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Thread: Suzie says you need 5 mil to RE

  1. #61
    Senior Member Teacher Terry's Avatar
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    We did that for one year. Together we get 40k/ pension and HI took 10k of it. Even with a paid off home and cars it was not a fun year. We didn’t vacation or go out. We have found that our perfect spending level is between 60-70k. This allows us to spend 10k taking 2 nice vacations each year. Everyone needs to find their comfort level. Right now it’s important for us to travel while we both still can.

  2. #62
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    Quote Originally Posted by Teacher Terry View Post
    We did that for one year. Together we get 40k/ pension and HI took 10k of it. Even with a paid off home and cars it was not a fun year. We didn’t vacation or go out. We have found that our perfect spending level is between 60-70k. This allows us to spend 10k taking 2 nice vacations each year. Everyone needs to find their comfort level. Right now it’s important for us to travel while we both still can.
    Smart. Testing it by lived experience while you were still in a position to make adjustments.

    Was there anything you found particularly surprising?

  3. #63
    Senior Member Teacher Terry's Avatar
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    To make it work we had to make cuts in most areas of our lives. We could no longer afford our cell phone plan for instance. The one cheap enough only worked in cities. We had to be on a strict grocery budget. Gone were eating out and going to events. HC taking a fourth of our before tax income was too much. If we ever have to cut back the vacations would go before giving up local events, etc. We could also take our RV for a few weeks a state away and stay in one spot to save money versus cruising or doing long car trips. I thought it was going to be easier than what it was. We stuck it out for a year to get the real feeling.

  4. #64
    Senior Member iris lilies's Avatar
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    I wanted to do the “live on your income a year before you retire” experiment, but not badly enough to sctually do it.haha

    Our income in retirement has been $30,000.

    Before we retired, I figured we would spend $45,000-$ 55,000 annually

    We actually spend closer to $70,000, but some of those are big expenses for COBRA or trip to Europe

    When we turn on the Soc Security spigots we will have income of nearly $70,000. We will be double plus fine until/unless one of us goes to a nursing home, then that event will require serious rejiggering of our resources.
    Last edited by iris lilies; 11-20-18 at 5:38pm.

  5. #65
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    I guess my income/expense ratio is low because we don't have the desire to do expensive trips. Our retirement income is around $55K (we took early SS) but our expenses thus far are well under $25K annually. My logic tin taking SS early was that I have seen too many friends and others either get sick or die well before full SS age. The pension brings it to an income we can work with. We did not have professional careers so we don't have a huge nest egg. I sock away quite a bit every month. It helps too that the house and car are paid for and that prop tax here is so low.

  6. #66
    Yppej
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    Over the past 53 months (when I started tracking) my average spending excluding payroll deductions is between what I would get from Social Security at age 67 and what I would get at age 70, much closer to the 70 number. But that's a big exclusion because my payroll deductions include medical insurance which I would have to cover myself through a Medigap policy. So I am not comparing apples to apples. Early retirement at 62 is fantasyland for me. My SS benefit would be almost cut in half from what it would be at 70.

    I think being in a single income household makes a huge difference. Most of the people who report retiring early come from two income families.

  7. #67
    Senior Member iris lilies's Avatar
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    Quote Originally Posted by Yppej View Post
    Over the past 53 months (when I started tracking) my average spending excluding payroll deductions is between what I would get from Social Security at age 67 and what I would get at age 70, much closer to the 70 number. But that's a big exclusion because my payroll deductions include medical insurance which I would have to cover myself through a Medigap policy. So I am not comparing apples to apples. Early retirement at 62 is fantasyland for me. My SS benefit would be almost cut in half from what it would be at 70.

    I think being in a single income household makes a huge difference. Most of the people who report retiring early come from two income families.

    Even Mr. Money Mustache struggles with the finances of a single person. Rumor has it that he is divoced and is buying out his wife’s half of their commercial building, and is seeking out extra income for that.

  8. #68
    Senior Member Teacher Terry's Avatar
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    IL, yes he is divorced.

  9. #69
    Senior Member Teacher Terry's Avatar
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    PT, so I am curious how your spending is so low. I am guessing that your health insurance is cheap. So no vacations, going out to dinner, festivals, concerts, etc. What do you guys do for fun?

  10. #70
    Senior Member dmc's Avatar
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    I don’t think the 5 million number is out of line for someone who is 30, that’s a long time to fund ones life. I retired 11 years ago at 50, my wife is younger. We spend around 120k a year, this does not include taxes or big ticket items like cars. We could live on less, but health insurance alone is 18k.

    We are spending much less than we made when we were working, but our spending has increased. And our net worth is higher now than it was 11 years ago by a large amount, so we are doing fine.

    On the other end my dad is living in assisted living, it cost $4000 a month. He retired at 57. His SS is $1200, but his insurance supplement cost $300. He can live were he is without any problem, but if it gets where he needs more assistance the cost could go to $6000. He would be able to afford that without any problems but due to his poor choice in girlfriend ,and his dementia ,much of his wealth has gone missing. So even good plans can have unforeseen events.

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