retiring

[caver]

For those of you are retired, have you seen a decrease in your expenses or have they stayed the same and what was the change?

Gasoline since I had sold my little car the year before I retired as was driving the F250 300 miles a week on commute. Food...I find myself eating a late breakfast and often skipping lunch since I'm not hungry. Laundry cut in half by not having to wash work clothes every 4-6 days. Also, when you are retired you are less likely to just burn money because "I'll make more money tomorrow." I now look at loads of junk I bought over the years that I really don't need but "hey I have a job and it's on sale." I even started changing my own oil which I had not done in 26 years. Some of these examples may seem silly to some but just sharing some observations. The big thing is be debt free and health insurance is a big kick in the shins.

 

[drssg]

One time I did get "lucky" on a 'two-bit-play' that wound up making some pretty good money.

This part got me curious. This is absolutely none of my business, so I'd happily accept that as an answer.

I'm guessing that your "two-bit-play" resulted in a possibility life-changing "two-bit-score". Would you care to elaborate on the details?

 

[Travelover]

It doesn't matter. My advice is to spend less than you earn and invest early. There is always the excuse that "I'll invest later when I have more money". For most, that time never comes because of lifestyle creep.

It always matters. You might have been making twice as much as someone else reading this thread.

My advice is to be debt free at retirement.

No, it doesn't matter how much I was making to the guy making half as much. He still needs to live below his means, save and invest if he wants to get ahead. There is always someone making twice what you do unless you are Bill Gates or Warren Buffett - that is just an excuse to fail. And, of course, you want to be debt free at retirement. I was debt free long before retirement because I didn't buy stuff I didn't need with money I didn't have to impress people I didn't even know, to paraphrase you know who.

 

[ovrszd]

No, it doesn't matter how much I was making to the guy making half as much. He still needs to live below his means, save and invest if he wants to get ahead. There is always someone making twice what you do unless you are Bill Gates or Warren Buffett - that is just an excuse to fail. And, of course, you want to be debt free at retirement. I was debt free long before retirement because I didn't buy stuff I didn't need with money I didn't have to impress people I didn't even know, to paraphrase you know who.

Easy to say when you are in a higher income bracket looking down. Much harder when you are looking up.

Not arguing. Just asking for income clarity to put things in perspective.

So how bout this. Was your high year gross income above $80K or below?

 

[RickB]

Easy to say when you are in a higher income bracket looking down. Much harder when you are looking up.

Not arguing. Just asking for income clarity to put things in perspective.

So how bout this. Was your high year gross income above $80K or below?

Easy answer. He mentions the guy making half as much as him but not the guy making twice as much.

 

[ovrszd]

Easy answer. He mentions the guy making half as much as him but not the guy making twice as much.

These discussions always make me wonder,,, what's considered poverty level income for a family of 4 now?

 

[RickB]

Having moved partway across the country I can say the real answer is location dependent regardless of what the Fed says about it. I moved from not the richest place to not the poorest place and the difference in cost of living is substantial.

 

[ovrszd]

Having moved partway across the country I can say the real answer is location dependent regardless of what the Fed says about it. I moved from not the richest place to not the poorest place and the difference in cost of living is substantial.

Yep. These variances make income amount critically important.

Another consideration.... what would you say is a healthy investment into one's retirement fund? 10% maybe? Let's go large and say 15%.

15% of $40K annual income is $6K per year. 15% of $80K is $12K. Spread over 20 years that's $120K. Throw in compounding interest and it doubles again. Then really throw a wrench in by considering employer matching contributions. Now the 20 year results might have a $500K spread.

So income absolutely matters.

We can't sir here on our pedestals and tell the younger men readings this that it's their fault if they can't retire at a young age. They just poorly managed their income.....

 

[RickB]

My wife and I each put about 20% of our gross income in various retirement accounts for about 25 years. We both contributed to plans that had a 3% employer match. I don’t have a company sponsored pension, she has a modest one over and above the plan she contributed to. We also are skilled at living below our means.

Edit: we were very aggressive. A realistic goal for many would be in that 15% area you mention. 12% could be a stretch for those on the lower end of the income scale. My wife retired at 65 last year. At 62 I am very happy to have shifted down a couple gears and am working a 3 day 20 hour week.

 

[3Ts]

No, what someone makes is not the issue here. To retire comfortably, one has to live within their means and invest wisely. The cost of living does affect living within your means and investing so that is part of the equation. Since you want to know how much I made, I'll do it this way:

First, the maximum amount someone makes is typically just before they retire so there is negligible contribution to their retirement. Compounding interest is the most important part of the retirement nest egg. So I contend the high year gross income is irrelevant. It's more important to invest young when you can take advantage of compounding. And, yes, it is hard but can be done.

Second, put money away for retirement out of your paycheck BEFORE any other expense. Then live on what's left over. Since you want actual numbers, here you go: When I graduated from college I went into the military at $6k per year (I had a choice of volunteering or being drafted) and my contemporaries went to civilian jobs at $10k per year. I lived on $50/week not including housing. My flight pay and combat pay went into investments. I lived frugally, but not to the extent of being a hermit. I dated and married my now wife while I was still in the military and was able to buy a house when we got married. We continued to live within our means and we now have a comfortable lifestyle where money is not an issue. By not an issue I mean we have gotten used to a particular lifestyle over the years and are continuing that in retirement with an occasional vacation to places we've not been yet.