Living Simply

Richard Quinn

HOW MUCH INCOME do I need to retire? That’s a question many Americans have. I recently learned the hard way how different the answers can be. On a Facebook group, a person posted the question, “Can I retire on $40,000 a year?”

I thought the question was about living on $40,000 a year after earning a much higher salary. I was wrong and insensitive. I replied from my life perspective that it would be tough to live on that amount for 30-plus years in retirement. My property taxes and homeowners’ association fees alone are more than half that amount, and in normal times I spend $20,000 annually on travel.

Other members of the group took me to task, and rightly so. Then I recalled that tens of millions of Americans live on that amount or less for their entire life. The median retirement income is $47,357, which means half of retirees live on less. By some estimates, 40% of retirees get by solely on their monthly Social Security check.

What about lifestyle? Again, the comments from others brought me back to reality. Those living on $40,000 a year or less often described themselves as doing fine, enjoying retirement, and even being able to travel and live comfortably.

It became clear that what makes people comfortable and able to enjoy life isn’t all about income. I like staying in nice hotels, book mini-suites when I take cruises and rent houses in Florida in the winter. By contrast, one person said their desired travel was a road trip—sleeping in the back of their minivan and stopping at free campgrounds.

A woman described her comfortable lifestyle as having no debt, not going out to eat and living frugally, just as she had done her entire life. The words “living simply” popped up frequently.

When their mortgage is paid off and the kids are out of the house, one couple planned to retire “easily” on $40,000 a year at ages 54 and 56. Retiring at 54 is truly beyond my comprehension.

Is living simply and having enough to “get by” a sound retirement goal? Or is it what many people must settle for based on their circumstances? When I hear people talk about retiring before age 60, and living frugally to do so, I believe these retirees are living too close to the edge. They’re too optimistic—and perhaps naïve—about the next 30 or 40 years.

Maintaining your preretirement lifestyle may sound easy. But the nature of expenses in retirement, plus inflation and the ups and downs of the stock market, say otherwise.

I retired at 67, when I was sure that my retirement income would equal the base pay I earned before retiring. Did I miss out on a decade or more of enjoying retirement? Did I trade some of my present leisure years for greater security? I did, and intentionally so. I don’t feel cheated, but I do feel financially secure.

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