Level of income req'd in retirement?

[David B.]

So... the most important decision we made at retirement was to never look back and second guess the decision.
We know that a job or savings is not our source.
Despite the devastation of 2007, we are happy and prosperous and will remain so.

Burn's admonition is quelled by Matthew 6: 24-34.
Faith displaces fear.[/QUOTE]

Thanks Floyd, well put.
Dave & Paula

[Jon Vermilye]

I know I'd be better off selling my current house & moving into a small apartment, however I live on a road that is on the shore of Lake Ontario (well, on the inexpensive side of the road). Winters can be "interesting", but the summers are wonderful.

As others have said far more eloquently than me, it isn't how much you have, but how you live your life that makes retirement a joyful experience. I've met couples living on half of what I do that are enjoying their retirement, and couples that make 10 times what I do that only complain.

[Cathy P.]

It all depends on who you are and where you come from. I watched the video "Without Bound" on the website and just loved it: Cheap RV Living.com-Home I think that a lot of people don't realize how much the economy has changed over the years and how little some people have but they can still have the "dream" and be as happy or happier than others.

Long, long ago I saw a TV show where a young woman had all of what meant something to her in a cigar box. It was a story about being a minimalist. I loved that too!

I have seen many people who go out and buy something just before they were going to retire and then say they must delay retiring. I believe for the most part that they wanted to avoid retirement. Some people are so hopelessly attached to their jobs to define who they are that they can't let go. That is fine too.

Choice is good. The right way is the way that works for you.

[hwdornbush]

I retired at 54 when my employer made me an offer I couldn't refuse, and my wife retired 2 year later when she got tired of being on the road 4 days a week. We had always planned to retire early and always spent less than our incomes. We developed a budget based on our actual expenses, with a basic and expanded version. We have been living between the two versions. We have no pensions but have savings from 401K. My goal was to have sufficient savings that our spending is no more than 4% of our savings total, and that has worked well for us. We just both started getting Social Security this year and that means we dip even less into our savings. When we came to the decision to buy an new Escape this year, it was easy to see that we had the money to do so, and as it will be core to our travel plans, it will be a good decision. We live on less than when we were working because we have no commuting and lunch expenses, and our house is paid off. As others said, being debt free allows you a lot of freedom. We travel but all is within the US and most has been to national parks and to see relatives, and the trailer will enhance that travel.

Others have said that their income went up when they had to take IRA distributions, but I don't look at it as an increase in income but as a time to pay the deferred taxes. We plan to not spend that extra income but to reinvest it, now without the tax hit. Our spending won't go up even though our taxes will.

[BruceandMaryJane]

I retired early (60) because I could. The wife and I have never looked back. We generally have enough to live on, travel some, visit the kids and grand kids when we want to and enjoy not working. Although some would say retirement is just like working since we are both rather busy and have a full calendar most of the time. We tend to have more money in the checking account than we ever had when we were working and still contribute to our savings on a regular basis. It is just a matter of trying to estimate an annual income flow and a set up a reasonable annual budget with something set aside for emergencies.

[Art VanDelay]

Each person will have different requirements. If your house and vehicles are paid off and you have no credit card and other bills then you need to look at what you want to do and have and if you have enough saved, retirement and social security to give you the type of life you want, then you have enough. If you don't have enough to accomplish that, then you need to re-evaluate what you want out of retirement.

[Timber Wolf]

This has been an interesting thread, glad I started it. My situation is probably a lot different than most, I might be able to financially retire "early", but still can't/won't because of other obligations. I am the single parent of a young daughter who won't start college until I am 62. Even so, depending on her college plans (where she goes) I may need (health insurance) or choose to continue to work till I am 67. But it is all good, I enjoy my life and what I do for a living. And just this week at my check up my Doctor said that my results were better than last year. That is a good deal to be a year older and in better health!

[mbbear]

I've enjoyed all of your comments. I would like to mention one thing and that is short and long term disability insurance. I have had two friends become disabled - one in their mid fifties and the other 62. Both had disability insurance and it saved their retirement investments. Typically it is the least expensive insurance that we consider for ourselves. One friend was earning $85,000 and the insurance was $18 a month. For the past 16 months it has paid her $3,450 a month tax free. She has been able to pretty much maintain her lifestyle and pay medical expenses and not touch her investments/401k.

[Courtland PieperCo]

Yes health in the USA is a problem with older people.

[Cathy P.]

When it comes to short and long term disability, the rates can be quite high depending on whether an employer pays anything towards it. There are also limits on what one can draw, etc. Every type of insurance needs to be really examined and understood.

Both myself and my husband have VA Healthcare available to us. We practice homeopathic medicine though and have found that along with exercise and a healthy diet to be more than adequate up to this point, both 60 years old. We don't feel like we are 20 anymore but never had that expectation which appears to help.

It comes down to priorities and needs/wants. I used to read, even 10 years ago, on one forum where they were convinced you needed $3,000 a month to full-time. We are campers and could probably have lived on 1/3 of that because being frugal, we have been debt-free for 15 years. What we can afford is what we have cash for. We don't think of it in the modern terms "what we deserve" which surely seem to drive the debt.

[Dextersp1]

Originally Posted by Timber Wolf

I know that what "retirement" looks like is a very personal thing for each of us. Therefore it may be impossible to make across the board conclusions about what percentage of "employed" annual income we will each need to fund a year of retirement. But what are your expectations of your needs post retirement compared to now (or you may already know being retired)?

I retired at 51 - now 60.
The first focus should not be on savings/pension/SS - it should be on a budget. We all should be able to build a budget from what we spend now and then adjust for what we think we will spend in retirement.

Then you look at your savings/pension/SS to see if it will work.

Investment advisors want you to focus on savings/investments to scare you into giving them your $.

This won't help much - own home/truck/travel trailer no debt, single
Last 8 years averaged 26,642 / year
Next 11 years est 34,809/year - this includes a $30,000 truck

[Darwin Maring]

I think Art VanDelay has stated it best.

[Cathy P.]

Remember also that many people work once they retire so the gap can be filled in that manner also either through wages or an exchange for a site. Some establish a way to make a little extra through the internet.

I am a "where there is a will, there is a way" person.

I am surprised at how many people don't maintain a budget as it is such a great tool to see where your money goes but some people really don't want to know. I am "genetically" frugal, thank you Grandpa!

[coastsignal]

I really enjoyed all these comments.

We are still working at 62 and 60. But you all have me convinced not to look back one bit one we decide to close our business and (sort of) retire. The (sort of) part is that we both like to work and probably will work a little bit into retirement.

We are debt-free and I would agree with many others that debt free is the #1 requirement for an enjoyable retirement.

Having some assets it a good plan also. Retirement funds, pensions, rental property, a vacation cottage, coin collection, or a large house you are able to downsize from and come out with some funds, ---anything you can sell, are all good to keep the retirement budget going.

The minimalist way is a good one also. I've still got to work on that.

We have learned to live without much extravagance. Dollar store, dollar menu, etc.

A long time ago, I figured out we could have 6 or 8 of our friends over, have salad and cook hamburgers or chicken and couple beers for everyone for the same price just the 2 of us would spend on eating out at a mid-range restaurant. Of course, every time we do this, even though we tell them no need to bring anything, the 6 or 8 friends that come over bring all sorts of food and drink with them, so we always, happily, have leftovers for everyone to take home. Sometimes the 6 or 8 friends turns into 12 or 15 friends. We plan on doing this even more in our (sort of) retirement. And, from what I've seen at Scamp Camp this year, this kind of fits right in with the FGRV camping folks.

My parents had a pretty good example for retirement. They had their own business, (which my brother took over), so not everyone can do it this way. But as they got older, they seemed to take 1 or 2 more weeks of vacation, every year, until they got up to 52 weeks of vacation!-then voila!--retired!!

We won't have much more than modest SS, a small retirement, and will liquidate some real estate along the way, but I expect that we will get by just fine when we are fully retired.

I'm not much for Vienna Sausage, ....but... the baked beans, peanut butter, ham sandwiches, homemade chili, the fruit and vegetable garden, and learning how to prepare fresh fish we've caught, will be part of our retirement fun & financial plan.

Now that I've talked my self into the retirement life & camping----Anyone want to buy our Mom & Pop Hardware Store and we will be outa here!

Mark

[Alf S.]

Hi: All... Not quite as bad as the title suggests. My retirement plan happened by accident. We fell into a great deal on an RV. Complete rig 5 years before retirement. Time to pay for it then enjoy it!!!
Given the Ontario (OHIP) health ins. plan looks after most things health wise we can buy extra for out of country trips. Learning to live on 75% less income is no big deal... We usually have more money in the bank now than before.
With 3 pensions each we have found freedom to enjoy the rest of our lives.
RETIRE as soon as you can... Yesterday's gone, no promise of tomorrow, so today's all that's left. Happy Retirement!!!
Alf S. North shore of Lake Erie

[emers382]

Great advice Alf.

I retired nearly two years ago, in two weeks I hit the big 65, but looking forward to income going up with OAS! It's hard to say how we are doing, have some debt yet with our big purchase last year (truck and the trailer referred to in previous post!) but with no mortgage and living in a less expensive town (hydro, taxes, etc) figure on getting by OK even with lots of travel.

I am fortunate to be asked to guest preach (including the U.S. - saves having to buy as many US$ with our low dollar). We will probably end up at 70% of pre retirement income.

Adrian


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[David Tilston]

I will move out of the house in 10 years, when my youngest is 18. If any of the kids want to rent the house, then I will give them the family rate, (about 1/2 of market). Otherwise, I sell the house and I start working from my Dad's cottage on Manitoulin island. My job is very portable. I work on the computer and phone. My boss lives on Prince Edward Island. I can do this job anywhere. I also plan to do it as I travel. I doubt I will ever "retire".

[Timber Wolf]

Originally Posted by David Tilston

I will move out of the house in 10 years, when my youngest is 18. If any of the kids want to rent the house, then I will give them the family rate, (about 1/2 of market). Otherwise, I sell the house and I start working from my Dad's cottage on Manitoulin island. My job is very portable. I work on the computer and phone. My boss lives on Prince Edward Island. I can do this job anywhere. I also plan to do it as I travel. I doubt I will ever "retire".

Dave, your "family rate" is very different than ours. In our family, family rate is what you will work for family for and is compensated at "you give me money whenever I ask for it".