How much do you need to live every year?

[sash]

Well given the Budget thread....I thought I would ask the question about how much it costs you to live every year.

So that is it clear the yearly cost includes all expense - food, car, insurances, heating/cooling, clothes, magazines/newspapers, takeaways, restaurants, travel, school fees, loans, car payments etc., etc.

I just did a calculation....it costs me about $4k per month or about 50k per annum.....much less than the $150k p.a. which I plan to retire on.

It will be certainly interesting to see....

 

[skater]

Well, I haven't done the calculations, so I could be a little out with my estimate. I think we could live quite comfortably on around $50k between us as we don't have expensive needs/wants, the kids have left home and I am quite happy driving an older car. We don't do the restaurant thing all that often and even though we intend to travel, I'm not one for the expensive hotel rooms. A clean comfortable bed is all I require in that department as well as adequate bathroom facilities.

However in saying all that, I want more. I want enough that should an emergency arise, I don't have to eat into capital to pay for it. I can afford the best medical treatment, should it be needed. I can fly out of whereever I am at a moments notice should a family member need me. Call me greedy if you like.

 

[sash]

I think I read somewhere super funds have estimated that $50k (assuming the mortgage is paid) will provide a very comfortable retirement for most people in Australia.

Unfortunately, less than 3% of retired Australians actually get this in income.

Well, I haven't done the calculations, so I could be a little out with my estimate. I think we could live quite comfortably on around $50k between us as we don't have expensive needs/wants, the kids have left home and I am quite happy driving an older car. We don't do the restaurant thing all that often and even though we intend to travel, I'm not one for the expensive hotel rooms. A clean comfortable bed is all I require in that department as well as adequate bathroom facilities.

However in saying all that, I want more. I want enough that should an emergency arise, I don't have to eat into capital to pay for it. I can afford the best medical treatment, should it be needed. I can fly out of whereever I am at a moments notice should a family member need me. Call me greedy if you like.

 

[bluestorm]

Maybe about $70K/yr. $35K in discretionary spending + $35K in essentials now (rent on harbour $500, bills, etc).

We don't spend extravagantly. Even when travelling, its 3 and 4 star mostly, but enjoy eating out, entertainment.

On par with what we would be comfortable to retiring on (moving back into an IP, saving $25K, so ample to spend). Planning to retire on $100K (~$65K after tax) passive.

 

[investor2009]

I could live on $30-50k but ticked the $50-$80k box because thats more comfortable.

I could also live on $100-$200k
Depends on your loans and lifestyle expenses.

 

[Kaz111]

I'm in the $50-$80 group spend. Whilst having no PPOR debt (Yippee) I have a young family and I think balance our savings nicely against what we spend.

 

[Intrinsic_Value]

10 times average australian wages, which is around $500k-$600k, trouble is it rises every year, so my goal rises as well

Heck probably dont need so much, but why aim low.
Even if i achieve 80% of this i think it will have been a worthwhile journey.

 

[kathryn d]

For now I voted $15-30K.

But within 10 years our CF will be $20K month minimum in todays dollars..so you will need to add increases in rents of how much with be in 10 years time.

I'll have to learn to spend faster..or buy more IPs.
..but since we only buy CF+..it will increase our monthly allowance
it's gonna be a vicious circle.

 

[virgo]

How much?

Hiya

I think the answer depends on where you want to live/retire?

My husband and i used to follow his work and lived many years in Asia; i had a maid, driver, guard at one time and i figure i could live on $25000 per year (and have change to spare!) : and i am seriously not kidding!

So i would really like to challenge you guys out there to open your mind and consider spending half of your retirement in an Asian country (lots of options: volunteer work, English teaching, travelling etc); well, at least that's what my hubby and I will be doing (at the same time renting out my PPOR and granny flat )

 

[grizzly_1]

as my wife and I are actively saving at the moment, our living expenses are 360 each week combined. This covers everything (groceries, fuel, maintenance, bills, insurance, going out) other than mortgage. We have done this for over a year now so is possible for us to sustain although looking forward to the light at the end of the tunnel which should be in 12 months time.

 

[VYBerlinaV8]

Heck probably dont need so much, but why aim low.
Even if i achieve 80% of this i think it will have been a worthwhile journey.

Agreed. My goal is $150k/yr in 2005 dollar terms, and I answered the poll accordingly. I won't retire early if I haven't achieved that much.

 

[ozmale42]

My current annual spend on living expenses is $76k p.a , or $6,400 per month. (Current take home net income after tax is $9,500 per month - $114,000 p.a)

My $6,400 in monthly outgoings includes $2,000 a month in child support payments to my ex wife plus $1,600 a month for the mortgage payments on my PPOR . No other debts . Without those two (which I won't have when I retire) that will leave me with a need for $2,800 a month or $33,600 p.a just for basics. If I want to have nice holidays and update the car and appliances every few years as well you may as well add another $10-15k p.a to that, so $50k is about on the money. Mind you that's for a single person , so the cash requirement would be a lot more if living as a couple

 

[Indifference]

Current expenditure for all living necessities is ~70K (this is 100% debt free expenditure)

If I include additional discretionary expenditure (holidays, tech gadgets etc..) then it would certainly be pushing 100K+.


Note: upon reflection, I can see this may be seen as a little extravagant to some, however, it is all relative to individual circumstances and from experience, I know it is difficult for many to truly appreciate the real meaning of this. If I were of the private school mentality (like some friends) then 150K /yr would approach with great velocity... I can fully appreciate how a few people have voted 150K+...

 

[investor2009]

See, it's funny this.

One person 'needs' $70k even once retired just to survive with no debts, someone else like myself would only 'need' $30k to live comfortably with no debts.

I would need around $55,000 to be comfortable if I was to retire today WITH the debts I have (Neg geared portfolio and PPOR), which is about where I'm at now. A total of $35k would be required to service mortgage and portfolio, that is all of my debts) that's $10k extra because no negative gearing now I wouldn't be working. I figure $20,000 for living expenses would suffice, but I would like $70-$80k all up, AND I would like to be able to provide the same income for my wife, so I would require more ideally.

I like my job now, and I see it wise to keep working for may years to come and I plan to have the ability to provide this income for 2 instead of one in a few more years. Not like that will be the signal to stop working because we're still quite young, but the feeling alone will be fantastic and will open up many doors we've probably never even thought of, I look forward to that!

Current expenditure for all living necessities is ~70K (this is 100% debt free expenditure)

If I include additional discretionary expenditure (holidays, tech gadgets etc..) then it would certainly be pushing 100K+.

 

[ozmale42]

Current expenditure for all living necessities is ~70K (this is 100% debt free expenditure)

If I include additional discretionary expenditure (holidays, tech gadgets etc..) then it would certainly be pushing 100K+.


Note: upon reflection, I can see this may be seen as a little extravagant to some, however, it is all relative to individual circumstances and from experience, I know it is difficult for many to truly appreciate the real meaning of this. If I were of the private school mentality (like some friends) then 150K /yr would approach with great velocity... I can fully appreciate how a few people have voted 150K+...

Not extravagant at all living in the US. $70k to go on restaurant and bar tips alone

 

[RumpledElf]

We comfortably live on $30k - including mortgage, 3 kids, and a shoe habit.

This is going to go up though, the older child is developing a taste for expensive electronic trinkets and silly me decided to camp eBay looking for Duplo for the other two.

Retirement is so far off I don't really want to think about it ... we already do what we want all day, not sure what exactly (except kids leaving) what is different between our current lifestyle and retirement anyway

 

[ozmale42]

what is different between our current lifestyle and retirement anyway

well generally you don't have an income from employment once you retire and what income you do have is generally less than what you had prior to retirement, so adjustments need to be made..

Luckily most would have paid off their PPOR and any other consumable debt by then so you need less income in retirement

 

[bluestorm]

well generally you don't have an income from employment once you retire and what income you do have is generally less than what you had prior to retirement, so adjustments need to be made.

Not true.
Much of your current income is used to build up assets to fund your retirement. I would think most would be saving and investing maybe 50% of current income. So your income can eventually fall to 50% of what it is now at retirement (when you no longer need to keep accumulating assets), with little effect on lifestyle.
This is why people work longer than they really need to, thinking that a 50% income will mean an downgrade to lifestyle.

 

[geoffw]

Meh. Nobody has answered the question properly.

How much do I need to live every year?

365 days. 366 in leap years.

If ever I fall short of that, I have problems. Then nothing else matters.

 

[BuildingBlocks]

Need vs want are such different things.

I don't spend hours researching and putting money on the line with long term delayed gratification just to scrape by in retirement.

I haven't really thought about retiring long before my goal and settling for the scrape by option, however some days at work I wonder why the hell not!