Having sold my family’s business at 54, officially retired at 56, and unretired nine months later, I’m approaching retirement longer than I worked. My spending increased in early retirement. Twenty-five years retired now, we’re living on about 35% of my average income during my working years. That does not include Social Security. That will increase when we move to a CCRC, but not by much. The biggest variables are eating out and trips. I expect that will decrease with age.
Our retirement expenditures remained roughly unchanged (100%) from pre-retirement for the first 5 years, although expenditures are now creeping higher due to recent inflation. Costs for travel and helping our adult kids replaced work, commuting, and college expenses. Expenditures as a percent of salary has been perhaps 70% as we saved quite a lot approaching retirement.
Youza! So, the day you retire you can live the rest of your life on 50% of what you earned the day before? If you earned a million a year, I get it, but let’s say it was more like $80,000.
Yeah, I misunderstood that, but my point is the same. It’s all about expenses, not pre-retirement income.
By the way, many people can live comfortably on $40,000. My wife’s uncle and aunt are in their eighties, each with health issues with medical expenses, and they told me they spent $40,000 in 2023. They live in a large home in a high cost of living area in a suburb of St. George, Utah. They don’t do much but play Dominoes these days, but they are very happy. They made a lot of money in their working years as general contractors and ranchers, so they’re living on a fraction of their pre-retirement income.
I think the question is better understood as what percentage of your salary you need at the outset of retirement. That value, in actual dollars, would need to be adjusted for inflation each year.
Having sold my family’s business at 54, officially retired at 56, and unretired nine months later, I’m approaching retirement longer than I worked. My spending increased in early retirement. Twenty-five years retired now, we’re living on about 35% of my average income during my working years. That does not include Social Security. That will increase when we move to a CCRC, but not by much. The biggest variables are eating out and trips. I expect that will decrease with age.
Our retirement expenditures remained roughly unchanged (100%) from pre-retirement for the first 5 years, although expenditures are now creeping higher due to recent inflation. Costs for travel and helping our adult kids replaced work, commuting, and college expenses.
Expenditures as a percent of salary has been perhaps 70% as we saved quite a lot approaching retirement.
About 50%
Youza! So, the day you retire you can live the rest of your life on 50% of what you earned the day before? If you earned a million a year, I get it, but let’s say it was more like $80,000.
Yes. Adjusted for inflation annually, of course. $80,000 is much more than we’d need.
My example was if a person earned $80,000 could they live on $40,000?
Yeah, I misunderstood that, but my point is the same. It’s all about expenses, not pre-retirement income.
By the way, many people can live comfortably on $40,000. My wife’s uncle and aunt are in their eighties, each with health issues with medical expenses, and they told me they spent $40,000 in 2023. They live in a large home in a high cost of living area in a suburb of St. George, Utah. They don’t do much but play Dominoes these days, but they are very happy. They made a lot of money in their working years as general contractors and ranchers, so they’re living on a fraction of their pre-retirement income.
Where I live in the country property taxes alone would easily equal 30% or more of that income.
It may for them too and they live comfortably on the other 70%.
I think the question is better understood as what percentage of your salary you need at the outset of retirement. That value, in actual dollars, would need to be adjusted for inflation each year.