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Very interesting article on CBS Marketwatch stating that you can retire on $22K per year. It also suggest that the "wise" recommending that we need 70% of current earnings may only be a myth that helps them.
http://cbs.marketwatch.com/news/current/superstar.htx?source=htx/http2_mw

Jerry - Happily retired on significantly less than 70%
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Interesting article but I don't believe too many millionaires are living on $15K/yr.

I retired a little over a year ago and while I could survive on $22K, I wouldn't really call it living. I'm single and my house and car are paid for. But my health insurance alone is $2900, and that's with $1000 deductible. I like to eat out somewhere nice once or twice a week. I like to travel 5 to 7 weeks a year, mostly by car. I prefer something a notch above Motel 6, so rooms usually run $50 to $60. Then there's utilities, taxes, internet fees, satellite TV with all the movie packages I enjoy, and golf club dues . It adds up. Yes, I could survive on $22K but life is a lot more enjoyable on $32K. And that doesn't count my one real indulgence - a new luxury car every four or five years.

I didn't retire to survive. I retired to live.
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I personally know several millionaires who live well on $18 to $24K per year. If a person doesn't understand how or why it's done, I'll bet you that person isn't a millionaire and won't be retiring any time soon if at all.
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Retire on $0 per year...move to the outback and live off the land. It all depends on the quality of life you want in retirement and quality is a subjective term that has to be defined by each individual.

It is important to understand the difference between what it will take to sustain your existence (food, clothing, shelter, etc.) till your death from what it will take to live the life you want (travel, hobbies, gifts to grandkids, etc.)

Clearly though, the idea that you need $1.5M in order to maintain a minimal existence is ridiculous.
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...what a great article....i too thought i had to have a lot of money @ my retirement......well, i am comfortable and it is about 22000$ and more than enough
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gbaker wrote:
Retire on $0 per year...move to the outback and live off the land. It all depends on the quality of life you want in retirement and quality is a subjective term that has to be defined by each individual.

It is important to understand the difference between what it will take to sustain your existence (food, clothing, shelter, etc.) till your death from what it will take to live the life you want (travel, hobbies, gifts to grandkids, etc.)

Clearly though, the idea that you need $1.5M in order to maintain a minimal existence is ridiculous.


The people I know who live well on $18K to $24K per year are worth between $2M and $4M. Some of them live in the USA. We live in Costa Rica.

My wife and I retired at age 38 five and a half years ago. My family (wife, myself and 4 kids) lives on $36K per year. Our biggest expense is domestic help (one "peon" and two maids) at $600 per month. My four kids' private bilingual school sets us back another $300 per month. If it were just my wife and I, we would have a difficult time spending $3K per month.

We travel quite a bit. Take vacations. Eat out quite a bit. We entertain at our home often. We live well. We just don't survive.

The key to living on $18K to $24K per year is to have very little fixed expenses. This means, own your own real estate and vehicles outright. No credit card debt. Of course, it helps to live in a place with a low cost of living and low taxes.
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We live in Costa Rica.


Lucky you ...great country, with out of this world scenery. Spent one week in the north part of Costa Rica in 1995, would like to go back sometime.

Lake Arenal and the volcano is beautiful. Fortunate to see the volcano errupt while we were there. Love the beaches down by Santa Cruz ...Tamirando (forgot how to spell it as well as pronounce.)

If I remember right, you live north of San Jose, near the airport.

I sure you could get by on 22K, but the style of living is much different than here in the USA. Much more laid back ...small towns reminded me of the 1940's is this country. Even fueled the car at a gas station using the old pumps that filled the top of the pump up and then gravity fed into the car. They don't believe in directional signs on the highways. Every town we drove thru, we had to ask for directions to where we were going.

Just had to put in my two cents worth. I did truly enjoy my short visit and as I said, I hope to return.

rclyde
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I am retired now and I do live on about 20k, but - because 20 years ago i came to this blessed country with 5 dollars in pocket,I fill like a millionare today. I travel to Europe and accross America, to satisfy my hobby - photography, so i am alive and well and feel wealthy (well, few extra millions would not bother me ..)on my 20k.
I even can afford a supplement to medicare.
it all is state of mind.

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Hi Galeno,

Has the ship sailed on costa rica as a retirement area?
Any particular area you would recommend?
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Has the ship sailed on costa rica as a retirement area?
Any particular area you would recommend?


Hope you don't mind an answer from someone else. We traveled extensively in Costa Rica about a year ago. Hot and steamy near the coast, much cooler and drier up in the hills.
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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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If you have health insurance, or can get it for a few hunded a month, and don't live in a high price/high tax environment, you can get by on 25K/yr...

My biggest expense, other than income tax, is on real estate ($5400 tax, $1500 insurance, and about $4500 in utilities and misc maintenence - plus every now and then a few thousand for a big repair)....

The more you have, the more you have to maintain - and the more you are willing to do, the more you reduce expenditures.

If you live in many areas of the country outside the 'big city' or expensive suburbs, and downsize housing to what you need, you could do this.

My current medical expenses I calculate at about $5000-$6000 a year....including monthly premiums and the $3000 deductible...which unfortunately I hit the past two years due to some problems. hopefully that will reduce.... (but between dental, routine things like Colooscopies - and trying to figure out what is wrong when things aren't right , it can add up quickly). If I had better insurance, that cost would be reduced. (now I have 30% co-pay)......plus deductible....

t.



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Thanks tedhimself

Appreciate the comments. Did you think it was an area that had value in buying a place with the anticipation of spending a 3-5 months there a year?
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I could not get the retirement article on marketwatch could you send it to me
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