Anyone out there living on $25,000 and less in retirement? Still enjoying life anyway? (physically, relocate)
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I am 63, so not retired yet, but I run the numbers relentlessly. My projected retirement spending- with all expenses inflated- comes in at about $24000 annually. I live very frugally, no credit card debt, own my home/no mortgage, will have house updates completed, and will have paid off my car; this includes road trips, camping, and the occasional lunch or movie.
My current budget is only a little more than this now in order to contribute significantly to my 401k; to make this budget work it was matter of figuring out what was really important to me and not spending money on things I don't need or want. Have old pay by minute flip phone, no cable, no interest in eating out or in designer clothes, etc. I have a relatively small nest egg which will grow into a more substantial sum over the next 10 years as the plan is to let it sit. I expect to continue working full-time for at least the next 3-4 years, and then work part-time just to bring in a little extra for the big fun items and continuing ed.
So, I will be in the middle- neither wealthy nor wondering how to pay the monthly bills. I had hoped and planned to be far more financially secure than I am, but life happened, and I consider myself fortunate to have the opportunities and options I have.
I am 62 and have not worked since I was 55. I worked part time from 52-55. I have always lived on under 25k/year. The last few years have been around 22k. I think this year will end up a little more, as I have had a couple of family situations that have cost a little more for travel etc. I do have savings to dip into when needed.
I live in the upper mid west in a town of about 80k. I own my house. Have a not old/not new car. I am happy with my life. I have always been frugal so things haven't changed much in that regard. Clothes come from second hand stores and garage sales, very occasionally I buy something new on sale in a store. I shop sales for groceries etc. I try to do a lot of repairs etc on my own, sometimes with a siblings help. I get books, magazines and movies from the library. I have netflex which I view on my smart tv. One small dog. I too have a simple phone from a simple Consumer Cellular plan. No garden, I hate being out in the heat and have never enjoyed weeding. I do Bountiful Baskets. Most of my meals are at home, but I do eat out for social reasons. Because of my heat intolerance I have AC, usually set at 78 unless for some reason I need it cooler.
I usually take one airplane trip a year to see my sister. I have been taking a couple of bus trips a year with friends. I do some short road trips in my car. I have seasonal community concert tickets and community theater tickets. Coffee with friends. Belong to a couple of card groups and a couple of Bunco groups. Have two brothers and their families near by.
I like twelvepaw above am in the middle, neither wealthy nor wondering how to pay the monthly bills. I enjoy my life. I have family. I have good friends. I have a silly wonderful dog. Life is good and yes I am enjoying it.
I will retire very soon. I'm currently practicing by using vacation. In order to max out Roth 401K in my final push, I've been living off of slightly less than $90 per week for the last 6 months. When we both retire, our pensions will be $26,000. We have ample savings if there is a serious shortfall, however. We can take Social Security in nine years, too. (Or sooner).
Last two nights, my wife and I went to the darkest rural regions to watch the meteor showers. Last weekend, we went kayaking. I garden, hike, fish and read freely thanks to the library. I play classical guitar, listen to news, jazz & classical radio. I prefer radio to be able to be active while being "entertained". I will splurge to take a college class this fall. There are some interests that i still want to pursue. Lifelong learning is one of my core values, and now I have some time to follow some of my postponed bucket list ideas, I'm doing just that. There is so much low cost, free or even profitable things to do, the last six months have been nice.
I do have a lot of advantages though. Debt is non-existent and has been for years. I have tools to work with to do all of my own DIY repairs. I have had "stuff" for enough years, to know that the real cost to wanting more is to need to maintain more. To me, less truly is more.
I heartily agree~
I too live on that income of < $25,000/yr. Very happily with my 2 cats.
I rent for much less than it would cost to own (my money goes further here in NC than it did up north) but to me renting is not just a "throw away" but smart- being alone, I just have to make a phone call if the appliances, heat, A/C etc goes out and don't need to write the check. And, if I get itchy to move then at some point I can.
I have internet but no cable and don't miss it. Roku :-)
Car was paid off 5 yrs ago but I keep up with the maintenance.
I mostly cook and eat at home but will occasionally splurge on a meal out and that's nice.
I love looking for bargains whether clothing or home goods etc and am learning where the best "finds" are.
Senior discount? Why yes, thank you!
It's doable to live on of course, but I feel that a lot has to do with attitude. I love where I am, what I do each day/each week and am content with what I have.
When I had more, I stressed more, worried more, and paid more taxes LOL!
I elected to retire at age 62 and take the hit on SS. I have a small pension, a small SS check, and pretty good health insurance (no dental, of course!) My income is small, but greater than 25K and frankly I am surprised that I made out so well considering my rocky road in life. I am wondering if there is a difference in lifestyle and spending connected to introversion/extroversion. Being an introvert I get my greatest pleasure from solitary activities. I am not shy and I love conversation, but I detest group activities and crowds. Extroverts need a lot of activity and staying home alone reading, quilting, writing, painting, etc, is not enough to satisfy them. I'll bet that extroverts spend much more on leisure.
Although I have always been interested in other cultures, countries, languages, I have never traveled abroad; in fact, I have seen very little of this country. I have never understood how people can justify the expense of a plane ticket unless they are well-off. No judgment, it's just not in me to 'waste' that much money getting from here to there. During the last twenty+ years of my working life, my only vacations were either spent camping or at home. I was able to save money - no investments, just a little nest egg. My original retirement plan got derailed as so many others here report, but I have made an adjustment and am happy enough with life as it is. Although I am happily single, I do have a twinge of envy towards those who are drawing two incomes and have someone to share some of life's inconvenient moments - like chauffeur duty after a medical procedure or unsticking the window that won't budge under my arthritic fingers.
I too place high value on learning new things and it griefs me that life is too short to learn everything that interests me. Obviously, money is very important, but how much one really needs to live a satisfying life is less than some imagine. I think that will change with subsequent generations as it looks like what began decades ago is coming to fruition, i.e., a
two-class society, the haves and the underclass.
I elected to retire at age 62 and take the hit on SS. I have a small pension, a small SS check, and pretty good health insurance (no dental, of course!) My income is small, but greater than 25K and frankly I am surprised that I made out so well considering my rocky road in life. I am wondering if there is a difference in lifestyle and spending connected to introversion/extroversion. Being an introvert I get my greatest pleasure from solitary activities. I am not shy and I love conversation, but I detest group activities and crowds. Extroverts need a lot of activity and staying home alone reading, quilting, writing, painting, etc, is not enough to satisfy them. I'll bet that extroverts spend much more on leisure.
Although I have always been interested in other cultures, countries, languages, I have never traveled abroad; in fact, I have seen very little of this country. I have never understood how people can justify the expense of a plane ticket unless they are well-off. No judgment, it's just not in me to 'waste' that much money getting from here to there. During the last twenty+ years of my working life, my only vacations were either spent camping or at home. I was able to save money - no investments, just a little nest egg. My original retirement plan got derailed as so many others here report, but I have made an adjustment and am happy enough with life as it is. Although I am happily single, I do have a twinge of envy towards those who are drawing two incomes and have someone to share some of life's inconvenient moments - like chauffeur duty after a medical procedure or unsticking the window that won't budge under my arthritic fingers.
I too place high value on learning new things and it griefs me that life is too short to learn everything that interests me. Obviously, money is very important, but how much one really needs to live a satisfying life is less than some imagine. I think that will change with subsequent generations as it looks like what began decades ago is coming to fruition, i.e., a
two-class society, the haves and the underclass.
Interesting comments about vacations. Prior to the crash of 2007-08 me and my wife did do the odd overseas vacation. But after that? No way Jose. Like you wrote, the expenses just cannot be justified. A bit of a cliche, and some folks criticize her, but harkening to the segment on Suze Orman's show "Can I Afford It?" - we relentlessly ask this question about every penny we spend. Hence, no more jet set vacations for us, as we take a harder road on half the income we had 10 years ago.
The discussion about living on $25K or less prompted me to review our current living expenses to see if we could also live with <= $25K net income.
I don't normally tally up our living expenses but do keep financial electronic record so it did not take me too long few months ago to complete a spreadsheet of income (post taxes) and expenses for 2014. This was easy to do because I use our credit union saving and checking accounts for everything. We have direct deposits for all our income. We rarely pay cash/checks and use our cash-back credit cards for almost everything then pay the credit card balance directly from our credit union accounts. This means all our income and expenses can be found in these accounts. Subtracting the difference in account balances at the beginning and end of 2014 and adjusting for debit or checks nor relating to expenses (such as additional income tax payment, transfer to IRA mutual funds) gave me the total 2014 expenses.
The bottom line is that in 2014, our total expenses were ~ $41K with ~ $17K for discretionary spending (vacations, cost of operating/maintaining our plane, health club, rowing club fees). So it looks like we should be able to live with $24K net income even with paying for the current high property tax in NY ($7.5K) and high utility cost (~$1.2K heating bill + $0.5K electric bill).
Will we be able to live comfortably and still enjoy life if we have to eliminate all our discretionary spending (i.e. all the current fun activities)?. I think the answer is yes. We can take driving instead of flying vacations. Camping/tenting is quite cheap. I can get myself an used shell, a car rack and row to my heart content without belonging to a club. I already have a home gym setup and there is really no need to belong to a health club (we joined it mainly for the swimming pool). Besides, we can check into cheap programs such as silver sneakers. We have been doing quite a bit of walking/hiking with the dog in many trails in the area. We can resume our biking hobby. The Hudson Valley rail trail is quite 1st class. There are also free public concerts in various local towns. We are already using the public library. Our high speed FIOS internet/phone bill is only $60/month and I use a Roku box for TV programs. To satisfy my flying need, I can utilize my commercial pilot rating and go towing gliders or get an instructor rating and teach flying. The pay is lousy but the fun is unlimited ;-)
If we relocate to a lower cost of living area, the saving we get from lower property tax, utility cost will give us more discretionary income.
Based on this analysis, I see that if one has no mortgage/car or other debt payment or live in subsidized housing, one person can live comfortably with $25K income and have some extra for discretionary spending. In high living cost area like NY, $25K is doable for 2 persons but there would be very little left for discretionary spending & a low COL area will leave more extra money for fun spending.
Although I have always been interested in other cultures, countries, languages, I have never traveled abroad; in fact, I have seen very little of this country. I have never understood how people can justify the expense of a plane ticket unless they are well-off. No judgment, it's just not in me to 'waste' that much money getting from here to there.
Different strokes for different folks. We love to travel and have traveled for many years started since the beginning of our marriage in our certainly not well-off days.
One year our cross country trip cost us $100 in diesel fuel in our VW Rabbit and very little in tenting/camp food at many state/national parks along the way. Short camping trips to state/national parks cost no more than $10/$20 a day.
If you are willing to travel at the last minute, bargain airfares and deeply discounted lodgings can be found. One extended weekend trip to Turks&Caicos cost us less than $500 total (airfare, motel, 2 dives and 'home-cooked' food - I packed lots of foods, ingredients to make soup, bread/muffins and even 2 bottle of wines). Another memorable cheap trip was <$1K trip to Italy (5 days in Florence & Rome - yes, this included $250 RT airfare, train tickets, bus fares, 50-80% off hotel stays, deli/grocery store food for breakfast/lunch and many great all inclusive dinners at ~$10).
Another way to travel cheap is to signup for credit cards with huge bonus frequent flyer miles from airlines. We used our FF miles earned mostly from 60K miles bonus CC cards for our trip to New Zealand. I We have accumulated 50 to 80K miles from several airlines mainly through credit cards offer and will use them for our trips overseas.
There is nothing like being at incredible places (mountains, rivers, valleys, waterfalls, historical buildings, ancient ruins, art museums etc) in person. Direct contact with people, eating/drinking local foods, experience the local ambience, attempting to converse in a foreign languages all enhance one's appreciation of other cultures, countries and languages greatly.
BTW, in our traveling, we have met many young people who traveled with literally just a shirt on their back, staying at youth hostels, doing temporary (even menial jobs) for basic but boatloads of fun living. They are certainly not well-off. I wished that I had as much courage and adventurous spirit as they have in my younger days.
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