Author Topic: Expenses in FIRE (from UK to rural western USA):is $30K enough?  (Read 6156 times)

gldms

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Expenses in FIRE (from UK to rural western USA):is $30K enough?
« on: January 08, 2016, 02:38:30 AM »
For the past 22 years, I've been living in the UK.  My plan is to retire back home in the US.  I want to live in a small town in rural OR/WA/N. California. My lifestyle would be to have a serious vegetable garden and do a lot of backpacking/hiking/flyfishing and playing music (oh, and chasing middle-aged women on dating sites).  No expensive toys or foreign vacations.   I will have a car (the hipster-requisite used Subaru Forester for long road trips/car camping and getting to the trailheads).   My housing expenses would be covered by a separate pot of cash I've put aside so that I can pay rent, say $1100/month, for two years; then, I'll buy a place (for $250K, I reckon) outright when I get my share of  my UK house from previous marriage).    After I pay for car/furniture/two years rent etc. to set up my basic infrastructure, I'll have a modest stash and pension.  According to cFireSim (and my own calculations with excel), if I bailed out next summer, I could have an income of $30000/year (95% success rate).  I would have a zero tax liability for the first few years (high cost-basis in pension and I'll be drawing down a ROTH IRA until my modest US Social Security and UK National Insurance kicks in;other income outside of Roth would be dividends/capital gains taxed at 0%).  My low MAGI means I'd be in the sweet spot for either full subsidy under ACA or outright Medicaid.

What am I missing? It sound like I'm totally sorted, but I worry that $30,000/year is too dangerous.  I know, some of you will laugh... Where I live now, however,  is very expensive; my outlook is conditioned to that. My rent for a modest flat is $2000/month and my other monthly expenses are about $2400 a month even though I live very frugally (no eating out, no car, no shopping for crap, no vacations, I don't even go to the pub..).  I'm assuming the USA would be a lot cheaper.   The median household income in rural Oregon/N. Calif. is about $30000 a year.  Given that everyone is obese from eating-out 5 times/week and everyone over 16 drives a MASSIVE vehicle,  $30K must be fine especially given that they pay housing tax and SS on that.   On the other hand, I reckon that's not the whole story, since pot money (cash transactions) and under-the-table wages are very common and not declared.     Is $30000 a year net (with housing covered) a comfortable income for a single man living in small town?  I need a high margin of safety as, once I bail out, there is no going back.   Thanks for your advice!

ender

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Re: Expenses in FIRE (from UK to rural western USA):is $30K enough?
« Reply #1 on: January 08, 2016, 07:32:25 AM »
So... basically you will have 30k in discretionary spending since your housing is not even included?

My wife and I spent $35k as a couple in 2015, including 3.5k in tuition, 2.5k worth of fancy pants computers, about $4k in replacement car savings (we count this as an expense). And that includes about $10k on rent. We're pretty mustachian but not even close to some of the hardcore people here.





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Re: Expenses in FIRE (from UK to rural western USA):is $30K enough?
« Reply #2 on: January 08, 2016, 07:47:50 AM »
The problem I see is that you are currently spending nearly 53,000 a year.  Even cutting out your current rent, you are spending nearly 29,000 a year, which translates to over $40,000.  Are there any changes in your lifestyle, other than a geographical relocation, to account for your plan to spend only $30,000?

The big danger in retiring on a limited income is not having enough to save up for occasional large expenses - house maintenance, car and other equipment replacement, emergency travel, health expenses and so on.  In later life or if disablement strikes, the problem is not having enough to pay for the social care you need.  Having an income cushion to put into an emergency/sinking fund for those things makes retirement feel much safer.

onlykelsey

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Re: Expenses in FIRE (from UK to rural western USA):is $30K enough?
« Reply #3 on: January 08, 2016, 07:53:25 AM »
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The problem I see is that you are currently spending nearly 53,000 a year.  Even cutting out your current rent, you are spending nearly 29,000 a year, which translates to over $40,000.

This jumped out at me, too.  Do you plan to do part-time work in retirement?  Expect expenses (ie with dating) to creep upward? 30K is generally fine, but it sounds like you're used to a higher standard of living, which is worth planning for.

KCM5

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Re: Expenses in FIRE (from UK to rural western USA):is $30K enough?
« Reply #4 on: January 08, 2016, 07:57:40 AM »
So, I've lived in the UK and currently live in the rural US. For me, $30k/yr for a single person without housing would be more than enough (like comfortably $10k more than enough). That's including an international vacation or two.

But the others bring up a good point. What do your expenses look like now? I know at times things are more expensive in the UK, but I think at most all expenses are about 30% more. So you'll be cutting it close if you plan on keeping your current lifestyle. But even then, at your current spend rate of $40k/yr outside of housing, if prices are 30% more in the UK than the US, you're right at $30k/yr.

gldms

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Re: Expenses in FIRE (from UK to rural western USA):is $30K enough?
« Reply #5 on: January 08, 2016, 09:12:06 AM »
The problem I see is that you are currently spending nearly 53,000 a year.  Even cutting out your current rent, you are spending nearly 29,000 a year, which translates to over $40,000.  Are there any changes in your lifestyle, other than a geographical relocation, to account for your plan to spend only $30,000?

Oh, I'm sorry, but you misread my figures; I already converted them from to $, so I'm spending $53000  (dollars) each year not 53000 (pounds). If I subtract my killer rent, my expenses are $32000 a year.  I know that is disgraceful by MMM standards, but I'm already living a seriously MMM lifestyle here: no car, no eating out...  I don't even use public transportation as I walk everywhere.  Maybe I'll go to a concert twice a year.  My clothes are getting worn out.. This spring (in about two weeks thanks to global warming..) I'll be riding my bike to my allotment where I'll start growing some of my own food!  I do take one trip to the USA each year for a month of camping and backpacking.  That trip costs about $2000 for airfare (me and son or daughter) and $1000 for rental car.  No motels; we're either camping or freeloading.  I guess what I'm asking is whether $30000 a year would enable me to live better in the western US given my interests.  Actually I would indeed want to keep building my savings cushion as cars break down and roofs need to be replaced.  So, I'd need to live on less than $30000/year.  Thanks so much for you comments/advice!

Exflyboy

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Re: Expenses in FIRE (from UK to rural western USA):is $30K enough?
« Reply #6 on: January 08, 2016, 08:57:16 PM »
Another data point for you.

Two of us without housing costs (we pay utilities and $2k in Real estate tax) we spent $29k last year, that included abotu $3k in charititable giving. We live in Oregon which is medium cost of living state. There is no sales tax but there is 9% income tax which is ignored in the above figures.

No healthcare premiums in the above numbers but the out of pocket costs are included.

Tom Bri

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Re: Expenses in FIRE (from UK to rural western USA):is $30K enough?
« Reply #7 on: January 08, 2016, 11:23:49 PM »
Bluntly, $30k/yr in small town US is normal living. Not living high, but just plain living. With MMM skills added in, you should be fine. As you note, this is the level where most people really do live. It's about where I live.
As a back-up, plan to have some back-up income. Maybe host UK hikers/campers. A cheap, old-fashioned advert in a UK outdoors magazine, plus word-of-mouth from friends there could bring in a slow stream of specialty clients that most US-based hosts wouldn't know how to access. Or, internet.

pbkmaine

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Re: Expenses in FIRE (from UK to rural western USA):is $30K enough?
« Reply #8 on: January 09, 2016, 05:41:37 AM »
Have you factored in healthcare costs?

Cassie

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Re: Expenses in FIRE (from UK to rural western USA):is $30K enough?
« Reply #9 on: January 09, 2016, 03:24:36 PM »
I think you might want to have more $ then 30k/year.

gldms

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Re: Expenses in FIRE (from UK to rural western USA):is $30K enough?
« Reply #10 on: January 11, 2016, 03:50:27 AM »
Have you factored in healthcare costs?

Well, yes: the ACA pretty much takes care of health care costs when you are retiring on an income of $30000.  Actually, because much of my income will be non-taxable (Roth and pension with very high cost-basis), my MAGI will be below $22000 a year and my daughter and I would fall in the Medicaid zone (OR/CA/WA are all Medicaid-expansion states).  Health care would be free, but even if we went somewhat above a MAGI of $22K/year and had regular health insurance,  the ACA subsidies would cover nearly EVERYTHING (premiums, deductible).  The ACA is a fundamental game-changer for Americans who want to retire before age 65 (when Medicare kicks in..).    What I'm surprised about on these forums is how confused many people are about the ACA.  Lots of people confuse Medicaid with Medicare and are clueless about the workings of the Medicaid expansion. I think the FIRE community should get up-to-speed on this stuff and VOTE to protect what the ACA has given you.


bognish

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Re: Expenses in FIRE (from UK to rural western USA):is $30K enough?
« Reply #11 on: January 11, 2016, 10:55:10 AM »
You could live pretty easy on $30k in Utah. Very rural puts you in mormon country, which could be culturally isolating, but the Salt Lake Valley is pretty affordable and you can't beat the access to hiking.

Think

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Re: Expenses in FIRE (from UK to rural western USA):is $30K enough?
« Reply #12 on: January 18, 2016, 04:00:42 PM »
You absolutely can live on that.  No question. 

Midcenturymater

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Re: Expenses in FIRE (from UK to rural western USA):is $30K enough?
« Reply #13 on: January 18, 2016, 07:34:59 PM »
We manage on 24 k after mortgage and prop taxes (7 k ) a year....in los,angeles...family of 4.

We own two cars,and have no debts...aside from the mortgage.

 We have a,couple,of cheap take a ways on that a month.$15 feeds 4 of us from our favorite Chinese take out.
 We left the UK and think it is much easier to live frugally here. But we need an emergency fund so I have to get myself,back to work soon. Your prop taxes will be much lower on 250 k.
30 k is plenty.

Exflyboy

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Re: Expenses in FIRE (from UK to rural western USA):is $30K enough?
« Reply #14 on: January 18, 2016, 08:16:16 PM »
We manage on 24 k after mortgage and prop taxes (7 k ) a year....in los,angeles...family of 4.

We own two cars,and have no debts...aside from the mortgage.

 We have a,couple,of cheap take a ways on that a month.$15 feeds 4 of us from our favorite Chinese take out.
 We left the UK and think it is much easier to live frugally here. But we need an emergency fund so I have to get myself,back to work soon. Your prop taxes will be much lower on 250 k.
30 k is plenty.

Thats pretty impressive..:)

ZiziPB

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Re: Expenses in FIRE (from UK to rural western USA):is $30K enough?
« Reply #15 on: January 19, 2016, 09:22:15 AM »
The problem I see is that you are currently spending nearly 53,000 a year.  Even cutting out your current rent, you are spending nearly 29,000 a year, which translates to over $40,000.  Are there any changes in your lifestyle, other than a geographical relocation, to account for your plan to spend only $30,000?

Oh, I'm sorry, but you misread my figures; I already converted them from to $, so I'm spending $53000  (dollars) each year not 53000 (pounds). If I subtract my killer rent, my expenses are $32000 a year.  I know that is disgraceful by MMM standards, but I'm already living a seriously MMM lifestyle here: no car, no eating out...  I don't even use public transportation as I walk everywhere.  Maybe I'll go to a concert twice a year.  My clothes are getting worn out.. This spring (in about two weeks thanks to global warming..) I'll be riding my bike to my allotment where I'll start growing some of my own food! I do take one trip to the USA each year for a month of camping and backpacking.  That trip costs about $2000 for airfare (me and son or daughter) and $1000 for rental car.  No motels; we're either camping or freeloading.  I guess what I'm asking is whether $30000 a year would enable me to live better in the western US given my interests.  Actually I would indeed want to keep building my savings cushion as cars break down and roofs need to be replaced.  So, I'd need to live on less than $30000/year.  Thanks so much for you comments/advice!

If what you are saying is true, where is your $32K per year going???  There seems to be a big disconnect here.

Faramir

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Re: Expenses in FIRE (from UK to rural western USA):is $30K enough?
« Reply #16 on: January 20, 2016, 04:03:29 PM »
I'm with ZiziPB on this, I don't see how your UK spending is US$32K excl rent with that lifestyle, although there is mention of a son and/or daughter which may account for some of it.

When I lived in the UK up to 2010 (Birmingham, West Midlands) I spent US$10,000 / yr excluding rent so you can add 6 years of low inflation to that figure.  That includes utilities (shared between 3) and also includes US$3500 for multiple short trips to continental Europe per year.

As with a lot of these types of questions, it's hard to know without seeing a breakdown of your expenses to see where you're spending to really know if you could do western US for $30K/yr. 





gldms

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Re: Expenses in FIRE (from UK to rural western USA):is $30K enough?
« Reply #17 on: January 20, 2016, 05:21:31 PM »
You guys are right: the current situation is a bit more complicated.  OK, here is my monthly budget for my current life in the UK (I've converted to $ using $1.50/):

Rent   $1650  (2-bed flat; tiny fridge, no dryer or dishwasher and no garden or storage. I bitch and moan, but it's in a nice neighbourhood that's only a 10 minute walk to work).
Council Tax   $156  (here,  you have to pay property tax even if you are renting; it covers trash though..)
Loan repayment    $230  (When my daughter moved in with me, I needed to find and furnish a two-bed flat and pay extortionate letting fee/deposits etc.  I decided that it would be better to take on a 6% loan for the expenses rather than skip 3 months of contributions to my pension since I get a 66% return on my pension contributions via tax-relief and the contributions are after US tax).
Child Support   $315  (for son at university; three more years)
Food   $678 (for myself and teenaged daughter; no prepared food, no eating out).
Water   $74
Transport   $70  (Occasional bus fare and I joined a car club for 4 trips a month at $15/trip).
Insurance   $21 (fire/theft)
Bank Fee   $30 (this also gives me travel insurance which I actually use..)
Mobile Phone   $14  (I finally got off that face-punch-worthy contract of $65/month!)
Broadband    $45 (apparently this is much cheaper than in the USA; no live TV, so I save 14 a month)
Clothes   $50 (me and teenaged daughter; thank goodness they make her wear a school uniform)
Social/Cultural/Hobbies   $75 (I don't really spend this much, but I reckon this new allotment will cost a bit at first)
Holiday   $300  (savings for annual pilgrimage to Sierras/Klamath mountains)
Charity   $60
Misc./Emerg.   $400  (something always comes up: mandatory rip-off school trip, school supplies, computer replacement...)
Dental insurance   $60  (covers 2 cleanings/year and everything but lab work. It might be better to do pay-as-you-go)

So, now that I really look at it, my baseline expenses (excluding rent) are actually only $24000 a year.   The other $8000 is for contributions to my son at university and loan repayment.  When I Fire, the small loan ($230/month) would be paid off but when my daughter goes to university, I'll be paying more, but I've already accounted for that.  I estimate that with my savings and pensions,  $30K is the max I could spend on myself after I have paid for housing and my contribution for children at university.  I've also budgeted $37000 for the cost of moving to the USA, buying a late-model used car (like a Subaru Forester for camping trips..) and setting-up house (furniture, US appliances).  So, if the US is cheaper than the UK, I guess I wouldn't even need to spend $30K a year.  This means that I may have actually achieved FI.  I really can't believe it.  It means I can  go home now if I want.  It means I really don't have to take any more shit at work; I am there by choice and they are lucky to have me.  Wow.

onlykelsey

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Re: Expenses in FIRE (from UK to rural western USA):is $30K enough?
« Reply #18 on: January 20, 2016, 05:25:51 PM »
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This means that I may have actually achieved FI.  I really can't believe it.

Congrats! 

WildJager

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Re: Expenses in FIRE (from UK to rural western USA):is $30K enough?
« Reply #19 on: January 20, 2016, 05:38:46 PM »
You guys are right: the current situation is a bit more complicated.  OK, here is my monthly budget for my current life in the UK (I've converted to $ using $1.50/):

Rent   $1650  (2-bed flat; tiny fridge, no dryer or dishwasher and no garden or storage. I bitch and moan, but it's in a nice neighbourhood that's only a 10 minute walk to work).
Council Tax   $156  (here,  you have to pay property tax even if you are renting; it covers trash though..)
Loan repayment    $230  (When my daughter moved in with me, I needed to find and furnish a two-bed flat and pay extortionate letting fee/deposits etc.  I decided that it would be better to take on a 6% loan for the expenses rather than skip 3 months of contributions to my pension since I get a 66% return on my pension contributions via tax-relief and the contributions are after US tax).
Child Support   $315  (for son at university; three more years)
Food   $678 (for myself and teenaged daughter; no prepared food, no eating out).
Water   $74
Transport   $70  (Occasional bus fare and I joined a car club for 4 trips a month at $15/trip).
Insurance   $21 (fire/theft)
Bank Fee   $30 (this also gives me travel insurance which I actually use..)
Mobile Phone   $14  (I finally got off that face-punch-worthy contract of $65/month!)
Broadband    $45 (apparently this is much cheaper than in the USA; no live TV, so I save 14 a month)
Clothes   $50 (me and teenaged daughter; thank goodness they make her wear a school uniform)
Social/Cultural/Hobbies   $75 (I don't really spend this much, but I reckon this new allotment will cost a bit at first)
Holiday   $300  (savings for annual pilgrimage to Sierras/Klamath mountains)
Charity   $60
Misc./Emerg.   $400  (something always comes up: mandatory rip-off school trip, school supplies, computer replacement...)
Dental insurance   $60  (covers 2 cleanings/year and everything but lab work. It might be better to do pay-as-you-go)

So, now that I really look at it, my baseline expenses (excluding rent) are actually only $24000 a year.   The other $8000 is for contributions to my son at university and loan repayment.  When I Fire, the small loan ($230/month) would be paid off but when my daughter goes to university, I'll be paying more, but I've already accounted for that.  I estimate that with my savings and pensions,  $30K is the max I could spend on myself after I have paid for housing and my contribution for children at university.  I've also budgeted $37000 for the cost of moving to the USA, buying a late-model used car (like a Subaru Forester for camping trips..) and setting-up house (furniture, US appliances).  So, if the US is cheaper than the UK, I guess I wouldn't even need to spend $30K a year.  This means that I may have actually achieved FI.  I really can't believe it.  It means I can  go home now if I want.  It means I really don't have to take any more shit at work; I am there by choice and they are lucky to have me.  Wow.

Food should be much cheaper depending on where you shop.  I don't know the going rate in the UK, but if you're an average consumer you'll save much more here.

Broadband will probably be about the same depending on who you sign up with.  The problem is that many locations only have one provider, and you're basically stuck with their rate.  Some companies (I have to use suddenlink) don't even offer lower speeds anymore which is frustrating.  I know the bandwidth I need, but I'm forced to pay well beyond my capacity.  And they wonder why people often share over routers to split the bill...

Faramir

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Re: Expenses in FIRE (from UK to rural western USA):is $30K enough?
« Reply #20 on: January 20, 2016, 05:47:27 PM »
Congratulations.  That must be a great feeling.

Midcenturymater

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Re: Expenses in FIRE (from UK to rural western USA):is $30K enough?
« Reply #21 on: January 21, 2016, 09:37:07 AM »
Thank you exflyboy. Only because we have to with a stinking big mortgage on an average family home. We only get tripped up by health expenses...son hospitalised last year..1300 and my parents had to help us out....We have now paid them back.

The thing is if you get creative and stop buying new stuff you can live on much less than people think.
When we are out and bought clothes we spent much more. But our life did not feel so different. We even had annual passes to Lego land on that last year.

The US is cheaper on most things apart from cell plans...which if course we don't do. We have one cell on pay as you go between us.
The opening will do fine in a cheaper area of USA.