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To me it means that we're retired and living well, that is as well or better than before retirement, on less than our income before retirement.

That's wonderful!


In retirement, one no longer pays FICA taxes or funds their 401k/403b/Roths/pension (and at age 65, you get an extra tax deduction). Work-related expenses are gone--and maybe also the mortgage--and very possibly one's in a lower tax bracket. One may need only 50-90% of what one earned while working to live just as well, have the same effective income.

This calculation is hard for me to make. DH lost his high tech job in the Tech Wreck, and I had my hours cut to 10/week 6 months later. In the interim, DH got an adjunct professor job. We're retired on a little more than his final teaching paycheck, but it's 1/3 of what we made in our peak year (2000). But we feel comparably well off since our expenses are also down by 2/3!
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