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Time and again I hear that a retired couple lives “comfortably.” I often wonder what that means. Of course it is quite relative not unlike defining living paycheck to paycheck.
My AI companion came up with this simple definition.
“Living comfortably means financial security to cover essentials without stress, and a lifestyle you enjoy. It’s not about excess, but having what you need and freedom to do what matters to you.”
That leaves the relative definition of “need.” Also, “lifestyle you enjoy” may mean rocking on the front poach or traveling the world.
I look at this definition and think that enough to “cover essentials” is living close to the edge. Living without financial stress is certainly desirable, but I think that goes beyond essentials to covering emergencies, a decline in come producing assets and other stuff we don’t like to think about.
In any case I’m pretty sure only the retired person can claim they live comfortably, but is it always providing the lifestyle they would like?
How do you define living comfortably in retirement?
Living comfortably means having the ability to do what you want, and not worrying about paying your bills, or unexpected things like repairs, replacing an automobile or a water heater, etc. It also means not worrying that somewhere down the road you will experience financial difficulties. Of course there are those who may feel living comfortably means they can travel the world staying in 5 star hotels and eating at 5 star restaurants.
I guess the remaining question is, how far does do what you want extend? For us it did include traveling the world, but not in luxury hotels.
This is a very interesting question, one that likely has as many answers as there are retirees. With so many answers possible, it might be worthwhile to think about the counter example, or what would constitute an uncomfortable retirement.
1) having insufficient income to pay your essential bills like food, housing, transportation
2) having to rely on others for financial support – like family or friends
3) having to live with friends or family
4) using credit cards to make ends meet
5) having to work longer than you want to, or your health allows
6) counting on public financial support, like property tax rebates, to get by
7) grey divorce
8) being forced into early retirement
I’ve seen all these in colleagues, friends, family, or TaxAide clients. There is a philosophical idea that evil is the absence of good. Maybe comfort is the absence of discomfort.
That’s gray rather than grey