Where do we stand? (55, pension, weather, state)

[Bideshi]

My wife and have have raised and educated our kids and it's just us and the cat now. I'm full retirement age and she's mid 50s. We have no debt, no property, and $250,000 in combined 401K, and other accounts. My SS income would be currently about $2000 a month (I'm still working at the moment).

My question is: where do we stand financially compared to most Americans? Better than average? Average? Charity cases?

[Tesaje]

Well, the rule of thumb (before the current economic meltdown) is that for a living of $50k/year gross in current dollars to have it maintained and account for inflation in the future (of a modest 3-4%/yr) requires $1 million in assets. Your assets amount to 1/4 of that. SS income of $2k/mo = $24k/yr. That leaves $26k/yr that your assets need to cover to reach the rather modest average income level of all people in the US. Now, translate that $$ to how you could live.

At this juncture, who know whether the basic rule of thumb is still valid?

[Bideshi]

So we're essentialy poverty level. Oh bother...

[Umbria]

Bideshi - Looks like you are in Germany now - obviousy you plan to come back to the US. The only consolation I an give is - you will not be alone. Think of the #s of Babt Boomers and older people that are at retirement. Many thought they had done what was necessary to be "comfortable" in retirement. Not living in the lap of luxury, but not stressed over $. That has changed for a whole lot of people. I am not one to sit back and say "Oh shucks...." I spend a majority of my day now stressed over what to do. Mainly because our assets have been stolen from us by greedy, unethical people. I have been retired for 8 years - my days of major employment are over. When I think about what I had to do (every day was a minimum 10 hrs +) to get that savings, I can't do anything but get really pis---. There is alot of age discrimination out there making getting even the part time jobs difficult to get. So. looks like the Govt better get ready to support all of us - they fell asleep at the switch and allowed their buddies to pull this off. This retirement site provides alot of helpful information on the lower cost of living areas. I hope you find something that works for you & your wife. The only good news is - you will not be alone - that gives me some comfort. I wish you luck!!

[MotleyCrew]

We just watched a chunk of our retirement stock go up in smoke. Who knows what the economic situation will be in a few months, let alone a few years. Will the government even have enough to fund ss? I feel like I am sitting here watching some very powerful people steal the American people's money.

To the OP: You might want to check out Costa Rica as your ss income will go further there. If you come back to the US, then I would look at AL with the very low property taxes, or TN, which is also not as high taxed.

[sweetana3]

I think it is critical to know your own expense profile in order to analyze what you need. For example, you have no property (house) and will need to purchase or rent. That will take a chunk but depending on your unique needs, can be expensive or frugal. Where I live a retired couple can rent a one bedroom in a very nice new senior complex (that would allow a cat) for around $700 a month or less market rate. This is within walking distance to library and a variety of stores. Of course you could spend $2,000 or more if you want all the amenities brought to your door.

My husband and I know from 25 years of budgets and records that we can live on his pension. Anything over and above is gravy. However, I still feel the need to keep working past 55 for the "comfort" level of security in this economy.

The biggest issue with the $2000 a month in SS is the unknown of health insurance and increases in cost. Even Medicare RX plans are going up significantly this year. This needs to be considered.

So sit down and do some budgeting using what you know and see where you stand on income and expenses. Ask a lot of questions.

Plus statistically you are in the upper 25% of all retirees and maybe even higher than that. Gives one pause doesnt it.

[ChunkyMonkey]

You may be better off in Germany at the moment. At least you get healthcare there. I hope your 401K is not in too much stocks as the market is very volatile at the moment.

[HappyTexan]

Also remember that not everyone needs to go by the figures the magazines give.
For example..this year I started living on what I think I can retire on. I have a 17 year old son as well. My projection is that we got by this year on about $45K (still have 3 more months).

I cut back or cancelled those items/services not needed. My son has a P/T job so his spending and gas $$ were not included but I did cover his car insurance and clothes/food. And this includes mortgage.

I live pretty simple and have chickens/grow my own vegetables/buy meat twice a year from a farmer and freeze.

So..when I retire the son will be out on his own and the home will be paid off. I think I can do it on $40 and have money to spare. I don't believe the reported CPI of 3% is true..it's more like 10% so I can't keep up unless I get risky with my investments..which I do not plan to do.

[Keeper]

I live on less than 20K and I am able to even save a little every month. My advantage is I paid cash for a house in N. AL with the money from a house in FL I sold. Property taxes are LOW.. HOI is very reasonable.. No state income tax on my pension.

Granted my house is older and in very good condition. I paid less than 90K for 1500 sq ft brick home with 3/4 acre lot. I have spent some money on a carport, new windows, new shed and privacy fence. Of course, I could live without those things.

I agree you have to know what you can afford and search for a place that will meet all your needs. Small town, big city, warm weather, cold weather a little of both..

[Bideshi]

Thanks to all of you for your input. We are in Germany only because of a short term contract ending next summer. Staying here was never an option. We've looked into Colorado, N. Idaho, Penn, and Alabama so far. AL may have the edge right now.