How low can you go? [Archive] - Simple Living Forums

catherine

11-5-17, 8:33am

Inspired by Tybee's post about taking money out of the stock market, and what is "enough," I'm curious as to what is an annual amount that you feel you would need to get by. I know that differs for everyone, but I've played around with numbers quite a bit, since my financial health was severely sidelined by the recession/MIL's house, etc.

Can you live on 25k? 35? 50? 75? More? I know it's a personal question and not everyone will want to answer. As for me, I am aiming towards living off of 30k with a paid-off home in a place with low property taxes. Because of the Apocalypse of 2008-2012, that is based on SS. I'll save what I can before I retire at 70+, and we'll be selling our home and downsizing and adding that to the kitty, but I'd like all my savings to be my emergency fund and not spend it down unless I have to.

Anyone else care to share their retirement bottom line?

Yppej

11-5-17, 8:47am

Mine will be what I get from Social Security also with any savings for extraordinary expenses.

rosarugosa

11-5-17, 9:14am

Catherine: I am thinking about $60,000.

Tybee

11-5-17, 9:15am

iris lilies

11-5-17, 9:20am

Last year we spent $61,000 and of that $12,000 was on healthcare premiums. That was pretty luxurious living, buying anything I wanted pretty much, taking several small vacations. But there were no major house renovations, trips to Europe, new cars.

catherine

11-5-17, 9:43am

Such a great question, Catherine. I guess for starters, do you mean actual money to spend, after taxes and such? So are you looking for an after-tax net income available to handle to spend/save etc. or before tax number?

Yes, exactly. After tax. Just what you would need for living expenses plus whatever quality of life stuff you want or need.

Tybee

11-5-17, 9:49am

Ok, thanks, off to ponder!

Tybee

11-5-17, 10:02am

I just totaled up what we are probably spending now, the barebones version of it, and came to about 39000 a year. That is with low property taxes, no mortgage. Some categories could not be cut, like propane and car insurance, although maybe would go down if we went to one car. That is counting only bare bones maintainance for my car only, not my husband's.
Our pets and travel of family are very expensive, but not sure I want to cut either of those!

I guess if I lived on my own, in a paid for place, maybe with minimal driving or no car, I might be able go lower. But two thoughts--my social security if I took it at 62 would only be 850 a month, and even if I wait til 66 1/2, it is not enough to live on.

So are you thinking of two people, two social securities, or budgeting on one?

Second thought--if you factor in taxes on the house and medical, will 30 be enough? I am thinking I could not do that, although I really, really want to be able to do that. But if you have low house taxes, and you live in Maine, for example, low is like 2400 a year for in the country. My kids pay something like 5-6 in Portland. So if you go car free, you tend to have higher taxes.

It was easier and cheaper living in SC when we did that because of fuel costs in winter and really low taxes.

39 k seems like so much, and we try to be frugal. Agh.

Rogar

11-5-17, 10:11am

I have been comfortable on around 30K-40K a year for a few years. I have health insurance partially covered by a previous employer and home paid off. About half of that income is not taxable. That includes a few thousand dollars in home repairs and upgrades each year, which seems inevitable in my older home. I paid cash for a new car a few years ago and suppose if you spread that expense over the ten or 12 years or so I plan to keep it, the cost would still fit into the 30K-40K annual income figure.

pinkytoe

11-5-17, 10:44am

Tybee

11-5-17, 10:50am

I would have to put a serious pencil to it but our monthly expenditures end up being around $1500 a month since we don't have a house or car payment. We only have one car and property taxes here are very low. I am thinking around $28-30K a year at this point. Of course, I am not adding all the home fixup expenditures which are coming out of their own pot of funds.

How does the 1500 break down? Do you include things like medication and pets travel to family, gifts, vacations, etc? That sounds really good! I really am starting to feel like a spendthrift. . .

Gardnr

11-5-17, 11:04am

Our retirement investment plan is based on $60k. We own 2 homes and 2 cars and we intend to keep it all-our mountain cabin if fabulously relaxing. It is our secondary fund if needed to sell.

We already do the level of travel expenditure we intend. We have already invested in the primary equipment needs of our hobbies.

We have planned funding for the projected # of: reroofings, appliance replacement, ac/heat units. We'll buy hubby 1 or 2 vehicled depending on his choice next time around.

herbgeek

11-5-17, 12:02pm

We're at about 40K so far this year, with 2 months to go. We live in a HCOL as far as real estate/state taxes go. Also had some medical procedures this year that were out of pocket to the tune of several thousand. I've bought some new clothing this year, instead of consignment store only. This included one trip to Florida, and multiple weekends away staying at reasonable but not lavish hotels (Hampton Inn/Holiday Inn Express vs Four Seasons). I could cut this back significantly, but I don't really want to. 30 years of being frugal means I get to do more traveling now, and less watching of the pennies.

Teacher Terry

11-5-17, 12:09pm

WE spend 10-12k/year on vacations and 12 on healthcare. WE also spend about 800/month on entertainment, eating out, etc. Now we spend between 62-72/year. Obviously we could cut out the travel and entertainment if we had too. WE are really enjoying ourselves at this stage of life.

ApatheticNoMore

11-5-17, 12:35pm

I figure 40k a year if I'm figuring saving up an emergency fund for x months or something but then that figures I lose my employer provided health insurance and am thrown on CORBA or the ACA etc.. Really it's more like 35k a year, that's not paid off mortgage that's what I spend fully including rent without any hardship or sacrifice in any real sense whatsoever, but I don't like expensive entertainment, but I do like organic food. But I probably won't have that much when retired realistically (of course the calculators are all based on current before tax income which I don't spend anyway so of course one never has enough saved for retirement and I could probably even get not too super far off from the total those calculators say for age, if the only thing I saved in was retirement accounts, but I am considering buying property some day so saving outside retirement accounts as well - it may not ever happen of course, as I'm only middle class and here that is stretching it). Oh I think it's fully realistic I won't have nearly as much in retirement as I do now no matter what I do.

bae

11-5-17, 12:50pm

$60-$70k/year.

However, at the moment we are running about $65k/year above that, but we're putting our daughter through college and paying full-fare. She's graduating this summer, but then it's off to grad school, preparing herself for a profession in which only a handful of jobs exist each generation.

lmerullo

11-5-17, 3:48pm

The last two years we lived on $39000/yr. I just did very part time work and we lived off dh salary, not bonus or profit sharing. Although it's doable, and at first felt free - I decided I really didn't want to live out my life that conservatively. I have gone back to near full time work with an eye on saving a large portion of my income to increase our reserves.

That said, we've been smacked in the face with the reality that life is fleeting... I fear I may need to carry on without dh. Again, a different financial reality- one in which I may have to work many more years.

Best case scenario - I work 15 years, and so does dh. We retire with a very nice nest egg and SS is still funded. Our health is good and we live happily ever after.

pinkytoe

11-5-17, 6:04pm

How does the 1500 break down?
Other than remodeling this house, we have very few expenses since retiring - health insurance for DH ($253) and auto/home insurance ($158). Groceries/wine ($400). Cell phones are $70 for both of us. Internet $38. Eating out around $150. Utilities average $140. Pet food $55. Netflix, Amazon Prime and local newspaper ($55) Neither of us take prescription meds. One tank of gas every three weeks so far. I try to save $1000 a month from my pension so not counting that. Prop taxes are under $800 a year. Everything else is for miscellaneous and unexpected expenses. I am hoping to spend some on travel next spring/summer.

befree

11-11-17, 9:19pm

Last year, I started prep for retirement (I'm 62 now) by tracking everything I spend. It came out to about $40k last year.

Gardenarian

11-11-17, 9:37pm

It depends so much on what happens with health insurance, but I'd feel comfortable with 50k. I'm retired but working part-time, mostly for fun. Along with my investments and pensions, I make around $5k per month, dh makes about the same, and we have a good amount in reserve.

We spent less than 50k last year. This year - I spent 20k on dental work alone (I got 5 different opinions, and this was actually a good deal. Just crummy teeth and procrastination.)

I'm very grateful I don't have to count pennies.

Long term care? Who knows.

ApatheticNoMore

11-11-17, 10:34pm

maybe I will get to find out soon, yea that will be my 3rd period of involuntary unemployment so far - weeeee - (yea it will be involuntary even if I up and quit because if things weren't so bad I'm not really the type to quit before something is lined up ... and I have had jobs with long tenure as well). FWIW I do of course have an idea what I spend now a year etc. as mentioned but in unemployment will be a different matter.*

* I'm beginning to think buying property really is a bad idea for me, because I have to live off savings periodically, unemployed in every recession etc.. At least unless it was some kind of investment property where the mortgage was paid that way and that's another can of worms. So cash savings sure, balanced fund as talked about in another thread beyond that sure (sure it can go down but at least it's liquid) but money I can't get at (and I mean before 59.5 too - I have a 401k but that's absolute last resort) because it is all tied up, yea it pays off in the long run but sometimes I think I won't survive financially until then with the periods of unemployment etc..

artist

11-12-17, 8:30am

Hoping to keep things close to where they are right now. Costs will eventually go up with inflation. Our current annual expenses are at $18,500. So that is a bare minimum. Need more to maintain savings for things like car repairs etc.

JaneV2.0

11-12-17, 9:39am

If I downsized from Chez Albatross and its now $6000 tax bill, I could live on 2/3 of my current income, which is modest. But then i probably wouldn't need to.

Ouch--Apathetic No More! I hope you land in a much better place when the dust has settled!

Teacher Terry

11-12-17, 12:05pm

APM: what type of work do you do that you keep getting downsized? May be you could switch to another type of work in which you have transferrable skills.

Yppej

11-12-17, 3:53pm

Theoretically $0.00. I believe a homeless shelter would take me in, I could get free healthcare without an income, and eat at soup kitchens. So maybe the question is not how low could you go and live, but how low do you want to go.

dmc

11-12-17, 6:18pm

I can of coarse live on much less, but I retired 10 years ago just shy of my 50th birthday and my wife worked a few years longer and also retired at 50. So far our net worth has gone up quite a bit, so we are still living below our means I suppose. I quit tracking our spending a few years ago.

We have stayed on my wife’s medical plan and it’s expensive, over $1500 a month now. And we like golfing so the country club gets it’s money. Owning a plane is also expensive, but if money was a problem could be cut, like the country club. We also travel a bit.

currently we are spending in the low 6 figures I suppose, but could cut 40k to 50k without to much hardship. And we could always downsize the house also.

But since we are doing fine and we will also be eligible for Social Security one day, I see no reason to cut back.

And we have also reduced our stock market holdings, we have around 25% in the market.

kib

11-13-17, 7:31pm

catherine

11-13-17, 8:02pm

This question always fascinates me. I think I could make $1,000 a month + health insurance a pleasant enough day-to-day budget, but the big stuff adds up scary fast. Replace some windows, put in a new furnace and buy glasses and my $1,000 is at least double, maybe triple.

Hey, kid! haven't seen you in a while!

Yeah, it's easy enough to meander along with a small budget as long as you have no emergencies.

To Yppej's point, I'm fascinated with the idea that the bottom line could be "0"--think of Suelo, Mark Boyle, Peace Pilgrim, and Heidemarie Schwermer. You have to find your own bottom line, and for some that bottom line is 0.