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Old 08-02-2017, 07:04 PM
 
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Quote:
Originally Posted by jasperhobbs View Post
I read a lot of posts that say you need millions to retire. For many including me that will not be the case. All you can do is save as much as you can and plan ahead. Of course things come up in life that can change everything.
One needs to plan for what they expect to have.

Maybe you (or others) will get some inheritance later? If not, there are many ways of lowering expenses and living well on much less than what is being discussed here.

I think the main thing is to not have debt - ideally own your home or most of it!

Here is one example. My MIL is fairly poor - she has a nice 2 BD condo in Florida that can be purchased for about 75K. The development has everything from tennis to pools to golf to shuttle busses and more.

Assuming you own the condo and are on medicare (over 65) the cost for a single person for everything else would be well less than 2K per month (condo fees, car, food, utilities, etc.).

So a person with a decent ss or small pension - plus the income from 250K or so (12K per year at 5%) would do the job.

My parents, on the other hand, are well to do and live in a MUCH more expensive condo. You know what? When I go and visit both of them there really isn't that much difference between the way they each live.

It's a whole different ball game when one is responsible for a larger family...or wants to live a high-end lifestyle. But 30K per year is plenty for older single folks who own their home (in many places)...

Of course, you have to escape from places where property taxes are ridiculous (10K+ in many cases).
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Old 08-02-2017, 09:50 PM
 
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You're going to get a million answers, and a million is my answer.
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Old 08-02-2017, 11:21 PM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
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From what I have seen here, most people rely on ss and a portfolio in the market counting on a 4% draw. It seems the number only changes for them if they can get a bigger draw.
My money is in rental real estate and I get a decent return. Doing like most people I would need over triple the value of my real estate portfolio in the stock market which I most certainly don't have that much.
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Old 08-03-2017, 02:33 AM
 
71,779 posts, read 71,875,234 times
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Quote:
Originally Posted by eliza61nyc View Post
LOL no I do have a taxable vanguard account. My goal in asking the question was twofold. 1) get some opinions on things I may have forgotten in my thinking (for example some one mentioned to plan for large emergencies such as house repairs) and 2) just get some real live information from folks who have retired.
my opinion is it is the ratio of discretionary to non discretionary spending that is important ,not the total amount .

if everything in your budget is a need and not a want , when big unexpected bills hit or poor economic times you have no where to cut back .

so i like to see about a 50/50 split between the 2 .

i can use the example of us living here in queens where we have a 50/50 split vs living in manhattan where most of the budget would be a need .

both cases have the same budget but the flexibility and safety in the 50/50 split is far greater living here in queens outside manhattan . .

don't rely on just cost cutting either . cost cutting only seems like more income until you bottom out and can't cut costs anymore and expenses keep rising .

you need both a cost cutting plan and a solid investment plan for increasing income too.

answers thrown out like live below your means or cut expenses and you don't need more income are really meaningless by themselves .
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Old 08-03-2017, 02:42 AM
 
71,779 posts, read 71,875,234 times
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as far as the mechanics of figuring out what you need i can tell you how we did it .

using hypothetical numbers :

lets say i added up all the non discretionary bills .things like rent , insurances ,utilities , our gym which is key to my diabetes , and anything else we choose to not do without .

lets say it is 30k. i would then double that to 60k as a total budget now including food,travel ,gifts ,clothes ,etc .

from the 60k we would subtract out social security , pension income and any other non portfolio related income . lets say it is 20k .


so 40k has to come from the portfolio. if we figure a 50/50 mix of equities and bonds/cash we need about 1 million saved to safely generate that 40k .

but the main thing is we have a lot of flexibility to adjust hen big expenses unexpectedly hit or extend market down turns .

that is a very different situation than adding up all your bills and just going our budget is 60k . because depending how that 60k is broken out you may likely need much more than you are figuring because you have no slack in the plan .
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Old 08-03-2017, 04:22 AM
 
Location: Silicon Valley
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Quote:
Originally Posted by Hefe View Post
$6K x 12 = $72K/yr; 58yo to 95yo = 37 yrs; 72K x 37 = $2,664,000

Obviously a quick & crude figure that ignores pension, social security, inflation, future health expenses, relocation, etc..... but a place to start?

Close, but would make that number more helpful is to know if the $6K is all subject to inflation or if some is debt service.

Assuming it's not debt, then it's $6,000, year 1, 6,180 year 2; 6,362 year 3 etc..

That said, if you had 2,664,000 you would definately be able to make more than the inflation with investments.
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Old 08-03-2017, 05:57 AM
 
Location: RVA
2,172 posts, read 1,270,926 times
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Visit early-retirement.org. A much more relevant site than this for numbers and this has been covered to death there. Without knowing how your savings will be invested, your tax situation, etc, the numbers are useless.

I love how the OP asked how much to save, and then gets some answers telling her to sell and move to a lower COL place and/or lower her expenses!

"I want to lose weight, tell me how?" You have to be taller, then your weight is fine. Or Move where gravity is lower. Or hang around really fat people, then you will feel thinner.

Last edited by Perryinva; 08-03-2017 at 06:18 AM..
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Old 08-03-2017, 06:26 AM
 
71,779 posts, read 71,875,234 times
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i agree.

the problem is there is to much thrown in about cost cutting when these questions are asked .cost cutting is different from income generation .ideally you need both .

but when someone is talking about how much is needed they are not talking about having someone tell them to move to cheapsville or buy a tiny house or apartment ..

it is like if you had a company and you were talking to the collections dept about the over 90 growing and someone said if we make more sales we don't have to worry as much about the over 90 list .

trying to use one as a substitute for the other is never a good idea .

Last edited by mathjak107; 08-03-2017 at 06:37 AM..
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Old 08-03-2017, 06:44 AM
 
Location: Philadelphia/South Jersey area
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Quote:
Originally Posted by Perryinva View Post
Visit early-retirement.org. A much more relevant site than this for numbers and this has been covered to death there. Without knowing how your savings will be invested, your tax situation, etc, the numbers are useless.

I love how the OP asked how much to save, and then gets some answers telling her to sell and move to a lower COL place and/or lower her expenses!

"I want to lose weight, tell me how?" You have to be taller, then your weight is fine. Or Move where gravity is lower. Or hang around really fat people, then you will feel thinner.
I know and I do appreciate it but I do want to be realistic especially since I'm still working. I'd rather plan with the goal of staying where I'm at. Right now I'm only 56, I want to retire at 58 but if need be I could stay at my job. it's a good paying job, I sock away 12% to my 401K (with a dollar for dollar match on 4% of it).

Remember I'm thinking of "early" retiring so I do have some lead way. I would totally investigate that option if say I was 67 and that was the only way to live comfortable.

The reality is I've seen way to many people move to lower col areas far from children and loved ones and actually blow more money because within 2 years they are back. If I had 100 bucks for every coworker who moved out west or to florida for various reasons and came running back because they left all their friends and loved one, I could probably retire now. lol. my parents included. who left NYC to move to Charleston, hated the slowness of the south and hated driving everywhere only to end up right back in Queens NY until they died.

I totally admire folks who do that but I'm honest with myself. sorry my children, siblings, grandchildren are waaay to important to me to settle for twice a year visits and phone calls.

Now I have said I plan to downsize. right now I'm in a 4 story townhome and the old gray mare ain't what she used to be (had a knee replacement and the other one will need replacing too). I'm moving simply to get away from the stairs. I have about 400K in equity in my current house so I plan on paying cash when I downsize but once again, I'm not moving to timbuktu to save a buck.

So perhaps I should have asked the question differently.

How much would you want saved to keep your current lifestyle and retire early. some people are perfectly fine with trading in their job by trimming expenses. I am in no way saying that's bad. I'm saying my goal is to accumulate a ball park figure to live the lifestyle I want.

Isn't that the entire idea of retirement planning?

Last edited by eliza61nyc; 08-03-2017 at 06:54 AM..
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Old 08-03-2017, 06:47 AM
 
71,779 posts, read 71,875,234 times
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same here . we live where we do because this is where our kids and grand kids are . our parents missed the daily lives of our kids because they lived 1000 miles away .

they were a stop over on vacation . we swore we would never do that and we would be an active part of their lives for as long as we can. if anyone moves away it won't be us first .

there are some things you can't put a price tag on and are non negotiable. where we live is one of those things .
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