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really ? so the fact in nyc it can cost 2x what it does in austin tx is not a factor ? or a small paid off house in long island or westchester can see taxes between 10-20k a year , interesting .
Last edited by mathjak107; 05-31-2017 at 04:06 AM..
Yes, please link to the post about $240k + incomes being a good min. I never saw it. That's silly....We all know you need at LEAST $400k to be comfortable....jeez louise. IIRC, there was some discussion of $60k being a comfortable debt free retirement income.
OK, you made me spit out my vodka, uh I meant tea, laughing over that one!
life is all about choices . that does not change the fact where you live is dependent not only on the income you need but likely the income you earned .
high cost of living areas are not high cost in a vacuum , they are high cost because that is where the opportunity and better pay are usually.
leaving our family ,kids and grand kids to save a buck is not an option that is acceptable . so the cost of living is what it is just as it is for many retirees who choose not to relocate . ruling out income needs because of location and pretending everyone can or wants to live in cheapsville is nonsense
I know it's a factor for you mathjak107! But you also choose to make it a factor. You could also choose to live elsewhere.
You are defeating your own premise. A high cost of living can have a huge impact on retirement. One of the impacts is often the necessity to move leaving behind family, friends and support systems. Then there are those of us who manage to retire in a high COL area. We not only need more retirement resources but often we need to be more careful in spending and managing money and assets.
Am I considered retired if I only work 12 hours a week? I'm blessed that my husband was prudent enough to sign up for the survivor benefit plan with the military when we got married. It meant a little less each month in his pension (he was a 20 year veteran) but I couldn't survive without it right now in this economy.
Between his pensions and social security I make $2974 a month tax free and $572 a month from my job which is taxable. It may sound like a decent amount for one person but my rent is $950 a month and I have a $300 a month car payment. Hoping to buy a condo/home/townhouse in the next 5 months so I will have a lower payment, then buy my car when the lease is up in 2 years. Who knows how long I will be able to work and I want my expenses lowered and my credit cards paid off. I don't owe much in CC debt, less than $6000 but one of the reasons I'm working now is to completely retire without any debt other than a mortgage payment.
I don't understand how people can live on $100/month in food or some of these other abnormally low quoted figures.
An after tax income of $40,000 annually is $3,333.33/monthly. That's not chicken scratch income. I make around $60,000/yr, and that's slightly under what I clear with no retirement contribution. I make a fairly well above average income for my city.
That goes "OK" here in Cheapsville, but not as far as you might think. A car costs about the same anywhere you go. Food is expensive here - milk $4/gallon, ground beef $7.50/lb for lean, bread is $2, etc. Car insurance is expensive - with no claims/traffic offenses in five years, driving a Hyundai, and at age 31, State Farm is nearly $900/six months for full coverage - others are not much cheaper. Gas is about $2.10/gallon.
I really don't live any better here in small town Tennessee than I did in Indianapolis on the same income. I clear a little more due to cheaper employer provided insurance and no state/county income taxes, but other things are far more expensive, so it's pretty much a toss-up COL wise.
The only way I can see reducing my grocery bill much farther is to basically fully shop at Aldi and the local salvage grocers. Most people are not shopping at salvage grocers, and I don't think it's reasonable to assume folks should. My increased grocery bills have probably consumed by TN state income tax savings over IN.
By the time you get two people, feed them, likely two cars (maintenance/gas/insurance/registration, assuming cars are paid off), pay utilities/property taxes (assuming mortgage is paid off), health care (!), and other essentials, a retired couple is by no means going to be living high on the hog here at $40k net.
Throw them in an expensive area and watch the red ink pile up.
Am I considered retired if I only work 12 hours a week? I'm blessed that my husband was prudent enough to sign up for the survivor benefit plan with the military when we got married. It meant a little less each month in his pension (he was a 20 year veteran) but I couldn't survive without it right now in this economy.
Between his pensions and social security I make $2974 a month tax free and $572 a month from my job which is taxable. It may sound like a decent amount for one person but my rent is $950 a month and I have a $300 a month car payment. Hoping to buy a condo/home/townhouse in the next 5 months so I will have a lower payment, then buy my car when the lease is up in 2 years. Who knows how long I will be able to work and I want my expenses lowered and my credit cards paid off. I don't owe much in CC debt, less than $6000 but one of the reasons I'm working now is to completely retire without any debt other than a mortgage payment.
If you have a car note or other consumer debt, that crowds out money that could either be saved or spent on essentials.
I made a big error several years back rolling negative equity from a previous car into another car. That left me about $7,000 - $8,000 underwater from the car's purchase price, and probably at least $10,000 from the time I drove the new car off the lot. The negative equity is bad, but it also inflates your monthly payment by a couple hundred dollars over what it would be on a "responsible" loan. If I had any cashflow problems (and I was facing pretty much imminent job loss this time last year), that negative equity could mean the difference between being able to make the payment and not. Lose that car four years into making payments, and you've just lost everything you've paid into the car, along with having to try to somehow get another car to get around.
It's a horrible situation to be in. I've since paid off my cards, paid off the negative equity, sold that car, and bought a used car. I have about $750/month of freed up cashflow over what I had this time last year. The used car (a 2006 Escape) is not as nice as my newer Hyundai was, but I am saving around $600/month in payments and extra insurance. Going forward, I'm going to try to avoid having a car payment - if I have to, it won't be more than $200/month.
The sad thing is it is honestly hard for one person to make it. Housing, especially in major urban areas where most people live, is basically tuned around two middle income earners. If you're single and not making a lot, presumably a single retiree, carrying all the "trappings" (literally - mortgage, car payments, maybe other consumer debt) of a middle class life into retirement is going to be particularly burdensome.
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