Do you have a "survival" retirement number?
Do you have a "survival" retirement number?
Investment planning often revolves around a certain amount of money you need for 25 years to meet your desired standard of living.
I wonder if anyone also figured out a few other numbers that can be used as milestones prior to reaching the desired number.
For example, one milestone could be the desired number minus vacations and other luxuries, but still includes the basics of middle class living (car and decent house). Perhaps a milestone far below that would be a survival number where you don't need food or housing government assistance (!) but you can't afford much else.
These numbers should also be standard and not dependent on anyone's specific case (if we exclude desired luxuries and chronic medical conditions). But they are obviously dependent on the location where the person will be retiring.
I wonder if anyone also figured out a few other numbers that can be used as milestones prior to reaching the desired number.
For example, one milestone could be the desired number minus vacations and other luxuries, but still includes the basics of middle class living (car and decent house). Perhaps a milestone far below that would be a survival number where you don't need food or housing government assistance (!) but you can't afford much else.
These numbers should also be standard and not dependent on anyone's specific case (if we exclude desired luxuries and chronic medical conditions). But they are obviously dependent on the location where the person will be retiring.
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Re: Do you have a "survival" retirement number?
Why would you retire to a substandard life?
Re: Do you have a "survival" retirement number?
I'd assume that I could "survive" on social security alone, just like many (most?) Americans.
In terms of intermediate milestones, I have computed how much money it would take to "glide" to my number (no contributions or withdrawals until retirement age) at various real rates of return. Maybe kind-of bizarre and it requires recomputation every year, but it is cool to see my retirement goals become gradually more realistic, and then eventually will become conservative.
In terms of intermediate milestones, I have computed how much money it would take to "glide" to my number (no contributions or withdrawals until retirement age) at various real rates of return. Maybe kind-of bizarre and it requires recomputation every year, but it is cool to see my retirement goals become gradually more realistic, and then eventually will become conservative.
Re: Do you have a "survival" retirement number?
I didn’t do this myself but it is discussed often on the retirement and IRA Show podcast. They call it the “minimum dignity floor”. I believe they include housing, food, utilities, health care and transportation in their calculations for this number. Then they add what they call fun money for vacations, etc, then inheritance on top of that.
https://www.theretirementandirashow.com ... ity-floor/
https://www.theretirementandirashow.com ... ity-floor/
Last edited by mhalley on Thu Jun 17, 2021 2:10 am, edited 1 time in total.
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Re: Do you have a "survival" retirement number?
A thread discussed in the past but I enjoy the discussion so I’ll add:
$1m - not starving or homeless ever but lots of adjustments to lifestyle
$6m - retire with current spending levels
$10m+ retire and have increased spending levels
Just my view. Yours may vary.
$1m - not starving or homeless ever but lots of adjustments to lifestyle
$6m - retire with current spending levels
$10m+ retire and have increased spending levels
Just my view. Yours may vary.
You can do anything you want in life. The rub is that there are consequences.
Re: Do you have a "survival" retirement number?
Not so much a number as much as how I put my portfolio together.etfan wrote: ↑Thu Jun 17, 2021 12:26 am Investment planning often revolves around a certain amount of money you need for 25 years to meet your desired standard of living.
I wonder if anyone also figured out a few other numbers that can be used as milestones prior to reaching the desired number.
For example, one milestone could be the desired number minus vacations and other luxuries, but still includes the basics of middle class living (car and decent house). Perhaps a milestone far below that would be a survival number where you don't need food or housing government assistance (!) but you can't afford much else.
These numbers should also be standard and not dependent on anyone's specific case (if we exclude desired luxuries and chronic medical conditions). But they are obviously dependent on the location where the person will be retiring.
1. Minimum income: consists of SS + TIPs + Ibonds starting at age 70 and lasting about 15 years. On this I can survive.
2. The remainder is a risk portfolio consisting of stocks & nominal bonds. With this portion plus #1 above, life will actually be worth living.
Cheers.
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Re: Do you have a "survival" retirement number?
Do you have a "survival" retirement number?
No. Pointless.
No. Pointless.
Avid user of forums on variety of interests-financial, home brewing, F-150, EV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.
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Re: Do you have a "survival" retirement number?
No. You work until you get social security and if necessary even after you get social security and then if you need subsidized food and housing, you do that too. That is the survival number. And we are lucky to have those programs as safety nets. I grew up around plenty of people for whom that was what retirement meant. Not what I would choose, but they certainly survived.
Re: Do you have a "survival" retirement number?
With a paid off house, we can probably live off our SS (and I could live off the survivor benefit if he passes first) and probably manage to save a little bit. That's just for monthly expenses though. We would still to have some padding for house maintenance and a vehicle, so maybe another 50-100K in the bank?
Re: Do you have a "survival" retirement number?
I've lived in a 3 season cabin in the woods without central heating through a terrible winter on a tiny budget with mono and you know what, it was one of the best times I've had. There is plenty to be said for a simple life where you just survive. If I had to retire on social security alone to a modest life like that, it wouldn't be so bad. The main thing to avoid is being forced to work into your 70's at some soul crushing job just to pay for medicine or something like that. I believe I have already avoided that scenario with savings and pension.
70% Global Stocks / 30% Bonds
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Re: Do you have a "survival" retirement number?
No number but attitude...stay positive and everything will work out fine!
“Those who move forward with a happy spirit will find that things always work out.” -Retired 13 years 😀
Re: Do you have a "survival" retirement number?
Never had a number, survival or otherwise.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
Re: Do you have a "survival" retirement number?
While I would not term it "survival" I think many on the board do have a "base" or "core" expense model of retirement and a "full" or "discretionary" model... which I suppose is what you are after.
So: shelter, food, taxes, utils, healthcare--all the un-avoidables--would be "survival mode."
If that's what you are asking, our core # is $50k, all of which would be covered by social security (two pretty high payments) and therefore we would need zero. Most of that would actually be covered by a pension which begins at age 60. That's with a paid off house. $10k of that is real estate tax, FYI, and does include some restaurant meals and entertainment (I don't plan on cooking 7 days a week when I'm retired.)
Our actual full retirement budget with all the bells and whistles is $100-$120k after tax.
So: shelter, food, taxes, utils, healthcare--all the un-avoidables--would be "survival mode."
If that's what you are asking, our core # is $50k, all of which would be covered by social security (two pretty high payments) and therefore we would need zero. Most of that would actually be covered by a pension which begins at age 60. That's with a paid off house. $10k of that is real estate tax, FYI, and does include some restaurant meals and entertainment (I don't plan on cooking 7 days a week when I'm retired.)
Our actual full retirement budget with all the bells and whistles is $100-$120k after tax.
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Re: Do you have a "survival" retirement number?
Same here.RickBoglehead wrote: ↑Thu Jun 17, 2021 5:47 am Do you have a "survival" retirement number?
No. Pointless.
Something goes wrong and you're in serious trouble.
Bogle: Smart Beta is stupid
- climber2020
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Re: Do you have a "survival" retirement number?
Yes- I set 3 numbers for myself early on.
The first one was a minimum amount that I could comfortably live on but without much discretionary spending.
The second one provides a lifestyle similar to what I have now.
The last one accounts for additional future costs for health care and a larger margin of flexibility.
I made changes to my asset allocation at each stage to get more conservative. Between stage 1 and 2 I also reduced the amount of time I spend at work.
Re: Do you have a "survival" retirement number?
I don't think it's a pointless spreadsheet exercise to look at various very low RoR over many years and explore whether you can live reasonably well in retirement based on current savings rate and portfolio value. In fact I think it's useful. I know that I do not "need" to spend $40k a year on travel. I plan to do so, but that doesn't mean I can't live pretty well without doing it.Jack FFR1846 wrote: ↑Thu Jun 17, 2021 7:04 amSame here.RickBoglehead wrote: ↑Thu Jun 17, 2021 5:47 am Do you have a "survival" retirement number?
No. Pointless.
Something goes wrong and you're in serious trouble.
Re: Do you have a "survival" retirement number?
I mean, you're just asking for a lean retirement number.
A standard here will be impossible to compute for everyone, as everyone's cost of living is vastly different.
Additionally, your luxuries might be someone's bare minimums for retirement.
Bezos might include a minimum 100ft yacht as his lean retirement, as opposed to 2 space shuttles in his 'normal' retirement.
A standard here will be impossible to compute for everyone, as everyone's cost of living is vastly different.
Additionally, your luxuries might be someone's bare minimums for retirement.
Bezos might include a minimum 100ft yacht as his lean retirement, as opposed to 2 space shuttles in his 'normal' retirement.
Get rich or die tryin'
Re: Do you have a "survival" retirement number?
Don't forget the support yacht with the helipad. That's non-discretionary.dziuniek wrote: ↑Thu Jun 17, 2021 7:14 am I mean, you're just asking for a lean retirement number.
A standard here will be impossible to compute for everyone, as everyone's cost of living is vastly different.
Additionally, your luxuries might be someone's bare minimums for retirement.
Bezos might include a minimum 100ft yacht as his lean retirement, as opposed to 2 space shuttles in his 'normal' retirement.
Re: Do you have a "survival" retirement number?
The absolute minimum number is whatever is in my portfolio at age 50.
That is when I am eligible for a pension, and my house would have been paid off for a few years at that point.
Not optimal, since two of my kids will still be in school, but I can stop caring as much at that point...
The pension is enough to live off without struggling, but not a luxurious life by any means. But it means not being homeless or hungry, and the house is in a decent neighborhood. Anything more will have to come out of my retirement accounts. Pension is also inflation adjusted.
My current "stop" number is $3 million in the Thrift.
That is when I am eligible for a pension, and my house would have been paid off for a few years at that point.
Not optimal, since two of my kids will still be in school, but I can stop caring as much at that point...
The pension is enough to live off without struggling, but not a luxurious life by any means. But it means not being homeless or hungry, and the house is in a decent neighborhood. Anything more will have to come out of my retirement accounts. Pension is also inflation adjusted.
My current "stop" number is $3 million in the Thrift.
Re: Do you have a "survival" retirement number?
Or a boat within a boat.Admiral wrote: ↑Thu Jun 17, 2021 7:16 amDon't forget the support yacht with the helipad. That's non-discretionary.dziuniek wrote: ↑Thu Jun 17, 2021 7:14 am I mean, you're just asking for a lean retirement number.
A standard here will be impossible to compute for everyone, as everyone's cost of living is vastly different.
Additionally, your luxuries might be someone's bare minimums for retirement.
Bezos might include a minimum 100ft yacht as his lean retirement, as opposed to 2 space shuttles in his 'normal' retirement.
Get rich or die tryin'
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Re: Do you have a "survival" retirement number?
So you would consider retiring when you hit that lower number? Unlikely.Admiral wrote: ↑Thu Jun 17, 2021 7:12 am
I don't think it's a pointless spreadsheet exercise to look at various very low RoR over many years and explore whether you can live reasonably well in retirement based on current savings rate and portfolio value. In fact I think it's useful. I know that I do not "need" to spend $40k a year on travel. I plan to do so, but that doesn't mean I can't live pretty well without doing it.
Big difference between identifying that some of your spending is not necessary and having a lower target. Yes, I have spending that I could cut out if I had to. No, I have no survival number.
Avid user of forums on variety of interests-financial, home brewing, F-150, EV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.
Re: Do you have a "survival" retirement number?
100' is just not that large - when you get 4X that length with helo's and subs onboard it gets v ery interesting.dziuniek wrote: ↑Thu Jun 17, 2021 7:18 amOr a boat within a boat.Admiral wrote: ↑Thu Jun 17, 2021 7:16 amDon't forget the support yacht with the helipad. That's non-discretionary.dziuniek wrote: ↑Thu Jun 17, 2021 7:14 am I mean, you're just asking for a lean retirement number.
A standard here will be impossible to compute for everyone, as everyone's cost of living is vastly different.
Additionally, your luxuries might be someone's bare minimums for retirement.
Bezos might include a minimum 100ft yacht as his lean retirement, as opposed to 2 space shuttles in his 'normal' retirement.
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Re: Do you have a "survival" retirement number?
People discussed LeanFIRE / RegularFIRE / FatFIRE numbers. Well, it's pointless unless you really consider LeanFIRE. Most people don't LeanFIRE, even if they hit it and get laid off at the same moment; they just look for a job because LeanFIRE doesn't make much sense.
Last edited by Marseille07 on Thu Jun 17, 2021 8:45 am, edited 1 time in total.
Re: Do you have a "survival" retirement number?
Would I? Probably not. But I can imagine there are those who would: hate their job, in poor health, care for relative, want to see more of kids, etc. They would make the the tradeoff between more years of retirement and standard of living. Fewer discretionary expenses for more years no longer working.RickBoglehead wrote: ↑Thu Jun 17, 2021 8:06 amSo you would consider retiring when you hit that lower number? Unlikely.Admiral wrote: ↑Thu Jun 17, 2021 7:12 am
I don't think it's a pointless spreadsheet exercise to look at various very low RoR over many years and explore whether you can live reasonably well in retirement based on current savings rate and portfolio value. In fact I think it's useful. I know that I do not "need" to spend $40k a year on travel. I plan to do so, but that doesn't mean I can't live pretty well without doing it.
Big difference between identifying that some of your spending is not necessary and having a lower target. Yes, I have spending that I could cut out if I had to. No, I have no survival number.
Re: Do you have a "survival" retirement number?
OP,
No a survival number but plan B.
Move to a LCOL country and live a decent life. I would not call this as a "survival" number. It would be a pretty good life in a decent place. Instead of visiting it every now and then, live there long-term.
KlangFool
No a survival number but plan B.
Move to a LCOL country and live a decent life. I would not call this as a "survival" number. It would be a pretty good life in a decent place. Instead of visiting it every now and then, live there long-term.
KlangFool
Last edited by KlangFool on Thu Jun 17, 2021 8:53 am, edited 1 time in total.
30% VWENX | 16% VFWAX/VTIAX | 14.5% VTSAX | 19.5% VBTLX | 10% VSIAX/VTMSX/VSMAX | 10% VSIGX| 30% Wellington 50% 3-funds 20% Mini-Larry
Re: Do you have a "survival" retirement number?
I have always preferred to have a range rather than a number for my retirement goal planning. The lower level of the range is not a "survival" point, but rather a number I would be ok. The upper level is the point that I desire. I was happy when I crossed the lower level a couple of years ago.
Mark
Re: Do you have a "survival" retirement number?
It sounds like you're looking for a number for permanent pandemic conditions, which of course is a possibility, although one I had never thought about before last year. It's amazing how much less I've spent in retirement in the the last year vs. what I would have spent otherwise. Well, at least until now with tens of thousands of dollars in storm damage to my house, but a part of that will be covered by insurance, maybe all but $10k or so, including my $3.5k deductible. But the point is you'll still have surges in expenses for "middle class living", especially if a homeowner, many of them unpredictable. So you have to decide how to account for those in your plan.etfan wrote: ↑Thu Jun 17, 2021 12:26 am Investment planning often revolves around a certain amount of money you need for 25 years to meet your desired standard of living.
I wonder if anyone also figured out a few other numbers that can be used as milestones prior to reaching the desired number.
For example, one milestone could be the desired number minus vacations and other luxuries, but still includes the basics of middle class living (car and decent house). Perhaps a milestone far below that would be a survival number where you don't need food or housing government assistance (!) but you can't afford much else.
These numbers should also be standard and not dependent on anyone's specific case (if we exclude desired luxuries and chronic medical conditions). But they are obviously dependent on the location where the person will be retiring.
Re: Do you have a "survival" retirement number?
I don't have different numbers for anything. Financially independent, to me, means that I can support the type of lifestyle I desire. Period. There's no "skinny" or "fat". I mean, if I have more than my minimum number, obviously I'll be able to spend more. But unless there was some crazy event, I would have no desire to retire into a lifestyle that was less than how I live now, while working.
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Re: Do you have a "survival" retirement number?
I'm guessing it depends on many years away from retirement (or FI) you are... if you have a survival number. I can see doing it. I did it sort of. It's hard to know what the 10 or 15 year out future holds (job loss? disability? life happening?) when you get to your 40's and you are trying to make plans for being 55 or 60 or beyond.
I had 3 or 4 numbers in my 40's - while I was trying to catch up on retirement savings (I realized I probably wouldn't be able to work a high income job until I was 65 and to be honest I couldn't see myself doing it - as I was rapidly loosing the "enjoyment" of my job. ) I had always saved 8% to a 401K (never had a match). Late 30's I realized I wasn't saving enough. In my late 40's I realized my employer's pension would "save me". I'm still saving aggressively (35%) of my gross income. )
Back in my early 40's I was working towards the idea my High paying job would end when I was 55 and that I would have to get some other kind of job (maybe not earning as much). I needed to "front load" my retirement savings before I was 55. (I hear this is called CoastFIre. )
The First Number (worst case scenario - or "survival") was if I had 10X my expenses at 55 that would bridge me to FRA when SS kicked in I would have to work probably until I was 65 but it wouldn't have to be a Big Income job. I would have to be careful with my money. (I had no clue at this point what having a pension meant and so assumed it was worth zero dollars)
The Second Number (a better case scenario) was if I 15X my expenses at 55 that would bridge me to FRA (SS kicked in) and I would have to work until 65 but it didn't have to be the Big Income. I could be a little bit less careful with my money - and maybe my 75 plus years wouldn't be so harrowing.
The Third Number - was 20X my expenses at 55 and still probably working until 65.
And the Fourth Number was 25X my expenses at 55. and still working until 65 but much less stressing about money and such.
Back in my 40's my "expenses" number changed over time - as I identified expenses and refined numbers and as the cost of stuff went up.
I reached the 25X my estimated expenses at 57. And then there's my Pension (which when I figured out how it fit into my retirement in my early 50's lifted a weight from my shoulders. The Pension means I can literally stop working at 59.5 and still have a comfortable retirement.
Another thing to remember is - in my Early 40's my estimated expenses at 65 (25 years away) kept going up every year as I got better at "guesstimating" my expenses and as time shortened (it's easier to guestimate 5 years or 10 years out).
So I had a bigger spread of "numbers" early on... By the time I hit 55yo - I pretty much had ONE number I needed to hit.
I had 3 or 4 numbers in my 40's - while I was trying to catch up on retirement savings (I realized I probably wouldn't be able to work a high income job until I was 65 and to be honest I couldn't see myself doing it - as I was rapidly loosing the "enjoyment" of my job. ) I had always saved 8% to a 401K (never had a match). Late 30's I realized I wasn't saving enough. In my late 40's I realized my employer's pension would "save me". I'm still saving aggressively (35%) of my gross income. )
Back in my early 40's I was working towards the idea my High paying job would end when I was 55 and that I would have to get some other kind of job (maybe not earning as much). I needed to "front load" my retirement savings before I was 55. (I hear this is called CoastFIre. )
The First Number (worst case scenario - or "survival") was if I had 10X my expenses at 55 that would bridge me to FRA when SS kicked in I would have to work probably until I was 65 but it wouldn't have to be a Big Income job. I would have to be careful with my money. (I had no clue at this point what having a pension meant and so assumed it was worth zero dollars)
The Second Number (a better case scenario) was if I 15X my expenses at 55 that would bridge me to FRA (SS kicked in) and I would have to work until 65 but it didn't have to be the Big Income. I could be a little bit less careful with my money - and maybe my 75 plus years wouldn't be so harrowing.
The Third Number - was 20X my expenses at 55 and still probably working until 65.
And the Fourth Number was 25X my expenses at 55. and still working until 65 but much less stressing about money and such.
Back in my 40's my "expenses" number changed over time - as I identified expenses and refined numbers and as the cost of stuff went up.
I reached the 25X my estimated expenses at 57. And then there's my Pension (which when I figured out how it fit into my retirement in my early 50's lifted a weight from my shoulders. The Pension means I can literally stop working at 59.5 and still have a comfortable retirement.
Another thing to remember is - in my Early 40's my estimated expenses at 65 (25 years away) kept going up every year as I got better at "guesstimating" my expenses and as time shortened (it's easier to guestimate 5 years or 10 years out).
So I had a bigger spread of "numbers" early on... By the time I hit 55yo - I pretty much had ONE number I needed to hit.
Re: Do you have a "survival" retirement number?
Minimal FI: 25x or average annual spending while we were living most similarly to how we plan to live at least the first few years out. When aiming for this number, we also added in a $100k "transition fund" to be able to change up our lifestyle should we so choose.
Plenty of FI: 30x our average annual spending with both a land based home and the boat.
What the heck are we still doing here?!!? FI: 33x our second highest annual spend (we had one crazy year that I would find a new lifestyle if every year turned into that).
In our case, these numbers come out to roughly X, 2X, 3X.
We do not count any potential inheritance or SS. Both are quite a ways off, if they come at all, so we might as well plan to be self sufficient.
Plenty of FI: 30x our average annual spending with both a land based home and the boat.
What the heck are we still doing here?!!? FI: 33x our second highest annual spend (we had one crazy year that I would find a new lifestyle if every year turned into that).
In our case, these numbers come out to roughly X, 2X, 3X.
We do not count any potential inheritance or SS. Both are quite a ways off, if they come at all, so we might as well plan to be self sufficient.
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Re: Do you have a "survival" retirement number?
I consider SS to be the survival number. You would have to live like the Golden Girls, but you could survive.
Re: Do you have a "survival" retirement number?
During the 2008 financial crisis it was not at all clear that it would not spiral out of control and turn into something like the Great Depression.
I was in my 50s and virtually no companies were hiring since there was so much uncertainty. Even companies that were doing OK were having layoffs just to improve their positions in case things got worse.
My son was a teenager then and few teenagers could get work at places like fast food restaurants since adults that could not find any other work had taken those jobs.
If I had been laid off then my job prospects would have been grim and I would likely needed to make due with what I had.
My sort of last resort fallback plan was to sell my house, in a depressed housing market, then move to a low cost college town that I knew of and buy a duplex or triplex for cash, in a depressed market, and rent out the other units.
That would not be how I would want to retire but it would be enough to get me through to when I could start Social Security.
I was never near needing to do that but it was actually sort of comforting to know that there was little risk that I would ever be homeless or hungry.
Compared to some people here I have not travelled a lot but I have traveled enough and gotten out of the tourist areas enough to have seen just how a lot of people in the world live. Compared to that my fallback plan was still very comfortable.
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Re: Do you have a "survival" retirement number?
The traditonal three legged stool metaphor is social seurity + pension + individual savings = retirement. Adjust for your own circumstances.
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Re: Do you have a "survival" retirement number?
We get the retirement we plan for.
With that being said, I don’t think there are many of us here who’ve planned for mere survival.
Edit: the following post is very well constructed to reinforce my point, since I suspect most here will land in category 6 by the time full-retirement arrives, depending on how large of a pension is secured.
With that being said, I don’t think there are many of us here who’ve planned for mere survival.
Edit: the following post is very well constructed to reinforce my point, since I suspect most here will land in category 6 by the time full-retirement arrives, depending on how large of a pension is secured.
Last edited by Wanderingwheelz on Fri Jun 18, 2021 6:46 am, edited 1 time in total.
Being wrong compounds forever.
Re: Do you have a "survival" retirement number?
I've thought about this more as I've approached and surpassed various financial milestones.
And for the record there is a book out about the 7 stages of financial independence by Joshua Sheats that has been discussed on numerous financial blogs/podcasts. There are also various levels of "FIRE" that people strive for from baristaFIRE to fatFIRE. Here are Joshua's stages.
Stage 0 – Total Financial Dependence. Everyone starts here. When you’re a child, for example, you’re dependent on grown-ups.
Stage 1 – Financial Solvency. You can support yourself, without help or handouts from others, and you’re current on your bills.
Stage 2 – Financial Stability. You can support yourself, your bills are current, and you hold some savings.
Stage 3 – Debt Freedom. You’re debt-free, in addition to the points above. It’s your choice whether or not you want to include your mortgage within this definition.
Stage 4 – Financial Security. You have enough investment income to cover basic, bare-bones living costs.
[I would consider this a baseline retirement goal; for those who get the max social security benefit that alone may cover this.]
Stage 5 – Financial Independence. You have enough investment income to cover your current lifestyle.
[This is most people's retirement reality/goal. Social security plus $500K to $1MM invested is probably a generic standard, especially with a paid off house.]
Stage 6 – Financial Freedom. – You have enough investment income to cover BIG dreams and upgrade your lifestyle.
[This is most Bogleheads' goal/standard I imagine. Social security + no debt + $2MM - $5MM invested let's say in most areas of the country.]
Stage 7 – Financial Abundance. – You have enough investment income that you cannot possibly spend this money. Vast amounts of your money will outlive you, and your focus is wise stewardship of this wealth so that you can leave a beautiful legacy.
[Many retire before getting here - no argument there that they could afford to - but many business owners or executives or high earners who resist retirement for whatever reason fall into this category.]
And for the record there is a book out about the 7 stages of financial independence by Joshua Sheats that has been discussed on numerous financial blogs/podcasts. There are also various levels of "FIRE" that people strive for from baristaFIRE to fatFIRE. Here are Joshua's stages.
Stage 0 – Total Financial Dependence. Everyone starts here. When you’re a child, for example, you’re dependent on grown-ups.
Stage 1 – Financial Solvency. You can support yourself, without help or handouts from others, and you’re current on your bills.
Stage 2 – Financial Stability. You can support yourself, your bills are current, and you hold some savings.
Stage 3 – Debt Freedom. You’re debt-free, in addition to the points above. It’s your choice whether or not you want to include your mortgage within this definition.
Stage 4 – Financial Security. You have enough investment income to cover basic, bare-bones living costs.
[I would consider this a baseline retirement goal; for those who get the max social security benefit that alone may cover this.]
Stage 5 – Financial Independence. You have enough investment income to cover your current lifestyle.
[This is most people's retirement reality/goal. Social security plus $500K to $1MM invested is probably a generic standard, especially with a paid off house.]
Stage 6 – Financial Freedom. – You have enough investment income to cover BIG dreams and upgrade your lifestyle.
[This is most Bogleheads' goal/standard I imagine. Social security + no debt + $2MM - $5MM invested let's say in most areas of the country.]
Stage 7 – Financial Abundance. – You have enough investment income that you cannot possibly spend this money. Vast amounts of your money will outlive you, and your focus is wise stewardship of this wealth so that you can leave a beautiful legacy.
[Many retire before getting here - no argument there that they could afford to - but many business owners or executives or high earners who resist retirement for whatever reason fall into this category.]
"An investment in knowledge pays the best interest." - Benjamin Franklin
Re: Do you have a "survival" retirement number?
OP not sure how you define "survival" retirement, but like some of the posts above, I track base expenses like utilities, taxes, insurance, auto, food, etc. That number is somewhere around $40k/yr. SS x2 and two small pensions more than cover those costs. I guess I could call that lean retirement. With travel opening up, we could spend an additional $10k/yr plus some other discretionary spending say another 10K, so that's around $60k/yr. Not sure if that is what you are looking for or if that is even actionable. Note, retired on time (FRA not FIRE) and paid off mortgage prior to retiring.
Bogleheads Wiki: https://www.bogleheads.org/wiki/Main_Page
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Re: Do you have a "survival" retirement number?
$1 Million in tax deferred + 75% of promised SS benefits would provide us with
the lifestyle we had during 2020
plus $10K/yr to escrow for home maintenance and car replacement,
plus $2K/yr for travelling to see relatives, though we may need to stay with them rather than
get a hotel like we would normally do.
We lived OK during 2020, though didn't have much fun. We could get by with a bit
less, driving older cars, not ordering in like we did to keep the eating establishments
we like afloat, and forgoing charitable contributions, if we are truly talking about just
survival.
Medical would be by far our largest expense, at 21% of our total income, which gets us
Medicare at 65 and a top tier group policy which I can keep from work. Medicare Advantage
might be cheaper if we had to go that route.
the lifestyle we had during 2020
plus $10K/yr to escrow for home maintenance and car replacement,
plus $2K/yr for travelling to see relatives, though we may need to stay with them rather than
get a hotel like we would normally do.
We lived OK during 2020, though didn't have much fun. We could get by with a bit
less, driving older cars, not ordering in like we did to keep the eating establishments
we like afloat, and forgoing charitable contributions, if we are truly talking about just
survival.
Medical would be by far our largest expense, at 21% of our total income, which gets us
Medicare at 65 and a top tier group policy which I can keep from work. Medicare Advantage
might be cheaper if we had to go that route.
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Re: Do you have a "survival" retirement number?
I like this. I've been thinking along these same lines.Meg77 wrote: ↑Thu Jun 17, 2021 10:50 am I've thought about this more as I've approached and surpassed various financial milestones.
And for the record there is a book out about the 7 stages of financial independence by Joshua Sheats that has been discussed on numerous financial blogs/podcasts. There are also various levels of "FIRE" that people strive for from baristaFIRE to fatFIRE. Here are Joshua's stages.
Stage 0 – Total Financial Dependence. Everyone starts here. When you’re a child, for example, you’re dependent on grown-ups.
Stage 1 – Financial Solvency. You can support yourself, without help or handouts from others, and you’re current on your bills.
Stage 2 – Financial Stability. You can support yourself, your bills are current, and you hold some savings.
Stage 3 – Debt Freedom. You’re debt-free, in addition to the points above. It’s your choice whether or not you want to include your mortgage within this definition.
Stage 4 – Financial Security. You have enough investment income to cover basic, bare-bones living costs.
[I would consider this a baseline retirement goal; for those who get the max social security benefit that alone may cover this.]
Stage 5 – Financial Independence. You have enough investment income to cover your current lifestyle.
[This is most people's retirement reality/goal. Social security plus $500K to $1MM invested is probably a generic standard, especially with a paid off house.]
Stage 6 – Financial Freedom. – You have enough investment income to cover BIG dreams and upgrade your lifestyle.
[This is most Bogleheads' goal/standard I imagine. Social security + no debt + $2MM - $5MM invested let's say in most areas of the country.]
Stage 7 – Financial Abundance. – You have enough investment income that you cannot possibly spend this money. Vast amounts of your money will outlive you, and your focus is wise stewardship of this wealth so that you can leave a beautiful legacy.
[Many retire before getting here - no argument there that they could afford to - but many business owners or executives or high earners who resist retirement for whatever reason fall into this category.]
I'm in the 5 to 6 range, depending on the definition of BIG, but doubt that I will ever get to 7.
Re: Do you have a "survival" retirement number?
I always like to consider the worst case scenario in any analysis. In a retirement scenario, I want to know how much would it cost to rent a decent 2 bedroom apartment/utilities, food, taxes, health insurance, and 1 car. All the basic living expenses ---I used $2k/month for an apartment with utilities plus another $3k/month for all other expenses.
That's $60-$70k of expenses per year which I guess you could call a "survival" retirement number.
Pension/year: $30-$35k.
SS / year: $25k.
So I need a ~500k portfolio for the remainder.
I have a lot more and I want to spend a lot more in retirement, but I like having a disaster plan....economic collapse/divorce, etc.
That's $60-$70k of expenses per year which I guess you could call a "survival" retirement number.
Pension/year: $30-$35k.
SS / year: $25k.
So I need a ~500k portfolio for the remainder.
I have a lot more and I want to spend a lot more in retirement, but I like having a disaster plan....economic collapse/divorce, etc.
Last edited by Flashes1 on Thu Jun 17, 2021 11:42 am, edited 1 time in total.
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Re: Do you have a "survival" retirement number?
In a broad sense, yes. Not really a true survival number, but rather a worst-case number. If I bother to plan at all, I will always add a best case and a worst case to my plan anyway. Simple to do, and it helps me understand the underlying dynamics - and that is the real importance of planning anyway.
But I use a realistic worst case, not an end of civilization scenario, or an eat dog food scenario. And not a "win the lottery" scenario for best case either. So for us, that worst case is social security income plus a few other income streams that cannot realistically go away. Just a realistic end point.
Survival mode is a brutal idea. But I have no problem whatsoever with flexing expenses as needed. Always have, always will. Does not affect my happiness. The other value in my doing this simple exercise is that it informs my asset allocation decision. A decision which is highly personal and dictated by my circumstances.
But I use a realistic worst case, not an end of civilization scenario, or an eat dog food scenario. And not a "win the lottery" scenario for best case either. So for us, that worst case is social security income plus a few other income streams that cannot realistically go away. Just a realistic end point.
Survival mode is a brutal idea. But I have no problem whatsoever with flexing expenses as needed. Always have, always will. Does not affect my happiness. The other value in my doing this simple exercise is that it informs my asset allocation decision. A decision which is highly personal and dictated by my circumstances.
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Re: Do you have a "survival" retirement number?
Whenever I consider the worst case, I tell myself what would be the worst case for those who are also in worse cases.
Being a millionaire is a blessing position that many people do not have, don't make your life unnecessarily complicated.
Being a millionaire is a blessing position that many people do not have, don't make your life unnecessarily complicated.
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Re: Do you have a "survival" retirement number?
I don't have an explicit "survival" number, but if I were forced to retire (and I were unable to work again for some reason), I would do what most people do: figure out what money I can get, and figure out how to live on that. 4% of my current portfolio is under the median income in this country at this point, but I'm sure there are places where it would provide a pretty good lifestyle, and that doesn't even account for home equity. That having been said, I'm many years from retirement and I have many contributing years to go.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_ |
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I survived my first downturn and all I got was this signature line.
Re: Do you have a "survival" retirement number?
I would 'settle' for one.smitcat wrote: ↑Thu Jun 17, 2021 8:09 am100' is just not that large - when you get 4X that length with helo's and subs onboard it gets v ery interesting.dziuniek wrote: ↑Thu Jun 17, 2021 7:18 amOr a boat within a boat.Admiral wrote: ↑Thu Jun 17, 2021 7:16 amDon't forget the support yacht with the helipad. That's non-discretionary.dziuniek wrote: ↑Thu Jun 17, 2021 7:14 am I mean, you're just asking for a lean retirement number.
A standard here will be impossible to compute for everyone, as everyone's cost of living is vastly different.
Additionally, your luxuries might be someone's bare minimums for retirement.
Bezos might include a minimum 100ft yacht as his lean retirement, as opposed to 2 space shuttles in his 'normal' retirement.
Get rich or die tryin'
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Re: Do you have a "survival" retirement number?
I don’t have it all figured out yet, but I have a floor spending (fixed expenses) in case things get bad. These are expenses I need to survive (property tax, insurance, utilities, groceries, etc.). This way I can adjust accordingly during the bad times as it makes up close to 50% of my normal spending.
But it’s all relative because everyone’s version of survival retirement is different. If you’re talking end of the world, my spending would be the last thing on my mind. I’ll probably be too busy hunting my own food and building my bunker.
But it’s all relative because everyone’s version of survival retirement is different. If you’re talking end of the world, my spending would be the last thing on my mind. I’ll probably be too busy hunting my own food and building my bunker.
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Re: Do you have a "survival" retirement number?
Yes, I have calculated various retirement options. I think it's a valuable thought exercise, not that I would or did retire at that number.
First there was my "coast FIRE" number where I decided I could stop contributing to my retirement accounts if necessary and could let them grow on their own while I just worked enough to cover my living expenses with a lower paid job. While I did switch to the lower paid job at that point, I never did stop contributing to my accounts, even if it was a fairly low amount some years. Then there's the "could I survive if I had to stop working right now" number. I find this important as a self-employed person who does not have a nice disability benefit from my employer. If, God forbid, I got really sick, could I stop right now and be OK even if I didn't manage to qualify for social security disability? Thankfully I have passed that number and am still happy to work (and able to work). Then there's "my number" of how much to enable me to retire with an OK standard of living and maybe a small travel trip here or there, but assuming that my spouse covers his own expenses. I'm happy to say I have passed that one too. Now I'm working on "our number" which is assuming that my spouse doesn't manage to save much, can I cover both of us even if it will be a bit tight and not allow for extravagant travel, OR assuming that he covers his own modest expenses, can I pay for more travel.
First there was my "coast FIRE" number where I decided I could stop contributing to my retirement accounts if necessary and could let them grow on their own while I just worked enough to cover my living expenses with a lower paid job. While I did switch to the lower paid job at that point, I never did stop contributing to my accounts, even if it was a fairly low amount some years. Then there's the "could I survive if I had to stop working right now" number. I find this important as a self-employed person who does not have a nice disability benefit from my employer. If, God forbid, I got really sick, could I stop right now and be OK even if I didn't manage to qualify for social security disability? Thankfully I have passed that number and am still happy to work (and able to work). Then there's "my number" of how much to enable me to retire with an OK standard of living and maybe a small travel trip here or there, but assuming that my spouse covers his own expenses. I'm happy to say I have passed that one too. Now I'm working on "our number" which is assuming that my spouse doesn't manage to save much, can I cover both of us even if it will be a bit tight and not allow for extravagant travel, OR assuming that he covers his own modest expenses, can I pay for more travel.
Sarah
Re: Do you have a "survival" retirement number?
I don't have a survival number per se. But I do have a bare minimum number that would cover my basics. While I would almost certainly would not retire on this number (in fact I have already exceeded it). It is useful for my planning purposes on what sort of risk I can take with my investments and my eventual withdrawal rate.
Re: Do you have a "survival" retirement number?
My daughter was helping to 'reposition' a 120' boat a couple of weeks back - they needed to stop and top off the tanks before getting near the city bu t they only took on a bit over 5,000 gals.dziuniek wrote: ↑Thu Jun 17, 2021 11:58 amI would 'settle' for one.smitcat wrote: ↑Thu Jun 17, 2021 8:09 am100' is just not that large - when you get 4X that length with helo's and subs onboard it gets v ery interesting.dziuniek wrote: ↑Thu Jun 17, 2021 7:18 amOr a boat within a boat.Admiral wrote: ↑Thu Jun 17, 2021 7:16 amDon't forget the support yacht with the helipad. That's non-discretionary.dziuniek wrote: ↑Thu Jun 17, 2021 7:14 am I mean, you're just asking for a lean retirement number.
A standard here will be impossible to compute for everyone, as everyone's cost of living is vastly different.
Additionally, your luxuries might be someone's bare minimums for retirement.
Bezos might include a minimum 100ft yacht as his lean retirement, as opposed to 2 space shuttles in his 'normal' retirement.
Re: Do you have a "survival" retirement number?
Yes, having passed a net worth that we could live off of indefinitely is a great comfort even though we still have a bit of a way to go before we have the net worth we'll retire at.
Re: Do you have a "survival" retirement number?
A few years back, I came up with 4 budget numbers. I labeled them A, B, C, and D as follows:
A = Absolutely fabulous. This is the retirement I aspire to with lots of first-class travel and paying other people to do any unpleasant tasks (yard work, etc.) I could spend more, but the extra money for a nicer hotel room or more expensive car wouldn't produce much extra happiness at all.
B = Baseline. This is pretty much what I spend now. Includes donations and a couple of nice vacations (one international) every year.
C = Cutback. Eliminates all discretionary spending like charity, vacations, dining out, etc. Still includes replacements for cars, appliances, roof, as needed. Not a "fun" retirement, but still living a comfortable lifestyle.
D = Death spiral. No maintenance items. Only pay bills as they come due / replace items as they fail. This isn't a sustainable budget level, but rather a though experiment for how much could I cut back for a few years if I lost my job and really needed to reduce spending.
In the context of this thread, I think "C" is my survival budget. I believe it's an important number to know. It's not what I would voluntarily choose for retirement, but it lets me know I could get by if I get laid off and can't find another job.
Between my investments, pension, and SS I'm close to being able to pull my "C" budget if I retired now. Once I hit "B" in maybe 3 years, I'll start evaluating whether X years of extra work is worth it just to add another vacation or fly business instead of coach. If I hang in there and get to "A", I'll be out the door in a heartbeat.
A = Absolutely fabulous. This is the retirement I aspire to with lots of first-class travel and paying other people to do any unpleasant tasks (yard work, etc.) I could spend more, but the extra money for a nicer hotel room or more expensive car wouldn't produce much extra happiness at all.
B = Baseline. This is pretty much what I spend now. Includes donations and a couple of nice vacations (one international) every year.
C = Cutback. Eliminates all discretionary spending like charity, vacations, dining out, etc. Still includes replacements for cars, appliances, roof, as needed. Not a "fun" retirement, but still living a comfortable lifestyle.
D = Death spiral. No maintenance items. Only pay bills as they come due / replace items as they fail. This isn't a sustainable budget level, but rather a though experiment for how much could I cut back for a few years if I lost my job and really needed to reduce spending.
In the context of this thread, I think "C" is my survival budget. I believe it's an important number to know. It's not what I would voluntarily choose for retirement, but it lets me know I could get by if I get laid off and can't find another job.
Between my investments, pension, and SS I'm close to being able to pull my "C" budget if I retired now. Once I hit "B" in maybe 3 years, I'll start evaluating whether X years of extra work is worth it just to add another vacation or fly business instead of coach. If I hang in there and get to "A", I'll be out the door in a heartbeat.