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Old 07-29-2019, 09:47 AM
 
Location: Florida/Tennessee
2,802 posts, read 4,383,168 times
Reputation: 1551

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I've been retired for 3+ years now. Here's what I've learned and know. Take everything you have and determine the "carrying" cost, not the total cost just what it takes to own it.

**For instance you own a car. You must have a driver's licence to use it, insurance too and possibly a loan. None of these necessities will make the car drive or move or start = carrying cost. Not everyone has the same carrying costs for specific items. Gas, oil, brakes, tires and repairs are NOT carrying costs.

** Appliances use 10 year average and large tools (think lawnmower)
** Don't forget subscribed services like TV and phone, etc. If you have unlimited then find out what the basic/minimum is.
** Insurance is a biggie
** property taxes too

**Now do that for everything you own or have. This is a lot or work and the amount will scare you. Then break everything down to monthly.

** Then double it if you do most of your own repairs or services
** If you rely on "others" to do it add 20%-30%

This is anecdotal, but it appears to be accurate for me. I need roughly $3800 a month just to own my stuff, 'cause I have lots of stuff. In addition as time marches on and I do less and less for myself (do 90% of my repairs and maintenance), my costs go up unless I get rid of some stuff.

Insurance costs are outrageous. 2 homes, RV, boat, medical, 2 cars and a truck, and some other polices as well.

Ideally you have 20% left over each month for fun.
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Old 07-29-2019, 09:48 AM
 
782 posts, read 556,307 times
Reputation: 936
I don't know what the average person needs but I know what I need for my definition of comfortable. Living in a high COL area, metro NYC I can take advantage of all the great food, art, music and theater. I've already downsized my housing. I know I could live in a cheaper region but then I wouldn't have the quality and breadth of options. Honestly, I'm embarrassed to say what my number is.
I can say that most young retiree couples living here need an annual income north of 200 to live comfortably and that does not include health care costs which would add another 30 or so. The economies of this area are expensive. High taxes, high costs for public transportation and parking, high property taxes, high housing costs, and it goes on and on.
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Old 07-29-2019, 09:53 AM
 
72,691 posts, read 72,534,115 times
Reputation: 50232
Quote:
Originally Posted by foodyum View Post
I don't know what the average person needs but I know what I need for my definition of comfortable. Living in a high COL area, metro NYC I can take advantage of all the great food, art, music and theater. I've already downsized my housing. I know I could live in a cheaper region but then I wouldn't have the quality and breadth of options. Honestly, I'm embarrassed to say what my number is.
I can say that most young retiree couples living here need an annual income north of 200 to live comfortably and that does not include health care costs which would add another 30 or so. The economies of this area are expensive. High taxes, high costs for public transportation and parking, high property taxes, high housing costs, and it goes on and on.
we won't live in manhattan for that reason . it is far to costly for where we would want to be .

we are in a great area in bay terrace queens and we run maybe 10-12k a month . but we enjoy our traveling , eating out and doing things daily so our budget is a lot . but i spent my life getting to this point . our idea of retirement was to live better in retirement then we did working , saving and raising a family .
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Old 07-29-2019, 10:09 AM
 
9,293 posts, read 9,361,015 times
Reputation: 29206
Quote:
Originally Posted by johngolf View Post
Though this question has been asked many different ways, I am going to try and limit the responses to those over 62 and fully (or nearly) retired.

The questions are for those doing it.

How much in Total Assets do you think the average person needs to have to retire reasonable comfortable?

How much Monthly Income do you think the average person needs to have to retire reasonable comfortable?
Do you have a pension? Does your spouse have one? How many years are you from claiming social security? Are you 62 or older?

Is the home you intend to live in fully paid for? Do you have any outstanding debts? Is your health good? Where in America do you live?
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Old 07-29-2019, 10:09 AM
 
1,134 posts, read 545,393 times
Reputation: 1923
Quote:
Originally Posted by Dave_n_Tenn View Post
I've been retired for 3+ years now. Here's what I've learned and know. Take everything you have and determine the "carrying" cost, not the total cost just what it takes to own it.

**For instance you own a car. You must have a driver's licence to use it, insurance too and possibly a loan. None of these necessities will make the car drive or move or start = carrying cost. Not everyone has the same carrying costs for specific items. Gas, oil, brakes, tires and repairs are NOT carrying costs.

** Appliances use 10 year average and large tools (think lawnmower)
** Don't forget subscribed services like TV and phone, etc. If you have unlimited then find out what the basic/minimum is.
** Insurance is a biggie
** property taxes too

**Now do that for everything you own or have. This is a lot or work and the amount will scare you. Then break everything down to monthly.

** Then double it if you do most of your own repairs or services
** If you rely on "others" to do it add 20%-30%

This is anecdotal, but it appears to be accurate for me. I need roughly $3800 a month just to own my stuff, 'cause I have lots of stuff. In addition as time marches on and I do less and less for myself (do 90% of my repairs and maintenance), my costs go up unless I get rid of some stuff.

Insurance costs are outrageous. 2 homes, RV, boat, medical, 2 cars and a truck, and some other polices as well.

Ideally you have 20% left over each month for fun.
The gist of your post makes a lot of sense. The more “stuff” we have, the more we are paying for upkeep, repairs,etc. For a relative minimalist like myself (I have the same digital alarm sitting on my nightstand that I bought when I went off to college 39 years ago....) these costs are relatively small. In my case, they are basically my house, my cars, my pets health and my health.

But as others have pointed out, it seems like every time you leave the house in retirement, it’s going to cost money (other than just the gas cost). This wasn’t the case when we were working, because a good portion of the time, we were headed to work. I’ve found these expenses much harder to quantify.
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Old 07-29-2019, 10:14 AM
 
782 posts, read 556,307 times
Reputation: 936
Quote:
Originally Posted by mathjak107 View Post
we won't live in manhattan for that reason . it is far to costly for where we would want to be .

we are in a great area in bay terrace queens and we run maybe 10-12k a month . but we enjoy our traveling , eating out and doing things daily so our budget is a lot . but i spent my life getting to this point . our idea of retirement was to live better in retirement then we did working , saving and raising a family .
A weekday night out in the city includes,
driving in and parking 50
discount tickets avg 100
moderate dinner+ after drink 100
So 250 for a midweek jaunt for 2 is about average.
2 or 3 times a week maybe.
In retirement you want to go out, you want to meet your friends, you want to take your kids/grandkids out, you want to see some great entertainment, you want to try all these new restaurants and see the latest exhibits, you want to support charity events and your friend's causes.
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Old 07-29-2019, 10:25 AM
 
1,787 posts, read 621,368 times
Reputation: 1856
Quote:
Originally Posted by mathjak107 View Post
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 .
You are correct however, my grandparents made it until their late 90ís and both of my parents are still alive and living on their own at 94 and 95.

So do you think I need to at least plan on a long retirement period ❓
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Old 07-29-2019, 10:26 AM
 
665 posts, read 350,430 times
Reputation: 906
Anyone can figure this out without any help from others.

Look at your budget spreadsheet or ledger. What, you do not have one? Start making one now. Look at you mandatory monthly expenses, everything you simply cannot do without, and do nor forget home maintenance costs, some of it may be discretional, but habits die hard. Average it over the last 6 months, preferably a year or two. Double it, that is what one will need to have a decent QOL in retirement. Lowering it from 100% (Double) to 50%, 30% or even 20% for an average QOL, sometimes having to give stuff up till next month or save for stuff. This assumes no debt unless it is included in the first number.

So if your Minimum COL is $3k pm, you will need $6k and so one. Not rocket science. You still may need to save up for a splurge.
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Old 07-29-2019, 10:34 AM
 
4,057 posts, read 3,270,208 times
Reputation: 13340
There is no way to determine what assets a person needs in retirement, until that person figures out what he will be spending in retirement. Then he can figure out what he needs.

Asking how much assets a person needs to retire is totally bass ackwards. Figure out what you will spend, then you can start to calculate what you need as assets.
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Old 07-29-2019, 10:45 AM
 
Location: Florida
4,432 posts, read 3,773,982 times
Reputation: 4250
Take you current spending and adjust for retirement. Say 50,000 a year. Subtract your social security, pensions etc. Lets say 25,000. That means your assets have to give you 25,000 a year. Multiply the 25,000 by 25 to get 625,000 in assets needed.

Next step is to start refining but this is a ball park number. It relates back to the SWR 4% rule.
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