Gross Yearly Income needed in Retirement (Speculation)

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DonCamillo
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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by DonCamillo » Tue Oct 28, 2014 11:17 am

new2bogle wrote:
What kinds of savings rate does one need to take $100k/year in retirement? It seems unattainable without a two income high earning (physician level +) people.

One key determinant of earning power is the ability to plan ahead. Typically, the longer your planning horizon, the higher your income. Since most of the people on this forum tend to plan years ahead, they are an atypical group.

Another key aspect of retirement income is retirement age. If you have a good job and enjoy your work, you tend to retire later.

If you combine those characteristics, planning ahead, making more and retiring later, it is easy to retire on $100,000 per year. My wife and I will have over $60,000 in SS starting next year when I turn 70.

The problems come when you try to combine stretch goals like retiring early and having a high income. I suspect that it is quite difficult to retire at 35 with $100,000 a year indexed for inflation.
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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by Grt2bOutdoors » Tue Oct 28, 2014 11:33 am

I only need enough for food, heat and light, medical and property taxes; indexed for inflation.
All else is just pure speculation - I desire, I need, I want; pure speculation as ones needs and wants are constantly changing as sure as the seasons are.
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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by HomerJ » Tue Oct 28, 2014 11:55 am

new2bogle wrote:How are people coming up with these numbers? 90K? 120k? Even $180k???

What kinds of savings rate does one need to take $100k/year in retirement? It seems unattainable without a two income high earning (physician level +) people.


Look at your current expenses, subtract those that may not exist in retirement (like a mortgage), and add expenses that may be new in retirement (health insurance)

Do NOT look at your current income. Expenses are what matter. A person making $100k a year may only need $50k in retirement to enjoy the EXACT same lifestyle.

If you spend $6000 a month now, and $1500 of that is mortgage, that means you probably only need $4500 a month in retirement... But then there's health insurance, so maybe you should plan on $5000 a month in retirement...

But don't forget Social Security... If you have two working spouses, you could easily be pulling in $20,000 - $40,000 a year from SS someday...

So even though you want $60,000 a year in retirement, you may only need to generate $30,000 of that from your investments...

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by MichDad » Tue Oct 28, 2014 12:01 pm

I've just set up a poll on this topic. Here's the link:

http://www.bogleheads.org/forum/viewtopic.php?f=2&t=149726

MichDad

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by Meg77 » Tue Oct 28, 2014 1:35 pm

I think a gross income of around $150K would be ideal/sufficient for me to live the type of lifestyle you describe (which fits my plans/goals). $10K a month net would allow me to cover the basics, eat well, live in a comfortable home in a cool neighborhood, travel frequently, and give as freely as I choose to charity and/or grandchildren. Interestingly, I think my target income figure is pretty much the same whether I'm still married or single in retirement. Without a spouse I'd want more cushion to pay for home help and other types of care if/when needed, and I'd also want to be busier outside the home and probably travel more. With a spouse the travel would cost a bit more (two flights versus one, etc) but we'd probably stay home more too. Of course this is all pure speculation - point is I'd love a 6 figure income in retirement either way. Of course who knows where healthcare costs, housing costs or taxes will go by the time I'm old so I could be overestimating the lifestyle I'll be able to afford...

For the record my retired father lives in a relatively low cost of living area (semi rural) and so far spends about $30K a year even though he earns more than that in dividends alone. And he hasn't claimed social security yet either. Most of his spending goes to health insurance, home insurance, utilities and home maintenance. He confessed to me recently that he is cheaper than ever now that he's retired - despite a recent 7 figure inheritance on top of his 7 figure investment portfolio - and can hardly bring himself to spend money at all. He's always sort of been that way (raising 4 daughters may have contributed to his anti-spending attitude), but I hope he can loosen up a bit and at least be willing to buy meat that isn't on sale at the Piggly Wiggly and spend more than $50 a night in a hotel during his golden years...

My mom hasn't retired yet but already has no debt and will maintain her current $80Kish standard of living in retirement I'm sure. She lives off her teacher pay but spends another $30K a year on gifts, travel and charity. She might bump it up to $100K or even $120K in years where she takes us all on a big trip or gives money to her grandkids or something (if she has a bunch more), but she too lives in a place where living really well just doesn't cost all that much.
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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by hoops777 » Tue Oct 28, 2014 3:18 pm

Avalpert and Bradshaw...I do not understand what Bradshaw said about eliminating SS....I never said anything about SS but I consider it to be the most important asset a retiree has.
Avalpert....You are right ,nothing in life is 100 pct guaranteed but treasuries and CD's are a lot more guaranteed than a 7 or 8 pct return on the stock market.I am talking about retiring EARLY when you do not have to but because you think you have enough money.You are right of course about inflation ,which is another reason one better think twice about how much money they really need to retire early.You are also giving up maybe 10 years of income and adding to your retirement instead of draining it.You also have to consider what retiring early does to your future SS payments.Of course anyone retiring early is going to factor all of this in.If you can do it without DEPENDING on the stock market to give you a big return I am all for it.It makes no sense to me to base your old age on stock market returns if you do not have to.Just my personal opinion
Regarding a 4 pct withdrawal rate.....not a big fan with today's conditions.I believe you figure out what you need and use common sense on your spending.
Believe it or not but there are actually very successful people who do not invest in stocks at all.
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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by GregR » Tue Oct 28, 2014 3:30 pm

I think you are describing a $100K a year or so lifestyle and spend give or take $15K, adjusted for inflation. What income you need I suppose will depend on the source and how it is taxed.

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by bradshaw1965 » Tue Oct 28, 2014 4:31 pm

hoops777 wrote:Avalpert and Bradshaw...I do not understand what Bradshaw said about eliminating SS....I never said anything about SS but I consider it to be the most important asset a retiree has.
Avalpert....You are right ,nothing in life is 100 pct guaranteed but treasuries and CD's are a lot more guaranteed than a 7 or 8 pct return on the stock market.I am talking about retiring EARLY when you do not have to but because you think you have enough money.You are right of course about inflation ,which is another reason one better think twice about how much money they really need to retire early.You are also giving up maybe 10 years of income and adding to your retirement instead of draining it.You also have to consider what retiring early does to your future SS payments.Of course anyone retiring early is going to factor all of this in.If you can do it without DEPENDING on the stock market to give you a big return I am all for it.It makes no sense to me to base your old age on stock market returns if you do not have to.Just my personal opinion
Regarding a 4 pct withdrawal rate.....not a big fan with today's conditions.I believe you figure out what you need and use common sense on your spending.
Believe it or not but there are actually very successful people who do not invest in stocks at all.


Was simply detailing some of the counter-examples to people depending on rosy stock returns posted here. Bogleheads is a difficult sub-sample since you are more likely to run into people over-saving and over-planning rather then the much more common conditions you describe

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celia
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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by celia » Tue Oct 28, 2014 5:19 pm

Well, a paid-off house and cars can be various sizes with various "features" so the just the annual taxes on them will vary as much as the value of the house and cars themselves.

You didn't mention health costs outside of what the insurances cover, nor taxes on Roth conversions, nor house maintenance.

Still, I would go with $80 in the typical year, not counting exotic vacations.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by hoops777 » Tue Oct 28, 2014 6:58 pm

You are right Bradshaw not too many people here need to hear what I was preaching......but if I maybe saved one person from early retirement so they could pound the pavement for 5 more years my mission is accomplished :twisted:
K.I.S.S........so easy to say so difficult to do.

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by maniminto » Mon Mar 20, 2017 4:44 pm

By & large the consensus seems to be around $100K. How much money does an average Boglehead make?

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by Tamales » Mon Mar 20, 2017 9:14 pm

market timer wrote:The average retired household in 2011 spent $38K, of which $26K came from Social Security and other pensions. Note that only $3K came from passive income sources, listed as "interest, dividends, rental income, other property income."

http://www.bls.gov/cex/2011/Standard/occup.pdf


Here's the 2015 update to the 2011 table (linked above) that market timer posted:
https://www.bls.gov/cex/2015/aggregate/occup.pdf
(or at least the closest table I could find. Very hard to navigate that BLS.gov website. Way too much data to fish through)

Edit: use this one instead: https://www.bls.gov/cex/2015/combined/occup.pdf
This one is average while the other one is aggregate/

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by rgs92 » Mon Mar 20, 2017 10:16 pm

About $130,000 a year in the NY metro area according to my calculations (including about $10K annual property taxes, about average for a modest house in the suburbs). No debt here. Not much for travel or expensive cars in this budget.

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by HomerJ » Tue Mar 21, 2017 12:26 am

rgs92 wrote:About $130,000 a year in the NY metro area according to my calculations (including about $10K annual property taxes, about average for a modest house in the suburbs). No debt here. Not much for travel or expensive cars in this budget.


I'd love to see your calculations.

No debt, so I'm assuming your house is paid off. Why can't you afford much travel?

What's the money being spent on each month?

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by Fox » Tue Mar 21, 2017 7:56 am

We are 30+ years from retirement, but I'd like to have a target income of at least $100k-$120k for retirement. That doesn't include any SS or inheritance (if any).

We want to be able to travel frequently, own a couple small properties, help support kids and grandkids, donate to charity/church, etc (maybe splurge on some hobbies)... Pretty standard retirement goals that will be highly satisfying for that stage of our lives.

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by Barefootgirl » Tue Mar 21, 2017 8:04 am

My calculation is not very scientific. I've spent my career in a HCOL area. I know my approximate annual expenses over the years here. In retirement, I plan to be mobile and spend more time in LCOL areas. I am just going with the number based on experience, but then I will be (fingers crossed) exiting with employer subsidized healthcare.
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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by The Wizard » Tue Mar 21, 2017 8:13 am

Gross income NEEDED and gross income DESIRED are two different things.
Having more than needed gives one flexibility and options...
Attempted new signature...

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by Lynette » Tue Mar 21, 2017 8:24 am

I retired a few months ago and have been calculating how much I will have to spend. I think that Gross income is a meaningless concept as taxes are a major component of one's expenses. It also depends if one has a large amount of one's holding in a tax deferred account and has to take RMDs. If I had done Roth conversions, my taxable income would be far less. I pay taxes on pensions, SS, RMDs, property tax, and of course federal and state tax. If my main assets were in a taxable account and I lived on withdrawals, dividends, capital gains and SS, my tax would be far lower.

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by cockersx3 » Tue Mar 21, 2017 8:31 am

beachlover wrote:
nelson1015 wrote: ...Here are the parameters.

-You own a house and it's paid for free and clear
-You own cars outright
-You have no debt of any kind whatsoever
-You want to live a middle to upper middle class lifestyle in retirement
-You'd like to be able to travel several times a year
-You'd like to be able to enjoy life, eat out on occasion and generally not worry about the bills.

What gross yearly income do you need a year to accomplish the above in retirement.


We live essentially as you describe, in an area with neither particularly high nor particularly low COL. Except for one lowball year at around $75K, the last six years have all come in between $80K and $90K annual household expenses for two - all in - all taxes included. Current year 7 is on track to fall within that range as well. The only caveat I'd add is that we benefit from reduced retiree medical premiums. If we had to buy that on the open market, I'm guessing it could add around another $10K (not considering ACA subsidies, if they'd even be applicable).


+1 on this number. We're living this exact lifestyle now (ie no debut, periodic travelling, etc) but I'm still working with two tween kids. Expenses over the past few years (per Quicken) have been steady at around $60-70K/yr, not including employer-paid health insurance and income taxes. About $40K of that is what I would characterize as non-discretionary (again, not including HI and income taxes). If you add health insurance back into my current spend, we'd be at about the same $80-90K annual spend as above which is what we're budgeting for in retirement. Hoping to retire in around 5 years at a 3.5% draw rate, if the market cooperates....! :sharebeer

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by Joe48 » Tue Mar 21, 2017 8:47 am

I am retired 8 years but my wife still works. We figured our expenses at $105k per year and our retirement income would be $155K after taxes.

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by Bogel0048 » Tue Mar 21, 2017 8:52 am

My wife and I can do fine on about $100K per year after state and federal taxes. That covers all our insurances, utilities and property tax, house and car expenses, groceries and restaurants, clothing, etc., which add up to about $80K per year. The last $20K is for our retirement travel budget, which is twice what we spent on travel when we were working.

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by lazydavid » Tue Mar 21, 2017 9:13 am

littlebird wrote:Off my topic, but I just read in another post above of someone paying $26K/year in federal income taxes ??? Here's my experience: except for the year in which I sold enough appreciated shares of TSM to buy a new house for cash, I've averaged less than $400/year in federal income taxes. Less in state income tax.


Federal income tax burden of $400/year means an annual household AGI of just $12,100 after deductions, in 2016 dollars. For MFJ taking the standard deduction, this means an income of $24,600. I suspect this does not describe you if you're selling investments to pay cash for a house.

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by SQRT » Tue Mar 21, 2017 10:03 am

I retired 10 years ago with a projected income in retirement well in excess of what I was spending prior to retirement. While most people decide how much they need then retire once this is secured, others just save as much as they can then adjust (up or down) their spending in retirement to match this. "Need" or "want" isn't always the prime determinant and can be very subjective. "Actually have" might be a better term? Quite often people will adjust the former terms to the latter.

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by littlebird » Tue Mar 21, 2017 1:57 pm

lazydavid wrote:
littlebird wrote:Off my topic, but I just read in another post above of someone paying $26K/year in federal income taxes ??? Here's my experience: except for the year in which I sold enough appreciated shares of TSM to buy a new house for cash, I've averaged less than $400/year in federal income taxes. Less in state income tax.


Federal income tax burden of $400/year means an annual household AGI of just $12,100 after deductions, in 2016 dollars. For MFJ taking the standard deduction, this means an income of $24,600. I suspect this does not describe you if you're selling investments to pay cash for a house.


You're not taking into account the 0% capitol gains bracket and the qualified dividend rate, also over 65 exemption, partial taxation of SS. New to me this year, and not taken into account in previous post -- partial taxation of annuity. Also new to me this year and not taken into account in previous post, medical costs greater than standard deduction, therefore itemized.

Not that long ago there was a thread about paying 0 income tax on a retirement income of ? was it $100,000? don't quite remember. I've never paid 0, nor is my income $100,000 but, do pay an amount so modest, it makes no functional difference. And living comfortably, despite long-term care costs for spouse. Thank you Mr. Bogle.

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by aristotelian » Tue Mar 21, 2017 3:23 pm

My mental goal is 100K, which is kind of tight for us now but I think would be fine when the kids are on their own and no longer in the saving/accumulation mode. I would like to have enough money to do an international trip or two per year. We are in a low cost of living state.

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by jebmke » Tue Mar 21, 2017 3:44 pm

lazydavid wrote:
littlebird wrote:Off my topic, but I just read in another post above of someone paying $26K/year in federal income taxes ??? Here's my experience: except for the year in which I sold enough appreciated shares of TSM to buy a new house for cash, I've averaged less than $400/year in federal income taxes. Less in state income tax.


Federal income tax burden of $400/year means an annual household AGI of just $12,100 after deductions, in 2016 dollars. For MFJ taking the standard deduction, this means an income of $24,600. I suspect this does not describe you if you're selling investments to pay cash for a house.

Trust me, you can make a lot more than $24,600 and pay no Federal income taxes.
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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by beattherush » Tue Mar 21, 2017 8:08 pm

nelson1015 wrote:How much gross yearly income before taxes do you think you need in retirement? I'm looking to get a bunch of different viewpoints on this. Here are the parameters.

-You own a house and it's paid for free and clear
-You own cars outright
-You have no debt of any kind whatsoever
-You want to live a middle to upper middle class lifestyle in retirement
-You'd like to be able to travel several times a year
-You'd like to be able to enjoy life, eat out on occasion and generally not worry about the bills.

What gross yearly income do you need a year to accomplish the above in retirement. We aren't counting SS, Pension, Passive Income. I'm looking for one total yearly number.

60k? 80k? 100k? more? (in today's dollars)

I would be nice to hear from some Retirees.


I'm not sure excluding SS makes sense... income is income.

But I figure $10k/month gross is a reasonable number. Taxes and living expenses, including property taxes on your free-and-clear home, insurance on home and autos, and maybe some fees and utilities, are going to get close to a quarter of that. Nice trips will chew up a lot of that if you are going to go to Europe or Asia and travel well. Nice meals out once a week and good wine etc. are $1k a month. And grandkid spoiling will add a few dollars to the pile. And we said no worries. I think most people would be able to do that on $10k with no problems.

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by lazydavid » Wed Mar 22, 2017 12:12 pm

nbseer wrote:I retired end of last year at age 62. House, 2 cars, child's college all done and paid for, no debt.

Will get pension in two years, will wait till 70 for SS, but will file and suspend at 66 so wife gets spousal benefit.


You're going to want to rethink this strategy, since it's no longer possible for people filing after April 30, 2016. You can still file and suspend, and your benefits will continue to rise until you take them, but "suspend" now means ALL benefits, including the spousal benefit. Additionally for people born after January 1, 1954, filing for spousal benefits now also means filing for your own benefits, so neither of you would accrue delayed retirement credits.

See more here

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by wolf359 » Wed Mar 22, 2017 12:33 pm

lazydavid wrote:
nbseer wrote:I retired end of last year at age 62. House, 2 cars, child's college all done and paid for, no debt.

Will get pension in two years, will wait till 70 for SS, but will file and suspend at 66 so wife gets spousal benefit.


You're going to want to rethink this strategy, since it's no longer possible for people filing after April 30, 2016. You can still file and suspend, and your benefits will continue to rise until you take them, but "suspend" now means ALL benefits, including the spousal benefit. Additionally for people born after January 1, 1954, filing for spousal benefits now also means filing for your own benefits, so neither of you would accrue delayed retirement credits.

See more here


Check the date of his post. Someone replied to an old thread. The original post was made in 2014, prior to the changes.

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by ulrichw » Wed Mar 22, 2017 12:34 pm

Of all of the two + year old threads to resurrect, I wish maniminto had picked a better one. This topic seems to get covered quite regularly.

OP made a mistake in posing his question by asking how much income was needed *excluding* pensions and SS.

For people who followed instructions (probably a minority) this means you'd need to know what they have available to them in pensions and SS in order to get the real picture of what their desired level of spending is in retirement.

As a poster on the first page mentioned, the more insightful question is to ask people about desired spending levels.

FWIW: I'm planning on a spending level somewhere around $75k (2017 dollars). Non-discretionary spending is probably in the $40k range without penny-pinching.

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HomerJ
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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by HomerJ » Wed Mar 22, 2017 12:36 pm

beattherush wrote:But I figure $10k/month gross is a reasonable number. Taxes and living expenses, including property taxes on your free-and-clear home, insurance on home and autos, and maybe some fees and utilities, are going to get close to a quarter of that. Nice trips will chew up a lot of that if you are going to go to Europe or Asia and travel well. Nice meals out once a week and good wine etc. are $1k a month. And grandkid spoiling will add a few dollars to the pile. And we said no worries. I think most people would be able to do that on $10k with no problems.


You're not wrong, but taxes are a lot less in retirement than you think. Plus, move out of the HCOL areas, and your property taxes are much lower.

Our lake condo costs us $6,000 a year in property taxes, insurance, and HOA fees. That's $500 a month for a home with a great view (that includes two pools, boat docks, swim docks, and yard maintenance)

That's pretty cheap living.

My parents would scoff at that though. They live in southern Missouri on 110 acres, where their property taxes are only $500 a YEAR.

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by lazydavid » Wed Mar 22, 2017 12:44 pm

wolf359 wrote:
lazydavid wrote:
nbseer wrote:I retired end of last year at age 62. House, 2 cars, child's college all done and paid for, no debt.

Will get pension in two years, will wait till 70 for SS, but will file and suspend at 66 so wife gets spousal benefit.


You're going to want to rethink this strategy, since it's no longer possible for people filing after April 30, 2016. You can still file and suspend, and your benefits will continue to rise until you take them, but "suspend" now means ALL benefits, including the spousal benefit. Additionally for people born after January 1, 1954, filing for spousal benefits now also means filing for your own benefits, so neither of you would accrue delayed retirement credits.

See more here


Check the date of his post. Someone replied to an old thread. The original post was made in 2014, prior to the changes.


Good catch. He was still impacted, but just couldn't have known it yet at the time. :beer

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by ubermax » Wed Mar 22, 2017 4:41 pm

We seem to be requiring ,from all sources, 65% of gross combined (joint) income just before retirement .

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by kmurp » Wed Mar 22, 2017 6:05 pm

Just started tracking expenses but I hope to have post tax around 37% of my current gross income.

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by Pilgrim4570 » Wed Mar 22, 2017 6:29 pm

I have compared budgets of others that have similar plan to ours.
Current income varies $75-110K
Our calculated guesses gives min income $36K, min desired $48K, goal $60K, and max is $84K
Our current home has $4k in taxes, secondary is $400. Yes the government services vary wildly.


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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by 732002 » Fri Mar 24, 2017 7:43 am

I'm going to estimate $120K @ 62 and 64 years , currently spend $70K on living expenses without effort economizing.

$40K SS,$40K pensions,$40K savings, it looks like SS would be taxed $8.5K (25% of 85% rule)
and the other income $8K, does this sound correct?

Hopefully this leaves enough to buy health insurance and have some excess to survive unexpected market down years.

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by RoadHouseFan » Fri Mar 24, 2017 9:11 am

Anything above $30k per year is extravagant.

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HomerJ
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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by HomerJ » Fri Mar 24, 2017 10:05 am

RoadHouseFan wrote:Anything above $30k per year is extravagant.


Anything above $10k per year is extravagant says 60% of the world. Why do you waste so much money?

RoadHouseFan
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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by RoadHouseFan » Fri Mar 24, 2017 10:13 am

HomerJ wrote:
RoadHouseFan wrote:Anything above $30k per year is extravagant.


Anything above $10k per year is extravagant says 60% of the world. Why do you waste so much money?


We're trying to reduce costs by only going out to eat at Cracker Barrel, Chick-fil-A or Dairy Queen. Outback and Olive Garden were a bit too fancy and pricey.

732002
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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by 732002 » Fri Mar 24, 2017 10:37 am

RoadHouseFan wrote:Anything above $30k per year is extravagant.


It doesn't feel extravagant $70K, HCOL area. but still able to max out retirement at work at $48K plus another $48K in a taxable account. For us a spending/saving ratio that we are comfortable with.

In retirement likely moving to a nearby state that doesn't have income tax and real estate is less expensive.

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JDCarpenter
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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by JDCarpenter » Fri Mar 24, 2017 10:57 am

HomerJ wrote:
RoadHouseFan wrote:Anything above $30k per year is extravagant.


Anything above $10k per year is extravagant says 60% of the world. Why do you waste so much money?


Actually, fighting to stay alive after ending one's full-time economic contributions to society is Double-plus Ungood. Not to mention hoarding the fruits bestowed upon you during the period that you were meeting your obligations to your fellow workers.

E.T.A., out of an abundance of caution... [/sarc].
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Riverstwo
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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by Riverstwo » Fri Mar 24, 2017 11:11 am

I am retiring this year and set my budget at $80,000 for a household of two people....and we like to enjoy life.

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by lazydavid » Fri Mar 24, 2017 11:23 am

Riverstwo wrote:I am retiring this year and set my budget at $80,000 for a household of two people....and we like to enjoy life.


This is my strawman for our eventually retirement (we're 40 and 42), in today's dollars. A bit less than our current takehome, but there'll be no mortgage, child/educational expenses, etc, so probably fairly realistic. Considering "projected" SSI plus 4% of our present-day portfolio is just shy of $100k, I think we're in pretty good shape. If SSI pays out at 70%, we're pretty darn close, if it's gone altogether we still have some work to do but will make it no problem.

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by JGoneRiding » Fri Mar 24, 2017 11:48 am

So I am really late to the game. Depends on your definition of "upper middle class" but based on income we qualify as that (since that is really just anywhere between 60-120k) since 53k is the median middle class income. I have calculated this number for us and figure it between 75-80k depending on your definition of "travel" but I believe for us that would include nice but not luxury trips yearly and nice extended trips every other year.

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Re: Gross Yearly Income needed in Retirement (Speculation)

Post by vveat » Fri Mar 24, 2017 1:02 pm

Not retired yet but I've done planning as we are considering early retirement. HCOL area.

Travel is the big expense - each 1-2 weeks trip to Europe or similarly remote location is $5-10k, if we take kids out of the equation, probably $5k will do it. Local US trips are cheaper, but I would still budget for travel $30k a year in the early retirement phase, that's what we are retiring for :sharebeer

Medical costs is our big unknown, given the current uncertainties and also that we are not retiring yet, we'll budget this closer to the time

Everything else is $50k. Your mileage may vary, we have some expensive hobbies.

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