What $$$ amount do you want to live off in retirement?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
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My goal is to live off of this amount in retirement (2012) dollars EXCLUDING SS

$10k-$20k
4
2%
$21k-$40K
30
17%
$41k-$60k
37
22%
$61k-$80k
30
17%
$81k-$99k
18
10%
$100k-$110k
21
12%
$111k-$125k
9
5%
$126k-$140k
2
1%
$141k or greater
21
12%
 
Total votes: 172

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frugalhen
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What $$$ amount do you want to live off in retirement?

Post by frugalhen »

Excluding social security, how much do you expect to spend or live on for the first 15 years of retirement in todays dollars?
"get out and live, you are dead an awfully long time" - Jimmy Demaret
chaz
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Re: What $$$ amount do you want to live off in retirement?

Post by chaz »

$10k-$20k.
Chaz | | “Money is better than poverty, if only for financial reasons." Woody Allen | | http://www.bogleheads.org/wiki/index.php/Main_Page
555
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Re: What $$$ amount do you want to live off in retirement?

Post by 555 »

Why exclude SS?
livesoft
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Re: What $$$ amount do you want to live off in retirement?

Post by livesoft »

555 wrote:Why exclude SS?
Because you are retiring 15 years before becoming eligible for SS.
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sscritic
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Re: What $$$ amount do you want to live off in retirement?

Post by sscritic »

livesoft wrote:
555 wrote:Why exclude SS?
Because you are retiring 15 years before becoming eligible for SS.
So you will spend $50,000 a year until age 62, and then you will start spending $70,000 a year once that $20,000 of SS starts. That's a huge increase in expenses; I never realized that SS was so costly.
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frugalhen
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Re: What $$$ amount do you want to live off in retirement?

Post by frugalhen »

No, I excluded SS because I do not expect it to be there in it's present form, but I don't want this thread locked because it breaks down into a political debate. I also tend to think some will spend more the first 15 years, although the reverse could be true with added healthcare expenditures toward later years.

I simply want some samples of what people project from their own savings.
"get out and live, you are dead an awfully long time" - Jimmy Demaret
sscritic
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Re: What $$$ amount do you want to live off in retirement?

Post by sscritic »

It's your question, but from my point of view money is money. I have three pensions, an IRA, three 403(b)s, SS, and taxable savings that generate dividends and capital gains. If I spend $40,000 a year, it doesn't make a difference to me where the money comes from. If I collect $80k and spend $40k, can you tell me which money I spent and which money I saved? I can't tell myself. Now if I left out one of the sources of income, I might collect $60k and spend $40k, but not counting SS in my income doesn't change my spending by a penny. Now if you took away my biggest pension, I might have to cut back a little, so maybe next time you run the same poll you could exclude pensions. :)
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Sheepdog
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Re: What $$$ amount do you want to live off in retirement?

Post by Sheepdog »

That was easy because I will complete 14 years in retirement this year. Besides SS, we have lived off of $21-40k per year
Unless you try to do something beyond what you have already mastered you will never grow. (Ralph Waldo Emerson)
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daytona084
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Re: What $$$ amount do you want to live off in retirement?

Post by daytona084 »

Like others, I totally don't understand the "excluding social security" part of the question. I am currently retired and not collecting social security. We spent X dollars last year. Had we been collecting social security, we would have spent the exact same amount.
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jasonv
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Re: What $$$ amount do you want to live off in retirement?

Post by jasonv »

Is this poll intended to capture per household or per capita spending? Also, does spending include or exclude health care?
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OAG
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Re: What $$$ amount do you want to live off in retirement?

Post by OAG »

When I "retired" (spouse was a SAH spouse and only had a SS working life of a tad over 10 years) 33 years ago we lived on a Pension/VA Disability and saved as much as we could. Then at 62 years old 2 SS payments came along so we saved that too. Saved too much so paid back the SS and restarted it at about 67.5 years old (for me) and are still not living on that. (BTW I thought we would never see SS Benefits - and now am surprised at the amount we receive - even after paying taxes on 85% of the benefits). Then RMD's came along at 70.5 years old - had to take it but for the most part do not spend it.

Still living on the Pension/VA Disability which has increased over the years but if we use a "current value" calculator it is still the same original amount (which has increased 3X in today's dollars).

I do admit to some "unbudgeted spending" every now and then but still try to return to the original budget.

I selected 21-40K in your poll.
OAG=Old Army Guy. Retired CW4 USA (US Army) in 1979 21 years of service @ 38.
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backofbeyond
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Re: What $$$ amount do you want to live off in retirement?

Post by backofbeyond »

For those of us a few years out to retirement (me-+20 years), it is difficult to guess what $ that would be due to the unknown inflation factor. So in planning for retirement, I take my current salary (which usually goes up at about what inflation is) and tact on/subtract a %. But in todays dollar, over $140K.
The question isn't at what age I want to retire, it is at what income. - George Foreman
Muchtolearn
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Re: What $$$ amount do you want to live off in retirement?

Post by Muchtolearn »

Less than whatever I take in from all sources including investment income. I subscribe to the thoughts of the late John Scheurer who had a radio show for many years in the New York area. He said never invade principal. I assume I am in the minority on this point of view but I am not comfortable with some calculator telling me I have x % chance of outliving what I have or vice versa. Also what is left when the lord takes me can go to others who need it like kids and charities.
Sidney
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Re: What $$$ amount do you want to live off in retirement?

Post by Sidney »

livesoft wrote:
555 wrote:Why exclude SS?
Because you are retiring 15 years before becoming eligible for SS.
That's why they call it planning. I'm not gonna wait around for SS.
I always wanted to be a procrastinator.
reggiesimpson
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Re: What $$$ amount do you want to live off in retirement?

Post by reggiesimpson »

Muchtolearn wrote:Less than whatever I take in from all sources including investment income. I subscribe to the thoughts of the late John Scheurer who had a radio show for many years in the New York area. He said never invade principal. I assume I am in the minority on this point of view but I am not comfortable with some calculator telling me I have x % chance of outliving what I have or vice versa. Also what is left when the lord takes me can go to others who need it like kids and charities.
Couldnt agree more! If at all possible never touch the principle therefore running out of $$ is never an issue. I wish i were my children!
albedo
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Re: What $$$ amount do you want to live off in retirement?

Post by albedo »

I just retired in January and we’re aiming at an income stream that keeps us in the 15% marginal tax bracket (married filing jointly), so I checked $41k - $60k. We’re expecting to live on <$50k, leaving some room for Roth conversions for the next few years. My wife started SS this year at age 62 but I won’t apply until age 70.
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Toons
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Re: What $$$ amount do you want to live off in retirement?

Post by Toons »

chaz wrote:$10k-$20k.
+1 :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
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pjstack
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Re: What $$$ amount do you want to live off in retirement?

Post by pjstack »

I apologize for being so negative but I can't imagine what the OP will find useful from this poll as it pertains to him/her.

There are so many variables from this anonymous group that the mind boggles!
Where do you live? (New York city or Lincoln, Nebraska?)
Married? Single? Children? No children? School age?
Warm weather? Cold weather?
Active? Sedentary? Travel? No travel?
Sociable? Recluse?
Good health? Poor health?
Accustomed to luxury? Accustomed to frugality?
Religious? Heathen?
Generous? Stingy?

I can't imagine that what I live on (I'm retired) would have any bearing whatsoever on what the OP will or will not need or want to spend.

Good luck on finding anything personally useful from this poll, but I suppose it's worth a try.
pjstack
john94549
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Re: What $$$ amount do you want to live off in retirement?

Post by john94549 »

This topic seems to come up quite often. Might I suggest a very simple "rule-of-thumb". Plan to have as much in retirement as you have pre-retirement. I've never been a fan of the "75% of pre-retirement is adequate" school of thought. I doubt my wife would ever ever agree to a 25% cut in her monthly budget. Given the fact that I'm retired, and she still expects me to contribute each month what I contributed pre-retirement, I think I'm on solid ground here.
xerty24
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Re: What $$$ amount do you want to live off in retirement?

Post by xerty24 »

john94549 wrote:This topic seems to come up quite often. Might I suggest a very simple "rule-of-thumb". Plan to have as much in retirement as you have pre-retirement. I've never been a fan of the "75% of pre-retirement is adequate" school of thought. I doubt my wife would ever ever agree to a 25% cut in her monthly budget. Given the fact that I'm retired, and she still expects me to contribute each month what I contributed pre-retirement, I think I'm on solid ground here.
You can justify the 75% rule by just excluding income taxes at 25% - you spend mostly capital and some capital gains, so your tax rate is pretty low compared to when you were working. Throw in the rest of the wage taxes (8 or 15% depending on how you count them), and it's not a bad rule.
No excuses, no regrets.
Greenie
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Re: What $$$ amount do you want to live off in retirement?

Post by Greenie »

SS is 1/3 of the income I plan to live on each month. I am not excluding it from my plan.
skyvue
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Re: What $$$ amount do you want to live off in retirement?

Post by skyvue »

In my current retirement plan I have budgeted $80K in today's dollars for the first two years of my early retirement because I plan to travel a lot. After the first two years, I have $48,000 per year (today's dollars) in my budget for the rest of my life. I am single and will have no debt so this should be a pretty nice lifestyle that will allow a fair amount for 'fun money". My biggest expense by far will be medical insurance.
skyvue
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Re: What $$$ amount do you want to live off in retirement?

Post by skyvue »

reggiesimpson wrote:
Muchtolearn wrote:Less than whatever I take in from all sources including investment income. I subscribe to the thoughts of the late John Scheurer who had a radio show for many years in the New York area. He said never invade principal. I assume I am in the minority on this point of view but I am not comfortable with some calculator telling me I have x % chance of outliving what I have or vice versa. Also what is left when the lord takes me can go to others who need it like kids and charities.
Couldnt agree more! If at all possible never touch the principle therefore running out of $$ is never an issue. I wish i were my children!
I would love to be able to do this ideally but when I run the math it means I would have to work another 8 years to live off principal only instead of a planned low risk draw down. No way am I personally willing to spend another 8 years of my life in Corporate America hell for that!! You have to factor in how much you like your job in this equation as well!
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GregLee
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Re: What $$$ amount do you want to live off in retirement?

Post by GregLee »

7k/month expenses, including 1k/month IRS, for couple in Hawaii.
Greg, retired 8/10.
yobria
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Re: What $$$ amount do you want to live off in retirement?

Post by yobria »

Single with a paid off house, $40-60K is plenty for my needs.
yobria
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Re: What $$$ amount do you want to live off in retirement?

Post by yobria »

john94549 wrote:This topic seems to come up quite often. Might I suggest a very simple "rule-of-thumb". Plan to have as much in retirement as you have pre-retirement. I've never been a fan of the "75% of pre-retirement is adequate" school of thought. I doubt my wife would ever ever agree to a 25% cut in her monthly budget. Given the fact that I'm retired, and she still expects me to contribute each month what I contributed pre-retirement, I think I'm on solid ground here.
Depends on your situation. If you move to a lower cost area, do things you paid someone else to do before (eg cooking), and save money on work related expenses (clothes, commuting), I think most can lower their living expenses.
mptfan
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Re: What $$$ amount do you want to live off in retirement?

Post by mptfan »

john94549 wrote:This topic seems to come up quite often. Might I suggest a very simple "rule-of-thumb". Plan to have as much in retirement as you have pre-retirement. I've never been a fan of the "75% of pre-retirement is adequate" school of thought. I doubt my wife would ever ever agree to a 25% cut in her monthly budget. Given the fact that I'm retired, and she still expects me to contribute each month what I contributed pre-retirement, I think I'm on solid ground here.
I think you are missing the point. The rule of thumb is based on the premise that your income tax bill will be much lower when you retire, and you will no longer have to pay social security or medicare taxes, and you will no longer have to save for retirement. The total of those things easily accounts for living off of 75% of your pre retirement income with no reduction in your wife's monthly budget.
reggiesimpson
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Re: What $$$ amount do you want to live off in retirement?

Post by reggiesimpson »

My math told me to generate double the amount in unearned after tax income that i needed to live on. The amount needed to live on is what i needed to pay the bills the year i retired. I call it my "fear of poverty" rationale. So far so good. Happily retired.
scrabbler1
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Re: What $$$ amount do you want to live off in retirement?

Post by scrabbler1 »

reggiesimpson wrote:My math told me to generate double the amount in unearned after tax income that i needed to live on. The amount needed to live on is what i needed to pay the bills the year i retired. I call it my "fear of poverty" rationale. So far so good. Happily retired.
My cushion is not quite as high as yours, maybe 65% of of my expenses, although when you include erratic cap gains distributions it rises to nearly 100%. Still a nice cushion! :)
skyvue
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Re: What $$$ amount do you want to live off in retirement?

Post by skyvue »

I hate any "rule of thumb" that is a percentage of "income". This makes no sense to me. If you were to use a rule of thumb it should be a percentage of "expenses" from pre-retirement. What is hard with simply sitting down and examining your current expenses, then putting together a budget for what your retirement budget will be?
555
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Re: What $$$ amount do you want to live off in retirement?

Post by 555 »

Interesting distribution. There are 3 peaks.

$41k-$60k: The Bogleheads middle class. This is already somewhat more than typical retirement income. (Also this number is spending which may be less than income.)

$100k-$110k: It looks like some people chose $100k as a round number because they can fund it so it makes a natural target. (The $100k-$110k range is narrower than the neighboring $81k-$99k and $111k-$125k ranges, but got more votes.

$141k or greater: the survey cut off to low for this forum.
scrabbler1
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Re: What $$$ amount do you want to live off in retirement?

Post by scrabbler1 »

skyvue wrote:I hate any "rule of thumb" that is a percentage of "income". This makes no sense to me. If you were to use a rule of thumb it should be a percentage of "expenses" from pre-retirement. What is hard with simply sitting down and examining your current expenses, then putting together a budget for what your retirement budget will be?
+1
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