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To contrast, my 80-something mother lives in a low COL town in rural Washington -- no state income tax there either. But her monthly spend definitely exceeds 2700:
HOA 950 (this includes all utilities)
Prop Tax 200
Car 400
IRS 300
Insurance (house, car, umbrella) 200
Medicare Part B 250
Medigap 200
Private Doctor "concierge" fee 100
Other Health 100 (drugs, copays)
Food & Entertainment 500
Miscellaneous (arts & crafts, cell phone, travel, gifts for grandchildren) 500
That's $3700/ month. Her investments and social security bring in about $4000 month so she's cash positive. But she is not a spendthrift -- her budget revolves around pretty basic costs. When you start to look at retirees with club memberships or who travel, the 5000/ month outlay becomes the norm.
People underestimate their health care spend in retirement -- my mother does have a concierge service so that she can see "her" doctor at any time -- but the big costs are the never-ending Medicare insurance premiums (450, including her Medigap coverage) plus prescription medicines at 100/ month. I think it's wise to plan 1000/ month for health care costs in retirement.
And utilities (which are more than half of her homeowner association fee) plus taxes continue to be significant line items. Another 1000/ month minimum for those expenses.
IF you own a home and reliable car, you can probably make do at 3000/ month. But that would require careful frugality.
But I said that I would be willing to relocate, if I have to, due to cost of living matters. I probably wouldn't be staying in CT, for that matter, because the cost of living here is high.
Well I can say that CT is not a good location for that income but it is probably doable. CT has good points and bad so I will not disparage the state by saying anything bad about it. However as someone mentioned if that income you mention is not COLA adjusted you would probably find that it would not work 20 years from now. Someone also mentioned it and you responded to it. The term comfortable is ambiguous. It can mean many things to many different people. Still the majority of us would assume that you meant a nice life with no frills but not starving or living in the poverty line. Your lifestyle would make a difference. If you were playing out every night at the club or eating at the many 5 star restaurants found in CT you will find that to be a woefully inadequate income stream.
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.
To contrast, my 80-something mother lives in a low COL town in rural Washington -- no state income tax there either. But her monthly spend definitely exceeds 2700:
HOA 950 (this includes all utilities)
Prop Tax 200
Car 400
IRS 300
Insurance (house, car, umbrella) 200 Medicare Part B 250
Medigap 200
Private Doctor "concierge" fee 100
Other Health 100 (drugs, copays)
Food & Entertainment 500
Miscellaneous (arts & crafts, cell phone, travel, gifts for grandchildren) 500
That's $3700/ month. Her investments and social security bring in about $4000 month so she's cash positive.
People underestimate their health care spend in retirement -- my mother does have a concierge service so that she can see "her" doctor at any time -- but the big costs are the never-ending Medicare insurance premiums (450, including her Medigap coverage) plus prescription medicines at 100/ month. I think it's wise to plan 1000/ month for health care costs in retirement.
And utilities (which are more than half of her homeowner association fee) plus taxes continue to be significant line items. Another 1000/ month minimum for those expenses.
Why is Part B so high? Her gross income needs to be over $107k/yr. before Part B costs that. Otherwise, norm is $105/mo. Did she sell a property or something that cranked up her income for a year? Also, utilities at $500/mo. ("more than half HOA fee of $950") seems too high. My water/gas/elec. w/central air runs $160/mo., probably lower than average; plus cable/internet/landline add $170 - total $330. And, granted I don't live in a warm climate, but house is 1900 sq ft. so it isn't exactly small. $350 mo. tops seems it would be about right. I have read of horrific elec costs in FL/AZ, etc. but WA state shouldn't be that bad.
I agree, medical costs can be an issue. I spend nothing other than Part B @ $105/mo. I have a Medicare Medical Savings Account plan (sort of a high-deductible Medigap w/o the premium) (not available in most states) instead of a Medigap b/c I rarely doctor. Annual $2k deposits by Medicare into this plan cover routine medical expenses, easily. My sister, otoh, different health profile, spends out-of-pocket probably $3,500 year on medication, plus Medigap and Part B costs.
OP - have you added in your Social Security income? Most people who've worked full-time all their lives are receiving between $25000-$30,000/year today in SS - before retirement withdrawals.
$60k is a better number to shoot for, imo, at the very least. You've got a lot of years to save - and you should. It's nice to have money when you need it.
"Over a multi-decade time horizon, even modest inflation can add up significantly. What starts out as $40,000/year spending can wind up anywhere between $70,000/year and $164,000/year after 30 years, just to maintain the same standard of living, depending on whether annual inflation averages just 2% or averages as high as 5%."
By "comfortable" I mean an average standard of living. No luxuries. Just average. Mediocre.
Of course you can.
A lifetime of proper money management and a heads-up attitude will help, but I could be comfortable; you can too.
If your current income is an indicator of your future income, and you get by now without great difficulty then you will do equally well in the future. Regardless of income. And you'll pay almost nothing in taxes.
Suggestions:
Learn to use commonly available resources like Salvation Army. Learn to do things for yourself, like painting or finishing your own furniture. Keep yourself in good physical condition. If you like it where you live, be sure to make an effort to develop 'social equity' in the form of long time friends; get used to helping others, so that you don't cringe when you need help. Ride a bicycle and take the bus when you feel like it. (Not saying you shouldn't own a car) And if you are going to stay where you are, see if you can get a home paid for in teh next 20 years or so - you won't believe what THAT will do for your attitude.
To contrast, my 80-something mother lives in a low COL town in rural Washington -- no state income tax there either. But her monthly spend definitely exceeds 2700:
HOA 950 (this includes all utilities)
Prop Tax 200
Car 400
IRS 300
Insurance (house, car, umbrella) 200
Medicare Part B 250
Medigap 200
Private Doctor "concierge" fee 100
Other Health 100 (drugs, copays)
Food & Entertainment 500
Miscellaneous (arts & crafts, cell phone, travel, gifts for grandchildren) 500
That's $3700/ month. Her investments and social security bring in about $4000 month so she's cash positive. But she is not a spendthrift -- her budget revolves around pretty basic costs. When you start to look at retirees with club memberships or who travel, the 5000/ month outlay becomes the norm.
People underestimate their health care spend in retirement -- my mother does have a concierge service so that she can see "her" doctor at any time -- but the big costs are the never-ending Medicare insurance premiums (450, including her Medigap coverage) plus prescription medicines at 100/ month. I think it's wise to plan 1000/ month for health care costs in retirement.
And utilities (which are more than half of her homeowner association fee) plus taxes continue to be significant line items. Another 1000/ month minimum for those expenses.
IF you own a home and reliable car, you can probably make do at 3000/ month. But that would require careful frugality.
I'm curious what type of living arrangement your MIL is in, westender, with that kind of HOA fee and then property taxes as well.
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