One of yesterdays threads had a sideline regarding retirement and the amount of income that the average person will need in retirement. The conventional wisdom of the last 30 years or so has been you need the same income in retirement as when you quit working, my question was why? How can that advice possibly be one size fits all? If a person needs the same income in retirement as they need during their working and accumulating life then they must not be financially able to retire and need to keep working, or, they are already living above their means and cannot cut expenses. My Wife's Grandmother lives on $800.00 per month of Social Security and saves around $300.00 per month, she has a paid for home and no debt, ever, she never took a pill until she was 92 and had a heart attack, she pays for her medicine out of her SS, no medicare prescription plan, some may say she must not live well but they would be wrong, she has 60-70 thousand in the bank and eats what she wants and goes where she wants, she has lived frugal all of her life and that did not change when she retired. I know a lot of people who have delayed retirement for a variety of reasons but mostly because they want to make more money, many of them will kick the bucket and never enjoy much of that money or the free time it should have bought them. I have a pension made, have saved money all of my life and have retirement accounts, in other words I have done what I need to do to take care of myself and mine, some say inflation will get you, well, if inflation is that high after I retire then interest rates on CD's ought to be back at 20% like 1980 to make up the difference.
- Thread starter LAA
- Start date
I think part of the retirement thing is NOT having debt. Wife and I have been so/so retired for 7 years now. I still mess with buying and selling but one can get by with less than you think and still live all right. We eat out when ever we want, travel, and spend but so far have not had to deve into our cash reserves.
A-MEN
I retired at 49 1/2, 11 years ago from a good paying job. Had a modist 401 and ask for my retirement up front, instead of monthly checks. That way I didnt have to decide which percent to put in my name and which in my beloved's. This way if I kick off next week she gets it all and vice-versa. However I still have a good health plan thru the company, or at least till your pres. changed things. But he did promise change. Have the house paid for and most of land paid off but run a few cows that make those payments. Work for a local Ma and Pa welding shop for spending money. made the right decision. No commute, can take a day off if I like, one week paid vacation, like what I do.
I retired at 49 1/2, 11 years ago from a good paying job. Had a modist 401 and ask for my retirement up front, instead of monthly checks. That way I didnt have to decide which percent to put in my name and which in my beloved's. This way if I kick off next week she gets it all and vice-versa. However I still have a good health plan thru the company, or at least till your pres. changed things. But he did promise change. Have the house paid for and most of land paid off but run a few cows that make those payments. Work for a local Ma and Pa welding shop for spending money. made the right decision. No commute, can take a day off if I like, one week paid vacation, like what I do.
redforlife
Well-known Member
Well, it really does all boil down to personal lifestyle. And of coarse if you are fully retired, or still puttering around here and there making a few dollars. If a person is working an average income 40 hour a week job, they should be able to live adequatly plus be able to save and contribute to retirement, investments, ect. Retired, they are likely to not be living on the same income. Likely less. The same would be nice, but out of reach for most people. Fare to say that for most people, saving anything at the lower income is unlikely. The average person is likely to also spend a heck of alot more money on a day off than on a day working wether it be for recreation, whatever. You can't really put much trust in these average figures anymore, and I'll tell ya why. A person that lives conservative, and don't over indulge in things, and can mannage their money, is not an average person this day in age. Analize your personal situation and your plans during retirement and do whats best for you.
mjsnodgrass
Member
i retired 7 years ago at 55. was with the same company 37 years. I watched many friend work past retirement age because of the money. I realized one day, if I didn't have enough money after nearly 40 years working, I probably wasn't going to ever get it. then a friend dropped dead the day after he retired at 70. he had the money, but ran out of time. my monthly pension is 10% of what I made in a month. my wife works 3 days a week, mainly for the health insurance. we don't spend like we use to, but we get by fine. retire while you have your health and can still do what you want.
If you can quit do so.I got out at 53.Wife and I travel a little and life is good.I got a little debt that can be gone if need be.I worked 40 years raised a family and put 2 thru college.Now it's time for me.Everyday is a Saturday.Keep a few things on the side for extra income.Don't need it but it's nice to have.I buried 3 friends my age in the last 2 years.Enjoy it why you can.Good Luck.
I was retired for about 5 years, got bored and started farming. Small scale but it keeps me busy. We spent less than when were working. For one didn't need work clothing. That for some is jeans and work boots and dress shirts and ties for others. Both cost money. When you are not working jeans and boots last a lot longer. We drive less not having to commute. The biggest thing I see with people getting close to retirement today is their debt load. Far too many that just had to have that bigger, now empty house sense the kids left, the new cars and expensive vacations. And lets not forget that 100K dream motor home. If a person can get their debt down then they darn sure don't need as much. I know a guy who retired from Onan as one of their mechanical engineers. Younger wife who is expensive to maintain. His retirement was much larger than mine. He's always complaining that he should have stayed working.
Rick
Rick
my wife says were retired. got rid of the dairy cows 3 years ago. i say were just not milking cows anymore. everythings still going, crops,raising heifers for the neighbor, steers, custom tiling in spare time. told the wife it would take 2 years to catch on all my projects, its been 3 years and not making much headway. bought 2 houses for cash rentals and cell tower supplement income, havent touched retirement savings yet, no sochibal secerity money for 8 years yet. have more money now than when we were milking cows
rodgernbama
Member
Most of what I've read says you need 70%-80% of your current income to continue the same lifestyle in retirement. Part of my retirement is a defined pension and there is not any built in raises to counter inflation. No increases in a pension over 10 year period will have a lot less buying power. I plan on taking my SS at the reduced rate but several coworkers that recently retired worked past the full SS age.
mjsnodgrass
Member
david
I'm in SW Washington. most of my relatives either stayed in southern Missouri, or returned there after retiring. been back there a few times. they have a good way of life back there.
I'm in SW Washington. most of my relatives either stayed in southern Missouri, or returned there after retiring. been back there a few times. they have a good way of life back there.
MarkB_MI
Well-known Member
- Location
- Motown USA
Not a difficult calculation to make: which bills will disappear when you retire? I don't see my cost of living going down much after retirement, and it's typical for it to go up. I'll have my house paid off, but I still have to pay insurance and taxes. Utility bills aren't going down. I won't have a long commute, but that doesn't mean I'm not going to drive anymore. My wife and I intend to do a fair amount of traveling, and you can't do that for free. We've both worked our entire lives and we don't intend to spend our retirement living like paupers.
Fawteen
Well-known Member
- Location
- Downeast Maine
I guess I've just been lucky, cuz there darn sure hasn't been any skill involved.
I retired two years ago this month @ 62. Part of my reasoning was that longevity is not a trend in my family. I've been paying in since I was 16, and by golly I'm going to take out every dime I can. Plus, I was working a part time job for chump change and actually INCREASED my monthly gross when SS kicked in.
Between my SS, my wife's SS and my Navy retirement, we keep all the bills paid and have a little cushion. As others have mentioned there are two main reasons this is possible: Simple lifestyle (never eat out, no vacations in the modern sense) and no debt. Only non-utility bill when I retired was a small (< $300) car payment.
One year in, I added a truck payment to that, still okay, still tucking a little away. It helps a lot that TAXABLE income went way down.
Last month, I picked up a part time job, more because I couldn't face another winter of sitting on my ample fundament than because I needed the money. I'm doing the sort of work I've always loved (building and fixing things) being paid VERY well and setting my own hours. At the moment, every dime of that income (other than what is being set aside for Quarterly Estimated Taxes) is being tucked into the Toy Fund.
Retiring was the best decision I ever made. Wife's happy that I'm around, I'm happy that I'm not working at a job I have to force myself to go to. Our fuel bill went down, our tax bill went down, and for reasons I can't quite put my finger on, our FOOD bill went down.
I retired two years ago this month @ 62. Part of my reasoning was that longevity is not a trend in my family. I've been paying in since I was 16, and by golly I'm going to take out every dime I can. Plus, I was working a part time job for chump change and actually INCREASED my monthly gross when SS kicked in.
Between my SS, my wife's SS and my Navy retirement, we keep all the bills paid and have a little cushion. As others have mentioned there are two main reasons this is possible: Simple lifestyle (never eat out, no vacations in the modern sense) and no debt. Only non-utility bill when I retired was a small (< $300) car payment.
One year in, I added a truck payment to that, still okay, still tucking a little away. It helps a lot that TAXABLE income went way down.
Last month, I picked up a part time job, more because I couldn't face another winter of sitting on my ample fundament than because I needed the money. I'm doing the sort of work I've always loved (building and fixing things) being paid VERY well and setting my own hours. At the moment, every dime of that income (other than what is being set aside for Quarterly Estimated Taxes) is being tucked into the Toy Fund.
Retiring was the best decision I ever made. Wife's happy that I'm around, I'm happy that I'm not working at a job I have to force myself to go to. Our fuel bill went down, our tax bill went down, and for reasons I can't quite put my finger on, our FOOD bill went down.
farmerwithmutt
Well-known Member
I always figured it's not what you make its what you spend.i have always farmed and worked off the farm so retirement for me will be just the farm.but also had a friend who saved every dime his younger brother died of cancer and in a year he's been all over the United states and now going over sea's .
There are pitfalls to avoid during retirement. We moved to a retirement community when we retired. It didn't take long to see what was going on with a majority of the people. They had no hobbies, did not want to volunteer to do anything - so they got bored and started Happy Hour about 4 p.m. and drank until late into the night without eating.
Most of them were on some type of medication that said that they should not consume alcohol, but they drank until they were blotto almost every evening. They didn't like to drink alone, so they invited other drinkers to come and they provided the booze & beer. They ended up spending a lot of money on their boozing friends.
Some people spent a lot of money on tours and entertainment. I had travelled during my working career, so didn't care to travel anymore.
We've never been big on entertainment and my Oncologist told me to avoid crowds so that works for us.
We kept our life simple and somewhat frugal, except for my woodworking hobby that kept me busy until this last year because of my health issues.
We've been retired 17 years now and have not spent any of our initial retirement savings. It can be done if you have the discipline to live within your means. Just make sure that you have health insurance coverage and control spending.
Most of them were on some type of medication that said that they should not consume alcohol, but they drank until they were blotto almost every evening. They didn't like to drink alone, so they invited other drinkers to come and they provided the booze & beer. They ended up spending a lot of money on their boozing friends.
Some people spent a lot of money on tours and entertainment. I had travelled during my working career, so didn't care to travel anymore.
We've never been big on entertainment and my Oncologist told me to avoid crowds so that works for us.
We kept our life simple and somewhat frugal, except for my woodworking hobby that kept me busy until this last year because of my health issues.
We've been retired 17 years now and have not spent any of our initial retirement savings. It can be done if you have the discipline to live within your means. Just make sure that you have health insurance coverage and control spending.
Geo-TH,In
Well-known Member
Mark,
I'm in agreement with you, things will always cost more. Remember when gas was $.25/gal, heating oil $.11/gal, bottle of coke $.05, a new mustang $1999? EPA will cause electricity to go up, insurance goes up, water/sewer bills, roof will need replaced, car replaced, furnace. AC, refrig, the list list goes on.
I know many people, spouse dies, living parent moves in with their kids because they didn't properly plan for retirement. I call them boomerang parents.
george
I'm in agreement with you, things will always cost more. Remember when gas was $.25/gal, heating oil $.11/gal, bottle of coke $.05, a new mustang $1999? EPA will cause electricity to go up, insurance goes up, water/sewer bills, roof will need replaced, car replaced, furnace. AC, refrig, the list list goes on.
I know many people, spouse dies, living parent moves in with their kids because they didn't properly plan for retirement. I call them boomerang parents.
george
You're right, there is no one size fits all. I took an early out retirement (from engineering) in 1991 and haven't looked back and glad I did. I saw so many of my friends stay that extra 5 or 10 years then retire and sit on the couch and die soon after. Some things I think MUST be done prior are:
NO DEBT you cant be running around with mortgages (house has to be paid off well DUH) and big car payments and certainly no credit card bills owed at retirement age, forget that in my opinion, have things paid for and pay cash thereafter.
HEALTH INSURANCE I was fortunate to have a federal civil service retirement (CSRS) from the Navy DOD so I have Federal Blue Cross in addition to Medicare A & B. If you dont have some sort of retirement insurance benefits, Id guess insurance can run you a thousand or more per month. WHAT HAPPENED TO external_linkS PROMISE WE WOULD SAVE $2500 PER YEAR UNDER external_linkCARE LOL LOL
LIVE A FUN ACTIVE BUT FRUGAL LIFESTYLE
BUDGET BUDGET BUDGET We sock away in separate savings accounts MONTHLY what we need for heating, utilities, taxes, insurance, travel. That way we know whats left is ours to spend no problem no questions asked. As much as possible have all bills possible on Automatic Pilot that are automatically paid each month the first of the month when our retirement checks come in.
HAVE AN EMERGENMCY FUND for when the car breaks down, water heater or furnace craps out, roof leaks etc etc.
HAVE A HEFTY SAVINGS SOCKED AWAY I have some in conservative Mutual Funds, some in an account from which we draw monthly interest income, some just in low interest yielding but very liquid cash.
HAVE AN ESTATE PLAN to care for the spouse when youre gone and leave something to the kids (if you like) and keep the government from getting what you worked all your life to accumulate. That takes a professional estate planner NOT Billy Bob and Bubbas advice lol
DONT WAIT UNTIL YOURE TOO OLD OR TIRED OR UNHEALTHY TO ENJOY RETIREMENT
Best wishes
John T
NO DEBT you cant be running around with mortgages (house has to be paid off well DUH) and big car payments and certainly no credit card bills owed at retirement age, forget that in my opinion, have things paid for and pay cash thereafter.
HEALTH INSURANCE I was fortunate to have a federal civil service retirement (CSRS) from the Navy DOD so I have Federal Blue Cross in addition to Medicare A & B. If you dont have some sort of retirement insurance benefits, Id guess insurance can run you a thousand or more per month. WHAT HAPPENED TO external_linkS PROMISE WE WOULD SAVE $2500 PER YEAR UNDER external_linkCARE LOL LOL
LIVE A FUN ACTIVE BUT FRUGAL LIFESTYLE
BUDGET BUDGET BUDGET We sock away in separate savings accounts MONTHLY what we need for heating, utilities, taxes, insurance, travel. That way we know whats left is ours to spend no problem no questions asked. As much as possible have all bills possible on Automatic Pilot that are automatically paid each month the first of the month when our retirement checks come in.
HAVE AN EMERGENMCY FUND for when the car breaks down, water heater or furnace craps out, roof leaks etc etc.
HAVE A HEFTY SAVINGS SOCKED AWAY I have some in conservative Mutual Funds, some in an account from which we draw monthly interest income, some just in low interest yielding but very liquid cash.
HAVE AN ESTATE PLAN to care for the spouse when youre gone and leave something to the kids (if you like) and keep the government from getting what you worked all your life to accumulate. That takes a professional estate planner NOT Billy Bob and Bubbas advice lol
DONT WAIT UNTIL YOURE TOO OLD OR TIRED OR UNHEALTHY TO ENJOY RETIREMENT
Best wishes
John T
I'm 43, I will most definatly retire at 49. The wife and I focused on getting our debt to zero, and then focused on saving. My wife is the same age, and has decided that she never wants to retire. More power to her, I'm gone first chance I get. I will work on the farm, and I seriously doubt that I will make a dime doing so. We have lived on one paycheck, and saved one paycheck for about 10 years now. Were accustomed to it.
Dean Olson
Well-known Member
There is no one size fits all. If retirement means sitting on the porch, rocking and watching the grass grow, I'll never retire.
In all likely hood if I don't have an income producing job I'll spend far more "retired" than when working.
Retirement to me means no debt, working an income producing activity so I can spend that on travel, hunting, fishing, my old Farmalls, my garden etc. All the activities I enjoy but didn't have enough time for when I had a job.
I sold my Plumbing company at age 42 and have been living my idea of retirement ever since. My current income producing activity is over the road trucking. I get to travel. Find interesting tractors and implements all over the country, cheap freight, and make some money.
Previous to that I got my Realtors liscense, accumulated a couple rent houses and made some commissions before the bust.
In all likely hood if I don't have an income producing job I'll spend far more "retired" than when working.
Retirement to me means no debt, working an income producing activity so I can spend that on travel, hunting, fishing, my old Farmalls, my garden etc. All the activities I enjoy but didn't have enough time for when I had a job.
I sold my Plumbing company at age 42 and have been living my idea of retirement ever since. My current income producing activity is over the road trucking. I get to travel. Find interesting tractors and implements all over the country, cheap freight, and make some money.
Previous to that I got my Realtors liscense, accumulated a couple rent houses and made some commissions before the bust.
I had the same sort of experience. I was the one of the younger folks at my plant, and I saw several guys work until they died. One guy I was working with slumped over drinking a coffee with us one day. He had a brain aneurism @56. Dead when he hit the floor, 38 years senority. He had 3 ex wives. He had NO retirement plans.
You will need a lot of income and savings in order to retire and live well. I retired at age fifty-seven over twenty years ago. I have two pensions plus SS. I have prospered over the years and my income now is greater than when I worked out. I hobby farm over 300 acres . Have some beefers and hay and crop farm corn and soybeans.
Now here is the kicker...I have received over $1,400,000 in pension income since I retired and several hundred thousand dollars in business generated income also. I am not a rich man, just a working man who spends his money wisely.
When I decided to remove myself from the workforce I did not have any debt but I am not against borrowing when it makes economic sense, such as adding land to a farm or making a large purchase that would deplete your cash balance as long as your income will allow it.
Advice to the younger crowd of workers..Start saving and investing now. Even if only a small amount. Pay down all debt before you tell the boss where he can stick the job. Know where you are going to live and if moving to a retirement state buy or lease your retirement home years before you need it. Have a great retirement.
Now here is the kicker...I have received over $1,400,000 in pension income since I retired and several hundred thousand dollars in business generated income also. I am not a rich man, just a working man who spends his money wisely.
When I decided to remove myself from the workforce I did not have any debt but I am not against borrowing when it makes economic sense, such as adding land to a farm or making a large purchase that would deplete your cash balance as long as your income will allow it.
Advice to the younger crowd of workers..Start saving and investing now. Even if only a small amount. Pay down all debt before you tell the boss where he can stick the job. Know where you are going to live and if moving to a retirement state buy or lease your retirement home years before you need it. Have a great retirement.
Mark, I know a lot of people who's house payment are a grand or more. If they can pay that off before retirement they have that much more spendable income. Reduced travel to and from work doesn't mean you stop driving but many people are logging 60-90 miles a day to and from work. They retired that may drop to 5 or 10 miles on average a day. I know a guy here who works 4 days a week in Fargo. Before his wife passed he drove that. 160 mile round trip. Now he keeps an apartment there. Still lives here. He should be retiring very soon. Get rid of the apartment/drive and that's a considerable savings. Most people can do that. Sure utilities and taxes are going to go up but other cost for most people will go down.
Rick
When we retired, my plans to make some extra money went out the window when my allergies got worse. I had planned to do "Handy Man" work in the community, but my allergies to perfume, carpet and most things scented prevented me from going into other people's houses.
My wife was happy that I didn't get started in that line of work; she said that we didn't really need the money and I didn't need to weaken my immune system by being sick from doing work for other people.
Everyone has to do what they got to do.
My wife was happy that I didn't get started in that line of work; she said that we didn't really need the money and I didn't need to weaken my immune system by being sick from doing work for other people.
Everyone has to do what they got to do.
Interesting. Your wife's Grandmother was raised the way a lot of us where. Don't spend more than you make. Pay for everything with cash. I literally had no credit for years because I never charged anything. It was only the last 20 years of my life that I established any credit. We live comfortably in retirement. We invested in mutual funds. No IRAs! A lot of our money is in real estate. In todays economy young people will have a struggle to get ahead. LAA you don't know anything about the folks on this site. So be cautious about hanging abundant or conservative labels on people. It's ok to disagree without calling names.
I retired in 1989 after 38 years from the federal government. In 1990 until 2000 I was rehired by several defense contractors to pay up my social
security. No house or car payments. Health insurance is through the civil service. I could sign up through the VA for the health insurance, but it wouldn't cover my wife. external_link's 1% cost of living is a joke. Health insurance increased 10%. Gas is $2.92 a gallon today. If you own property there's always something to do. Hal
security. No house or car payments. Health insurance is through the civil service. I could sign up through the VA for the health insurance, but it wouldn't cover my wife. external_link's 1% cost of living is a joke. Health insurance increased 10%. Gas is $2.92 a gallon today. If you own property there's always something to do. Hal
hughb,
Let me explain when I need your advice regarding anything, NEVER. I may not know you but based on your obsession with a few minor disagreements we have had on this forum I think you are some kind of nutcase. You instigated the back and forth with me several months ago, you don't know anything about me either.
Let me explain when I need your advice regarding anything, NEVER. I may not know you but based on your obsession with a few minor disagreements we have had on this forum I think you are some kind of nutcase. You instigated the back and forth with me several months ago, you don't know anything about me either.
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