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Old 04-08-2017, 10:10 PM
 
343 posts, read 256,541 times
Reputation: 289

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You can definitely do it. I do. I'm retired. I spent $23,460 last year - $3000 Obamacare tax rebate = $20460. I'm VERY happy with my work-free lifestyle. My monthly expenses include:

$645 for rent
$225 for medications (no dr. prescription, so no other medical overhead)
$512 for health insurance (partially offset by Obamacare tax rebate)
$60 for internet access (no cable)
$50 for car insurance (higher liability, no medical, no collision, no comprehensive)
$10 for gym membership (go five or six days a week - w/walk there spend up to 4 hours/day)

$0 for weekly visit to senior center for five hours socializing, free lunch, and card games
$0 for hobby relearning piano
$0 swimming in my apartment pool
$0 for senior complex movie nights and pool parties
$0 for my ten year old car w/23K miles fully paid off


I moved to Las Vegas. It has one of the lowest COL for a major metropolitan region with no state income tax.
My only regret was that I was nave thinking rents would stay low here. They are rising, so I'm buying a condo w/cash, but staying frugal with my purchase (limit of 50K).

Yes, I do have a sizeable cash cushion just in case, and will tap SS in 9 years at age 70 for 42K annually (2016 dollars)... but I plan to continue living frugally. What's leftover will go to charity.
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Old 04-14-2017, 05:43 AM
 
Location: Tampa, FL
27,798 posts, read 24,873,761 times
Reputation: 14611
Quote:
Originally Posted by mitchmiller9 View Post
You can definitely do it. I do. I'm retired. I spent $23,460 last year - $3000 Obamacare tax rebate = $20460. I'm VERY happy with my work-free lifestyle. My monthly expenses include:

$645 for rent
$225 for medications (no dr. prescription, so no other medical overhead)
$512 for health insurance (partially offset by Obamacare tax rebate)
$60 for internet access (no cable)
$50 for car insurance (higher liability, no medical, no collision, no comprehensive)
$10 for gym membership (go five or six days a week - w/walk there spend up to 4 hours/day)

$0 for weekly visit to senior center for five hours socializing, free lunch, and card games
$0 for hobby relearning piano
$0 swimming in my apartment pool
$0 for senior complex movie nights and pool parties
$0 for my ten year old car w/23K miles fully paid off


I moved to Las Vegas. It has one of the lowest COL for a major metropolitan region with no state income tax.
My only regret was that I was nave thinking rents would stay low here. They are rising, so I'm buying a condo w/cash, but staying frugal with my purchase (limit of 50K).

Yes, I do have a sizeable cash cushion just in case, and will tap SS in 9 years at age 70 for 42K annually (2016 dollars)... but I plan to continue living frugally. What's leftover will go to charity.
Very good - and the gym membership is a great investment in your health. Well done! Curious what your grocery bill might be.
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Old 04-14-2017, 06:06 PM
 
Location: New Jersey
6,043 posts, read 6,082,943 times
Reputation: 4757
Don't forget she would get Social Security too which is ~$15,000 a year in round numbers on average. Some people get significantly more than that.
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Old 04-17-2017, 02:29 PM
 
Location: Bella Vista, Ark
69,300 posts, read 79,490,574 times
Reputation: 38656
Quote:
Originally Posted by tigergirl87 View Post
I know it's way early for me to be thinking about this, but I am 29 now and work in government. I was bored and running some numbers according to the money I have already put in and at age 58 I will get 36k, if I were to work until 65 it would be 5,000. These estimates do not factor in raises, etc but just my current salary. I really do not want to work until the age of 65 and hopefully I get a higher paying job where I can retire sooner than that, but I am wondering if a yearly pension of 36,000 which is roughly over 3k a month for someone who lives relatively frugal to retire on. Right now I have been paying all of my debt down. I currently have about 8,000 in student loans but last year I have had over 15,000 in student loans so I am happy that I am slowly but surely getting this paid off My next debt would be my car which is roughly about 6k. This is a pension by the way. Thanks!
If you are 29 now, I don't understand how you can even post this question?

To answer your question: yes, it very easy if you have a small house payment or no payment and live in a state with a low cost of living. We are living on just about that much, plus we have investments that we touch a couple times a year. We are still able to take a couple of trips a year and eat out or do something fun once in awhile. We don't have money to spare though, so we do have to be careful. Do we have CC dept? Yes a little, but not much and we have plenty of life insurance to more than pay any debt if we have any when we are no longer here. I will add, about the only thing we charge is vacations and try to get the debt paid off in a month or so after returning.

Our house payment is very little, with a lot of equity, we have a car that is paid for and will probably last the rest of our driving days, we have medi care of course and a suppliment that costs very little. I love to cook; we eat very well (probably too much) but I do shop frugally. Hubby also still does pet sitting which is pretty much our play money. Unfortunately his clients or their pets are dying off. With the amount he makes a month on that, my small retirement and SS we are living on just about exactly 36,000 a year.

Last edited by nmnita; 04-17-2017 at 02:44 PM..
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Old 04-17-2017, 02:33 PM
 
Location: Bella Vista, Ark
69,300 posts, read 79,490,574 times
Reputation: 38656
Quote:
Originally Posted by baysky View Post
thank you so much for sharing your experience. I constantly listen to experts talking about retirement, but they all have different philosophies on how to do it. Figuring out the best path is to do case studies of people just like you!
most of those experts want to sell you something.
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Old 04-19-2017, 02:47 AM
 
3,471 posts, read 1,986,388 times
Reputation: 7873
Quote:
Originally Posted by tigergirl87 View Post
I know it's way early for me to be thinking about this, but I am 29 now and work in government. I was bored and running some numbers according to the money I have already put in and at age 58 I will get 36k, if I were to work until 65 it would be 5,000. These estimates do not factor in raises, etc but just my current salary. I really do not want to work until the age of 65 and hopefully I get a higher paying job where I can retire sooner than that, but I am wondering if a yearly pension of 36,000 which is roughly over 3k a month for someone who lives relatively frugal to retire on. Right now I have been paying all of my debt down. I currently have about 8,000 in student loans but last year I have had over 15,000 in student loans so I am happy that I am slowly but surely getting this paid off My next debt would be my car which is roughly about 6k. This is a pension by the way. Thanks!
Sure retiring on $36 is possible, we live on less than that here with earned income and my SSDI.

We are planning to MAKE sure we retire living on MORE than that if we can swing it.

But, we could NOt do it in an expensive city. We live in a small out in the country city, that has a lot of benefits, but lacks some "culture" I guess,though we DO get off-broadway shows, have a minor league baseball team, a hockey team, a university adn a 2 yr college with sports teams, our own arena, zoo, and three hospitals. We have an arena, a forum theater, a performing arts cetner,and more,So we aren't exactly lacking.

The area we are looking at retiring to has about the same, and COL is about the same, and our build up of rentals will cover our retirement nicely,.

Yes, it can be done, but why would you settle?????
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Old 04-19-2017, 06:47 AM
 
300 posts, read 506,662 times
Reputation: 452
Quote:
Originally Posted by tigergirl87 View Post
I know it's way early for me to be thinking about this, but I am 29 now and work in government. I was bored and running some numbers according to the money I have already put in and at age 58 I will get 36k, if I were to work until 65 it would be 5,000. These estimates do not factor in raises, etc but just my current salary. I really do not want to work until the age of 65 and hopefully I get a higher paying job where I can retire sooner than that, but I am wondering if a yearly pension of 36,000 which is roughly over 3k a month for someone who lives relatively frugal to retire on. Right now I have been paying all of my debt down. I currently have about 8,000 in student loans but last year I have had over 15,000 in student loans so I am happy that I am slowly but surely getting this paid off My next debt would be my car which is roughly about 6k. This is a pension by the way. Thanks!
I think it would be doable if all goes according to plan, but I wouldn't put all my eggs in one basket. There are going to be a lot of Baby Boomers reaching an unpleasant realization as they try to retire just on social security, and government pensions are an easy target and source of resentment.

I would recommend in addition to the pension that you participate in your deferred comp program or just open up an IRA and contribute the max each year to the IRA (currently $5500). If you just contribute the $5500 each year, you have a good chance to have around 500k in your account by the time you are 58. That would be a nice safety net if anything happens with the pension or if you have higher than expected expenses.
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Old 04-19-2017, 09:11 AM
 
5,221 posts, read 2,380,595 times
Reputation: 5111
Quote:
Originally Posted by Submariner View Post
When I was on Active Duty I had a Navy paycheck and I had rental income. I also had mortgages and a lot of other expenses to maintain those apartments. We kept our AGI close to zero, always less than $1,000.
With an AGI of less than $1,000, what money did you live on?

Quote:
We lived on my paycheck and we spent the surplus on the apartments. Rental income went to the expenses of those properties and to buying down the mortgages, to build equity and avoid income taxes.
Paying down mortgages isn't tax deductible.

Quote:
After I retired we used the equity that we had built-up to buy our retirement homestead with cash. Then later during the Recession, we went through bankruptcy after we lost all tenants for a year. We never used rental income for our own living expenses. They were vehicles to build equity and shelter my salary from Income Taxation.
Whether or not you used it for your own living expenses, that rental income was income, and it would assuredly be more than the "less than $1,000" that you mentioned earlier. Why wasn't that income taxed?

Quote:
Income from our apartments has always gone into buying down the mortgages. If we had ever touched any of that money for ourselves we would have had to pay income taxes on that money.
Another statement that makes it pretty clear that things are NOT as you have led others to believe. That money was income, regardless of whether or not you ever "touched" it. "Touching it" has nothing to do with its taxability, and paying down the mortgage isn't tax deductible (except for the interest portion).

<<SNIP>>

Quote:
At the time of my retirement, we were down to only one property. We took the equity out of that apartment complex after I retired in 2001 and we used it to buy our homestead. We own our homestead 'free and clear'. As a side-line I sell farm produce, my gross income from farm sells is less than $1,000/year selling maple, honey, eggs and herbs. After expenses our Schedule F [farm income] is zero.
If the income from the activity is zero, why do it? The PITA factor alone would be quite a bit more than the zero income you are earning.

The more you talk about what you have done to "avoid paying in to income taxation since 1983," the more convoluted and less believable it becomes. It sure would be nice to get the straight story, but I have no confidence that that will ever happen.
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Old 04-19-2017, 09:23 AM
 
Location: Grosse Ile Michigan
24,718 posts, read 59,615,271 times
Reputation: 26823
My father lives comfortably on $20K a year. House is paid off. Car is leased with GM discount and not very expensive. Groceries are minimal for one person and he does not eat anything fancy. Very little health care costs. Utilities are pretty small too. His biggest expense is probably church/charity donations and possibly gasoline. He still has enough money to buy dinner for the whole family at times, if he has an unusual expense, like a new furnace, he can just sell some stock.

Last edited by Coldjensens; 04-19-2017 at 09:48 AM..
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Old 04-19-2017, 12:18 PM
 
Location: Forests of Maine
29,724 posts, read 47,507,271 times
Reputation: 17577
Quote:
Originally Posted by TaxPhd View Post
Whether or not you used it for your own living expenses, that rental income was income, and it would assuredly be more than the "less than $1,000" that you mentioned earlier. Why wasn't that income taxed?
On a Schedule C, E, or F, your expenses are subtracted from the income.



Quote:
... Another statement that makes it pretty clear that things are NOT as you have led others to believe. That money was income, regardless of whether or not you ever "touched" it. "Touching it" has nothing to do with its taxability,
You should really look at the Schedule Cs, Es and Fs.

All expenses [including mortgage payments] are deducted from the income.



Quote:
... and paying down the mortgage isn't tax deductible (except for the interest portion)
You are thinking of Single-Family-Residences, not Multi-Family-Residences.



Quote:
... If the income from the activity is zero, why do it? The PITA factor alone would be quite a bit more than the zero income you are earning.
We built up a lot of equity, that we were able to use later when buying our retirement home.
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