How much?
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I retired 8 years ago at the age of 35. I'm sort of semi coming out of it since I'm working on getting a bee business up and going, but I'm doing this more because I love working with bees and want to work with beginners than for income.
It is not so much a hard and fast dollar amount in savings so much as it is how much income do your investments generate. Some people are better at investing than others. No debt is the key! Good for you!
A good starting point is to get an actual picture of what you spend per month. Rather than writing down everything....because everyone forgets to write down little stuff.....pay cash for EVERYTHING for one month. Put X amount of cash in your purse and make all your purchases with it. When you have spent all the money in your wallet write down that amount. You can pay recurring bills as normal and write them down. You will be surprised at how much money you actually spend in a month. You will also want to add things like taxes and insurance to your figures as well.
Add a bit extra for things like flat tires, the well pump going out, etc. That will be the monthly income you need to generate.
That meets your basic needs. I also recommend having enough in ordinary savings to pay for 3 months of expenses. The stock market does whoopsies from time to time. You need that cushion 'just in case'. 3 months of living expenses would give you time to get a job if you end up needing to do that.
If you can manage to live below what you have coming in and then take the extra and reinvest it.....you are in essence making money from thin air. I like thin air money. It will snowball if you have patience. I'm buying bee equipment in bulk quantities with air money
Only reason I'd go back to having a job would be for the social aspects. Hard to get a date when I don't meet new people.
It is not so much a hard and fast dollar amount in savings so much as it is how much income do your investments generate. Some people are better at investing than others. No debt is the key! Good for you!
A good starting point is to get an actual picture of what you spend per month. Rather than writing down everything....because everyone forgets to write down little stuff.....pay cash for EVERYTHING for one month. Put X amount of cash in your purse and make all your purchases with it. When you have spent all the money in your wallet write down that amount. You can pay recurring bills as normal and write them down. You will be surprised at how much money you actually spend in a month. You will also want to add things like taxes and insurance to your figures as well.
Add a bit extra for things like flat tires, the well pump going out, etc. That will be the monthly income you need to generate.
That meets your basic needs. I also recommend having enough in ordinary savings to pay for 3 months of expenses. The stock market does whoopsies from time to time. You need that cushion 'just in case'. 3 months of living expenses would give you time to get a job if you end up needing to do that.
If you can manage to live below what you have coming in and then take the extra and reinvest it.....you are in essence making money from thin air. I like thin air money. It will snowball if you have patience. I'm buying bee equipment in bulk quantities with air money
Only reason I'd go back to having a job would be for the social aspects. Hard to get a date when I don't meet new people.
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8,092 Posts
Final question is incomplete; would I do what? Retire? Already did and at a much younger age.
But still have many other 'irons' in the fire. But basically do what I want and when I want to.
How much is 'needed' is a whole 'nother ball of wax. It really depends......
It depends on your lifestyle and what you expect the future to hold.....
which of course, NO ONE can know really. Figured that I had enough
invested when I made the decision back in '97 to cut the strings and
took off on our own. Of course, I hadn't planned on the ex, deciding to
make a grab 14 years later and run off with over half my earnings and
retirement pension as well. But life continues and we adjust and move on.....
Do I have enough now? Probably not......dreams died, or changed.
My folks have spent the last 10 years, hopping in and out of assisted
care/retirement centers.....mainly because they felt they couldn't afford them.
Which was a crock......but that's what they told the world.....the reality was
that mom was very controlling and didn't want to be anyplace but her house,
and would brow-beat dad until he gave in and took her back home;
although he couldn't adequately care for her and they didn't keep adequate help
around to care for her. Consequently her developed a UTI that became septic
and she finally was taken to the hospital by ambulance. She nearly died, but always
maintained that "other people get septicemia.....but I NEVER had it!!!" This illness,
then led her to developing early alzheimers and with it, the inability to make wise decisions;
like getting heavily into sweepstakes and rigged contests thru the mail......literally spending
over a $1000/month on the "games" and never seeing dime one in return. Dad finally came over
to me to seek help: "We've got a problem...." (I should mention here, that he had been diagnosed
several years previously, with early dementia, which was somewhat controlled with medication.)
He explained that things were getting out of hand and that something needed to be done.
Since mom had MS and has not physically been able to walk or get out of the house without
assistance from my father or me, it seemed an easy task to 'help' with. Told him that when he
went to the mailbox, to simply pull the ones that appeared to have those "something for nothing"
look to them, toss in the outside burn cage and bring the rest inside to mom. Couldn't do it.
Turns out, he was nearly as 'hooked' as she was. This had been going on for 6+ months.
Finally had to take legal steps to protect their investments by taking her to court and lock-down her checking account.
She NEVER forgave me for that decision..... and figured out a way around it by sending dad to the bank,
pulling several hundred dollars out at a time, and then sending CASH thru the mail to continue feeding her addiction.
Eventually, with the help of my other siblings, we were able to get them into a nearby assisted-living care center,
where she lived out the rest of her miserable existence for the next 23 months. In the end, she was NOT even recognizable
as the woman who had once raised us. A lot of the misery that ensued to both them and their family/friends,
could have been avoided, if THEY had simply planned things differently and trusted their kids to do what was right for them....
So we may never know what is really needed......until it's too late.
But still have many other 'irons' in the fire. But basically do what I want and when I want to.
How much is 'needed' is a whole 'nother ball of wax. It really depends......
It depends on your lifestyle and what you expect the future to hold.....
which of course, NO ONE can know really. Figured that I had enough
invested when I made the decision back in '97 to cut the strings and
took off on our own. Of course, I hadn't planned on the ex, deciding to
make a grab 14 years later and run off with over half my earnings and
retirement pension as well. But life continues and we adjust and move on.....
Do I have enough now? Probably not......dreams died, or changed.
My folks have spent the last 10 years, hopping in and out of assisted
care/retirement centers.....mainly because they felt they couldn't afford them.
Which was a crock......but that's what they told the world.....the reality was
that mom was very controlling and didn't want to be anyplace but her house,
and would brow-beat dad until he gave in and took her back home;
although he couldn't adequately care for her and they didn't keep adequate help
around to care for her. Consequently her developed a UTI that became septic
and she finally was taken to the hospital by ambulance. She nearly died, but always
maintained that "other people get septicemia.....but I NEVER had it!!!" This illness,
then led her to developing early alzheimers and with it, the inability to make wise decisions;
like getting heavily into sweepstakes and rigged contests thru the mail......literally spending
over a $1000/month on the "games" and never seeing dime one in return. Dad finally came over
to me to seek help: "We've got a problem...." (I should mention here, that he had been diagnosed
several years previously, with early dementia, which was somewhat controlled with medication.)
He explained that things were getting out of hand and that something needed to be done.
Since mom had MS and has not physically been able to walk or get out of the house without
assistance from my father or me, it seemed an easy task to 'help' with. Told him that when he
went to the mailbox, to simply pull the ones that appeared to have those "something for nothing"
look to them, toss in the outside burn cage and bring the rest inside to mom. Couldn't do it.
Turns out, he was nearly as 'hooked' as she was. This had been going on for 6+ months.
Finally had to take legal steps to protect their investments by taking her to court and lock-down her checking account.
She NEVER forgave me for that decision..... and figured out a way around it by sending dad to the bank,
pulling several hundred dollars out at a time, and then sending CASH thru the mail to continue feeding her addiction.
Eventually, with the help of my other siblings, we were able to get them into a nearby assisted-living care center,
where she lived out the rest of her miserable existence for the next 23 months. In the end, she was NOT even recognizable
as the woman who had once raised us. A lot of the misery that ensued to both them and their family/friends,
could have been avoided, if THEY had simply planned things differently and trusted their kids to do what was right for them....
So we may never know what is really needed......until it's too late.
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7,215 Posts
It's such a personal choice Tambo that one size doesn't fit all. I chose to retire at just about the age you are now. There were many factors that entered into the decision, but probably in order of importance these were the things weighing on my mind at the time:
1.) I was financially secure with 30 years of service credits in my retirement plan, enough for full benefits. While I could not eat caviar each night with my pension, luck was with me in that I prefer corn bread, pintos, and sliced onion. I can afford all of that I want.
1.A) I wanted to do other things, especially get this farm back into some type of operational condition. Also, I like to travel, meet new people, and experience new cultures. It challenges me in a way I find very satisfying, not to mention that it's a lot of fun.
2. I was kinda' bored with what I was doing at work (same old same old basically), especially after the thrill (or disgust) of Y2K was past.
3. My leaving opened up opportunities for those that worked for me, at a time when those opportunities were slim due to the economy tanking in 2006-2007.
4. After selling my in-town place, I was driving 45 miles each way to work in Atlanta traffic, and if my hair had gotten any grayer it would have been transparent.
I've had no regrets, at least not about retiring. Now some of the consulting/work assignments I've take on for friends since retiring, those I regret. Gained 20 pounds due to stress on the last one, and I'm still trying to work it off.
Best wishes to you as you try to figure out how to proceed.
1.) I was financially secure with 30 years of service credits in my retirement plan, enough for full benefits. While I could not eat caviar each night with my pension, luck was with me in that I prefer corn bread, pintos, and sliced onion. I can afford all of that I want.
1.A) I wanted to do other things, especially get this farm back into some type of operational condition. Also, I like to travel, meet new people, and experience new cultures. It challenges me in a way I find very satisfying, not to mention that it's a lot of fun.
2. I was kinda' bored with what I was doing at work (same old same old basically), especially after the thrill (or disgust) of Y2K was past.
3. My leaving opened up opportunities for those that worked for me, at a time when those opportunities were slim due to the economy tanking in 2006-2007.
4. After selling my in-town place, I was driving 45 miles each way to work in Atlanta traffic, and if my hair had gotten any grayer it would have been transparent.
I've had no regrets, at least not about retiring. Now some of the consulting/work assignments I've take on for friends since retiring, those I regret. Gained 20 pounds due to stress on the last one, and I'm still trying to work it off.
Best wishes to you as you try to figure out how to proceed.
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1,585 Posts
I have several clients that have retired at pre retirement age and it seems the ones that puttered at a fun small part time business that they lived for the the work, rather work to live have been very happy. Some of the others retired only to find a lack of drive, motivation, and otherwise discontentment. I mean after a few months how much can you really goof off. I think the part time self employed fun job is the way to go.
Personally I'd love to retire and just work at the homestead thing. It would not be like work for me, it would be living. Figuring in a small income from a small roadside seasonal table of eggs, corn, honey, Blacksmithing, and odd fun stuff that played a little, I think $8,000 saved per year of retirement planned would be more than plenty for one person. For two people I think a total of 12,000 per year would be enough. All that is assuming you don't want to travel, have lavish VACAs, or drive a new car every year.
Personally I'd love to retire and just work at the homestead thing. It would not be like work for me, it would be living. Figuring in a small income from a small roadside seasonal table of eggs, corn, honey, Blacksmithing, and odd fun stuff that played a little, I think $8,000 saved per year of retirement planned would be more than plenty for one person. For two people I think a total of 12,000 per year would be enough. All that is assuming you don't want to travel, have lavish VACAs, or drive a new car every year.
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If your property is paid for , you should figure your yearly property tax (because in reality you only rent your property by the year) and add 20% to it and divide by 12, do the same with utility costs, property and equipment maintenance and average store purchase costs during the year.
As long as your monthly income from pensions , savings and investments cover your projected costs you should be good for the basics for at least five or 10 years.
Retirement is not leaving the workforce as much as it is transitioning from being one of the cogs to being a cog replaced by a newer cog and becoming part of the fuel of the machine by investing in future industry.
As long as your monthly income from pensions , savings and investments cover your projected costs you should be good for the basics for at least five or 10 years.
Retirement is not leaving the workforce as much as it is transitioning from being one of the cogs to being a cog replaced by a newer cog and becoming part of the fuel of the machine by investing in future industry.
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Darn, so we grow up to become old cogs.
One thing you have to ask is Where are you getting insurance? I work basically for low insurance. I am not old enough for medicaid and anyway that doesn't cover everything only 80 percent. I couldn't get insurance as cheap as I have it now anywhere. I am thinking about drawing my SS in Jan 5 months before I turn 65 because the difference is so small in those 5 months it would take me 13 years to make up those 5 checks between Jan and May. I will keep working and draw also. If I go over the cap I will have to pay back in taxes to the goverment. I don't think I will go over. I still have some figuring to do. I went to the SS office last Friday because you hear so many stories about what is taxed and not taxed etc. They were very nice and I got the information instead of what people had "heard".
I was told I could draw off my ex since we were married 10 years and I had not remarried turns out only if he died lol. I asked the person helping me so if my ex drops dead tomorrow I can collect off of his? He laughed and said are you going to hunt him down? This is interesting to me---My ex has been remarried twice since we divorced yet if he died I would have first widows choice of drawing off his SS.
I was told I could draw off my ex since we were married 10 years and I had not remarried turns out only if he died lol. I asked the person helping me so if my ex drops dead tomorrow I can collect off of his? He laughed and said are you going to hunt him down? This is interesting to me---My ex has been remarried twice since we divorced yet if he died I would have first widows choice of drawing off his SS.
I accidentally retired at 52.
I researched my SS contributions and found I was already at max. Working more years and putting more money into ss wasn't going to increase the amount I would receive in payments. So one thing I would recommend is to do an analysis of ss and see how much you will receive at different ages. Determine how many more years, if any, you need to work to max it out. Also assume inflation is going to increase faster than your increase in ss will.
The other biggie is health insurance. Rapidly increasing health insurance premiums took a much bigger chunk of my retirement funds than I had planned for. Even when you qualify for Medicare, you can easily have medical expenses of several thousand dollars a year. My Part B, Part D, and Supplemental plan cost well over $3000/yr.
Then you need to look at investments. In the current economy, there are very few safe investments that pay enough to be worthwhile. Protecting your money can be difficult.
I researched my SS contributions and found I was already at max. Working more years and putting more money into ss wasn't going to increase the amount I would receive in payments. So one thing I would recommend is to do an analysis of ss and see how much you will receive at different ages. Determine how many more years, if any, you need to work to max it out. Also assume inflation is going to increase faster than your increase in ss will.
The other biggie is health insurance. Rapidly increasing health insurance premiums took a much bigger chunk of my retirement funds than I had planned for. Even when you qualify for Medicare, you can easily have medical expenses of several thousand dollars a year. My Part B, Part D, and Supplemental plan cost well over $3000/yr.
Then you need to look at investments. In the current economy, there are very few safe investments that pay enough to be worthwhile. Protecting your money can be difficult.
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9,640 Posts
I've read a lot on this . how we need millions to retire and whatnot. it depends a lot on your lifestyle. my friend had quite a bit of money coming in but she spent every cent and more on cruises, eating out 3 meals a day etc. etc. she also drank a lot of her money away. my husband was only a couple months away from retiring when he passed . he would have had his Canada pension and our Rsp's. that's it until we had gotten SS but we would have been fine. we were both frugal and not interested in travelling except by car. we were so looking forward to that. mostly living off our land. ~Georgia ps.I forgot to mention everything we had was paid for.
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I've never made plans to retire. Work is all I know. Hopeful that I'm not ever forced to retire cuz of health or something.
One son wants to take over the business sometime, but I'm not sure I want to quit. Maybe a partnership of some type might work. It's not labor intensive, but time intensive and demanding, when in season.
I've got options in my head if I did sell it though. I could pursue the leather artistry. I've got a bit of talent in it, but just don't like being glued to a cave, at this point. I've got a neat little place to call home that would be ideal for raising a bunch of light weight calves.
And a small start at making at little sustainable place with possibilities for niche marketing, as well as raising enough to feed me.. A big sore spot for some of them is it involves dealing with the public, or making lots of tracks to go to shows. Which I don't care to do at this point in life.
I do have an IRA that doesn't amount to whole lot, but my biggest plan is this piece of land. I hope to give it to the kids someday, and I hope to die an easy death if it comes to dying. Maybe a horse will kick me in the head, or a tractor flip over, or a bale of hay fall on my gourd. If I get to a point where I can still putter about, that'll be cool. If not, maybe I'll be a wild assed ape and challenge life?
Retirement...NO!
One son wants to take over the business sometime, but I'm not sure I want to quit. Maybe a partnership of some type might work. It's not labor intensive, but time intensive and demanding, when in season.
I've got options in my head if I did sell it though. I could pursue the leather artistry. I've got a bit of talent in it, but just don't like being glued to a cave, at this point. I've got a neat little place to call home that would be ideal for raising a bunch of light weight calves.
And a small start at making at little sustainable place with possibilities for niche marketing, as well as raising enough to feed me.. A big sore spot for some of them is it involves dealing with the public, or making lots of tracks to go to shows. Which I don't care to do at this point in life.
I do have an IRA that doesn't amount to whole lot, but my biggest plan is this piece of land. I hope to give it to the kids someday, and I hope to die an easy death if it comes to dying. Maybe a horse will kick me in the head, or a tractor flip over, or a bale of hay fall on my gourd. If I get to a point where I can still putter about, that'll be cool. If not, maybe I'll be a wild assed ape and challenge life?
Retirement...NO!
Pretty much as shrek mentioned regarding property taxes.
If income you receive from retirement covers your basic
heating, electrical, food and water then you figure what more
you need to cover your animal needs and other possible
expenses might come up keeping up your stead like
maintenance or emergencies.
Face it, as self sufficient as we would like to be, there is no
escaping some necessities or requirements such as, for example,
water well repairs, reroofing and such.
From reading posts above I only wish I was as well off
financially. Restarting after mid life divorce takes a lot
out of your cash resources. The longer you can work putting
into your pension plan obviously dictates what you can afford
when you retire. I could never have retired at 50, but if you
can do it, think how much more time you can put into playing
and working your homestead.
At one of my regular poker games, there are several financial planners, they discussed this topic a couple of weeks ago. In their estimation, to maintain a modern middle class lifestyle in an urban / suburban area, pay a mortgage, insurance, etc, you need about $10M in income producing investments. If you have zero debt, don't want to travel extensively, and live on a budget, you can retire on $5M. Both these assume zero outside income.
Of course, they know nothing of rural life, working on a homestead, canning, growing a lot of your own food, etc.
A good rule of thumb is to calculate your spending needs for a year. It doesn't matter how you define need, just come up with a number that includes total annual expenditures. If you assume zero outside income, then total annual income divided by 0.05 = investment needed. So if you need to spend $50K per year, you need $1M in investments. Financial planners use the 5% rule for folks who want to have a fund that has a near zero percent chance of ever being used up in a lifetime. In some years, the markets will be bad and you'll eat into your principle, in most years, you'll grow your principle by a small amount that will allow you to keep your income and spending in pace with inflation.
Of course, they know nothing of rural life, working on a homestead, canning, growing a lot of your own food, etc.
A good rule of thumb is to calculate your spending needs for a year. It doesn't matter how you define need, just come up with a number that includes total annual expenditures. If you assume zero outside income, then total annual income divided by 0.05 = investment needed. So if you need to spend $50K per year, you need $1M in investments. Financial planners use the 5% rule for folks who want to have a fund that has a near zero percent chance of ever being used up in a lifetime. In some years, the markets will be bad and you'll eat into your principle, in most years, you'll grow your principle by a small amount that will allow you to keep your income and spending in pace with inflation.
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$ 10-5 million??? I have no doubts I could live my current lifestyle on $150,000 for the rest of my life. Unless i start going to Vegas and feel the need to be entertaining ladies of the evening, umm no thanks. Of course its not very likely I'll make 70 years of age. Most of the men in my family burn out just before reaching 70. I mean at some point when you can't do stuff you just got to call it quits, and let it go. Some value life in any capacity, me not so much. Spending every evening at the nursing home will pretty much give you a reality check any such notions concerning the golden years. :buds:
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Whoa! only 70? I'm expecting to live close to 100 myself all things considered. dads father worked in his fields right up to 104. not as a vegetable for me though. hopefully I will have some notice beforehand and I know what I will do. i've seen the nursing homes too. ~Georgia.
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Some of these numbers are insane. However, from a regular person, living it instead of speculating about it, here are some real numbers. Our total bills, which are composed of real estate tax, insurance(homeowners and 2 vehicles), electric bill, DSL, phone come to 350 a month.
Growing most of your own food helps a lot, along with being capable of taking on any sort of home or vehicle maintenance that may come up. Unless you got really serious entertainment costs, 600 or so a month should work OK, it does for us. My dislike for and distrust of the health care industry is well documented, I don't have any health insurance. I may be eligible for medicare, don't know and don't care. Eat right, get plenty of exercise and sleep, and die when it's time. I don't want to be fragile and frail anyway. My wife respects my life values enough to not try to make me change them.
Growing most of your own food helps a lot, along with being capable of taking on any sort of home or vehicle maintenance that may come up. Unless you got really serious entertainment costs, 600 or so a month should work OK, it does for us. My dislike for and distrust of the health care industry is well documented, I don't have any health insurance. I may be eligible for medicare, don't know and don't care. Eat right, get plenty of exercise and sleep, and die when it's time. I don't want to be fragile and frail anyway. My wife respects my life values enough to not try to make me change them.
How much?
We had $3000.00 in savings when I retired. Our money is in other things, we enjoyed what we worked for. We have some rental income, a very nice IRA and my PERS retirement. We are completely off grid. It doesn't cost us much to live out here. We actually live on the dividend from our life insurance for gas, food, cell phone/internet and incidentals. We are using (using up) a lot of things we have gathered over the years. Our needs are small, we have everything we need and want. We have the beach cottage, Lake cabin and the farm to enjoy. It keeps us out of trouble and occupied....James
We had $3000.00 in savings when I retired. Our money is in other things, we enjoyed what we worked for. We have some rental income, a very nice IRA and my PERS retirement. We are completely off grid. It doesn't cost us much to live out here. We actually live on the dividend from our life insurance for gas, food, cell phone/internet and incidentals. We are using (using up) a lot of things we have gathered over the years. Our needs are small, we have everything we need and want. We have the beach cottage, Lake cabin and the farm to enjoy. It keeps us out of trouble and occupied....James
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Those multi million dollar numbers come "new money, over paid, under aware" folks that were brought up in a world of entitlement. Anything they want they should have instantly.
My father made a modest living as a top notch mechanic. He never made more than $30,000 year. Mom was a stay at home, work for the advancement of our family woman (which she did very well). We did not go on VACAs but went on family camping trips nearly every weekend. My parents were able to amass a very nice nest egg for their older years. In my opinion theydid it right.
5-10 million, that's bull talk infused with Whiskey and a losing hand.
My father made a modest living as a top notch mechanic. He never made more than $30,000 year. Mom was a stay at home, work for the advancement of our family woman (which she did very well). We did not go on VACAs but went on family camping trips nearly every weekend. My parents were able to amass a very nice nest egg for their older years. In my opinion theydid it right.
5-10 million, that's bull talk infused with Whiskey and a losing hand.
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Most excellent post James!!!!:thumb:
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Those million dollar est. were for middle class. We aren't middle class any more because that class is way up there now. We/I am considered lower class. I will do good to make middle 20's this year. But I'm happy (when I'm not at work), lord knows I try to be happy at work but it's hard to stay that way these days.
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