How much annual budget do you need to feel comfortable in retirement?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are aiming for $20k/month or $240k/year. So, $8M at the 3% rule. We could definitely be happy with less but that's the goal.

We are planning to own one home (roughly $1.5m value in today's money) travel extensively and spend a lot of time with kids and grandchildren. No country clubs or second homes, aren't into designer products. Nice cars replaced every 7-8 years but not range rovers or anything.

We’ve been retired for ten years (wife was always a SAHM) and this is exactly what we live on. Our net worth is closer to $9M (before today’s crash ha ha) and has doubled since we retired (early, when I was 53).

Remember that you’ll be getting social security so you’re not going to need $8M necessarily to hit your number. We elected to take SS early and collect a combined 45k a year. We also have a basement rental in our DC home that brings in another 30k. So we’ve been able to live on $240k a year while our net worth continues to grow.

We have found it very easy and comfortable on this amount. We have a nice home in the city and a large second home maybe 90 minutes away. We have house cleaners and yard help, we travel abroad frequently, spoil the kids and grandkids, eat out whenever and whatever (always footing the bill), and basically don’t want for anything or really even have to think about money. It’s amazing how much more money you have when you’re no longer saving for retirement or spending on kids.

I wouldn’t say we live extravagantly, of course—we certainly don’t spend foolishly—but living on what we have has proven over ten years to be very easy. Maybe it helps that we were never the country club type when we were making money. You don’t miss what you never had—or wanted.

What do you estimate is your monthly spend on two paid-for homes? Ie: what do you spend on insurance/taxes, cleaners, yardwork and general upkeep?

DP: that will vary so much. For us in a HCOLA, we have a condo in an expensive city and a house nearby. Both paid off, taxes and maintenance (including HOA fees at the condo) will run us $60K+ per year (and both places were recently gutted/renovated so maintenance is minimal). But for many people that would be 50-75% of their total expenses for a year

The question was directed at me and I already answered it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our goal is 360k/yr after taxes in today's dollars because that covers assisted living for two people. We probably won't get there, and that is ok because most people do not need assisted living for all 30 years of a retirement.

People usually only need it for a couple of years

Well people tend to live longer. I have 5+ elderly relatives who have been in Assisted/memory care/nursign care for over 2 years. One was in memory care for 7+ years, caught the flu and it them in. But otherwise had been looking at easily another 2-5 years. Another has been in nursing care for 3+ years now, still going strong relatively speaking. It's not that far fetched to need advanced care for more than a few years.

The average nursing home stay is less than 1.5 years. The average assisted leaving stay is 1-3 years. These are averages but 7+ years is not the norm. Not saying you shouldn’t plan for the possibility but it’s unlikely.

[Anonymous]

10K/mo for 2, but only if we're in good health and everything is hunky-dory.
As soon as one of us get dementia or needs continuous care and expensive treatments, costs will skyrocket.

Which is why I feel comfortable with my 20M in the stock market. We live frugal lives, but the wealth behind it makes me feel secure, for myself and my children.

Your question is disingenuous, because the answer is actually - how much for the worst case scenario?

[Anonymous]

I agree 20M is a solid retirement number if you want to feel comfortable.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Realistically I am looking at $1000 in SS honestly. I’ll have to move back to my home country most likely. I also hope to not live past 75.

I will have $900 from SS. It's actually enough to live in the old country. I have a paid off condo there, everyone has a garden, social worker in every town. I will try to help out others until I can't anymore. I know my parent volunteer to take people to hospital and so on.
I think it will be lovely to go back as aging here is expensive.
I want to live til 97 though. I want to see how the world changes.

Yes, my plan is to find a nice social worker and pay her extra to help me with things that aren’t part of the help paid for by the state. I have a very run down condo there and I’ll either update it or sell and buy a better one.

As for living past 75, unfortunately most seniors I see who are older just require too much “maintenance” and are always aching, they are also losing sharpness of mind. It’s just sad. I’ll probably change my mind though which is also sad

My parents are mid80s, still living "on their own" in a CCRC/retirement center and are in the Ind Living area still. There are people there in their 90s/late 90s still in independent living (without any extra outside care---I don't count Ind Living with an aide 8 hours a day as Ind Living--those people would be in Assisted living but choose to use their funds to stay in ind living). My parents are still find in Ind living, and I anticipate that will be the case for another 3-5 years.

[Anonymous]

My goal is 150k annually, plus any SS income.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are aiming for $20k/month or $240k/year. So, $8M at the 3% rule. We could definitely be happy with less but that's the goal.

We are planning to own one home (roughly $1.5m value in today's money) travel extensively and spend a lot of time with kids and grandchildren. No country clubs or second homes, aren't into designer products. Nice cars replaced every 7-8 years but not range rovers or anything.

We’ve been retired for ten years (wife was always a SAHM) and this is exactly what we live on. Our net worth is closer to $9M (before today’s crash ha ha) and has doubled since we retired (early, when I was 53).

Remember that you’ll be getting social security so you’re not going to need $8M necessarily to hit your number. We elected to take SS early and collect a combined 45k a year. We also have a basement rental in our DC home that brings in another 30k. So we’ve been able to live on $240k a year while our net worth continues to grow.

We have found it very easy and comfortable on this amount. We have a nice home in the city and a large second home maybe 90 minutes away. We have house cleaners and yard help, we travel abroad frequently, spoil the kids and grandkids, eat out whenever and whatever (always footing the bill), and basically don’t want for anything or really even have to think about money. It’s amazing how much more money you have when you’re no longer saving for retirement or spending on kids.

I wouldn’t say we live extravagantly, of course—we certainly don’t spend foolishly—but living on what we have has proven over ten years to be very easy. Maybe it helps that we were never the country club type when we were making money. You don’t miss what you never had—or wanted.

We don't count on SS (Different pOster). We will get ~$4-6K/month when we are 67 ( in 10-11 years, one of us has been SAHP for 25+ years) That hardly puts a dent into what we need/want monthly (~$40-45K) It will be nice if we get it, but we are assuming it might be diminished in the next 10 years

Then start taking it early.

I think it’s funny that you think you need that much money in retirement.

Why is it "funny"? We have calculated our budget of wants and needs. Our two homes alone cost $65K+ in property taxes, HOA fees (one is a condo) and insurance and maintenance. WE have seasons tickets to one pro sports team and pay to attend several others when we are in town. We like to travel, fly business and stay at nicer hotels. For the next 10-15+ years, we plan to travel extensively while we can (we are early 50s and retired). Add in cars and insurance, food, dining out, and all the extras that is what we have calculated.
We can do all of this without touching any principle of our investments. So yeah, we get to retire and spend what we want. If you plan well, you can higher "wants" and actually afford it.

But sure we could sell our places and live on much less, sit at home and watch TV only (no going out, sports events, etc) and not much travel (or sit back in coach for a 10+ hour flights). But that is not my definition of life. We have the funds, why not spend it. Already our kids will inherit more than they need, and we have to estate tax plan to minimize the govt getting more money (both fed and state level).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our goal is 360k/yr after taxes in today's dollars because that covers assisted living for two people. We probably won't get there, and that is ok because most people do not need assisted living for all 30 years of a retirement.

People usually only need it for a couple of years

Well people tend to live longer. I have 5+ elderly relatives who have been in Assisted/memory care/nursign care for over 2 years. One was in memory care for 7+ years, caught the flu and it them in. But otherwise had been looking at easily another 2-5 years. Another has been in nursing care for 3+ years now, still going strong relatively speaking. It's not that far fetched to need advanced care for more than a few years.

The average nursing home stay is less than 1.5 years. The average assisted leaving stay is 1-3 years. These are averages but 7+ years is not the norm. Not saying you shouldn’t plan for the possibility but it’s unlikely.

I know the "averages". But I'm telling you what I personally have witnessed with multiple elderly relatives (so people with similar gene pools as me). And they have been in "higher level care" for much more than 1.5 years. All of my grandparents lived into their 90s (this was 25+ years ago), despite 2 of them being extremely "Unhealthy". So I will plan that I might be alive until 90+ quite easily. Rather have the funds to live nicely if I'm still alive and not be a burden to my kids

[Anonymous]

I'm single and spend about 85k per year. House isn't paid off and I travel about 2 months/yr.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are aiming for $20k/month or $240k/year. So, $8M at the 3% rule. We could definitely be happy with less but that's the goal.

We are planning to own one home (roughly $1.5m value in today's money) travel extensively and spend a lot of time with kids and grandchildren. No country clubs or second homes, aren't into designer products. Nice cars replaced every 7-8 years but not range rovers or anything.

We’ve been retired for ten years (wife was always a SAHM) and this is exactly what we live on. Our net worth is closer to $9M (before today’s crash ha ha) and has doubled since we retired (early, when I was 53).

Remember that you’ll be getting social security so you’re not going to need $8M necessarily to hit your number. We elected to take SS early and collect a combined 45k a year. We also have a basement rental in our DC home that brings in another 30k. So we’ve been able to live on $240k a year while our net worth continues to grow.

We have found it very easy and comfortable on this amount. We have a nice home in the city and a large second home maybe 90 minutes away. We have house cleaners and yard help, we travel abroad frequently, spoil the kids and grandkids, eat out whenever and whatever (always footing the bill), and basically don’t want for anything or really even have to think about money. It’s amazing how much more money you have when you’re no longer saving for retirement or spending on kids.

I wouldn’t say we live extravagantly, of course—we certainly don’t spend foolishly—but living on what we have has proven over ten years to be very easy. Maybe it helps that we were never the country club type when we were making money. You don’t miss what you never had—or wanted.

We don't count on SS (Different pOster). We will get ~$4-6K/month when we are 67 ( in 10-11 years, one of us has been SAHP for 25+ years) That hardly puts a dent into what we need/want monthly (~$40-45K) It will be nice if we get it, but we are assuming it might be diminished in the next 10 years

Then start taking it early.

I think it’s funny that you think you need that much money in retirement.

Why is it "funny"? We have calculated our budget of wants and needs. Our two homes alone cost $65K+ in property taxes, HOA fees (one is a condo) and insurance and maintenance. WE have seasons tickets to one pro sports team and pay to attend several others when we are in town. We like to travel, fly business and stay at nicer hotels. For the next 10-15+ years, we plan to travel extensively while we can (we are early 50s and retired). Add in cars and insurance, food, dining out, and all the extras that is what we have calculated.
We can do all of this without touching any principle of our investments. So yeah, we get to retire and spend what we want. If you plan well, you can higher "wants" and actually afford it.

But sure we could sell our places and live on much less, sit at home and watch TV only (no going out, sports events, etc) and not much travel (or sit back in coach for a 10+ hour flights). But that is not my definition of life. We have the funds, why not spend it. Already our kids will inherit more than they need, and we have to estate tax plan to minimize the govt getting more money (both fed and state level).

I say I think it’s funny because you sound like a pompous and self absorbed ass.

[Anonymous]

We've been retired for almost ten years and as crazy as it sounds I'm not sure how much we spend! All I know is that it is a lot because we have two debt free homes with a combined value of $10M so upkeep, taxes and insurance are all high. We just completed our 2024 taxes and our non investment income which includes pensions, social security, required retirement distributions and a required distribution from a charitable remainder unitrust totals about $650k. It's likely our spending is less than that but that doesn't include our income taxes which are even more than that. We were aggressive savers for many years and we invested wisely and it's really paid off. Yes, we are very lucky!

[Anonymous]

$200k/yr for both of us assuming house is paid off (property taxes are $9k/yr). We have separate savings for our kids' education; we will be 60-62 when they graduate from high school and aren't planning to delay retirement. Assuming $4-5M in retirement savings by then plus $1M for kids' education and other help.

[Anonymous]

20k a month net - not including charitable stuff

We have a paid for home in Chevy Chase and condo in Naples.

Live off our 8M brokerage account so our tax bill is minimal, don’t touch IRAs at the moment.

[Anonymous]

My grandparents are living on a low 200’s income in Bethesda and are pretty comfortable

[Anonymous]

Anonymous wrote:I agree 20M is a solid retirement number if you want to feel comfortable.

Oh so our $15M isn't adequate to be comfortable? Gotcha.