Retired guys, what did you really need?
 

As I start thinking about retirement, I’m wondering how much monthly income did you really need. Conventional retirement planning suggests around 60-70% of your peak income.

Id like to ask a different way.

When you think about your monthly retirement income, how old were you when you made that while you were working. In your retirement, do you need the same income when you were in your 30’s, 40’s, 50’s, or something else?

Bonus question: is your retirement adventurous or just smelling the roses?

It’s really an individual thing. Depends on so many things, like your debts, spending, risk tolerance, etc etc etc. Also, how big is your nest egg? Are you ok with your principal declining? (That’s a big one, I am not ok with it).
I retired at 50, it’s been a few years now.
When I retired I still had expensive kids at expensive colleges, so that was a huge impact on my spending.
They’re all off the payroll now, and it’s been a major difference. Our spending is surprisingly little, less than I would have guessed, even though we do all the things we want. Having zero debt and only having to support 2 people makes it easy.

I'm 63 and have been retired/semi retired for 17 years. Recently I've found I just can't be bothered doing things. Which saves a lot of money. Not that I'm trying to save. But with overseas holidays being a PITA due to covid. And can't be bothered with parking etc when going out to dinner in town, I've ended up spending a lot less money than usual.

I don't want a new car etc.

I think in retirement, you don't need the kind of income you did in your middle age era. Retiring into a life with no debt is key. You'll find out your preferences continue to evolve as you get older, and you won't be out there sailing, skiing, hunting, traveling like you did at those younger ages. I'll be 80 in a few months and retired almost 18 years ago. Other than traveling expenses, I think you'll find your interests will trend toward things that center more around home as time goes on especially. I find I have a pretty big BTDT attitude anymore and tend to do things I like at the time rather than haviing, investing, committing to activities that involve a lot of stuff.

I plan to spend about 65% of my pre retirement spending. So far I’m even more frugal that I thought I’d be but it’s only been 3 months since retirement. I’m 58, wife is 56.

I spend more now than when I was working. I started tracking my spending a few years before I retired. Income has nothing to do with spending. I quit tracking my spending after being retired for a while, but do keep track of my net worth.

When I retired I had more time to do many of the things I didn’t have time for before. I joined a golf club, bought a plane, and traveled more. I’ve been retired now for 15 years, 8 years ago I moved to Florida. Ive sold the plane and bought a nice boat, still golf, and taken up shooting sporting clays. We haven’t traveled as much recently due to covid, but plan to start again this year.

My wife and I both retired at 50. One of our biggest expenses has been health insurance. Make sure you have that covered. We currently pay $1,700 an month. I start Medicare in may so that will drop our cost $400 a month. The wife still has a few years to go.

I retired 4 years ago at age 60 . My wife retired a year earlier than me . Everything we have is paid for . Other than health insurance our biggest expense is groceries followed by utilities . We live comfortably without excessive spending .

My wife is now on Medicare and this coming January so will I . That will free up a large chunk of $$$ that can be used for anything we want . The key to retirement being a financial success in my opinion is:

1. Everything paid for
2. A financial plan in place 30 years prior
3. Stick to a weekly budget and adjust as needed
4. Have fun . You can't worry every day about running out of money . Likewise don't spend like a drunken sailor.

Common sense goes a long ways . Stay busy but keep in mind there are tons of activities that aren't expensive.

During our earning years we did our building. House, barn garage and equipment are debt free. Cars are usually in the stable for ten years or more. We don't buy what we can't pay for. We did quite a bit of traveling before our grand daughter came to live with us, but with the world becomming acclimated to covid we are starting to get the travel bug again.
The best thing is the wife is not interested in trends. I tend to look for projects rather than new toys.
Everyone is different.

Best
Les

There is is. I’ve wrapped up one (20 years of car racing) but ultimately have a lifelong itch to scratch which is a liveaboard boat for part of the year. …and a pretty big one at that. Other than that it’s only motorcycles. If it weren’t for this part I could probably retire in 3-4 years.

I’ve been debt free for a while and once I divest myself of all the cars I don’t think I’ll take on any debt (or much) for the boat

Lots of excellent insight already written that I agree with so I won't repeat.

One interesting aspect of CV-19 is that I was able to get a really good handle on expenses working from home 70% of the time, expenses with kids out of the house and off all insurance, etc., and a good glimpse into a full retirement budget.

Because my wife's government health insurance is very good and will follow her into retirement (I am registered for Medicare but don't have to use it since her insurance covers me as well) a large expense is off the books for the foreseeable future.

No debt not covered by renters.

Removing farm expenses, I was surprised how little my wife and I actually spend steady state for food, utilities, phones, gas, insurance of all kinds, entertainment, internet connections, etc.

Our largest monthly expenses depending on the time of year is electricity. We have made adjustments in phone plans, car insurance (our miles driven are 1/2 of what they were), Direct TV plans, wireless, etc. and the saving are, with no noticeable decrease in overall capability, great.

My only real extravagance is I do a "walk about" everyday working from home to get out of the house; completely unnecessary but my wife works on classified programs and has to go to the SCIF at Pax 5 days a week: I need to get out of the house!

I don't know when I will retire/retire (I am 65) but it will involve all the activities I did when I was younger and still do now.

I’m thinking about a 35-45 foot sailing cat. Owners edition as it would likely just be the wife and I with guests. Ideally just take the winter to sail from one coast to the next (FL to Caribbean , Panama, then north or south) or some coastal hopping. So an RV on the water.

Basically it would be my winter home. My guess is I could keep that up from age 60 until 70 if I chose. After that I would have to see where the will and the body wants to be.

One option would be to start this before I retire as I can work remote pretty much anywhere 3-6 weeks at a stretch. Sail on the weekend and htie up in a marina or a secure location for the week.

Several mentions of 'no debt'.....most important, at least for me.
It's allowed my net worth to actually gain some in the 8 years of retirement.

Same for us. We paid off our mortgage before I turned 50. No debt, don’t buy new cars, etc.

Our biggest expense is insurance. For good coverage of the house, and three cars is a decent chunk of change. Then add in our health insurance and utilities and don;t forget the government tax for the honor of owning property, we have a decent monthly nut to cover. Add in going out to eat on date night, every Friday night, I know what it costs for us to live. Then add in the cost of a few vacations, most all driving to a destination and enjoying that part of the world and sights between here and there, we spend a hunk of money. We have no debt at all except my airplane for the business. The business easily pays for all the costs of the airplane, so it is not a burden to me at all.

I have yet to start drawing social security. I have paid into it since 1971 so I feel like I should get some of that back.

I’m listening. :)

I really like the new Leopards, but not sure they’ll be in my range when I’m ready. Mid 2000’s model would be but I’d have to budget 10-20% for a refit at least. I like the purity of monohulls, but I’ll probably spend much more time anchored than sailing, so the cat would offer a better situation there.

No cigs for one year now. That's $3000 at $8 per pack.

Nothing compared to a boat, plane or expensive car, though.

Well to do pal was told by his financial advisor to drop the Porsche Cup car and race spec Miata and that's what he did.

I did exactly the same about 4 years ago. Still have both cars though, ow call them and the associated accoutrements (RV, trailer, etc) my boat fund.

We avoided some retirement hardship when soon after I retired my MIL was diagnosed with Alzheimer's.
I had mentioned Long Term health care to her a decade earlier and she had bought a nice long term health care policy.
That saved her and our assets over her 12 year illness including over a million bucks in memory care bills.
She got great care and did not have to live with us.

Port Townsend is adorable.

My retirement strategy was to marry a smokin' hot 30-something neurosurgeon but that didn't work out so I found a smokin' hot 55-something who plans to work a few more years.

My last day of work will be May 31. My mortgage will be paid off. I can't remember the last time I had a car loan. There is a modest 'nest egg' in equities, I will have a defined benefit income from 22 years in state service, plus social security. I will not need to 'spend down' anything. Earnings will substantially exceed expenses while the wife works, and will continue to exceed expenses when she retires.

We plan to do some traveling. I don't see myself buying expensive toys but honestly, a boat is an intriguing idea. Inside the reef in Belize, near Chris's boat, sounds like a good place to wake up for a few months of the year.

And to answer his question more directly: Our retirement earnings will be in the neighborhood of 60-70% of our earnings today. I was in my 40s when I first earned that amount. Our expenses won't be more than about half our income, if that. We are both introverts, being quite happy at home reading, hobbies, chasing each other around the house, etc. I don't like cold weather as much as I used to. I have never seen Paris.

Good for you. I think I would have been really good at smoking. :)

Your original question is an interesting one. I have trouble wrapping my head around the nostalgia of not making as much in my younger years and seemingly being just fine with it at the time.

I suspect anything above the base 'burden' (housing, healthcare, food, etc) is pretty personal as to what would lead to a fulfilling life. We're similar age, kids etc so the near term college expense, health insurance, etc is a bit of a load in the 50's.

I struggle with the concept of drawing down before SS/Medicare kick in so some sort of part time/lower stress income stream to stay reasonably net worth neutral until that point seems to make sense to me.

My spreadsheet works a lot better for retirement if my wife keeps working. :D