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What do you need to get by on? All thing being equal, it would be possible to get by on less than $40K, but what does one do with less than $40K? (that is gross right?)
We (wife and I) will leave full time employment in 2 years--no pension, no SS, no guarenteed income. If we are diligent, we will have just about $15K and 11 years to SS (if it still exists). My father survived on a $150 month pension after 33 years in the steel mill (the mill's bankruptcy closed the pension fund for management) and had to go back to work making $25K to keep the bills paid for him and my mother.
We are living on just under $40K net pay now and have some money, but can not imagine living on less as our expenses will probably continue to rise in the coming years.
Food......8,000 (NOT going out to eat)
Utilites.......included with over night accomodations
Phone and internet.......1500.00 (cell)
insurance......ZERO (what is this?) wishful thinking for us.
Car, gas, maintaniance, insurance......6,000
Housing or rent ......6,000 (if half the nights are free)
At 62, health care for my wife and self will be about $900 a month paying for our current employer service, In three years medicare will kick in for me and our total will drop to about $650 a month, and three years after that when my wife gets medicare it will drop again to about $400 a month.
It varies for everyone depending on where you choose to live. If I stayed in PA then my two pensions would not be taxes by the state or the local governments, but in Maine where I'm moving I'm paying for quality of life and taxes will be about double for the state portion from what I'm paying now before pension in PA.
You need to figure food, other taxes, and things you can't do without. I could do a bare bones arrangement for about $3400 a month for both of us. But if we want to do things and go places it will be a lot more. Luckily, I do have a lot more than the bare-bones retirement income.
But then again, anything could happen and these pensions could disappear, or inflation could kill us by skyrocketing to 15% like it was in the early 80's.
I am living quite comfortably in expensive MD on less than 50k with no discernible difference in my standard of living. It costs me a lot less in miscellaneous expenses to live retired than it did while working. My house is paid for but I still have rather expensive property taxes that did not go down despite the huge decrease in property value. I want to sell this house and move on but that isn't happening for a while yet.
Consider that in many states, their taxation method includes a 'Standard Deduction' and 'Personal Exemptions'.
For a couple filing 'Married-Joint' many pensions slide under the minimum required for paying income taxes.
Also depending on your portfolio [and if it offers any sheltering] you may easily be able to earn $10k to $15k above the minimum tax bracket and still not have an AGI high enough to actually pay income taxes.
We moved to Maine, which is commonly assumed to have high taxes. However from among the fellow retirees that we have come to know, most of us have pensions and portfolios that keep our AGIs below the minimum for paying income taxes.
My Dw was working p/t. For the past 9 years, our combined incomes [my pension, her salary and our portfolio income] had kept us below the threshold for paying income taxes.
She was promoted last fall to f/t and into a lower management position. So now suddenly our AGI shot up above the threshold. When she finally decides to take her SS pension, our AGI will go back under the threshold again.
During your working career you were accustomed to paying income taxes. But going onto pension your income may drop, which also means that you may stop paying income taxes. This is something that most people approving retirement should look at and consider.
zthatzmanz28 : Since you appear to be contemplating full time RVing if I read your post correctly, you should comment on the tread about "being single at age 62". I have had some difficulty in conveying actual costs while full time RVing. Perhaps you can speak from experience.
Apparently, I need to do more planning. When I showed my wife this thread, we hit our first impasse on the post suggesting defining "needs" vs "wants". She is still struggling with the concept that there is any difference between the two.
Agreeing to participate in retirement planning she has submitted the following annual budget:
Food......being taken out to eat: $8000
groceries: $0 (husband does the shopping and cupboards are
always full.)
Utilities.......$???? (Must not be much since it is always cold in here)
Cell Phone.......1900.00
Personal hygiene.......Me: $1350 (Hair stylist, pedicure, etc)
Husband: $0 (Been cutting your hair for years and
it looks just fine)
Car........ $???? (Could be a lot. Need a new car to keep maintenance low)
Housing.....$??? (Don't know. Husband pays bills. Do we have a mortgage?)
Entertainment.......$9000
Clothes................$11,000
Gifts for my relatives & friends......$3000
Gifts for hubby..........$50
Pets.....................$32,000
Allowance for hubby......Outside chores...$80 (New gloves for cleaning
gutters, liniment creme)
Allowance for hubby...Inside chores..$52 ($1/week. laundry, cooking, etc).
Grand total = ( Honey, total this up for me will you? All this budgeting
has worn me out)
Our follow-up discussion and planning session:: p
Last edited by GLS; 04-26-2011 at 01:09 PM..
Reason: took out some of the curse words
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,779 posts, read 58,241,105 times
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Quote:
Originally Posted by GLS
Apparently, I need to do more planning. When I showed my wife this thread, ... "needs" vs "wants". She is still struggling with the concept that there is any difference between the two.
....
Grand total = ( Honey, total this up for me will you? All this budgeting
has worn me out)
Our follow-up discussion and planning session:: p
Ha-Ha, Very good 'correction to the numbers'
Income tax must be fun
Maybe you can just report your delta or Std Deviation between each ? (If the calculator hasn't been stomped on yet)
I think you have exposed a bit of Variation (As is the case with all based on the simplicity of the original poll)
How much $$ do I think I need annually?
A little bit more
I could live 'happily' on $12k / yr
A 'little' bit more happily on $120k,
BUT... I will be somewhere, doing something, and being happy on whatever flows my way. How much Most of us are one catastrophe or accident away from the poor house or being 6ft under. I would prefer to go with the latter, just sorry I missed the 2010 DEATH ADVANTAGE. Seems I didn't plan that too well. Seems lots of things are that way.
I'm figuring insurance about $12,000 or more for health/house/auto - before Medicare...at today's dollars.
I won't have a car payment, mortgage nor any kind of debt.
So I am going to say I would be fine with $3,000 - $4,000 a month over the basics/fixed costs (insurance, food, utlities). I would like to do some traveling (not every month but quite a bit) and be able to save a bit...of course I do like good hotels so maybe I should up that...
For us, what we used to make when we worked and what we need in retirement is very different. My salary was $120K the last year I worked and my husband was semi-retired at that time making another $30K to $50K per year. We were paying down a mortgage making additional principal payments of about $20K per year, maxing out on our $401K contributions and putting as much as possible in an emergency savings account, so we lived on only $36K per year. Now, that we are retired we need about $25K. No mortgage now, but healthcare is much more...about $1K per month. We could get by really well on $15K per year, if it weren't for the crazy high cost of healthcare.
Lifestyle is a huge factor. We are homebodies who like to garden. We like the challenge of seeing how frugal we can be and enjoy keeping things simple. We've lived in two very expensive states, Hawaii and California and find that it's still possible to live well on a fairly small amount. So, I think it's more about how you live than where you live...property taxes not withstanding.
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Wife's Perspective
? (If the calculator hasn't been stomped on yet)
Most of us are one catastrophe or accident away from the poor house or being 6ft under. I would prefer to go with the latter, just sorry I missed the 2010 DEATH ADVANTAGE. Seems I didn't plan that too well. Seems lots of things are that way.
