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

Heading up to retirement ain't in my future, nope Ill work until I bloody drop dead. Some folk can snap their fingers and get gold, I aint that lucky, and will never be. For my headed to the grave years, money, food, shelter and maybe a hot broad or 2.;)http://forums.pelicanparts.com/uploa...1648320169.jpg

I’m 49 and my last day of work will be April 1st . Four more days of work! How much you need is more a factor of what makes you happy. I’m a pretty simple guy and it doesn’t take much to make me happy! I’m lucky my wife is a simple gal. For the most part we’ve always lived below our means. My retirement income is nowhere near 60-70% of my peak. Closer to 47%.

I still have two kids in high school and I also still have a mortgage on the house. I’ve been tracking my burn rate over the last year. Mortgage, food, insurance, entertainment - all of our normal expenses my retirement income will more than pay for. Aside from my retirement funds we’ve managed to save a sizeable amount of money for vacations, home improvement, college, weddings (2 daughters), new cars, and other unplanned expenses. We plan on taking Social Security at 62.

I’m not worried about paying the house off since that extra money in the bank wouldn’t change what we normally do. We live in a beautiful part of the country so no need to get away from it all. My house is surrounded by the Rockies – a view out every window – and I have lakes all around me. Skiing, hiking, fishing, boating, off roading – it’s all in my back yard.

I will probably take up a gig here and there just to keep busy. The place I’m retiring from is already talking about bringing me back as a consultant. I’d be working part time earning twice as much. It’s nice to have options and I feel very fortunate.

That’s the thing isn’t it? You grow into your income. With no mortgage and only one expensive hobby, I wonder if I’ll need less than I think. I don’t want to work a day longer than necessary.

Taking almost a year off work really helped trim some fat out of the budget but I need to have a look at it again, figure out the overhead and then try and estimate what that hobby will reasonably cost.

Someone should start a poll....Retirees only.
"Do you wish you would have stayed working longer?"

I can almost guarantee the majority of the answers. :)

Subscibed

We live pretty simply if you take away the 20 years of racing and a few spendy cars. Im certain I have a much more modest house and lifestyle than most of my colleagues. Wife and I like to have one thing that we spend on, but it’s not houses, jewelry and keeping up with the Jones’s. It’s immersing in an experience/adventure.

It used to be racing…. …no regrets but I’ve done everything I set out to do there. Sailing the coasts and the Caribbean has been a lifelong itch that I think I’d really like to scratch.

I'm 61 and basically retired end of last year having worked for the same company for 38 years.. and have basically done the same thing for 43 years...

I had enough....

I've been aggressively investing in a 401k for 35 years or so.. and my company is employee owned.. so I have 38 years of growth in an ESOP plan.

I can pay myself my "salary" for the few years until I can get social security/Medicare..

So that's what I am doing..

I didn't plan this... one day at work I just thought eff this... and told my boss that I was done.. The company I worked for has generously offered to maintain my medical benefits for a bit..


So my plan is 3 years or so drawing down a fraction of m 401k... Apparently it takes a few years to get the ESOP payout... when that happens... Ill dump that into annuities or ETFs...

This retirement is all new to me and quite sudden....so I'm learning what I need etc..

CV-19 really kicked the boat market HARD
NEW waiting lists are long years not months if the builder is any good

used they sold last week for top dollar
get there yesterday is now too late


mid sized cats are about the worst price inflation point
a good used non-plywood ocean cat is priced in large fractions of a million and way up

docking is an other BIG WIDE PROBLEM hard to find and very high costs for the few that there are

best place to find maybe in odd places so be prepared to travel and get there FIRST

GOOD LUCK

BTW
I had a 31 ft wharram cat plywood +lots of epoxy that sailed up from south Africa
then got a F-28 racers alloy mast and sails think hot rod when I had it [bay toy not offshore]

https://www.wharram.com/

very low buck way to cross oceans

YouTube makes finding dock space look so easy. Good news is solar and LiPo can take the place of AC without a huge effort

I guess if you have lots of supporters paying your way it is

at anchor the wind cools so a/c is only needed when very calm and hot
12v car rad fans work to move lots of air at far less draw then a/c
wind scoops work in lite winds as the boat points into the wind mostly

many find a lux apt about the same cost as a dock in miami or worse if liveaboards are allowed
where we anchored for free is now 330 a month for a mooring ball
then you need a dink or two to get ashore

with your longer time line not buying today or this year is a good plan
as current market is nuts

Well I retired 7 weeks ago, just a few days after turning 69. My problem is that I love flying airplanes and thats what I did, spending 22 years with the last employer. Tried to retire at 65 and he would not let me, instead he bought a new $26 mil jet and gave me a 30% pay raise.

Except for the house I have no debt of any kind. Refinanced it for 2.6% and the monthly payment with taxes and insurance is about $1000, which I can easily handle with social security. Am now doing some part time contract work ($1500/2000 per day) and thats doing wonders for the bank account. Now I have time to fuss with the cars, bikes and airplane, oh and to take a nap whenever I want!

I’m worried that at 70 my body won’t be in shape to do the dumb **** I like to do like off road motorcycles, etc…. …so I’m in a bit of a rush to retire earlier while I can still do those things. Taking a 4-5 day bike trip is good, but I want to take 2-3 week trips, etc…

I'm reaching 72 soon. I retired in 2015. With my 401 and other income sources, I can't spend my money enough each month. I love it that I h ave the money to buy what I want. I never earned what most of you did, but being like my paarents, saved a lot. Now the money is coming in faster then I can spend it. Think back to frugal. I'll die long before my money runs out and my wife will live a good life.

Strupgolf did it right.

I could have written that post except I retired at age 55 more than a decade ago. I kept moving the projected dispersal date for my 501K back. At some point the mandatory minimum dispersal will kick in.

Chris, thats exactly why I pulled the plug when I did. Age is starting to catch up with me and I wanted to retire while I could still enjoy life.

I stopped because burn out 3 years ago. Didnt really think it was retirement. Took some trips then covid so i went back to work. Hated it so sincerely researched my financial situation and found id overshot. So ive quit again i think for good. Was a weird thing to realize i was free. Early 50s and my athletic recovery is becoming terrible so afraid ive only got a few years left to do cool stuff.

I imagine our costs will go way up since we will travel now that kids are in college. But maybe not increase by much since luckily we both like the dirtbag lifestyle.

subbed!! nice to see some actual perspectives.

my home payments and career are on the same trajectory. both are ending in about the same time. i cannot imagine my life without a house payment!! it is a huge monthly nut. my issue, i have no plans of staying in this home when i am retired. my wife and i want a smaller place. so, i could feasibly sell this place and take the cash to buy a tiny place outright. in a place with much fewer wildfires for sure.

our health coverage is taken care of for life. part of my stipend for accepting a lifetime of smaller paychecks. we buy cars cash now so that shouldnt change anytime soon.

thanks for the insights. i have no kids, a younger hard working wife, a good retirement plan....and minimal hobbies. i do plan on living life. and that is never free.

from what i read, it is the impending health issues that put people in the poor house. i say plan for that!!

Same here Vash. Downsize and simplify.

I’m ready to shed 80% of life’s accumulated stuff. …the prospect is daunting though. Maybe I just take my tools and basics, then have an estate sale…

47 here. Saved mightily since the last century and I (hopefully) also have a healthy UCal pension once I hit it, also mrs mjohnson makes a good (OK, better) wage - and I'm really eager to hang up the engineer hat and maybe work part time at our brewery/co-op. The grind's been a grind, and I'm ground up...

We've been so conservative in our budgeting that we don't even fall on the scale of the typical "what do you need to retire..." clickbait. Still the thought of a serious cash-flow change freaks me out.