Reply to Realistic calculator for retirement

Forum Index » Money and Finances

Reply to "Realistic calculator for retirement "

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I agree OP.

Once the kids are out of college and we are ready to retire we can downsize to a lower COL and our expenses will plummet. I am estimating 50k a year for us as a couple. (And this is being pretty generous. We could swing it on $35.)

We will have either no mortgage, an extremely low one, or rent. We are modest people -- our biggest splurges are occasional travel and our kids.

So in my case let's say we need about 4k a month. Maybe a third will come from SS and a third from our retirement funds (about $1 mil) and a third from savings/profit from our house which we plan to sell (about 1 mil).

I think we'll be fine. And I think my kids will still get a little chunk of change when we die.

So for people/couples like me (not big spenders or lavish lifestyle) I would sat $2 mil plus SS.[/quote]

Can you live on that budget now? If so, ok. Otherwise, I wouldn’t count on “plummeting” expenses in a LCOL area unless you plan to lower your standard of living.

We moved to a “lower cost of living” area when we retired, and inflation has hit everywhere. Taxes are lower (but I couldn’t say that everywhere, obviously).  Services (plumber, haircuts, appliance repairs) were cheaper, but worker shortages are making them more expensive every day. Restaurants aren’t cheaper than DC and groceries are slightly cheaper, but not much. Things from big box stores are pretty much the same price everywhere. We could have bought a cheaper house, but it would be in a cookie-cutter subdivision with no trees that was a farm last year. A nice house/condo in a desirable neighborhood, much less near the water or Mountain View, etc, is expensive everywhere, and prices have doubled in the last few years. With WFH, nice cheap places aren’t cheap anymore. Some things are [u]more[/u] expensive — insurance (car and homeowners), utilities, and some odd things like dry cleaning or shoe repair. Remember you’ll have to pay for your own cell phone bill in retirement.

I just did some quick math and we spend almost $30,000 a year on taxes, insurance (car, home, health + deductibles), and utilities (cell, WiFi, electric/gas). Even if your costs are lower, are you really going to live on a $1,000 a month for everything else? That doesn’t include home maintenance, maintenance, groceries, travel, clothes, gifts for family, etc.

I realize that people do it all the time. In fact, [u]i[/u] have. But I worked my a** off for a long time so I never have to do that again. Which is why I ask about your current standard of living. If you live that way now, you’ll be fine. Just don’t expect to lower your cost of living dramatically in retirement by virtue of moving somewhere else. That magic place doesn’t exist in the 50 US states.

Not to mention it sounds like you’re double counting your home equity — there will be a good chunk invested in your new house (or the income will be spent on rent, which will be on top of that $4k a month).

If you haven’t visited a LCOL area recently, don’t count on a 2000 (or even 2010) COL. [/quote]

Maybe I am being too optimistic but I am helping pay for dementia care for my mom, which is a cost I won't bear in retirement, paying for college and paying for private school now.

I do not think I am double counting my home equity. Our house is about 1.5 mi now with a $300k mortgage. I hope/pray that in fifteen years we will have close to 1 mil net, and can put the rest towards a condo or small house with a small mortgage. Maybe this is crazy . . .[/quote]

Maybe not crazy, but it does sound like you are assuming that the cost of real estate will go up where you live and not where you’re going to buy. Net of transaction costs, your current budget is pretty minimal. With the boomers retiring, on top of remote workers, most nice LCOL places are appreciating faster than cities right now.

Not trying to rain on people’s parades, but we were on the brink of retiring in 2007, and we thought we could just barely make it work. When the recession hit, we decided to back off our work schedules but wait another ten years to actually retire, and I’m so glad we did. When I go back and look at the fairly detailed budgets I drew up back then, I laugh. My assumptions were so far off. I would have been better off doing what pp suggests — figure out how much we were spending and then backing out obvious expenditures (retirement savings, private school tuition) but assume we’d find a way to spend the rest. Now, we’re staring down a recession and watching our investments stagnate, at best, and I’m so very glad we aren’t trying to make it on what we had in the bank back then. [/quote]

This is good advice. It does worry me a bit that there might not be any nice lower COL areas in 15 years. At least ones I would want to live in.[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics