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Author: telegraph Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19483  
Subject: Re: Retire On 22K Per Date: 5/9/2007 1:09 PM
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Half the retired folks live in FL on less than 25K/year income....

SO there are lots who live on that much.

It depends upon your lifestyle. If you have been making $100,000 and spending most of it, then you might be challenged to reduce spending to 22K/yr.

If you have a million in assets, that will give you about 40K.....

Of course, if you get SS, that can add $8K or more, typically in the mid teens to 20s depending upon being single, or married, and what your earnings and years of work were. For many, it is still substantial.

When I first retired, my minimum worst case budget was about 22K...but that was 'survival budget'. staying in same paid for house, and keeping things running, but no travel, and no fun money. Now that is up to about 25-26K...with higher taxes, insurance, and other costs.

Mid level was around 30-33K....that got be cable TV, eating out twice a week or more, magazine subscription renewals, etc.

My portfolio spins off dividends and interest well above that, so I don't have, at this point, to worry. I have been moving more toward investments that spin off good dividends, REITS, GNMA....trying to stay below 70% in stocks, but that is becoming a challenge (and a happy one).

At this point, barring buying a new car, I can live comfy off my dividend and interest and cap gain/distributions each year. (about a 2% withdrawal rate). If I want to buy a new car, I'd sell some equities or funds. The IRA which has about 20% of net assets is untouched..and is 40/40/10/10 stocks/TIPS/REIT/GNMA. Plan to tap that around 65 or so in 4 years. Plan to take SS at 62 - one year from now.

If I had to, by selling my house and downsizing, I could potentially cut my living expenses to under 25K, and still have fun money.

But I like the swimming pool ($1000/yr to operate - chemicals, part replacement, electric for the pump year round)...not including added taxes and added insurance.

I like the suburban location - but that comes with $5400/yr tax bill and $1500/yr insurance bill. (no state income tax)

I drive a full size car - I could downsize to a smaller car and get somewhat better mileage, but I like the good car for highway driving (excellent road trip car).

It comes down to choices and what your financial limitations are.

There are many folks on the LBYM board who could probably get by on $1000/mo....the biggest challenge for many will be heatlh insurancee/coverage until 65.

t.









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