have you accepted a lower cost lifestyle to retire early?

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grayparrot
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have you accepted a lower cost lifestyle to retire early?

Post by grayparrot » Wed May 03, 2017 11:34 am

My DW and I are in our mid-40s, and thinking deeply about when we should give up a work life that allows healthy savings, but is taking a toll on body and mind. We live a modest but comfortable life (80k a year expenses) in an expensive large US metro area, and save $60k a year. Since our net savings is a bit over $2MM, all liquid (we rent) and our perspectives are very conservative (planning on 2% annual returns for next decade), we know that retiring early would mean moving to a much cheaper area, and generally living a simpler life. We figure it would be ok to spend $50k a year (we'd be a bit nervous about even this level, but we have been told to expect $2-$3MM current value as inheritance somewhere in the 10-25 year timeframe). We'd ideally like to live somewhere like a smaller university town, with eclectic cultural amenities. We're interested in places with great independent movie theaters, farmers' markets, decent alternative grocery stores (TJ's, Whole Foods, New Leaf, Sprouts etc) and extensive and accessible natural beauty. We're curious about whether such locations exist where a $50k budget would still allow a comfortably modest lifestyle.

So, we wanted to hear from anybody also thinking about this, or who has already made such a switch, and how your experience has been. Any favorite locations you considered or have found, or thoughts about the potential budget shift?

thank you.

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Re: have you accepted a lower cost lifestyle to retire early?

Post by niceguy7376 » Wed May 03, 2017 11:40 am

No mention of if you have kids or not.

If I look at my budget right now, Mortgage(not including property taxes and maintenance) and Health Ins take up nearly 45% of our 6k monthly budget.

So, does your 80K include those two? Once they are taken care of, most of the other expenses are self controlled and manageable.

What are independent theaters? For movies or plays?

GrandMasterBlaster
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Re: have you accepted a lower cost lifestyle to retire early?

Post by GrandMasterBlaster » Wed May 03, 2017 11:41 am

There is a similar post going now where the poster listed 60K as his yearly spending and 300K for a house - there are many replies, which might give you a good head start on scouting some locations.

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Re: have you accepted a lower cost lifestyle to retire early?

Post by livesoft » Wed May 03, 2017 11:46 am

I find it easy to live in a low cost of living place and then to travel inexpensively to places of natural beauty for extended periods of time. Places of natural beauty often do not have nearby decent health care nor Whole Foods and TJs since those are usually found in wealthy suburban areas that can support those overpriced amenities.
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grayparrot
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Re: have you accepted a lower cost lifestyle to retire early?

Post by grayparrot » Wed May 03, 2017 11:57 am

niceguy7376 wrote:No mention of if you have kids or not.

If I look at my budget right now, Mortgage(not including property taxes and maintenance) and Health Ins take up nearly 45% of our 6k monthly budget.

So, does your 80K include those two? Once they are taken care of, most of the other expenses are self controlled and manageable.

What are independent theaters? For movies or plays?


thanks..

-yes, I guess it's only because we don't have kids we didn't even think to note that :)
-as to housing, we currently pay $2400 a month for a 780sf nice 1 br/1ba. We'd hope to lower our rent/mortgage equivalent for a place of similar size...perhaps slightly larger with an extra half bath, in a cheaper area.
-health insurance would need to be a budget line item
-by independent move theaters I meant primarily movie theaters that show independent/foreign movies.

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Re: have you accepted a lower cost lifestyle to retire early?

Post by yellowgirl » Wed May 03, 2017 12:00 pm

livesoft wrote:I find it easy to live in a low cost of living place and then to travel inexpensively to places of natural beauty for extended periods of time. Places of natural beauty often do not have nearby decent health care nor Whole Foods and TJs since those are usually found in wealthy suburban areas that can support those overpriced amenities.



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Re: have you accepted a lower cost lifestyle to retire early?

Post by Solair of Astora » Wed May 03, 2017 12:05 pm

grayparrot wrote:My DW and I are in our mid-40s, and thinking deeply about when we should give up a work life that allows healthy savings, but is taking a toll on body and mind. We live a modest but comfortable life (80k a year expenses) in an expensive large US metro area, and save $60k a year. Since our net savings is a bit over $2MM, all liquid (we rent) and our perspectives are very conservative (planning on 2% annual returns for next decade), we know that retiring early would mean moving to a much cheaper area, and generally living a simpler life. We figure it would be ok to spend $50k a year (we'd be a bit nervous about even this level, but we have been told to expect $2-$3MM current value as inheritance somewhere in the 10-25 year timeframe). We'd ideally like to live somewhere like a smaller university town, with eclectic cultural amenities. We're interested in places with great independent movie theaters, farmers' markets, decent alternative grocery stores (TJ's, Whole Foods, New Leaf, Sprouts etc) and extensive and accessible natural beauty. We're curious about whether such locations exist where a $50k budget would still allow a comfortably modest lifestyle.

So, we wanted to hear from anybody also thinking about this, or who has already made such a switch, and how your experience has been. Any favorite locations you considered or have found, or thoughts about the potential budget shift?

thank you.


Just go move to Asheville, NC already. Meets all your requirements and then some.
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rob65
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Re: have you accepted a lower cost lifestyle to retire early?

Post by rob65 » Wed May 03, 2017 12:07 pm

You might also look at some of the early retirement websites. I suspect that folks here will say you don't have enough to risk retiring yet and the Mr. Money Mustache folks will wonder why you didn't retire 5 years ago. :happy

As mentioned above, the other ongoing thread might give you some places to investigate.

I think your idea of University towns might work well; places like Athens, GA or Austin, TX or Raleigh/Durham/Chapel Hill, NC. There are probably also good options in some places in the Mountain West if you prefer that climate.

Does it have to be all or nothing on working? Could you move to a LCOL area and work part-time or in a lower stress full-time job?

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Re: have you accepted a lower cost lifestyle to retire early?

Post by NoGambleNoFuture » Wed May 03, 2017 12:11 pm

I'm likely biased but Austin sounds like it fits all of your criteria. If you plan on continuing to rent you'll get much more bang for your buck at that price point, and we've got plenty of nature (town lake, greenbelt, pedernales falls, blue hole, jacobs well, bull creek, hamilton pool, etc.) within a 30-40 minute drive. On top of that, we have the most ridiculous whole foods you'll ever see (headquarters) downtown :)

We've also got a few massive film festivals that I'm aware of (probably more) in SXSW and the Austin Film Festival.

Seems like it fits all of your criteria.

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Re: have you accepted a lower cost lifestyle to retire early?

Post by zuma » Wed May 03, 2017 12:11 pm

I'd look into small midwestern college towns like Oberlin, Ohio or Ames, Iowa.

Even larger towns like Ann Arbor or Madison could be cheap enough for you and would offer much more.

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Re: have you accepted a lower cost lifestyle to retire early?

Post by Traveler » Wed May 03, 2017 12:16 pm

I live in a decent Atlanta suburb (own a townhouse but rents are about $1000 for a 1-2 bedroom apartment) on a $50K budget that includes about $12000 for travel. It doesn't include healthcare since I have that through work and rarely use it. You could even buy an older but decent townhouse or condo for $150K or less and only have to worry about association fees and the occasional broken appliance. Surprisingly, there are quite a few nice places to hike and kayak in the Atlanta metro area, and within two hours, there are plenty more. The Atlanta Outdoor Club hosts daily group hikes in the area. Given the large city, there are theaters, every store you can imagine, festivals, sporting events, concerts, etc. And an airport that can take you almost anywhere.

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Re: have you accepted a lower cost lifestyle to retire early?

Post by bloom2708 » Wed May 03, 2017 12:21 pm

Yes you can do it. Cover your health care costs. The exchanges or health sharing services could be used.

What if you "fail" after 10 years and decide to work part time again? Not much of a failure.

You can use 72t (substantially equal payments) to access 401k/Trad IRA funds if needed.

I would do it, but we have 3 girls, 3 colleges, 3 weddings, 3 healthcares until on their own. :shock:

As to the "where" question, if you poll 100 people you will get 100 answers, maybe more than 100.

This is a current thread: viewtopic.php?f=11&t=217961&newpost=3353690

My vote: Anthem, AZ (NW corner of Phoenix)
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Re: have you accepted a lower cost lifestyle to retire early?

Post by johan_s » Wed May 03, 2017 12:27 pm

My wife and I lived in Lawrence, Kansas for a couple of years. We loved it. A charming and progressive college town: independent theater, great music scene, endless cultural events at the university, Sprouts and a fantastic local food co-op. Only a 40 minute drive to Kansas City for TJs/Costco/pro sports/ballet, etc. About an eight hour drive to the Rockies and less than an hour from the Kansas City airport. And the BBQ. . .

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Re: have you accepted a lower cost lifestyle to retire early?

Post by jlcnuke » Wed May 03, 2017 12:33 pm

grayparrot wrote:
niceguy7376 wrote:No mention of if you have kids or not.

If I look at my budget right now, Mortgage(not including property taxes and maintenance) and Health Ins take up nearly 45% of our 6k monthly budget.

So, does your 80K include those two? Once they are taken care of, most of the other expenses are self controlled and manageable.

What are independent theaters? For movies or plays?


thanks..

-yes, I guess it's only because we don't have kids we didn't even think to note that :)
-as to housing, we currently pay $2400 a month for a 780sf nice 1 br/1ba. We'd hope to lower our rent/mortgage equivalent for a place of similar size...perhaps slightly larger with an extra half bath, in a cheaper area.
-health insurance would need to be a budget line item
-by independent move theaters I meant primarily movie theaters that show independent/foreign movies.


$2,400 for a 1/1 at 780sf huh? To put that in perspective, my 2,250sf 3/2 on a 1/2 acre costs me $1,059/month on a 15 year loan (after 20% down) in a suburb of Atlanta (~40-44 minutes to Hartsfield airport in Atlanta, 25 or so to the perimeter). So yeah, moving to an "average" cost of living area could drop those housing costs significantly.

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Re: have you accepted a lower cost lifestyle to retire early?

Post by White Coat Investor » Wed May 03, 2017 12:45 pm

grayparrot wrote:My DW and I are in our mid-40s, and thinking deeply about when we should give up a work life that allows healthy savings, but is taking a toll on body and mind. We live a modest but comfortable life (80k a year expenses) in an expensive large US metro area, and save $60k a year. Since our net savings is a bit over $2MM, all liquid (we rent) and our perspectives are very conservative (planning on 2% annual returns for next decade), we know that retiring early would mean moving to a much cheaper area, and generally living a simpler life. We figure it would be ok to spend $50k a year (we'd be a bit nervous about even this level, but we have been told to expect $2-$3MM current value as inheritance somewhere in the 10-25 year timeframe). We'd ideally like to live somewhere like a smaller university town, with eclectic cultural amenities. We're interested in places with great independent movie theaters, farmers' markets, decent alternative grocery stores (TJ's, Whole Foods, New Leaf, Sprouts etc) and extensive and accessible natural beauty. We're curious about whether such locations exist where a $50k budget would still allow a comfortably modest lifestyle.

So, we wanted to hear from anybody also thinking about this, or who has already made such a switch, and how your experience has been. Any favorite locations you considered or have found, or thoughts about the potential budget shift?

thank you.


Not retired yet, but $50K from $2M is an extremely conservative plan. If you're really okay living on $50K, you're going to be just fine with any reasonable portfolio. That's a 2.5% withdrawal rate.
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Re: have you accepted a lower cost lifestyle to retire early?

Post by keystone » Wed May 03, 2017 12:55 pm

White Coat Investor wrote:
Not retired yet, but $50K from $2M is an extremely conservative plan. If you're really okay living on $50K, you're going to be just fine with any reasonable portfolio. That's a 2.5% withdrawal rate.


+1. I suggest taking a look at this detailed study on safe withdrawal rates if you have not done so already:

https://earlyretirementnow.com/2016/12/ ... t-1-intro/

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Re: have you accepted a lower cost lifestyle to retire early?

Post by MI_bogle » Wed May 03, 2017 1:06 pm

White Coat Investor wrote:
grayparrot wrote:My DW and I are in our mid-40s, and thinking deeply about when we should give up a work life that allows healthy savings, but is taking a toll on body and mind. We live a modest but comfortable life (80k a year expenses) in an expensive large US metro area, and save $60k a year. Since our net savings is a bit over $2MM, all liquid (we rent) and our perspectives are very conservative (planning on 2% annual returns for next decade), we know that retiring early would mean moving to a much cheaper area, and generally living a simpler life. We figure it would be ok to spend $50k a year (we'd be a bit nervous about even this level, but we have been told to expect $2-$3MM current value as inheritance somewhere in the 10-25 year timeframe). We'd ideally like to live somewhere like a smaller university town, with eclectic cultural amenities. We're interested in places with great independent movie theaters, farmers' markets, decent alternative grocery stores (TJ's, Whole Foods, New Leaf, Sprouts etc) and extensive and accessible natural beauty. We're curious about whether such locations exist where a $50k budget would still allow a comfortably modest lifestyle.

So, we wanted to hear from anybody also thinking about this, or who has already made such a switch, and how your experience has been. Any favorite locations you considered or have found, or thoughts about the potential budget shift?

thank you.


Not retired yet, but $50K from $2M is an extremely conservative plan. If you're really okay living on $50K, you're going to be just fine with any reasonable portfolio. That's a 2.5% withdrawal rate.


Especially if there's a decent chance of a million dollar plus inheritance...



Off the top of my head (midwest bias), places that might fit your bill are Bloomington IN, Burlington VT, Ann Arbor MI, Blacksburg VA, Charlottesville VA the Twin Cities in MN (yes, not terribly small, but it has a real small-town feel in many of the neighborhoods)

Some places are more expensive than others but I know people in all those places that make it work just fine on 50K or less expenses

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Re: have you accepted a lower cost lifestyle to retire early?

Post by Twood » Wed May 03, 2017 2:02 pm

rob65 wrote:Does it have to be all or nothing on working? Could you move to a LCOL area and work part-time or in a lower stress full-time job?


I second this idea if you're worried, letting your nest egg compound while you do something that covers the bills but is good for your physical and emotional health.

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Re: have you accepted a lower cost lifestyle to retire early?

Post by btenny » Wed May 03, 2017 2:11 pm

I retired early at 52 because I was fed up at work and the company offered a early retirement package. So I took the package and quit. That was one of the best decisions of my life. I had to downsize from a big family home and acreage to a medium size retirement home to make the numbers work. We were almost empty nesters (youngest was 18 and a senior in HS) so we did not need the big house and big expenses any more. It has been 18 years since I made that decision. We have lived through two major market crashes and I have more $$ than when I first retired. I am still happy I retired early.

I also think your withdrawal plan is too conservative. I am sure you can withdraw at least 3% of your funds per year and do fine. Life is too short. So spend a little and live a little.

Good Luck.

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Re: have you accepted a lower cost lifestyle to retire early?

Post by ReadyOrNot » Wed May 03, 2017 2:51 pm

Of course you can live a modest middle class lifestyle on roughly the median household US income. You have lots of people in the US doing so. Even in areas close to or within many high cost areas. You don't have to spend as much as the rich people living nearby -- look at where the retired people live and spend. I'll just take the expensive example of the Pacific Northwest. There are plenty of retirees living within walking distance of Trader Joe's, but you don't need to live within walking distance. A large area around Everett (including Trader Joe's) is affordable for middle income people, but they probably shop more at the local Wal-Mart than Whole Food. You could argue that they might not be living as high a lifestyle as you want, but they live appropriately for their middle income. If you wanted to be closer to Seattle, you could live near the Trader Joe's in Burien or Tukwila, also considered affordable areas. (I hope no one actually takes this advice and comes to this area and drives up the demand -- but you get the idea -- there are plenty of other fine places in the US where middle-income people or retirees live at moderate cost amidst or near the rich.)

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Re: have you accepted a lower cost lifestyle to retire early?

Post by MikeG62 » Wed May 03, 2017 5:15 pm

In response to the title of your thread, my answer is no. I did not retire until I was comfortable we could maintain our existing lifestyle indefinitely. There are so many places to see, things to do and experiences to be had and now that we have unlimited free time (retired last year) we are doing just that. I would not drop out of the workforce early if it meant I had to curtail my lifestyle in retirement.

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Re: have you accepted a lower cost lifestyle to retire early?

Post by mrsytf » Wed May 03, 2017 5:59 pm

It seems to me you can retire now with the same lifestyle you have now. 80k is a 4% withdrawal rate and that is BEFORE SS and the possible inheritance. Of course that doesn't include taxes so depending on where you draw your income that can be anywhere from 0-15% which would put you slightly over the 4% withdrawal rate which is my book is ok considering you have SS and the inheritance.

We are similar to you. We have almost enough to retire at a similar level of spending however we have three small kids and a mortgage. I could have continued full time and powered through but felt burnt out at work but also had more importantly some home issues I wanted to pay more attention to. I decreased my hours significantly but continue to work to shore up college savings and pay off the mortgage. So if I were you with no kids or mortgage I would absolutely get off the hamster wheel and parlay myself into a part time more fulfilling gig. You could even take a sabbatical and recharge.

Time to close your eyes, hold your nose and just jump.

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Re: have you accepted a lower cost lifestyle to retire early?

Post by MichaelRpdx » Wed May 03, 2017 6:17 pm

livesoft wrote:I find it easy to live in a low cost of living place and then to travel inexpensively to places of natural beauty for extended periods of time. Places of natural beauty often do not have nearby decent health care nor Whole Foods and TJs since those are usually found in wealthy suburban areas that can support those overpriced amenities.
TJs is or can be quite inexpensive.
See the section on them in this story https://www.thrillist.com/eat/nation/how-save-money-groceries-usda-food-plans

Synopsis: a guy decided to try living on $42.60 per week for food. He would follow the USDA's Thrifty Plan for meals. No eating out unless it fit that budget. No food gifts. TJs experience is described as "Trader Joe's: The Week That Heaven Sent."
Be Appropriate && Follow Your Curiosity

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Re: have you accepted a lower cost lifestyle to retire early?

Post by bligh » Wed May 03, 2017 6:48 pm

If you don't have kids, it seems to me that you can maintain your current lifestyle on your portfolio.

However, if you disagree I would caution against accepting a lower lifestyle in order to retire. You may think you would be okay with it, but find that you are not. You may have miscalculated your expenses. You may find your expenses actually increase in retirement (health care, travel and entertainment).

I personally would not retire unless I felt I could comfortably maintain my current standard of living with my portfolio. However, I would then intend to live on significantly less just to give myself that additional margin of safety.

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Re: have you accepted a lower cost lifestyle to retire early?

Post by FrugalInvestor » Wed May 03, 2017 6:59 pm

grayparrot wrote:-yes, I guess it's only because we don't have kids we didn't even think to note that :)
-as to housing, we currently pay $2400 a month for a 780sf nice 1 br/1ba. We'd hope to lower our rent/mortgage equivalent for a place of similar size...perhaps slightly larger with an extra half bath, in a cheaper area.
-health insurance would need to be a budget line item
-by independent move theaters I meant primarily movie theaters that show independent/foreign movies.


If you'll be in the private market for health insurance I'd recommend waiting until (hopefully) some certainty is established. The health insurance market is in chaos right now with political change and indecisiveness complicating an already problematic market. There's really no way to budget for the cost of health care under these circumstances.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

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Re: have you accepted a lower cost lifestyle to retire early?

Post by radiowave » Wed May 03, 2017 7:43 pm

+1 on Chapel Hill NC (full disclosure I'm a Carolina Grad). All of the diversity you are looking for, between Duke and NC State, there is plenty of things to do in the area. Another college town off the beaten track is Boone NC (Appalachian State). Its up in the mountains, plenty of skiing and winter sports, reasonably cool in the summer and low cost overall. Healthcare may be a bit of a challenge however.

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Re: have you accepted a lower cost lifestyle to retire early?

Post by reriodan » Wed May 03, 2017 8:13 pm

if I were you I'd have retired 5 years ago.

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Re: have you accepted a lower cost lifestyle to retire early?

Post by Watty » Wed May 03, 2017 8:23 pm

FYI, Here is a list of college towns.

https://en.wikipedia.org/wiki/List_of_c ... ted_States

If you are concerned about living on $50K a year then a part time "fun" jobs could make a lot of difference.

For example if you each had jobs that paid just $500 a month that is $12,000 a year. That would be about 25% of your planned budget and would allow you to make Roth contributions. For example I knew a guy that was really into sports so he became a high school sports referee. It didn't pay much but he enjoyed it and helped keep him active.

You also need to consider how much you will eventually get in Social Security and I didn't see any mention of that.

You also need to consider that a decision to retire at your age is not necessary a permanent decisions. Ten years from now if you needed to you could go back to work. You would likely have a hard time getting back into your current career and income but you would find something or start a side business.

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Re: have you accepted a lower cost lifestyle to retire early?

Post by AlohaJoe » Wed May 03, 2017 8:33 pm

Yes, I did.

But going from $80,000 to $50,000 is a big step for most people. You need to identify exactly what you'd cut from your lifestyle. Even if your housing costs somehow went completely to $0 you'd still need to cut other things from your current lifestyle.

What are you doing today that you'd stop doing to make $50,000 work?

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Re: have you accepted a lower cost lifestyle to retire early?

Post by FrugalInvestor » Wed May 03, 2017 8:42 pm

To answer your question more directly, yes I have. I retired early and had I continued to work I could have retired with a much more expensive lifestyle. But at that point in time I thought that having better health was worth infinitely more than having more money.

My health has improved tremendously since retirement. The stress level is down from a ten to a two. I now have and take the time to exercise regularly. We eat much healthier than we ever did during our working years. My cholesterol levels have gone from elevated to excellent. My blood pressure is 120/80. I run regularly. I've likely added ten or more years to my life expectancy and have already outlived my father and his father by nearly that much.

We live comfortably but far from lavishly. To do that we watch our investments and expenses carefully. We enjoy but we don't splurge. We have "enough" in terms of dollars and we are rich when it comes to health, lifestyle and friendships.

Early retirement was the right thing for me and the tradeoff for a "lesser" lifestyle for "richer' one in many ways has been good.

However, when we retired a number of years ago we calculated our base expenses (no frills) at $50,000/yr. That has since gone up and we've been fortunate to have additional to live on - thanks in no small part to Jack, Vanguard and the Bogleheads. So for me to encourage you to retire on that amount would not be responsible, especially knowing so little about you and your lifestyle priorities. And as I posted earlier, today's uncertain healthcare expenses muddy the water even further.
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Re: have you accepted a lower cost lifestyle to retire early?

Post by White Coat Investor » Thu May 04, 2017 9:30 am

Misread a response and replied to it.
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Re: have you accepted a lower cost lifestyle to retire early?

Post by Carefreeap » Thu May 04, 2017 9:49 am

bloom2708 wrote:Yes you can do it. Cover your health care costs. The exchanges or health sharing services could be used.

What if you "fail" after 10 years and decide to work part time again? Not much of a failure.

You can use 72t (substantially equal payments) to access 401k/Trad IRA funds if needed.

I would do it, but we have 3 girls, 3 colleges, 3 weddings, 3 healthcares until on their own. :shock:

As to the "where" question, if you poll 100 people you will get 100 answers, maybe more than 100.

This is a current thread: viewtopic.php?f=11&t=217961&newpost=3353690

My vote: Anthem, AZ (NW corner of Phoenix)


We did retire early but were fortunate to have bought in the SF Bay Area in the early 90s. With a paid off house and Prop 13 taxes we found that living in our Bay Area house was actually one of the cheapest options we had vs our rentals in the San Diego, mountains of Riverside County and greater Scottsdale area.

That said, one scenario was to retire in the greater Scottsdale area and either summer at our mountain cabin or at our beach condo in San Diego.

Anthem, in my opinion, is a little too far from the amenities the OP would find near ASU (Tempe). But I agree that given the OP's budget and requirements, s/he could enjoy a very nice life living in the greater Phoenix area full time including a month vacation rental in the AZ mountains, San Diego, or Mexico.

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Re: have you accepted a lower cost lifestyle to retire early?

Post by bloom2708 » Thu May 04, 2017 10:05 am

Carefreeap wrote:
Anthem, in my opinion, is a little too far from the amenities the OP would find near ASU (Tempe). But I agree that given the OP's budget and requirements, s/he could enjoy a very nice life living in the greater Phoenix area full time including a month vacation rental in the AZ mountains, San Diego, or Mexico.


Good information. Isn't "a little too far" one of the key requirements of being on the lower/affordable scale?

Moving "out" a little (30, 40, 50 min) but close enough to easily drive to ASU, baseball, spring training Cactus league, football, NBA, Scottsdale, Costco, soccer, Trader Joes, etc. etc.
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FrugalInvestor
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Re: have you accepted a lower cost lifestyle to retire early?

Post by FrugalInvestor » Thu May 04, 2017 10:16 am

bloom2708 wrote:
Carefreeap wrote:
Anthem, in my opinion, is a little too far from the amenities the OP would find near ASU (Tempe). But I agree that given the OP's budget and requirements, s/he could enjoy a very nice life living in the greater Phoenix area full time including a month vacation rental in the AZ mountains, San Diego, or Mexico.


Good information. Isn't "a little too far" one of the key requirements of being on the lower/affordable scale?

Moving "out" a little (30, 40, 50 min) but close enough to easily drive to ASU, baseball, spring training Cactus league, football, NBA, Scottsdale, Costco, soccer, Trader Joes, etc. etc.


Phoenix is a big place with many options for good areas to live. The best way to find one that suits you is to rent seasonally so you have time to really look around. Also, anyone considering permanent relocation may want to spend some time in the summer before making the move.

FYI, the health insurance situation in Arizona is as bad as any.
Last edited by FrugalInvestor on Thu May 04, 2017 10:31 am, edited 1 time in total.
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sambb
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Re: have you accepted a lower cost lifestyle to retire early?

Post by sambb » Thu May 04, 2017 10:26 am

be cautious about making these decisions at the current height of a long bull market. If we go in to a bear, and one was down 35%, would one feel the same way. this is the issue to think about. You dont know, but its been a good run..

Carefreeap
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Re: have you accepted a lower cost lifestyle to retire early?

Post by Carefreeap » Thu May 04, 2017 10:58 am

bloom2708 wrote:
Carefreeap wrote:
Anthem, in my opinion, is a little too far from the amenities the OP would find near ASU (Tempe). But I agree that given the OP's budget and requirements, s/he could enjoy a very nice life living in the greater Phoenix area full time including a month vacation rental in the AZ mountains, San Diego, or Mexico.


Good information. Isn't "a little too far" one of the key requirements of being on the lower/affordable scale?

Moving "out" a little (30, 40, 50 min) but close enough to easily drive to ASU, baseball, spring training Cactus league, football, NBA, Scottsdale, Costco, soccer, Trader Joes, etc. etc.


It's a lifestyle choice. It sounds like the OP would like a walkable or access to public transit to visit cultural venues. There is a light rail system near the downtown core. Public transit outside of that area is not very good.

We own a home up near the Far North Scottsdale area. We love being at 2500' and access to Spur Cross and the Tonto National Forest as I am an avid hiker. Being 30 miles away for the biannual visit to the Heard, the Desert Botanical Museum and so forth is not a hardship. But if I were a big art lover or other cultural event lover I wouldn't be a happy camper. I actually have a friend who moved from Paradise Valley to the Pinnacle Peak area and sold after a year because he couldn't stand being in the "Wilderness", lol! He's definitely a city boy. :wink: To each his own!

Carefreeap
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Re: have you accepted a lower cost lifestyle to retire early?

Post by Carefreeap » Thu May 04, 2017 11:01 am

sambb wrote:be cautious about making these decisions at the current height of a long bull market. If we go in to a bear, and one was down 35%, would one feel the same way. this is the issue to think about. You dont know, but its been a good run..


If you are holding for the long-term (10+ years) it's likely not going to matter.

And while it doesn't matter to the OP for someone looking to downsize, getting top dollar for your big home and getting less of a "deal" on a cheaper home still works out mathematically. :wink:

windrose
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Re: have you accepted a lower cost lifestyle to retire early?

Post by windrose » Thu May 04, 2017 11:14 am

Yes.

I have not retired yet, but plan to retire early, in 4 years.

I have already taken the steps to live a lower cost lifestyle, by downsizing my space (a condo)...I actually moved to a *more* expensive neighborhood (same city), but into a place about 1/2 the size. I decided it would be a trial run. So far I LOVE it.

I could have just downsized in my old neighborhood, and saved even more money, but the appeal of my new place is that I can walk to anything and everything, including a very good hospital...or, if I don't feel like walking, I can take a cab, uber, or bus.

Once I actually retire, I will get rid of my car....which will lower my lifestyle cost even more. I will just rent a car for long trips out of town.

For me, based on rents in my area, it made more sense to pay cash for the unit, vs. paying rent on a similar unit with a 4% withdraw on my retirement savings. But I think that largely depends on where you are. And how much you want to be able to move around at will. In my case, I knew exactly where I wanted my home base, so the decision was easy.

I find, as I get closer to my actual retirement, that every purchase decision now brings the retirement question to mind....is that *thing* worth working an extra day, week, year for? The answer is usually no. But like all early retirees, the healthcare issue is the wildcard. So we will just have to see how it all plays out.

SQRT
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Re: have you accepted a lower cost lifestyle to retire early?

Post by SQRT » Thu May 04, 2017 11:40 am

No, actually quite the contrary. Just kept saving away and all of a sudden had quite a nestegg. Retired a few years later at 56. Now 66 and divs plus pension is about 40% higher than my spend while working. I know thIs is not the norm and how lucky I am that it worked out this way.

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Re: have you accepted a lower cost lifestyle to retire early?

Post by SQRT » Thu May 04, 2017 11:47 am

Carefreeap wrote: I actually have a friend who moved from Paradise Valley to the Pinnacle Peak area and sold after a year because he couldn't stand being in the "Wilderness", lol! He's definitely a city boy. :wink: To each his own!


Agree. Our Arizona house is in Paradise Valley but we have a lot of friends up near Pinnacle Peak. Went up there this week for a party and it took a long time to get an Uber home. Then quite a ride back. 35 minutes and $40. Worth it as it was a great party.

Our friends often come down our way as there is a better selection of restaurants.

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Re: have you accepted a lower cost lifestyle to retire early?

Post by bayview » Thu May 04, 2017 8:15 pm

Solair of Astora wrote:
grayparrot wrote:My DW and I are in our mid-40s, and thinking deeply about when we should give up a work life that allows healthy savings, but is taking a toll on body and mind. We live a modest but comfortable life (80k a year expenses) in an expensive large US metro area, and save $60k a year. Since our net savings is a bit over $2MM, all liquid (we rent) and our perspectives are very conservative (planning on 2% annual returns for next decade), we know that retiring early would mean moving to a much cheaper area, and generally living a simpler life. We figure it would be ok to spend $50k a year (we'd be a bit nervous about even this level, but we have been told to expect $2-$3MM current value as inheritance somewhere in the 10-25 year timeframe). We'd ideally like to live somewhere like a smaller university town, with eclectic cultural amenities. We're interested in places with great independent movie theaters, farmers' markets, decent alternative grocery stores (TJ's, Whole Foods, New Leaf, Sprouts etc) and extensive and accessible natural beauty. We're curious about whether such locations exist where a $50k budget would still allow a comfortably modest lifestyle.

So, we wanted to hear from anybody also thinking about this, or who has already made such a switch, and how your experience has been. Any favorite locations you considered or have found, or thoughts about the potential budget shift?

thank you.


Just go move to Asheville, NC already. Meets all your requirements and then some.

Beat me to it, dang it. :D

For people from other places in NC, Asheville seems expensive, but those who move from a HCOL, it feels very reasonable. $50k is our retirement budget, and that includes still paying on a mortgage.

At any rate, it's very lovely, we enjoy the vibe here (think Austin, Portland, SF), and we bought a hundred year old 2 BR house in a very walkable, front-porchy area of town. Four seasons, all of which are endurable, although we will probably break down and install central air eventually.

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Tamalak
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Re: have you accepted a lower cost lifestyle to retire early?

Post by Tamalak » Fri May 05, 2017 9:24 am

Yes, definitely. I plan to retire at 40ish on about a million. Withdrawal rate of 2.25%. Not a lavish lifestyle, but I'll be totally free!!

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Re: have you accepted a lower cost lifestyle to retire early?

Post by vitaflo » Fri May 05, 2017 9:51 am

grayparrot wrote:
-as to housing, we currently pay $2400 a month for a 780sf nice 1 br/1ba. We'd hope to lower our rent/mortgage equivalent for a place of similar size...perhaps slightly larger with an extra half bath, in a cheaper area.


This is your "problem" right here. Moving to a LCOL area will decrease your costs significantly. One of my siblings lives in a very nice 2br, 1,200 sq ft apartment for under $800 in a medium sized midwest town. That would save you almost $20,000 per year in costs, and get you a nicer place to live. No whole foods there, but the farmers markets are amazing because it's the midwest.

That said if you want to check all the boxes be prepared to pay for it, especially the "natural beauty" part. But it should be easy to get 80% of what you want just by looking around.

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Re: have you accepted a lower cost lifestyle to retire early?

Post by Sophia1884 » Fri May 05, 2017 10:06 am

Twood wrote:
rob65 wrote:Does it have to be all or nothing on working? Could you move to a LCOL area and work part-time or in a lower stress full-time job?


I second this idea if you're worried, letting your nest egg compound while you do something that covers the bills but is good for your physical and emotional health.


National park ranger? :)

sschoe2
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Re: have you accepted a lower cost lifestyle to retire early?

Post by sschoe2 » Fri May 05, 2017 10:22 am

Tamalak wrote:Yes, definitely. I plan to retire at 40ish on about a million. Withdrawal rate of 2.25%. Not a lavish lifestyle, but I'll be totally free!!

I'd love to as well but the biggest obstacle I see is health insurance. Otherwise I could live on $30-40k just fine but not if I am paying $2500 a month for health insurance.

SimplicityNow
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Re: have you accepted a lower cost lifestyle to retire early?

Post by SimplicityNow » Fri May 05, 2017 10:58 am

I haven't retired yet (later this year) but we have been giving a lot of thought to the retirement budget with a spend similar to yours.

My wife and I discussed it and although we could afford to spend a lot more we probably won't. More spending doesn't equal more happiness and there are plenty of things to do without spending a lot. Outside is free and it sounds like you already know that.

I think you should go over your projected expenses with a fine tooth comb. Some things I'd use in planning.

Don't count on the inheritance until it is in your hands. Things can and do change.

Figure out what distances you consider near for purposes of shopping, entertainment and recreation.

Walkable, bike-able and short rides all change the scenario on picking a location.

University towns can offer a lot of low cost activities so I think for your situation that's a great choice.

I agree that the cost of health care is the elephant in the room. I would assume a worst case scenario (being the conservative that I am :) ) and calculate cost on the high end.

Also realize that retiring that young with severely reduce social security benefits when you are eligible for them.

Best of luck in your decision.

2015
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Re: have you accepted a lower cost lifestyle to retire early?

Post by 2015 » Fri May 05, 2017 11:38 am

MikeG62 wrote:In response to the title of your thread, my answer is no. I did not retire until I was comfortable we could maintain our existing lifestyle indefinitely. There are so many places to see, things to do and experiences to be had and now that we have unlimited free time (retired last year) we are doing just that. I would not drop out of the workforce early if it meant I had to curtail my lifestyle in retirement.


This. As a reward for patiently waiting, I am spending much more money in retirement than before, and enjoying all the free time, experiences, activities that go along with it. This is Heaven.

remomnyc
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Re: have you accepted a lower cost lifestyle to retire early?

Post by remomnyc » Fri May 05, 2017 12:13 pm

Yes, we live in less home than we can afford so I can retire at 51 instead of 65.

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HomerJ
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Re: have you accepted a lower cost lifestyle to retire early?

Post by HomerJ » Fri May 05, 2017 12:18 pm

It's very hard to reduce one's lifestyle.

That is why it is important to not let it creep up.

Probably the best way to reduce one's living expenses is to move to a cheaper area. Save your money on housing, but keep everything else the same.

If you're moving from crazy silly VHCOL areas (like New York and SF), you can INCREASE your lifestyle with a nicer, bigger house, and still cut your expenses dramatically.

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Re: have you accepted a lower cost lifestyle to retire early?

Post by curmudgeon » Fri May 05, 2017 12:34 pm

Gave some serious consideration to going to a significantly lower cost lifestyle to retire in our late 40's. I was burned out, and took 9 months off from working at that time. Eventually got a bit bored, and I took a job with focus on people and projects that I enjoyed, rather than highest pay. I carried on for another 10 years, until recently retiring.

We are in the process of downsizing in retirement, which will probably save us $10K per year in taxes and other costs. A bunch of factors went into the downsize decision; it wasn't purely driven by lifestyle costs, but having a higher level of financial security as a result was definitely a consideration.

For myself, I think waiting until late 50's to retire has been a good choice, but a significant part of that was working at a job that was less stressful but still interesting. It also let us increase our travel budget, both before and after retirement, which is something we enjoy.

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