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Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by MckinneyOwnr
I...
A quick calculation shows that $3500 for retirement in 1990 would need to increase to $5763 in 2010 to maintain the same standard of living.
... the costs of inflation have even more of an impact if you live for 30 or even 40 years past retirement age.
or for more than 50 yrs in retirement !! Retire early, Retire Often
Thus a good idea to have some 'inflation-proof' investments and assets providing your cash flows.
I find it really tough to cut back on expenses, since (for the last 40 yrs):
I drive a $35 car that burns free fuel,
.. eat on <$100 / month
.. heat with wood and solar
.. use well water and septic
.. buy 'near new' used tires for $5 (junk yard)
.. grow my own... food and stuff..
.. brew my own .. (fuel)
.. build my own furniture from trees from my forest
.. 100 % of my own auto and home repair
Don't carouse around (much) excluding volunteer ushering at classical concerts to get free tickets.
Retirement affords time to explore a WHOLE lot of the above and to find even more ways to determine YOUR REAL costs of retirement!For me... the biggest adjustment was NO MORE Paid vacation or holidays! Just like being self employed... Yup... retirement can mean 'lost opportunity costs'.. so be prepared!
I'm about to learn yet another level of 'Cut-Backs'... Temp international Travel job (?) will draw to a close by EoY. No more PAID flights, visas, food, and 5* stays... Back to Guest homes,,, $10USD / night worldwide. It will be good to get back to reality (and nice, caring hosts, and beautiful guest homes)
I'm trying to figure out the real cost of retirement.
Assume that someone has a fully paid home and car. They also have medical insurance.
Besides utilities and food, what are the other major, regular expenses during retirement?
I'm doing an estimate. If I have $1k a month coming in from a pension, $1.5k a month from SS, and $1k a month from a 401k, that's about $3500 income a month. Yes, I know that taxes will come into play.
Without any major expenses like mortgage/rent/car, I think I'll be okay???
What am I missing?
I would hope so, assuming that you live within those expenses, and try to save some money each month for those unexpected things that could happen to anyone?. Do you have any savings, or other investments that you could fall back on in the event the unexpected things come your way?
I think the OP has flown the coop. (or didn't like your answers) My assumption would have to be that the OP is not currently living on $3,500 a month, or they would not be asking if it is enough to live on. So my guess here, is they will need to be reducing their expenses in retirement, and were looking for people who possibly do live on this amount to see how doable it is.
Of course the obvious answer is. It depends on where you live now? Do you plan on staying there or contemplating moving somewhere cheaper? Is your pension a cola pension and are you figuring on leaving something in your 401K to grow to help with the inflation inevitability? And, how well disciplined are you if you must cut your discretionary spending as well. MANY people must move from where they are currently living to be able to retire without undue stress due to their current high non-discretionary expenses. Many people must radically change their life style in order to retire.
So why is everyone on here just assuming this is not the case and not considering the idea that it may be necessary for the OP to relocate in order to make it work? Or possibly just lower their non-discretionary expenses everywhere they can to make it happen. Perhaps examples how people have achieved this might be in order. Or is everyone on this board so financially well off not to have to adjust to a lower cost of living when retired? Statistically, as a single person, the OP is better off than most reaching retirement age today, so it is obviously very workable as long as they understand budgeting and have tried to work within a budget or at least feel capable of doing so in the future.
Last edited by modhatter; 09-10-2014 at 05:31 PM..
... Many people must radically change their life style in order to retire.
I have enjoyed the changes. My career was terribly stressful. Retirement living is wonderful
Quote:
... So why is everyone on here just assuming this is not the case and not considering the idea that it may be necessary for the OP to relocate in order to make it work?
I relocated.
Some places where we have lived, we knew all along that we would not be able to retire there. Other places we really did not think about it. It was not the lifestyle that we wanted.
I do not think that, not moving was in my mind.
Quote:
... is everyone on this board so financially well off not to have to adjust to a lower cost of living when retired?
When I was working, much of our income went into investments.
Today our COL is lower, though mostly due to our relocation. Our daily spending habits are largely the same as they were when I was working. Any 'adjustments' we made were minor.
The OP pension is about 2.5X my pension. That is to say that my pension is around 43% of her retirement income.
Is that 'financially well off'? I am not sure. We relocated to a region where we fit-in as just a slight bit wealthier than the average household income. Among our neighbors, we would appear to be somewhat wealthy.
Quote:
... Statistically the OP is better off than most reaching retirement age today, ...
I've read so many people asking what is enough to retire on? The formula varies from place to place! It's all about location and the perspective cost of living where one plans to retire!
Me personally, I already knew that taking an early retirement from my U.S. government job, we couldn't afford to live where we were currently living at in N. California. Solution, we moved overseas where the cost of living was affordable where we wouldn't have to work just to make ends meet!
When my other pensions kicked in at age 60 and 62, my monthly pension tripled including COLAs and pay raises over the years across the board.
All is well that ends well. We could move back to the U.S. and retire, but we just decided to stay put overseas here in the Philippines, our roots (which btw isn't for everyone) since we are content and satisfied where we are currently living. We may return to the U.S. some day to replant our feet, but that's still a big maybe!
Our home is paid off and we do not have any debts! We are now presently only living on 60% of my U.S. government pension and the other 40% goes into our nest egg!
Life has been good to us, but that was due to the choices we made from the beginning after the day I retired 6 yrs early and we always lived within our means and now we are splurging a little!
I've read so many people asking what is enough to retire on?
The formula varies from place to place!
er, no. I say that there really is NO formula.
it is all (every bit of it) experiential and personal... but with a few common themes
Quote:
Our home is paid off and we do not have any debts!
ding! ding! ding! #1 & #2 of those common themes that allows for options.
Quote:
It's all about location and the perspective cost of living where one plans to retire!
Correct.
And like when still working (and hopefully saving/investing)
financial health is less income about ...than it is about expenses.
Especially structured unavoidable commitment expenses (like mortgages or debt).
That $1000 (or often a wjole lot more) every month will cover a lot of other bills better.
Quote:
All is well that ends well. We could move back to the U.S. and retire,
but we just decided to stay put overseas here in the Philippines, our roots
...since we are content and satisfied where we are currently living.
Sounds wonderful! I wish you both much happiness and joy. Live well.
yep there is no formula for how much is enough . it all depends on location ,wants ,needs ,goals and legacy money you desire.
no one can ever tell anyone what is enough by adding up a bunch of non descretionary bills.
even though we have a decent size retirement war chest the fact we live in one of the highest cost areas in the country still will have us watching our spending and yearly budget.
had we lived in a lower cost area i don't think we would even set a budget ,we would just spend on whatever we wanted just as we do now when working.
Retirement Budget For Couple Montlhy Total $3,453.90
I see a LOT of pockets in that list
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Yup... retirement can mean 'lost opportunity costs'.. so be prepared!
(and nice, caring hosts, and beautiful guest homes)
