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Old 07-29-2019, 06:03 AM
 
Location: Minnesota
1,596 posts, read 1,366,313 times
Reputation: 2115

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Quote:
Originally Posted by marino760 View Post
The question though was about the average person. I don't think you qualify as the average retiree. This discussion isn't really about how you personally would be living.....just saying. I'm not trying to be snarky, just realistic.
Yes...I love the variety of answers. It depends on so many things. My home is worth about $340K where I live in the Midwest. My brother lives in Pasadena, and walking around with Zillow on my phone tells me that my exact home on a small lot in Pasadena would be worth $900K

Secondly, if you faucet drips, do you call a plumber, or do you grab a couple tools and fix it yourself? If a light doesn't come on, and you change the bulb and it still doesn't work, do you call an electrician, or shut off the breaker, a few tools, and take the switch out to see if it needs to be replaced?

Do you vacation in Europe twice a year, or is a domestic vacation more to your liking? I can spend two weeks in Arizona in mid/late April (beginning of low season), renting an entire house with private pool for about 4K including all expenses. I have a friend who does a similar thing for a month, but in early March (high season), but he wants to be in a gated community...and he spends 15K. Adjusted for my two weeks vs. his month...he's spending almost 4 times per day what I am.

What are you happy with, are you handy around the house, do you need a large house with high end appliances in a trendy neighborhood, or are you ok with a smaller home with Whirlpool appliances in a less trendy neighborhood? Do yo collect lots of "stuff", or do you prefer experiences to make you life enjoyable? Do you need a 150K motorhome to make those traveling "experiences" enjoyable, or is a tent or 15k pull behind camper more to your liking?

There is NO one size fits all answer....and people throwing around the "oh you need at least 2 mil (or more) to exist comfortably in retirement do nothing but demoralize 80% of people who will never have that much. I can retire, and am planning to do so immanently on far less than 2 mi, and our lifestyle (financially anyway) will be exactly as it is now...and I'm enjoying life now.....but not having to go to work will certainly be an added bonus :-)
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Old 07-29-2019, 06:18 AM
 
665 posts, read 350,430 times
Reputation: 906
Quote:
Originally Posted by TheShadow View Post
So Mathjak and others, what do you think the magic ratio is?

I was just doing a quick mental rundown of my budget. I know my expenditures pretty well by heart. I would say our ratio is about 50% of our available steady net income is non-discretionary (mortgage, utilities, taxes, insurance, auto, food, health care, etc), and 50% discretionary (gym memberships, clothing, golf, toys for ourselves, travel, dining out, money left over at the end of the month). We also have some taxable variable income that is thrown on top of that, and we use that income for projects and vacations and what not, so I'm not including that income in the ratio, because it is highly variable and might even be zero in some months.
We are somewhere between 30% and 40% Mandatory Expenses. We have about 60% available for fun but mostly we save it as we cannot think of anything we need to spend it on. We probably come out 50% at the end of each year that we do not need a new car or car lease. Sad really as we are only 65 and 60 respectively.
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Old 07-29-2019, 06:22 AM
 
4 posts, read 3,559 times
Reputation: 15
Default Taking a chance

I really dislike where I live (the state). Moving to Fl. in a few months. Wife will transfer and work for a few more years while I play "house husband". Rough numbers.....pensions and ss gives us about 71k a year before taxes etc. We are both 64. Not taking my social until full age, and wife will work until full age.

No debt to speak of. About 80k in savings and 340k in 401k plus 40k in wife's 401k.

I think we can afford a small mortgage if we use 100k as a down payment on a small house. Renting is still on the table until I am convinced that it is a bad financial move.

I don't foresee us living on canned tuna, and I don't think surf and turf twice a week will happen either.

Think I am taking a chance?
Am I delusional about something?
How do I know how long my 401k will last with minimum deductions kicking in at 70?
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Old 07-29-2019, 06:44 AM
 
72,704 posts, read 72,534,115 times
Reputation: 50237
Quote:
Originally Posted by TheShadow View Post
So Mathjak and others, what do you think the magic ratio is?

I was just doing a quick mental rundown of my budget. I know my expenditures pretty well by heart. I would say our ratio is about 50% of our available steady net income is non-discretionary (mortgage, utilities, taxes, insurance, auto, food, health care, etc), and 50% discretionary (gym memberships, clothing, golf, toys for ourselves, travel, dining out, money left over at the end of the month). We also have some taxable variable income that is thrown on top of that, and we use that income for projects and vacations and what not, so I'm not including that income in the ratio, because it is highly variable and might even be zero in some months.
it is hard to say because what i consider non discretionary are things like my gym since i am diabetic as well as my drumming ... these are things i would give up last so they are a part of our non discretionary budget .

but i think we run about 50/50 ...

fidelity has a decent idea they came up with ... it is 50% essential expenses / 15% retirement savings /5% short term savings / 30% non discretionary spending ....

if you don't need the savings part then it shakes out about 50/50
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Old 07-29-2019, 06:46 AM
 
72,704 posts, read 72,534,115 times
Reputation: 50237
Quote:
Originally Posted by marino760 View Post
The question though was about the average person. I don't think you qualify as the average retiree. This discussion isn't really about how you personally would be living.....just saying. I'm not trying to be snarky, just realistic.
average retiree where ? without location it makes little sense to even discuss if it does not even apply to the person asking . when someone asks that question they usually ask it that way because they don't think in terms of location being so important not because they care about straw people somewhere
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Old 07-29-2019, 08:54 AM
 
2,439 posts, read 624,572 times
Reputation: 4244
Quote:
Originally Posted by johngolf View Post
How much in Total Assets do you think the average person needs to have to retire reasonable comfortable?
Approximately $X.

Quote:
Originally Posted by johngolf View Post
How much Monthly Income do you think the average person needs to have to retire reasonable comfortable?
Approximately $Y.
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Old 07-29-2019, 08:58 AM
 
2,439 posts, read 624,572 times
Reputation: 4244
Quote:
Originally Posted by ansible90 View Post
It depends!

Yes... it Depends...
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Old 07-29-2019, 09:16 AM
 
Location: Loudon, TN
5,928 posts, read 4,928,765 times
Reputation: 20016
Quote:
Originally Posted by rationalexpectations View Post
approximately $x.



approximately $y.
if $x > 360($y) then
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Old 07-29-2019, 09:42 AM
 
1,791 posts, read 621,368 times
Reputation: 1861
Calculating your expected cash flow in retirement becomes an analyzation of many factors.

The first one will be based on your expected life span and coming up with your best guesstimate based on your health and family mortality.

Then you need to establish what lifestyle you want to maintain in retirement with your individual living/ medical/recreation expenses which can be fairly accurately calculated. You offset this with your income including social security, pensions, investment income and if you have a 401k or IRA’s, you can factor that in before 70 if needed, or wait until your 70.5 (RMD) years of age to start withdrawing monies. Annuities can be added if your individual life expectancy is really up there in age. All of this needs to be a conservative estimate since we have no way of know what part inflation will play in this calculation as well as market fluctuations which will most assuredly occur. At best case, it’s still an educated guess.
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Old 07-29-2019, 09:46 AM
 
72,704 posts, read 72,534,115 times
Reputation: 50237
we never really know our life expectancy unless we have some terminal illness usually . many are surprised that with poor health and or poor genetics they are still going on and on .

we can't predict future inflation .

we can't predict market outcomes or rates .

so pretty much retirement planning , at least initially is based on the worst possible outcomes so anything better then becomes a plus .

that is the idea behind " safe withdrawal rate " calculations . it puts the odds on our side of at least providing that initial amount we planned around .
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