How much after tax income do you need in retirement (PPOR paid off)?

[jaycee]

Jaycee,
Do you think Rob and I don't go to the dentist or the doctor? We do,(yesterday in fact..$173 for check up & cleaning) and have health care just like you..in both countries. It still comes from our $1000 month

Do you think we don't buy Xmas and birthday gifts? We do..and it still comes from our $1000 month

Do you think we don't have car repairs and petrol? We do, and it comes from our $1000 month (We do own our vehicle in Canada..1997 Rav 4)

Our going to the movies, museum admission, zoo entrance fees etc all come from our $1000 month. Going to MacDonalds, Tim Hortons, KFC etc all come from this $1000.

PeterC mentioned most that posted to this thread were showing their "wants" and he was interested in needs. We can live on less on $1000 month, but choose not to.

The money we collect from the college kids pay for the utilites, rates, insurance, maintenace for our place.

kathryn, I wasn't having a go and I beleive you do what you say you do and see nothing wrong with it.

I'm trying to work out what I might feel I need like I said above that's all. I just can't see how one could it it much less than I worked out, the wya I worked it out.

When I said utilities I meant utilities (electicity/gas/whatever) for my PPOR. so I HAVE to include it in weekly needs

Like I said, this is what I see and don't know much else, interested for others to share and open my eyes

 

[kathryn d]

kathryn, I wasn't having a go and I beleive you do what you say you do and see nothing wrong with it.

I'm trying to work out what I might feel I need like I said above that's all. I just can't see how one could it it much less than I worked out, the wya I worked it out.

When I said utilities I meant utilities (electicity/gas/whatever) for my PPOR. so I HAVE to include it in weekly needs

Like I said, this is what I see and don't know much else, interested for others to share and open my eyes

Jaycee,
I am not suggesting you are having a go at me. Maybe you have never been in the situation of having your income cut in half, and needing to wait 5 weeks for your next paycheque? I have several times, in my pre-investing years.

Saying you couldn't live on $1000 month if your PPOR was paid for, simply isn't true. (IMHO)
Not wanting to do it...that, I may be able to agree with.

Simply no different than the new investors who say they can't get their first IP. It just takes discipline and maybe a bit of thinking "outside the box"?

At the place we house sat for 5 monmths, we forward them the bills, as requested. The bill was about $200 each for electricty and gas...they come every 3-4 months? This was a large 4 bedroom house..but only 2 of us there, and we cooked all meals at the house.

 

[Rixter]

$100k p/a will cover our ideal lifestyle costs...however it gets better because with an LOE strategy that $100k only needs to come from before tax funds

 

[Monopoly]

Saying you couldn't live on $1000 month if your PPOR was paid for, simply isn't true. (IMHO)
Not wanting to do it...that, I may be able to agree with.

Absolutely right Kath, $1000 per month if you have no other major commitments (ie. paying a mortgage or renting, or car loan) for 2 people just putting aside a little extra for everyday living expenses such as doctors, dentists and utility bills, and a little for Xmas/birthday gifts is perfectly do-abble. However, if one's lifestyle preference is to dine out or spend money on entertainment regularly, that of course will require more than a little extra moo-lah, but as you rightly suggested, is more about choice than necessity.

 

[Ace in the Hole]

This question does depend on what ones goals are for retirement.

We have been so busy working hard for the last 5 years, don't get a chance for holidays or spending money.
We could spend alot more money once semi-retired, doing all the things we want to do, rather than what we spend now.

I think around 200k would be a good start.
However, probably wouldn't spend it all due to past habits of not spending.
Don't think spending will be very linear either, could easily spend alot if doing alot of travelling.

 

[Angel]

I am a bit like Kathryn. I really do plan to housesit my way around Australia for a year or so as soon as we retire.

I did a calculation about two years ago and worked out on (then) current figures, that we would require about $600 a week for our regular stuff which included saving up for some travel and allocating $100 a week for Healthcare - Hubby rides motorcycles and is a candidate for future knee and hip replacements. I am thinking make that $1000 a week in today's money and we could still keep buying IPs even after we "retire".

 

[devo76]

I keep adjusting the goal posts with this but the band is sways between $1,000 and $1500 per week after all expenses.
I'm not a tight #as.
I don't keep up with the joneses.
A nice car replaced every 5 years( purchased at 3 years old)
A few club meals a week with the odd flash resteraunt thrown in.
A caravan or similar for day trips up and down the coast every few weeks.
Maybe one or two overseas trips per year to the affordable locations.
Golf,fishing, surfing.
Maybe one income producing hobby like refurbing old boats/ tinnies.
( more to keepbusy than cashflow)
Plus the day to day boring stuff

That's it I'm done and more than happy.
6 average houses would get me there.

It really is a " how longs a piece of string" kind of question.
One things for sure. I'm not going to grind myself into the ground chasing an income greater than what I'm on now considering I'm living above what what I call very comfortable. Considering you move from gaining assets to maintaing them.

 

[jaycee]

Jaycee,
I am not suggesting you are having a go at me. Maybe you have never been in the situation of having your income cut in half, and needing to wait 5 weeks for your next paycheque? I have several times, in my pre-investing years.

Saying you couldn't live on $1000 month if your PPOR was paid for, simply isn't true. (IMHO)
Not wanting to do it...that, I may be able to agree with.

Simply no different than the new investors who say they can't get their first IP. It just takes discipline and maybe a bit of thinking "outside the box"?

At the place we house sat for 5 monmths, we forward them the bills, as requested. The bill was about $200 each for electricty and gas...they come every 3-4 months? This was a large 4 bedroom house..but only 2 of us there, and we cooked all meals at the house.

Of course I have been in the situaton where money was short & I lived pay cheque to cheque, only just making it a lot of the time... for years.

And I know that if something rerrible happened, I could do exactly what was needed, I'm not that proud to say I'd "die" (nor that naive/silly either, not that I'm saying you suggested that). Of course I would and could, what else whould I do.

But, that would mean sacrificing life comapred to now. And fortunatley I have the opportunity, due to luck of where I live, being able to earn a normal wage, to not HAVe to do that, which probably also explains why so many people don't. And why I can't see myself setting a goal of living of $12k pa ppassive income as a goal for myself.

In fact, if I could swing somethng like a redunancy, I reckon I could come pretty close to that now. It would also mean selling all 3 IP's and getting nothing out of them but maybe some bills to pay cause I certainly could not afford to svce them loans without a job. But I can't see myself doing that.
Rather I fell I'd prefer to keep working at this a bit longer and seeing what it can lead to.

Also in my mind is what if somethng went worn gwith the small invstment I'd have eanring me my $12k per annum that I live off ? I'd feel safer if I had chosen to retire if that was not my only income. Again, just me. I dont have any postive passive cashflow at the moment, so in my mind I factor that sort of thng into what I think I'd need as income.

Do other people see the approx living costs I put up as accurate or over estimated ?

I paid my electricity bill yesterday $179, it comes 2 monthly, not quartely also.

 

[kathryn d]

Jaycee,
I'm not saying you are wrong.
Even I don't plan on keeping to $1000 a month for ever.It's just reassuring to know I can (to me).
If something breaks in our investments, it doesn't come from our personal income, it comes from the investment buffer.

It was how the OP and PeterC worded the question, as to how I answered the question.

 

[jaycee]

Well thanks for that. Cause I defintiely was looking at it as if you were suggesting it "forever"

I think what you guys are doing is fantastic, travelling, without need to work, much earlier than many would (if at all) due to perceived low $ and experiencing so much because of it, whilst knowing you will soon be able to not have to limit yourself to that income should you choose not to.. a hell of a lot better than what I either have now or have even planned actually.

With that in mind though, what the amount would you suggest is "not forever", what do you see a more forever" income to be ?
I think this ends up being the main question we are all thinking and confused about.

I'm starting to think about it and I think $30k could do it and $50k could give you opportunity to do a decent bit (depends what you're used to but, without PRESSURE, one can make that go a long way). For a sense of achievement I think a comfortable $50k would be a reasonable goal (for me), but that's not really the topic/question....

I'm also naivley single, so perhaps that skews my view too

 

[kathryn d]

Well thanks for that. Cause I defintiely was looking at it as if you were suggesting it "forever"

With that in mind though, what the amount would you suggest is "not forever", what do you see a more forever" income to be ?
I think this ends up being the main question we are all thinking and confused about.

We don't know. I guess when we find this amount too restrictive?
Very soon (within 3 years) we will have a lot more disposable income..about $10K a month.
That is too much for me to consider to waste, so I know it will be buying more properties..because that is my passion.
Most likely as Rent to Owns, because of the no maintenace and repairs aspect.They help people, and I like that too. Also because of the easy profit.
I want as many "hands off" property.

 

[jaycee]

We don't know. I guess when we find this amount too restrictive?
Very soon (within 3 years) we will have a lot more disposable income..about $10K a month.
That is too much for me to consider to waste, so I know it will be buying more properties..because that is my passion.
Most likely as Rent to Owns, because of the no maintenace and repairs aspect.They help people, and I like that too. Also because of the easy profit.
I want as many "hands off" property.

When you get back to Canada and setlle back home, do you expect to continue to be able to live on $1k /month.. hence it beig the figure ? or more likely more than that ? Thats what I've been trying to work out and my guess is as Ive said, $30k -$50k

 

[kathryn d]

When you get back to CAndad and setlle back home, do you expect to continue to ba\e able to live on $1k /month.. hence it beig the figure ? or more likely more than that ? my guess is as Ive said, $30k -$50k

We are back in Canada now, and yes, the $1000 month continues.(back for 3 weeks now)
We knew this was a good figure for us because we back tracked our expenses for the 2 previous years before retiring last year.
I tend to pay by debit card in canada, and it is easy to see where we spend our money.
In Australia we withdraw $1000 a month, and take out another $1000 the next month.

 

[jaycee]

We are back in Canada now, and yes, the $1000 month continues.(back for 3 weeks now)
We knew this was a good figure for us because we back tracked our expenses for the 2 previous years before retiring last year.
I tend to pay by debit card in canada, and it is easy to see where we spend our money.
In Australia we withdraw $1000 a month, and take out another $1000 the next month.

So there we go

I still don't think someone living in their own home payng bills, repalcing things as they need to be repalced like washing machines and cars etc could do it on $12k pa in Australia though.

Hmmmmm

 

[kathryn d]

So there we go

I still don't think someone living in their own home payng bills, repalcing things as they need to be repalced like washing machines and cars etc could do it on $12k pa in Australia though.

Hmmmmm

I disagree..as we replace many washing machines in our properties.
We get most of them free..from someone who wants to get rid of their old set, because they are not "matching" or they bought a house with a set.

Cars..I may be able to agree with..but repairs?....is doable.

 

[jaycee]

"washing machine" was an example for erything I can't think of, but yeah, OK..

 

[kathryn d]

"washing machine" was an example for erything I can't think of, but yeah, OK..

I'm just trying to encourage anyone who really wants to retire, if your home is paid off, it doesn't cost that much.

There is so much available free for the asking.
People want to get rid of good stuff...and not always to "charity".

 

[jaycee]

That's good.. encouraging.

I'd feel scared if I retired with just $12k coming in though and nothing else coming in/there to access. That's just me. If there was enough of "something else coming/there to access" I'd have to add that into the $12k amount if I were trying to calculate what I thought I need in order to figure out retiremet plan.

 

[mjv]

How much do i need to retire, with no kids at home, 2 cars, and home paid off about $1100 in todays money. This amount will allow us to go out to dinner once per week and supply us with a domestic holiday for 2 weeks per year

$2000 per week would allow us to help the kids and go overseas once per year

Cheers Mick

 

[VYBerlinaV8]

How much do i need to retire, with no kids at home, 2 cars, and home paid off about $1100 in todays money. This amount will allow us to go out to dinner once per week and supply us with a domestic holiday for 2 weeks per year

$2000 per week would allow us to help the kids and go overseas once per year

Cheers Mick

The best help you can give your kids is teaching them financial literacy. Statistically, kids who receive financial help from parents end up worse off than those who don't.