Can a single person live off $32K in retirement? (weather, movies, seniors)

[M3 Mitch]

Originally Posted by nep321

Actually, I forgot to factor in healthcare costs. Damn. Never mind....$33K ain't gonna cut it. It will have to be more like $37K minimum now.

Do you really want to set yourself up to have only the minimum necessary income?

What if you have an expense in the real world you are not anticipating now?

What if there is a new technology that can significantly enhance your quality of life, something we don't know anything about now, but your insurance won't cover it?

I guess I'm just a conservative old engineer, and like to "When in doubt, build it stout, out of stuff you know all about" rather than try to just set up the minimum to get by.

At the end of the day, it's your money and your life, do what you want to do. Do check with your payroll people though, I think you will find that reducing 401k contributions won't raise your take-home as much as you are apparently thinking.

[BLS2753]

I've done it for the last 25 years, since age 42, courtesy of a military pension. Although now, SS has pushed it to slightly above $40k.

Single, and residing in an area with less than the national average CPI index are key.

[Tim Randal Walker]

Originally Posted by Serious Conversation

I'd rather have it and not need it than need it and not have it.

Probably a good idea for the OP to start developing a frugal life style now.

[Tim Randal Walker]

Originally Posted by nep321

I would certainly be willing to relocate to a low cost area, if necessary.


Thoughts?

There has been a bit of discussion about COL in other threads. If you are willing to relocate, two things to take into consideration:

1. Availability of jobs in the area.


2. Cost of living in the area.


Generally, glamour areas are likely to be expensive. The law of supply and demand-high demand, limited supply.

[BLS2753]

Originally Posted by jghorton

One's view of life at age 32 will dramatically change by 50 or 60.

As I grew tired of working in my 30's, I convinced myself that living on an 'affordable' sailboat and island-hopping would be a great idea. Later, it seemed like ex-pat living in an 'affordable' country sounded good... etc.. Today, I clearly recognize those things as only wishful dreams of finding an 'affordable' way to escape the drudgery of the working mainstream.

But, I simply couldn't reconcile locking myself into decisions that would leave me in a marginal (albeit 'affordable') lifestyle for the next 40-50-years.

Look at it this way - 20-years ago, $32K in today dollars was probably about $12-$15K -- which would leave someone below the poverty level and 20-years distant from a 'marketable' track-record and skills today.

In short, even if you could live 'comfortably' on $32K per year for a couple of years, you need to be careful not to burn your bridges in the process -- because it's unlikely to last.

Your COL increase is overstated. The last 20 years is around 50%, which puts $32k today, between $21k-$22k in 1996. This is based on personal experience with government COLA increases with almost the exact dollar amount stated by the OP.

[BLS2753]

The problem with giving advice to a 32 year old, is that there's way too many unknowns that will occur over the next 30 years. Some circumstances will be controllable by the OP, but many more will not.

The younger people I know with similar defined retirement income goals, are high earners who want to stuff money away early and often, and exit the rat race in a decade or so. Planning a lifestyle 30 years into the future with modest requirements is much more difficult to predict. We don't know inflation rates. We have no idea what SS will look like. We don't know what an equivalent of $32k will look like.

There's a fine line between living comfortably and living in poverty, as one projects minimum income needs 30 years into the future.

[Ariadne22]

Originally Posted by nep321

However, I think I am going to continue contributing 16% so that I can have OPTIONS for retirement!

If I contribute at the rate I am contributing, I will have the following options available to me:

I could live in a high COL area with no problem!
I could retire earlier than normal!
I could live perfectly fine with a rent/home payment, if I still have one!
I could travel the world a bit if I want to!
I could just live a nice luxurious retirement lifestyle without worry!

What do you think of my decision?!

I think this is a fine idea. I'm a big believer in saving often and early. You have time on your side. You can still enjoy life - and save for the future. It's very nice to have OPTIONS. The more you have saved, the move OPTIONS you will have later in life.

[90077]

IMO, there is no such thing as having too much money in retirement. Save and invest as much as you can now so you will have a secure and enjoyable retirement. Being debt free is a wonderful existence.

[marino760]

I'm now wondering how many people here would have said no if the question was $50,000 a year or even $100,000 a year if it meant sitting in the back of a concert with the poor people, LOL.

[nep321]

Yeah, I suppose there is no such thing as saving too much for retirement. The way I look at it...if I "oversaved," there's always the option to retire early anyway!