyone can retire on so little. I am extremely frugal but there's no way in hell I can keep my basic expenses under $73K. Let's start with the assumption that I am responsible for medical coverage for a family of four, I have no mortgage and I drive a paid for car.
Property taxes, insurance, maintenance 600
Food/life and TLC insurance 1,500 (cook most of my food and eat farm to table mostly)
Health insurance premium and out of pocket 2,500
Utilities/phone/cable 800 (family of four and older home with gas heat)
Car insurance and gas $700 (teenage driver and one more to go)
And I haven't even added all the other expenses like car for teenagers, incidentals, entertainment, travel, allowances for teenagers, clothes, etc. I am honestly baffled. I can only assume that most of those taking the poll live in very low cost area, are mostly single, not living an average middle class life, do not own cars, do not travel, grow their own food, etc.
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I am very curious on how anyone can retire on so little. I am extremely frugal but there's no way in hell I can keep my basic expenses under $73K. Let's start with the assumption that I am responsible for medical coverage for a family of four, I have no mortgage and I drive a paid for car.
Property taxes, insurance, maintenance 600
Food/life and TLC insurance 1,500 (cook most of my food and eat farm to table mostly)
Health insurance premium and out of pocket 2,500
Utilities/phone/cable 800 (family of four and older home with gas heat)
Car insurance and gas $700 (teenage driver and one more to go)
And I haven't even added all the other expenses like car for teenagers, incidentals, entertainment, travel, allowances for teenagers, clothes, etc. I am honestly baffled. I can only assume that most of those taking the poll live in very low cost area, are mostly single, not living an average middle class life, do not own cars, do not travel, grow their own food, etc.
I'm not sure if you are serious or not. You have a lot of posts on the forum though which confuses me greatly.
If a paid off house costs you nearly $20k a year, then yeah, you're going to have an expensive retirement.
Though you still spend about 3x per adult as my family does on food (only considering adults). Your car insurance and gas expenses are INSANELY expensive, too.
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I am very curious on how anyone can retire on so little. I am extremely frugal but there's no way in hell I can keep my basic expenses under $73K.
I can only assume that most of those taking the poll live in very low cost area, are mostly single, not living an average middle class life, do not own cars, do not travel, grow their own food, etc.
If you expect to live an average middle class life and you think you are extremely frugal I think there is a terminology problem in your post. The two are mutually exclusive. At least based on what is average behaviour in North America.
MMM posts his annual spending on his blog and is in the $25K/yr range for a family of 3 with a paid off house. You can see his annual reports and see what he spends money on.
If you are actually interested in lowering your annual cost of living post a case study and folks will help you pair down your spending.
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I am very curious on how anyone can retire on so little. I am extremely frugal but there's no way in hell I can keep my basic expenses under $73K. Let's start with the assumption that I am responsible for medical coverage for a family of four, I have no mortgage and I drive a paid for car.
Property taxes, insurance, maintenance 600
Food/life and TLC insurance 1,500 (cook most of my food and eat farm to table mostly)
Health insurance premium and out of pocket 2,500
Utilities/phone/cable 800 (family of four and older home with gas heat)
Car insurance and gas $700 (teenage driver and one more to go)
And I haven't even added all the other expenses like car for teenagers, incidentals, entertainment, travel, allowances for teenagers, clothes, etc. I am honestly baffled. I can only assume that most of those taking the poll live in very low cost area, are mostly single, not living an average middle class life, do not own cars, do not travel, grow their own food, etc.
I'm not sure if you are serious or not. You have a lot of posts on the forum though which confuses me greatly.
If a paid off house costs you nearly $20k a year, then yeah, you're going to have an expensive retirement.
Though you still spend about 3x per adult as my family does on food (only considering adults). Your car insurance and gas expenses are INSANELY expensive, too.
Since you didn't say what about my other posts that greatly confuses you I cannot address this comment. I am not sure you even read my latest post carefully since your response doesn't make sense to me. I don't see where a paid off house is costing $20K. While I agree that my expenses are not bare minimum they represent close to what I spend today with two teenagers and very high life insurance for my partner and I because we have underage children and rental properties. Also eating farm to table is not cheap and gas and insurance for three cars in a household isn't cheap. What's not shown is all the other expense categories in which we are extremely frugal. For example we do our own extensive yard and house maintenance, travel on the cheap and do some major thrifting. The paid off house and the medical insurance are estimated costs in case I do decide to stop working. I still have a mortgage and my job cover the majority of medical expense right now. If I do decide to quit, I expect to live on rental income and investments.
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I am very curious on how anyone can retire on so little. I am extremely frugal but there's no way in hell I can keep my basic expenses under $73K.
I can only assume that most of those taking the poll live in very low cost area, are mostly single, not living an average middle class life, do not own cars, do not travel, grow their own food, etc.
If you expect to live an average middle class life and you think you are extremely frugal I think there is a terminology problem in your post. The two are mutually exclusive. At least based on what is average behaviour in North America.
MMM posts his annual spending on his blog and is in the $25K/yr range for a family of 3 with a paid off house. You can see his annual reports and see what he spends money on.
If you are actually interested in lowering your annual cost of living post a case study and folks will help you pair down your spending.
Yes I have reviewed MMM spending in detail and I will not dissect it here but suffice it to say that there are other expenses that are omitted and which likely fall under his business expenses which most people cannot do. I am not knocking him in anyway just pointing out the obvious. Also, with teenagers at home, I am sure you can imagine that one's expenses would be way more until at least they are self supporting.
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40-45k until mortgage is paid off in 2027, then 30-35k per year. Two adults, no kids at home.
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Live on 41k per year with a mortgage. 28K if mortgage was paid off. This is for family of three. Could take another 20k per year from stash, but don't need it.
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I am very curious on how anyone can retire on so little. I am extremely frugal but there's no way in hell I can keep my basic expenses under $73K.
I can only assume that most of those taking the poll live in very low cost area, are mostly single, not living an average middle class life, do not own cars, do not travel, grow their own food, etc.
If you expect to live an average middle class life and you think you are extremely frugal I think there is a terminology problem in your post. The two are mutually exclusive. At least based on what is average behaviour in North America.
MMM posts his annual spending on his blog and is in the $25K/yr range for a family of 3 with a paid off house. You can see his annual reports and see what he spends money on.
If you are actually interested in lowering your annual cost of living post a case study and folks will help you pair down your spending.
Yes I have reviewed MMM spending in detail and I will not dissect it here but suffice it to say that there are other expenses that are omitted and which likely fall under his business expenses which most people cannot do. I am not knocking him in anyway just pointing out the obvious. Also, with teenagers at home, I am sure you can imagine that one's expenses would be way more until at least they are self supporting.
Yeah, MMM isn't the best example here. There are lots of folks on the forums and in other blogs who legitimately live on less than the median annual household income without lots of shadow business expenses.
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I said $50k or under. Right now, DH and I are living on just my income (saving a bunch pre-tax), and it's been do-able but I think we would both prefer to have some extra funds for travel. Our basic budget to be able to retire is around $40k annually, but shooting for closer to $50k would mean we could take a couple very lavish international trips each year, or multiple US-based trips.
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65 to 75k for 2 people. Four years ago we lived on 40k to see if we could do it. that meant no traveling, eating out, etc. OUr health insurance premiums are 10k/year. Also we have 4 old dogs and vet bills are high here. Right now we are traveling and having experiences while we can. It feels good to know that we can cut back if we have too.
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LetJ, I also occasionally wonder about the people who plan to live on less than 30K. I guess we COULD do it, but I'm not sure I want to. We spend a bit on travel, but we aren't really typically consumptive sorts...don't spend much on clothes, toys, gadgets, etc. Food is a big expense, and could be tightened with better planning, but frankly, our grocery budget is always going to be relatively higher than is desired by many MMMers, and I'm ok with that.
But I have a hard time seeing a good path to 30K when I run the numbers...we are currently saving 40-50% of take home pay, and living in one of the cheapest cities in the country on after-savings income of 45-55K, which is our cost for 2 people + 3 cats + 1 additional person that we are partially supporting in a second household (utilities, insurance, mortgage, prop taxes, repairs, etc.).
So if you remove the support for the third person, that would shave approx. 10K off expenses. But that person is likely to live at least 15 more years, and at least SOME support will likely continue until then (depressingly, my husband will be full retirement age by then).
If both houses were paid off, then that would free up another 8K. We could tighten a few misc. categories of spending up, too, if we had to, maybe freeing up another 3 to 5K.
Given all those caveats, we could get close to or under 30K BUT, if we had more free time, there would inevitably be some more spending to fill it. Also, I have miscellaneous health conditions that are ongoing, and expect to cost ever more money as I age. And who knows what costs aging will bring in term of my husband's health. (I suspect a lot of young people on this forum underestimate medical costs out of pocket as they age). And finally, we don't WANT to stay in this inexpensive town where the mortgages are scheduled to be paid off. Because it sucks and the idea of aging and dying here makes us miserable. But anywhere else we move, we will be spending a lot more on housing. In fact, we expect to be carrying a substantial mortgage in retirement because of this. Or spending the equivalent on rent.
So, I am aiming for similar plan to Cassie...65-75K minimum, so actually spending MORE in retirement than we currently do, and possibly spending >75K/year if we end up with very expensive housing after a move.
Whether we can achieve this goal is somewhat questionable, but this forum keeps me focused on working toward it.
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I am very curious on how anyone can retire on so little. I am extremely frugal but there's no way in hell I can keep my basic expenses under $73K. Let's start with the assumption that I am responsible for medical coverage for a family of four, I have no mortgage and I drive a paid for car.
Property taxes, insurance, maintenance 600
Food/life and TLC insurance 1,500 (cook most of my food and eat farm to table mostly)
Health insurance premium and out of pocket 2,500
Utilities/phone/cable 800 (family of four and older home with gas heat)
Car insurance and gas $700 (teenage driver and one more to go)
And I haven't even added all the other expenses like car for teenagers, incidentals, entertainment, travel, allowances for teenagers, clothes, etc. I am honestly baffled. I can only assume that most of those taking the poll live in very low cost area, are mostly single, not living an average middle class life, do not own cars, do not travel, grow their own food, etc.
Some of your costs are just really high, that's all, presuming those are monthly. Here's a sample of the big differences with mine.
Taxes & insurance on my home runs $250. Maintenance varies widely, but over the first six years it's roughly an extra $100 on average for $350.
Food $400, no life insurance as it's a waste of money for us.
Utilities/Phone/Internet $150.
Car insurance (for 3 cars and the motorcycle) and gas $200
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LetJ, I also occasionally wonder about the people who plan to live on less than 30K. I guess we COULD do it, but I'm not sure I want to. We spend a bit on travel, but we aren't really typically consumptive sorts...don't spend much on clothes, toys, gadgets, etc. Food is a big expense, and could be tightened with better planning, but frankly, our grocery budget is always going to be relatively higher than is desired by many MMMers, and I'm ok with that.
But I have a hard time seeing a good path to 30K when I run the numbers...we are currently saving 40-50% of take home pay, and living in one of the cheapest cities in the country on after-savings income of 45-55K, which is our cost for 2 people + 3 cats + 1 additional person that we are partially supporting in a second household (utilities, insurance, mortgage, prop taxes, repairs, etc.).
So if you remove the support for the third person, that would shave approx. 10K off expenses. But that person is likely to live at least 15 more years, and at least SOME support will likely continue until then (depressingly, my husband will be full retirement age by then).
If both houses were paid off, then that would free up another 8K. We could tighten a few misc. categories of spending up, too, if we had to, maybe freeing up another 3 to 5K.
Given all those caveats, we could get close to or under 30K BUT, if we had more free time, there would inevitably be some more spending to fill it. Also, I have miscellaneous health conditions that are ongoing, and expect to cost ever more money as I age. And who knows what costs aging will bring in term of my husband's health. (I suspect a lot of young people on this forum underestimate medical costs out of pocket as they age). And finally, we don't WANT to stay in this inexpensive town where the mortgages are scheduled to be paid off. Because it sucks and the idea of aging and dying here makes us miserable. But anywhere else we move, we will be spending a lot more on housing. In fact, we expect to be carrying a substantial mortgage in retirement because of this. Or spending the equivalent on rent.
So, I am aiming for similar plan to Cassie...65-75K minimum, so actually spending MORE in retirement than we currently do, and possibly spending >75K/year if we end up with very expensive housing after a move.
Whether we can achieve this goal is somewhat questionable, but this forum keeps me focused on working toward it.
It certainly possible but takes sacrifice. Like you I spend very little outside the necessities. We save the equivalent of my salary and live on income from our rental business. Some MMMers forget that having children, particularly teenagers/college age could add quite a bit. Even when my house is paid off and children are self supporting I think all in I would like to have about $75K so I don't have to scrimp and I can enjoy some travel. The biggest wild card would be the cost of health insurance. I plan to budget between $2000 to $2,500 if I retire early.
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I am very curious on how anyone can retire on so little. I am extremely frugal but there's no way in hell I can keep my basic expenses under $73K. Let's start with the assumption that I am responsible for medical coverage for a family of four, I have no mortgage and I drive a paid for car.
Property taxes, insurance, maintenance 600
Food/life and TLC insurance 1,500 (cook most of my food and eat farm to table mostly)
Health insurance premium and out of pocket 2,500
Utilities/phone/cable 800 (family of four and older home with gas heat)
Car insurance and gas $700 (teenage driver and one more to go)
And I haven't even added all the other expenses like car for teenagers, incidentals, entertainment, travel, allowances for teenagers, clothes, etc. I am honestly baffled. I can only assume that most of those taking the poll live in very low cost area, are mostly single, not living an average middle class life, do not own cars, do not travel, grow their own food, etc.
Some of your costs are just really high, that's all, presuming those are monthly. Here's a sample of the big differences with mine.
Taxes & insurance on my home runs $250. Maintenance varies widely, but over the first six years it's roughly an extra $100 on average for $350.
Food $400, no life insurance as it's a waste of money for us.
Utilities/Phone/Internet $150.
Car insurance (for 3 cars and the motorcycle) and gas $200
Just to get a bit more granular. My property tax is $6,000 a year on a house worth about $550K. Cable/internet/home phone $150, cell phone for 4 people $200 includes phone plans, food $1000, life insurance and long term care $600( a lot of insurance but I have a rental business and my husband manages mostly since I work. If something happens to him we can be screwed), gas heat and water in the winter for 4,000 sq ft $700, non winter months $130. I could go on and on but I think you get the picture and I haven't included all the kid related activities and other expenses. I plan on selling my house in the near future but I got it so insanely cheap during the Great Recession it was worth every penny.
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$15,000/year is my magic number
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extremely frugal
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$550K home
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spend very little outside the necessities
...
Property taxes $500
insurance, maintenance $100
Food $1000
life and TLC insurance $500 $600
Health insurance premium and out of pocket $2,500
Utilities $450
Cell Phone $200
phone/cable $150
Car insurance and gas $700
Monthly Total: $6200
Annual cost: $74,400
Just so I understand correctly, you spend $30,000 on health insurance premiums and expenses?
Not to mention over $8000 on car insurance and gas?
The fact that you own a high-cost home isn't even the issue. Your property costs aren't outrageous. Your utilities are high, though I'd love to know "actual annual expense" rather than estimates like $450 or "sometimes $700, sometimes $130." And actual car insurance vs gas costs. How many miles does your family drive each month?
At $0.57 / mile, $700 would cover 1200 miles per month... but since we're only talking insurance and gas, not the cost of the car, maintenance, oil or repairs, we're probably talking about $0.2 mile or 3500 miles each month (100 miles / day.)
Hopefully you live in a very, very high cost-of-living (and very high income) area, or this whole set of numbers is truly mind-numbing.
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I do think younger people do not think about the cost of health care as they age. My dental insurance paid 1500 and I had to have 33k worth of dental work done. There was no way to spread it out for a few years. That was on top of our normal budget. I have a few friends with cancer that spend a fortune even with insurance.
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I do think younger people do not think about the cost of health care as they age. My dental insurance paid 1500 and I had to have 33k worth of dental work done. There was no way to spread it out for a few years. That was on top of our normal budget. I have a few friends with cancer that spend a fortune even with insurance.
I budget $1,000 per month for health insurance alone. Out of pocket, Dental and Vision not included.
Edit: This is for two people.
Makes me think hard about retiring overseas!
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Our insurance alone costs 10k/year for 2 people.
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I am very curious on how anyone can retire on so little. I am extremely frugal but there's no way in hell I can keep my basic expenses under $73K. Let's start with the assumption that I am responsible for medical coverage for a family of four, I have no mortgage and I drive a paid for car.
Property taxes, insurance, maintenance 600
Food/life and TLC insurance 1,500 (cook most of my food and eat farm to table mostly)
Health insurance premium and out of pocket 2,500
Utilities/phone/cable 800 (family of four and older home with gas heat)
Car insurance and gas $700 (teenage driver and one more to go)
And I haven't even added all the other expenses like car for teenagers, incidentals, entertainment, travel, allowances for teenagers, clothes, etc. I am honestly baffled. I can only assume that most of those taking the poll live in very low cost area, are mostly single, not living an average middle class life, do not own cars, do not travel, grow their own food, etc.
Some of your costs are just really high, that's all, presuming those are monthly. Here's a sample of the big differences with mine.
Taxes & insurance on my home runs $250. Maintenance varies widely, but over the first six years it's roughly an extra $100 on average for $350.
Food $400, no life insurance as it's a waste of money for us.
Utilities/Phone/Internet $150.
Car insurance (for 3 cars and the motorcycle) and gas $200
Just to get a bit more granular. My property tax is $6,000 a year on a house worth about $550K. Cable/internet/home phone $150, cell phone for 4 people $200 includes phone plans, food $1000, life insurance and long term care $600( a lot of insurance but I have a rental business and my husband manages mostly since I work. If something happens to him we can be screwed), gas heat and water in the winter for 4,000 sq ft $700, non winter months $130. I could go on and on but I think you get the picture and I haven't included all the kid related activities and other expenses. I plan on selling my house in the near future but I got it so insanely cheap during the Great Recession it was worth every penny.
You wonder how people do it...
Cut cable/phone & only keep internet = $50/mo => 100/mo savings
Cheaper cell phones $25/person = $100/mo => 100/mo savings
Cut your grocery bill to 125/person/mo = $500/mo => 500/mo savings
Retired means don't need life insurance = $0/mo => 600/mo savings
Keep the house colder in winter (blankets) =400/mo => 300/mo savings
There's $19,200 off your yearly expenses right there and that doesn't count the huge drop in expenses once you no longer support your children...
You might not choose to do it but this is expenses many people here live on.
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I do think younger people do not think about the cost of health care as they age. My dental insurance paid 1500 and I had to have 33k worth of dental work done. There was no way to spread it out for a few years. That was on top of our normal budget. I have a few friends with cancer that spend a fortune even with insurance.
I budget $1,000 per month for health insurance alone. Out of pocket, Dental and Vision not included.
Makes me think hard about retiring overseas!
Yeah, we have relatively good insurance through the Feds, but it covers squat in terms of dental and vision. This year so far, we've spent 5.5K (including premiums of $500/month) for very basic medical care: an annual physical with full lab panels for my husband, eye exams for us both, and an annual ob/gyn exam for me that included a bit of lab work and a heinously expensive ultrasound (which I need to have done every few years)>
We still haven't done dental cleanings, which will cost several hundred bucks.
Then I need to get a full physical, with lab panels, since my last was 2.5 years ago.
Then there are the procedures the doctors are always pressuring me to get. Mammogram doesn't cost so much, but I'm planning to have one only every third year. Docs also harass me to get an annual MRI (~900$ out of pocket). Then there's the very expensive, uninsured medication (200$/month) that I should really start taking for a chronic condition. I've put that off for about 4 years, but can't put it off any more...
So I expect another 6-8K of medical costs just this year. And this is with relatively good insurance!
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extremely frugal
...
$550K home
...
spend very little outside the necessities
...
Property taxes $500
insurance, maintenance $100
Food $1000
life and TLC insurance $500 $600
Health insurance premium and out of pocket $2,500
Utilities $450
Cell Phone $200
phone/cable $150
Car insurance and gas $700
Monthly Total: $6200
Annual cost: $74,400
Just so I understand correctly, you spend $30,000 on health insurance premiums and expenses?
Not to mention over $8000 on car insurance and gas?
The fact that you own a high-cost home isn't even the issue. Your property costs aren't outrageous. Your utilities are high, though I'd love to know "actual annual expense" rather than estimates like $450 or "sometimes $700, sometimes $130." And actual car insurance vs gas costs. How many miles does your family drive each month?
At $0.57 / mile, $700 would cover 1200 miles per month... but since we're only talking insurance and gas, not the cost of the car, maintenance, oil or repairs, we're probably talking about $0.2 mile or 3500 miles each month (100 miles / day.)
Hopefully you live in a very, very high cost-of-living (and very high income) area, or this whole set of numbers is truly mind-numbing.
I am sorry but I can't rehash this again. You need to read my original posts and follow up posts carefully. The medical insurance is only an estimate if I were to stop working. The cost is gas, maintained and insurance for 3 cars that are used daily to get back and forth to work and school. The cost is not so far fetched. The $450 for utilities is a monthly estimate when you smooth out the annual costs. I have a large house that's 100 years old so not energy efficient and I keep it at 73 in the winter. I could do better there for sure.
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I am very curious on how anyone can retire on so little. I am extremely frugal but there's no way in hell I can keep my basic expenses under $73K. Let's start with the assumption that I am responsible for medical coverage for a family of four, I have no mortgage and I drive a paid for car.
Property taxes, insurance, maintenance 600
Food/life and TLC insurance 1,500 (cook most of my food and eat farm to table mostly)
Health insurance premium and out of pocket 2,500
Utilities/phone/cable 800 (family of four and older home with gas heat)
Car insurance and gas $700 (teenage driver and one more to go)
And I haven't even added all the other expenses like car for teenagers, incidentals, entertainment, travel, allowances for teenagers, clothes, etc. I am honestly baffled. I can only assume that most of those taking the poll live in very low cost area, are mostly single, not living an average middle class life, do not own cars, do not travel, grow their own food, etc.
Some of your costs are just really high, that's all, presuming those are monthly. Here's a sample of the big differences with mine.
Taxes & insurance on my home runs $250. Maintenance varies widely, but over the first six years it's roughly an extra $100 on average for $350.
Food $400, no life insurance as it's a waste of money for us.
Utilities/Phone/Internet $150.
Car insurance (for 3 cars and the motorcycle) and gas $200
Just to get a bit more granular. My property tax is $6,000 a year on a house worth about $550K. Cable/internet/home phone $150, cell phone for 4 people $200 includes phone plans, food $1000, life insurance and long term care $600( a lot of insurance but I have a rental business and my husband manages mostly since I work. If something happens to him we can be screwed), gas heat and water in the winter for 4,000 sq ft $700, non winter months $130. I could go on and on but I think you get the picture and I haven't included all the kid related activities and other expenses. I plan on selling my house in the near future but I got it so insanely cheap during the Great Recession it was worth every penny.
You wonder how people do it...
Cut cable/phone & only keep internet = $50/mo => 100/mo savings
Cheaper cell phones $25/person = $100/mo => 100/mo savings
Cut your grocery bill to 125/person/mo = $500/mo => 500/mo savings
Retired means don't need life insurance = $0/mo => 600/mo savings
Keep the house colder in winter (blankets) =400/mo => 300/mo savings
There's $19,200 off your yearly expenses right there and that doesn't count the huge drop in expenses once you no longer support your children...
You might not choose to do it but this is expenses many people here live on.
I hear you and I am taking notes. I plan to stop working in the next 3 years but I plan to keep the LTC and life insurance. My husband does most of the maintenance and management of the rentals. The life insurance is equivalent of the payoff amount on the mortgage for the rentals.
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I am very curious on how anyone can retire on so little. I am extremely frugal but there's no way in hell I can keep my basic expenses under $73K. Let's start with the assumption that I am responsible for medical coverage for a family of four, I have no mortgage and I drive a paid for car.
Property taxes, insurance, maintenance 600
Food/life and TLC insurance 1,500 (cook most of my food and eat farm to table mostly)
Health insurance premium and out of pocket 2,500
Utilities/phone/cable 800 (family of four and older home with gas heat)
Car insurance and gas $700 (teenage driver and one more to go)
And I haven't even added all the other expenses like car for teenagers, incidentals, entertainment, travel, allowances for teenagers, clothes, etc. I am honestly baffled. I can only assume that most of those taking the poll live in very low cost area, are mostly single, not living an average middle class life, do not own cars, do not travel, grow their own food, etc.
Some of your costs are just really high, that's all, presuming those are monthly. Here's a sample of the big differences with mine.
Taxes & insurance on my home runs $250. Maintenance varies widely, but over the first six years it's roughly an extra $100 on average for $350.
Food $400, no life insurance as it's a waste of money for us.
Utilities/Phone/Internet $150.
Car insurance (for 3 cars and the motorcycle) and gas $200
Just to get a bit more granular. My property tax is $6,000 a year on a house worth about $550K. Cable/internet/home phone $150, cell phone for 4 people $200 includes phone plans, food $1000, life insurance and long term care $600( a lot of insurance but I have a rental business and my husband manages mostly since I work. If something happens to him we can be screwed), gas heat and water in the winter for 4,000 sq ft $700, non winter months $130. I could go on and on but I think you get the picture and I haven't included all the kid related activities and other expenses. I plan on selling my house in the near future but I got it so insanely cheap during the Great Recession it was worth every penny.
You wonder how people do it...
Cut cable/phone & only keep internet = $50/mo => 100/mo savings
Cheaper cell phones $25/person = $100/mo => 100/mo savings
Cut your grocery bill to 125/person/mo = $500/mo => 500/mo savings
Retired means don't need life insurance = $0/mo => 600/mo savings
Keep the house colder in winter (blankets) =400/mo => 300/mo savings
There's $19,200 off your yearly expenses right there and that doesn't count the huge drop in expenses once you no longer support your children...
You might not choose to do it but this is expenses many people here live on.
I hear you and I am taking notes. I plan to stop working in the next 3 years but I plan to keep the LTC and life insurance. My husband does most of the maintenance and management of the rentals. The life insurance is equivalent of the payoff amount on the mortgage for the rentals.
I think its still not coming through as to why you need insurance. As above, retired typically means you or him are not working. Managing and maintaining rentals isn't technically retired. It would seem (based on the limited info provided) that if your husband wasn't around you could get a property management company to take 10% of rent and be in the same position. It seems that by structuring a windfall from insurance to pay off mortgages that something isn't computing. If they need to be paid off before retirement then that does not go to the original question, as to what is needed in retirement. Also not sure why kids expenses would still be included. Its just not making much sense which is why everyone is so confused about your numbers.
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I am very curious on how anyone can retire on so little. I am extremely frugal but there's no way in hell I can keep my basic expenses under $73K. Let's start with the assumption that I am responsible for medical coverage for a family of four, I have no mortgage and I drive a paid for car.
Property taxes, insurance, maintenance 600
Food/life and TLC insurance 1,500 (cook most of my food and eat farm to table mostly)
Health insurance premium and out of pocket 2,500
Utilities/phone/cable 800 (family of four and older home with gas heat)
Car insurance and gas $700 (teenage driver and one more to go)
And I haven't even added all the other expenses like car for teenagers, incidentals, entertainment, travel, allowances for teenagers, clothes, etc. I am honestly baffled. I can only assume that most of those taking the poll live in very low cost area, are mostly single, not living an average middle class life, do not own cars, do not travel, grow their own food, etc.
Some of your costs are just really high, that's all, presuming those are monthly. Here's a sample of the big differences with mine.
Taxes & insurance on my home runs $250. Maintenance varies widely, but over the first six years it's roughly an extra $100 on average for $350.
Food $400, no life insurance as it's a waste of money for us.
Utilities/Phone/Internet $150.
Car insurance (for 3 cars and the motorcycle) and gas $200
Just to get a bit more granular. My property tax is $6,000 a year on a house worth about $550K. Cable/internet/home phone $150, cell phone for 4 people $200 includes phone plans, food $1000, life insurance and long term care $600( a lot of insurance but I have a rental business and my husband manages mostly since I work. If something happens to him we can be screwed), gas heat and water in the winter for 4,000 sq ft $700, non winter months $130. I could go on and on but I think you get the picture and I haven't included all the kid related activities and other expenses. I plan on selling my house in the near future but I got it so insanely cheap during the Great Recession it was worth every penny.
You wonder how people do it...
Cut cable/phone & only keep internet = $50/mo => 100/mo savings
Cheaper cell phones $25/person = $100/mo => 100/mo savings
Cut your grocery bill to 125/person/mo = $500/mo => 500/mo savings
Retired means don't need life insurance = $0/mo => 600/mo savings
Keep the house colder in winter (blankets) =400/mo => 300/mo savings
There's $19,200 off your yearly expenses right there and that doesn't count the huge drop in expenses once you no longer support your children...
You might not choose to do it but this is expenses many people here live on.
I hear you and I am taking notes. I plan to stop working in the next 3 years but I plan to keep the LTC and life insurance. My husband does most of the maintenance and management of the rentals. The life insurance is equivalent of the payoff amount on the mortgage for the rentals.
I think its still not coming through as to why you need insurance. As above, retired typically means you or him are not working. Managing and maintaining rentals isn't technically retired. It would seem (based on the limited info provided) that if your husband wasn't around you could get a property management company to take 10% of rent and be in the same position. It seems that by structuring a windfall from insurance to pay off mortgages that something isn't computing. If they need to be paid off before retirement then that does not go to the original question, as to what is needed in retirement. Also not sure why kids expenses would still be included. Its just not making much sense which is why everyone is so confused about your numbers.
Ok hopefully this clears it up. We were a one income family when we first started a family and my husband stayed home with the children so we each had substantial life insurance for obvious reasons. We then started investing in real estate which we grew substantially and which can support us with a very good lifestyle if I were to retire. In the meantime we've used the profits to continually acquire new properties, refinance and acquire more. Because my husband does much of the remodel and maintenance we've been able to have a much greater ROI and greater rental profits. He is very skilled and does everything from electrical to plumbing. If he can no longer do this our profits and ROI would take a big hit. The properties are class C and located in the inner city and have mostly section 8 so maintenance is very high since tenants are hard on them. These are not the kind of properties you can use a property manager to manage. The management is just too intense. I am unlikely to continue this business if my husband isn't around to help and vice versa since we work closely as a team. We have several dozen properties and this great cash flow will disappear if neither me nor my husband can do this so we've decided that we should hang on to our life insurance. We have been focused on acquisition for the last 8 years so we are just beginning to use our substantial cash flow in alternative investments. I know you could pick this apart but it is the decision we've made because it feels right. I know the snipets I have provided does not provide enough context or background and hence the confusion. Maybe I'll start my own journal if I can find some time.
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We hover right around 45K expenses now but this is with spending a lot on eating/drinking and other expensive activities. As we get more badass those expenses will drop but then we will have kids so some expenses will rise. My target is 50K a year just to be safe.
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I am very curious on how anyone can retire on so little. I am extremely frugal but there's no way in hell I can keep my basic expenses under $73K. Let's start with the assumption that I am responsible for medical coverage for a family of four, I have no mortgage and I drive a paid for car.
Property taxes, insurance, maintenance 600
Food/life and TLC insurance 1,500 (cook most of my food and eat farm to table mostly)
Health insurance premium and out of pocket 2,500
Utilities/phone/cable 800 (family of four and older home with gas heat)
Car insurance and gas $700 (teenage driver and one more to go)
And I haven't even added all the other expenses like car for teenagers, incidentals, entertainment, travel, allowances for teenagers, clothes, etc. I am honestly baffled. I can only assume that most of those taking the poll live in very low cost area, are mostly single, not living an average middle class life, do not own cars, do not travel, grow their own food, etc.
Some of your costs are just really high, that's all, presuming those are monthly. Here's a sample of the big differences with mine.
Taxes & insurance on my home runs $250. Maintenance varies widely, but over the first six years it's roughly an extra $100 on average for $350.
Food $400, no life insurance as it's a waste of money for us.
Utilities/Phone/Internet $150.
Car insurance (for 3 cars and the motorcycle) and gas $200
Just to get a bit more granular. My property tax is $6,000 a year on a house worth about $550K. Cable/internet/home phone $150, cell phone for 4 people $200 includes phone plans, food $1000, life insurance and long term care $600( a lot of insurance but I have a rental business and my husband manages mostly since I work. If something happens to him we can be screwed), gas heat and water in the winter for 4,000 sq ft $700, non winter months $130. I could go on and on but I think you get the picture and I haven't included all the kid related activities and other expenses. I plan on selling my house in the near future but I got it so insanely cheap during the Great Recession it was worth every penny.
You wonder how people do it...
Cut cable/phone & only keep internet = $50/mo => 100/mo savings
Cheaper cell phones $25/person = $100/mo => 100/mo savings
Cut your grocery bill to 125/person/mo = $500/mo => 500/mo savings
Retired means don't need life insurance = $0/mo => 600/mo savings
Keep the house colder in winter (blankets) =400/mo => 300/mo savings
There's $19,200 off your yearly expenses right there and that doesn't count the huge drop in expenses once you no longer support your children...
You might not choose to do it but this is expenses many people here live on.
I hear you and I am taking notes. I plan to stop working in the next 3 years but I plan to keep the LTC and life insurance. My husband does most of the maintenance and management of the rentals. The life insurance is equivalent of the payoff amount on the mortgage for the rentals.
I think its still not coming through as to why you need insurance. As above, retired typically means you or him are not working. Managing and maintaining rentals isn't technically retired. It would seem (based on the limited info provided) that if your husband wasn't around you could get a property management company to take 10% of rent and be in the same position. It seems that by structuring a windfall from insurance to pay off mortgages that something isn't computing. If they need to be paid off before retirement then that does not go to the original question, as to what is needed in retirement. Also not sure why kids expenses would still be included. Its just not making much sense which is why everyone is so confused about your numbers.
Ok hopefully this clears it up. We were a one income family when we first started a family and my husband stayed home with the children so we each had substantial life insurance for obvious reasons. We then started investing in real estate which we grew substantially and which can support us with a very good lifestyle if I were to retire. In the meantime we've used the profits to continually acquire new properties, refinance and acquire more. Because my husband does much of the remodel and maintenance we've been able to have a much greater ROI and greater rental profits. He is very skilled and does everything from electrical to plumbing. If he can no longer do this our profits and ROI would take a big hit. The properties are class C and located in the inner city and have mostly section 8 so maintenance is very high since tenants are hard on them. These are not the kind of properties you can use a property manager to manage. The management is just too intense. I am unlikely to continue this business if my husband isn't around to help and vice versa since we work closely as a team. We have several dozen properties and this great cash flow will disappear if neither me nor my husband can do this so we've decided that we should hang on to our life insurance. We have been focused on acquisition for the last 8 years so we are just beginning to use our substantial cash flow in alternative investments. I know you could pick this apart but it is the decision we've made because it feels right. I know the snipets I have provided does not provide enough context or background and hence the confusion. Maybe I'll start my own journal if I can find some time.
i think other people have beaten this horse to death but even if you kept your life and health insurance you're still just building your retirement to meet you current spending. The purpose of this blog is to optimize your life and your spending so you can retire earlier. if you dont want to cut cable and need your 1k a month food budget and your 200 a month cell phone bill by all means go ahead. but when you ask the question "how do you live on so little" and inlcude "i'm a frugal person" ... you're going to get all the answers you've seen here b/c as this community goes you're probably one of the top spenders here and would not be considered frugal with bills like that.
you want to live on less
1. buy an efficient house thats around 2500 sq ft. your 4k sq ft monster at 550k is not a frugal housing choice
2. tru 6 were already covered in the post above
there is a lot of bloat in your spending and if you're ok with it thats fine and live your life that way. but it doesnt take much to cut that fat.
the snipits provided more than provide enough info to find places to cut your stereotypical middle class spending.
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Bare-bones we could probably get down to 25K.
But counting travel and ageing health costs I would rather budget close to 50K.
We are super fortunate to be in Canada where most health costs should be covered but insurance will be required for dental, eyes and Rx once it is not covered by work. A quick Google search and this seams to be only $120/month per family for 50-80% coverage. This seams too good to be true, I "estimated" $500/month. More research required to know for sure.
Lejt? I know your $2,500 was just an "estimate", and US is very different from Canada, but how did you estimate it?
Our housing costs are also quite high ~$1150/month for tax, insurance & utilities (450+150+ ~550). We don't plan on moving, so this will only go up with time. Utilities would include water+elec+trash 160, gas 220, internet 70, 2 cells 100.
My SO is crazy handy and we can currently do almost all home maintenance. Ironically, we had roofers do our house because of the steep slope, but we helped my SIL re-roof for free. Avoiding the risk of falling off our roof was well worth the money.
We only have 1 child, 1 car, 2 cell phones. With 3 teenagers our costs could be creeping closer to Letj levels...
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I am very curious on how anyone can retire on so little. I am extremely frugal but there's no way in hell I can keep my basic expenses under $73K. Let's start with the assumption that I am responsible for medical coverage for a family of four, I have no mortgage and I drive a paid for car.
Property taxes, insurance, maintenance 600
Food/life and TLC insurance 1,500 (cook most of my food and eat farm to table mostly)
Health insurance premium and out of pocket 2,500
Utilities/phone/cable 800 (family of four and older home with gas heat)
Car insurance and gas $700 (teenage driver and one more to go)
And I haven't even added all the other expenses like car for teenagers, incidentals, entertainment, travel, allowances for teenagers, clothes, etc. I am honestly baffled. I can only assume that most of those taking the poll live in very low cost area, are mostly single, not living an average middle class life, do not own cars, do not travel, grow their own food, etc.
Some of your costs are just really high, that's all, presuming those are monthly. Here's a sample of the big differences with mine.
Taxes & insurance on my home runs $250. Maintenance varies widely, but over the first six years it's roughly an extra $100 on average for $350.
Food $400, no life insurance as it's a waste of money for us.
Utilities/Phone/Internet $150.
Car insurance (for 3 cars and the motorcycle) and gas $200
Just to get a bit more granular. My property tax is $6,000 a year on a house worth about $550K. Cable/internet/home phone $150, cell phone for 4 people $200 includes phone plans, food $1000, life insurance and long term care $600( a lot of insurance but I have a rental business and my husband manages mostly since I work. If something happens to him we can be screwed), gas heat and water in the winter for 4,000 sq ft $700, non winter months $130. I could go on and on but I think you get the picture and I haven't included all the kid related activities and other expenses. I plan on selling my house in the near future but I got it so insanely cheap during the Great Recession it was worth every penny.
You wonder how people do it...
Cut cable/phone & only keep internet = $50/mo => 100/mo savings
Cheaper cell phones $25/person = $100/mo => 100/mo savings
Cut your grocery bill to 125/person/mo = $500/mo => 500/mo savings
Retired means don't need life insurance = $0/mo => 600/mo savings
Keep the house colder in winter (blankets) =400/mo => 300/mo savings
There's $19,200 off your yearly expenses right there and that doesn't count the huge drop in expenses once you no longer support your children...
You might not choose to do it but this is expenses many people here live on.
I hear you and I am taking notes. I plan to stop working in the next 3 years but I plan to keep the LTC and life insurance. My husband does most of the maintenance and management of the rentals. The life insurance is equivalent of the payoff amount on the mortgage for the rentals.
I think its still not coming through as to why you need insurance. As above, retired typically means you or him are not working. Managing and maintaining rentals isn't technically retired. It would seem (based on the limited info provided) that if your husband wasn't around you could get a property management company to take 10% of rent and be in the same position. It seems that by structuring a windfall from insurance to pay off mortgages that something isn't computing. If they need to be paid off before retirement then that does not go to the original question, as to what is needed in retirement. Also not sure why kids expenses would still be included. Its just not making much sense which is why everyone is so confused about your numbers.
Ok hopefully this clears it up. We were a one income family when we first started a family and my husband stayed home with the children so we each had substantial life insurance for obvious reasons. We then started investing in real estate which we grew substantially and which can support us with a very good lifestyle if I were to retire. In the meantime we've used the profits to continually acquire new properties, refinance and acquire more. Because my husband does much of the remodel and maintenance we've been able to have a much greater ROI and greater rental profits. He is very skilled and does everything from electrical to plumbing. If he can no longer do this our profits and ROI would take a big hit. The properties are class C and located in the inner city and have mostly section 8 so maintenance is very high since tenants are hard on them. These are not the kind of properties you can use a property manager to manage. The management is just too intense. I am unlikely to continue this business if my husband isn't around to help and vice versa since we work closely as a team. We have several dozen properties and this great cash flow will disappear if neither me nor my husband can do this so we've decided that we should hang on to our life insurance. We have been focused on acquisition for the last 8 years so we are just beginning to use our substantial cash flow in alternative investments. I know you could pick this apart but it is the decision we've made because it feels right. I know the snipets I have provided does not provide enough context or background and hence the confusion. Maybe I'll start my own journal if I can find some time.
Thank you for clarifying. I hope you see though that the situation you describe with reliance on only one person for working and maintaining these specialized properties isn't what some would consider retirement, so these costs and that setup would be different when you are truly hands off for passive income in retirement, in which case the insurance need would go away. To be retired in the traditional sense would be free from these obligations and have a passive income.
In a way, the insurance you have is more like a business expense hedge against loss of your key employee, which you could consider as a line item cost for how you have structured your RE investment. For the poll here, I think the intent was for describing how much you need given a more traditionally passive income stream.
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"150k or less" will probably fit me just fine regardless of what happens
I don't know why everyone doesn't vote for this.
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We could live on 30k. 40k is what I'm aiming for, and provides sizable cushion to deal with potential problems.
our plan :)
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We currently live on just shy of 50k/year and even though we plan to have a paid off house and no commute in retirement we also have very high medical cost so I assume our barebones in retirement will be similar.
HOWEVER, we don't WANT to live on a barebones budget in retirement, we want to be able to afford whatever medical treatment might be best for our circumstances and travel frequently in a manner that our health will allow so we are aiming for double our current spending in retirement.
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gas heat and water in the winter for 4,000 sq ft $700, non winter months $130. I could go on and on but I think you get the picture and I haven't included all the kid related activities and other expenses. I plan on selling my house in the near future but I got it so insanely cheap during the Great Recession it was worth every penny.
As you're finding out, that's one of those double-edged swords. Great deals can bleed you dry, because it makes it easier to buy into something with higher maintenance costs. Applies to housing, cars, etc. Fer instance, my highest gas bill (with my old 91% furnace, since replaced with a 96% and with my (still surviving) ancient water heater) during the Winter that it was -17F here for a week straight just barely hit $130. I live in a nice 3 bedroom ranch with attached 2 car garage, living AND family room, separate dining room, etc, not exactly a "tiny house", but certainly not a McMansion either.
Even my screaming great deal motorcycle, which only cost me $1 requires me to ride between 400-800 miles a year (depending on which vehicle it's displacing and gas prices, etc) just to break even. I'm OK with that, like you're OK with your house. Just as long as you understand the costs... :-)
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I am very curious on how anyone can retire on so little. I am extremely frugal but there's no way in hell I can keep my basic expenses under $73K. Let's start with the assumption that I am responsible for medical coverage for a family of four, I have no mortgage and I drive a paid for car.
Property taxes, insurance, maintenance 600
Food/life and TLC insurance 1,500 (cook most of my food and eat farm to table mostly)
Health insurance premium and out of pocket 2,500
Utilities/phone/cable 800 (family of four and older home with gas heat)
Car insurance and gas $700 (teenage driver and one more to go)
And I haven't even added all the other expenses like car for teenagers, incidentals, entertainment, travel, allowances for teenagers, clothes, etc. I am honestly baffled. I can only assume that most of those taking the poll live in very low cost area, are mostly single, not living an average middle class life, do not own cars, do not travel, grow their own food, etc.
It's hard to compare expenses between people in these kinds of polls to a certain extent because they don't take into account family size, housing needs, medical needs, caring for parents, etc...
A lot of us with low expenses don't have kids, have no debts or mortgage, and no expensive medical needs or hobbies/activities so have very low expenses even when living in very HCOL areas and owning a SF home as I do, cars, etc... and living a typical middle class life style.
Also some of us are talking about barebones expenses rather than total spending. My barebones expenses are only around $6000 - $7000/year but my spending is higher by more than double that for all the fun stuff like travel and not so fun stuff like home or car repairs. Still well under $25k/year all together though. Best to compare to people in your own situation. I know lots of people here have lowered their expenses a lot after posting a case study and having others pick their expenses apart.
This whole exchange with Letj shows the importance of certain milestone moments in designing one's lifestyle. When you get a career-oriented job, when you move out of your parents' house, when you get married, when you have kids (and decide how many, or choose not to have kids), and any time you move -- these are key watershed events in which you make choices that will set your spending levels for many years to come. You choose a 4,000 sf house instead of a 1,300 sf house. You choose to live and work in different places. You get accustomed to eating out and stopping by Starbucks instead of cooking at home. You get used to leasing a new car every three years. You have three kids instead of one, and you sign them up for every sport and extra-curricular activity available instead of giving them time to engage in unstructured play. Etc., etc.
Once these choices have been made and the habits ingrained, it is extremely difficult to change. You marvel at how anyone can live on $25k/yr, and you think it is totally impossible in your situation. For example, DW and I have always loved good food (which we do mostly cook at home), and it's been very important to us since the beginning of our marriage. We scratch our heads in amazement at the people on this site who feed a family of 4 on $400/mo. We could never do that because we aren't willing to change to a diet that is based on cheap starch. But we've made lots of other choices along the way that have enabled us to live what we consider to be a very comfortable life on around $40k/year. Letj and her family have made choices that do not allow that. It's easy for us to point out all the wasteful aspects of their lifestyle, but it's not as simple as just waving a wand and saying "move out of your big house and change all of your habits."
So the moral of the story for all of you young aspiring mustachians - choose very carefully when you get to these big milestone moments in your life.
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It's easy for us to point out all the wasteful aspects of their lifestyle, but it's not as simple as just waving a wand and saying "move out of your big house and change all of your habits."
This is MMM, that's what we do. But no magic wand, we give Facepunches!
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This whole exchange with Letj shows the importance of certain milestone moments in designing one's lifestyle. When you get a career-oriented job, when you move out of your parents' house, when you get married, when you have kids (and decide how many, or choose not to have kids), and any time you move -- these are key watershed events in which you make choices that will set your spending levels for many years to come. You choose a 4,000 sf house instead of a 1,300 sf house. You choose to live and work in different places. You get accustomed to eating out and stopping by Starbucks instead of cooking at home. You get used to leasing a new car every three years. You have three kids instead of one, and you sign them up for every sport and extra-curricular activity available instead of giving them time to engage in unstructured play. Etc., etc.
Once these choices have been made and the habits ingrained, it is extremely difficult to change. You marvel at how anyone can live on $25k/yr, and you think it is totally impossible in your situation. For example, DW and I have always loved good food (which we do mostly cook at home), and it's been very important to us since the beginning of our marriage. We scratch our heads in amazement at the people on this site who feed a family of 4 on $400/mo. We could never do that because we aren't willing to change to a diet that is based on cheap starch. But we've made lots of other choices along the way that have enabled us to live what we consider to be a very comfortable life on around $40k/year. Letj and her family have made choices that do not allow that. It's easy for us to point out all the wasteful aspects of their lifestyle, but it's not as simple as just waving a wand and saying "move out of your big house and change all of your habits."
So the moral of the story for all of you young aspiring mustachians - choose very carefully when you get to these big milestone moments in your life.
+1
This is the reason the concept of early retirement (or for some folks, retirement at all) is so crazy to many people. Because the realty is that the ability to ER is made by a series of life choices, none of which of themselves seem significant by themselves but are mainly significant in aggregate.
Realistically you can still spend what seems absurdly low while having considerable luxury -- just not every luxury. Maybe it's food. Maybe it's a nice(r) house. Maybe it's nice(r) cars. Maybe it's nice(r) home location. Maybe it's expensive hobbies. Maybe it's having lots of kids (though I would say kids themselves are not overly expensive, it's the activities and "everything the best for Johnny!" that makes them that way).
You can pick even a few of those and still spend a relatively small amount of money. You probably cannot pick all of them.
(http://cdn.shopify.com/s/files/1/0535/6917/products/irresponsibilitydemotivator.jpeg)
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This whole exchange with Letj shows the importance of certain milestone moments in designing one's lifestyle. When you get a career-oriented job, when you move out of your parents' house, when you get married, when you have kids (and decide how many, or choose not to have kids), and any time you move -- these are key watershed events in which you make choices that will set your spending levels for many years to come. You choose a 4,000 sf house instead of a 1,300 sf house. You choose to live and work in different places. You get accustomed to eating out and stopping by Starbucks instead of cooking at home. You get used to leasing a new car every three years. You have three kids instead of one, and you sign them up for every sport and extra-curricular activity available instead of giving them time to engage in unstructured play. Etc., etc.
Once these choices have been made and the habits ingrained, it is extremely difficult to change. You marvel at how anyone can live on $25k/yr, and you think it is totally impossible in your situation. For example, DW and I have always loved good food (which we do mostly cook at home), and it's been very important to us since the beginning of our marriage. We scratch our heads in amazement at the people on this site who feed a family of 4 on $400/mo. We could never do that because we aren't willing to change to a diet that is based on cheap starch. But we've made lots of other choices along the way that have enabled us to live what we consider to be a very comfortable life on around $40k/year. Letj and her family have made choices that do not allow that. It's easy for us to point out all the wasteful aspects of their lifestyle, but it's not as simple as just waving a wand and saying "move out of your big house and change all of your habits."
So the moral of the story for all of you young aspiring mustachians - choose very carefully when you get to these big milestone moments in your life.
+1
This is the reason the concept of early retirement (or for some folks, retirement at all) is so crazy to many people. Because the realty is that the ability to ER is made by a series of life choices, none of which of themselves seem significant by themselves but are mainly significant in aggregate.
Realistically you can still spend what seems absurdly low while having considerable luxury -- just not every luxury. Maybe it's food. Maybe it's a nice(r) house. Maybe it's nice(r) cars. Maybe it's nice(r) home location. Maybe it's expensive hobbies. Maybe it's having lots of kids (though I would say kids themselves are not overly expensive, it's the activities and "everything the best for Johnny!" that makes them that way).
You can pick even a few of those and still spend a relatively small amount of money. You probably cannot pick all of them.
(http://cdn.shopify.com/s/files/1/0535/6917/products/irresponsibilitydemotivator.jpeg)
Yep exactly. and all of the things that are luxury can be done with a a frugal twist so you can appear to have many luxuries from the outside while still spending quite a bit less.
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I'm spending around $29,000 in LCOL area with small, mortgage-free house. I'm saving and investing 38% of actual income above and beyond that 29K. I'm widowed, no kids at home, drive SUV, the puppy lives large. Spend way too much on books and DVDs.
Shop at Aldi, cook whole foods from scratch and freeze, cut own hair with crea clip and do not color, wear simple, dark clothes that pretty much all mix, match, and layer together. Not a big traveler (been everywhere, done it all, like home the best), but mostly use credit card rewards, budget airlines, and hostels when I do travel. (Or stay with friends and family.) I'm not a cheapskate, but I hate recreational shopping, hate "stuff" and clutter, don't like going out to eat much anymore, like to make my own entertainment at home--music, writing, new interest of sketching and watercolors. Live across road from walking trails on 4,400 acre park and a municipal golf course that is in the top thirty of U.S. municipal golf courses...was given a set of old golf clubs, so do want to try golf for the first time--will walk to the course from home, and at least practice putting, which is free. I am a happy person. : D
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Yep exactly. and all of the things that are luxury can be done with a a frugal twist so you can appear to have many luxuries from the outside while still spending quite a bit less.
Yup. We're in the process of buying a "nicer than we need" house but it's still a mortgage we can very easily afford while still dumping quite a bit into savings every year. But our cars are cheap. We homecook nearly everything. We won't spend crazy amounts furnishing the place. We don't have expensive hobbies (yet? gardening might become one :P). Almost all our current furniture except our bed is garage sale, family gifts (multiple items from grandparents), or Craigslist purchased.
All about priorities. We're willing to pay a bit more per month for a great location for our home. We're not going to similarly pay more for nice(r) cars or going out to eat continuously or buying fancypants furniture.
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Yep exactly. and all of the things that are luxury can be done with a a frugal twist so you can appear to have many luxuries from the outside while still spending quite a bit less.
Yup. We're in the process of buying a "nicer than we need" house but it's still a mortgage we can very easily afford while still dumping quite a bit into savings every year. But our cars are cheap. We homecook nearly everything. We won't spend crazy amounts furnishing the place. We don't have expensive hobbies (yet? gardening might become one :P). Almost all our current furniture except our bed is garage sale, family gifts (multiple items from grandparents), or Craigslist purchased.
All about priorities. We're willing to pay a bit more per month for a great location for our home. We're not going to similarly pay more for nice(r) cars or going out to eat continuously or buying fancypants furniture.
pretty similar to what we just did. we just bought lake front in our community. got the house ~10% under market value. i think i may have actually profitted when we moved by selling our old items and buying bed sets / dining sets. on CL and selling off the pieces we didnt need. even our bed was a CL find. it was 2 months old per the tag and 33% of the price in store. actually sold our old mattress for the same price i bought the new one for. i love cooking and do all our meals we dont have cable, we live in a google fiber area so internet is 300 dollar install charge then no cost for 7 years. we travel but its basically free thru hacking. i have what most would consider an expensive hobby in that we own a boat. but i buy in the fall keep em for a few years and usually flip for a profit. so we are out the gas and routine maint. but anything can be done affordably IMO.
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I think people get into trouble when they try to have everything. When we were young and raising our kids we needed to be frugal in order to save for retirement, etc. WE actually are more spendy now in retirement. It is comforting to know that if we ever needed too we could go back to our old ways and be fine. I think people should choose what brings them the most value and then scale back on things that don't. This will be different for everyone but is much better then mindless spending.
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I voted less than $50,000. We currently spend right at $48,000 with a mortgage and two teens. Without the mortgage, it would be $35,000. When the teens are on their own, it will reduce even further. All of this will happen in 11 years when we will retire at 52 (me) and 55 (DH).
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I voted "need" $75k or less, as in that is what I expect to spend. I don't actually "need" that much, but expect to spend close to it for a family of four.
Cheers!
-PoF
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This depends entirely on whether we will have a paid off home, and where we will live during ER, so there's no way I can answer. That's one of the most challenging parts of all of this for Husband and me. To many variables make it impossible to come up with a good number.
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I'm aiming for an ER budget of about $48,000 for my two-person household. That's a little less than what we spend now, but our current spending includes commuting costs that won't exist in retirement, as well as restaurants, charitable donations and other luxuries we can dial up or down as we're comfortable with. No kids yet, but I don't expect them to make a huge change to this if they do come along. The way I see it, if you can't live on $4K a month you're doing something wrong.
The only thing that concerns me is health insurance, which isn't part of our budget right now since DW and I get it through our jobs. A lot will depend on how stable and affordable the private insurance market is when we're getting closer to our FIRE date.
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Insurance can easily add another 10-15k/year.
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Insurance can easily add another 10-15k/year.
That's something I worry about, to be honest. Maybe we need another poll asking people how much they've budgeted to spend on this.
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Insurance can easily add another 10-15k/year.
That's something I worry about, to be honest. Maybe we need another poll asking people how much they've budgeted to spend on this.
If the ACA stays intact after the upcoming election, I'll be budgeting about the same as my current health care expenditures. I checked healthcare.gov a while back, and due to the premium subsidy at my projected FIRE income, I'll actually be paying a little less than I'm currently paying for my employer-sponsored health insurance.
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Insurance can easily add another 10-15k/year.
using an ACA calculator for my state and 2 kids at home and annual spending of 60k (which is high for this forum) i still come out to about 4800 per year. this is in the state of MO for reference and 2 37 year olds with 2 kids.
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....and how many years of 15 to 50% premium increases can you afford?
The premium increases are what is scaring me more than anything else in ACA. (Not that there aren't other scary parts.)
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Docs also harass me to get an annual MRI (~900$ out of pocket).
Huh! Is that a full body MRI? What would they be looking for? Do the docs have ownership in the MRI office?
My doc is either incompetent or Mustachian in recommending medical tests.
I'm 61, never had a stress test, colonoscopy, full body MRI.
When I had a severe lower backissue, he put me through (tried) a couple of
movements and said I herniated a disc. He said, "we could do an MRI but it wouldn't make it better".
I suffered for a year before I said I wanted an MRI. Yep, I have a herniated disc, My $400 confirmed what he told me :-/
Anyone else ever been sent for an MRI as part of an annual checkup?
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$38k would be comfortable for us.
Our monthly expenses look like this:
Paid off mortgage
Property taxes (even lakeside! - $75)
Food for four: $450 (Aldi/Costco combination helps)
Utilities - $175
Med Insurance: $600
Fuel for vehicles - $250
Fuel for motorcycle/boat - $100
Property Maintenance - $150
Vehicle Maintenance - $100
Entertainment - $500 (zoos, camping, friends over, etc.)
Clothing - $75
Vacations - $200
Unexpected - $150
Gifts - $100
Homeowners insurance - $100
Splurge Stuff - $200
Plan to back down to fun, part time work in 12-18 months, making 30k between both of us, and deriving the remainder from dividends/interest.
Keep nest egg working in investments to eventually pass down to the kids/grandkids.
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Qmavam: The MRi you said you quoted from me is not me. I don't know who in their right mind would get one a year or what insurance would even pay for that yearly.
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That's me who gets pushed for an annual MRI. It's not part of an annual check up. It's because I have a pituitary tumor and even though they will treat the tumor exactly the same way (meds) regardless of the MRI results, and even though they can track whether the tumor is growing at a problematic rate with a simple blood test, they still push me to get it scanned annually. It's so annoying. I'm planning on arguing it at my next appointment, but I have the feeling they won't start me back on my meds without it.
So stupid. And expensive.
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That's me who gets pushed for an annual MRI. It's not part of an annual check up. It's because I have a pituitary tumor and even though they will treat the tumor exactly the same way (meds) regardless of the MRI results, and even though they can track whether the tumor is growing at a problematic rate with a simple blood test, they still push me to get it scanned annually. It's so annoying. I'm planning on arguing it at my next appointment, but I have the feeling they won't start me back on my meds without it.
So stupid. And expensive.
Isn't that a fairly large dose of radiation every time?
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That's me who gets pushed for an annual MRI. It's not part of an annual check up. It's because I have a pituitary tumor and even though they will treat the tumor exactly the same way (meds) regardless of the MRI results, and even though they can track whether the tumor is growing at a problematic rate with a simple blood test, they still push me to get it scanned annually. It's so annoying. I'm planning on arguing it at my next appointment, but I have the feeling they won't start me back on my meds without it.
So stupid. And expensive.
Isn't that a fairly large dose of radiation every time?
CT/CAT scans are x-rays; MRIs are just magnets, and involve no radiation exposure.
Edited to add: REALLY BIG magnets. https://www.youtube.com/watch?v=6BBx8BwLhqg
grin
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CT/CAT scans are x-rays; MRIs are just magnets, and involve no radiation exposure.
Edited to add: REALLY BIG magnets. https://www.youtube.com/watch?v=6BBx8BwLhqg
grin
Thank you for clarifying. Apparently my doctors and their assistants at my last ER visit don't know that. (no sarcasm intended, I really don't think they know or there was a misunderstanding in the conversation.)
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It's difficult to say it this point. A lot depends on whether I get married (I plan to) and have children (I plan not to). With a paid off house or two I could do pretty well on $50K/year. My current career trajectory puts me on track for an annual pension of $75,000-$100,000 if I'm insane enough to work until age 62, but I have a hard time seeing myself in a full time job after age 50. If I retired at that age, I could expect a pension of $50,000-$60,000 at age 62. Withdrawing at an earlier age would carry penalties so I'd have to live on investments for over a decade. Certainly doable.
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1. What will we need?
2. What wil we want?
3. What will we have that we can't possibly spend?
Three completely different numbers. Fortunately years of saving, investing and mustachianism mean that the answer is #3.
We're going to have a lot of fun doing whatever the hell we want and supporting charities we like.
For clarification, I am FIRE now, but not drawing down assets, DH has five years to go, because his pension with awesome healthcare benefits is the fourth leg of our stool. He could retire earlier, but he won't leave that much on the table, plus his mom has Alzheimer's and lives with us, so we can't travel large scale anyway right now.