How much do you need to live every year?

[sash]

Interesting 66.67% or two-thirds of people indicated that it costs between $30k-$80k to live.

That also happens to be what most Australian earn.

I did some initial analysis.....you could earn only 85 and still have almost same income after tax as a 100k earner if you include depreciation.

For example after tax on a 100k you are left with approximately $73,350 but if you are property investor say with 85k in passive income adn say $25k in depreciation you will have $72,325.

Something to think about.....

 

[weg]

For example after tax on a 100k you are left with approximately $73,350 but if you are property investor say with 85k in passive income adn say $25k in depreciation you will have $72,325.

Something to think about.....

Which is why this Q should be specific in asking what you need to live in net after tax dollars.

In our case what we bring in net, minus what's left/saved is what we need, which is around 70K.

We realistically anticipate having at least this at retirement but with significantly reduced expenses.

I'm already noticing a big difference now that my son is working fulltime. I think I've gifted him $82 dollars -excluding Chrissie presents- since finishing school in Nov. .

Come to think of it may have to revise down my figure to around 55K net .

 

[lizzie]

hmm - i worked out that if were mortgage free AND stopped spending on reno's, we'd only need $50k too ... BUT ... i want to do so much more travelling after retirement, so $50K really won't cut it.

more like $100k

 

[jaycee]

Worse thigns could happen than hitting say 50 and having $50k passive income after tax.... in fact I am unsure I will... 10 yrs and a few months to go
it will take some learning and dooing to acheive...

Obviously 100k woudl be better, I'd ahvae no problem spending it either LOL.. but seriously, havin g the ability to pay for emergencies or things liek health expenses and whatever else I am still pretneding is totally irrelevant as I continue to deny my age, would be comforting..

 

[ozmale42]

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.

For you and I maybe , but I'd hazzard a guess that most of the adult poulation are saving nowhere near that, if anything. On the contrary the "living beyond our means" and the "must keep up with the Jones's" societies we currently live in mean most have spiralling credit card debt and a live for today attitude that I suspect will only get worse

Also when people retire they have more free time - time which can be spent on expensive hobbies like overseas travel, restoring old cars, dining out more etc

 

[Indifference]

Which is why this Q should be specific in asking what you need to live in net after tax dollars.

Well, I for one, only considered the Q to be referring to net after tax dollars as it is really about expenditure, which is paper out of your pocket, not funny money, which is a number written on paper (gross figures...)

 

[ozmale42]

Well, I for one, only considered the Q to be referring to net after tax dollars as it is really about expenditure, which is paper out of your pocket, not funny money, which is a number written on paper (gross figures...)

what he said...The numbers I quoted in my example above are actual $ spends , not what gross income I'd need to supoport that level of expenditure

 

[dwv]

Just checked on this last week and I chose $15-$30K per year for two people. Our budget for the year including food, bills, leisure and holidays is 20K. This excludes the car and mortgage repayments. Our car is novated leased (so this already includes petrol, maintenance and insurance) and it's around 6K. But we're finding it hard to keep the bills down since water, gas and electricity are really going up FAST every year!

 

[jaycee]

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.

Most of whom ? The majority don't invest at all pretty much I thought.. .of those who invest, I don't think so many of us are that good to make up for the larger number of others.... I still don't see how expenses can go down so much with somuch medical requirements which can happen with age if nothing else, electricity,gas,rate, insurance , food etc cost about the same.... I also supsect that peopel say I only need this much money only, in total, but I will buy my car with other money, I will fund my holiday with other money, I would buy one off luxuries/presents etc with other money etc etc....

 

[bluestorm]

Most of whom ? The majority don't invest at all pretty much I thought.. .of those who invest, I don't think so many of us are that good to make up for the larger number of others.... I still don't see how expenses can go down

I don't care about the rabble that will be living off only super and a pension suppliment.

This is an investment site, and I'm talking about those that are actively investing for retirement. I'm talking about those of us who currently save and invest 50% of combined income. When retiring and living off passive income, that's 50% that effectively won't change your lifestyle, because you are already living comfortably on the other 50%.
But then, unlike some, I don't scrimp on spending, but work on improving income stream (so our combined in $210K (~140K after tax)). Spend $70K (discretionary + essential), invest $70K, --> retire $70K passive income. (ie, 50% of current income).

 

[Deltaberry]

Depends on your circumstances. Probably $50k for a modest lifestyle. If you want to have 3 kids and send them to elite schools, the $50k is not even enough for school fees.

 

[jaycee]

I don't care about the rabble that will be living off only super and a pension suppliment.

This is an investment site, and I'm talking about those that are actively investing for retirement. I'm talking about those of us who currently save and invest 50% of combined income. When retiring and living off passive income, that's 50% that effectively won't change your lifestyle, because you are already living comfortably on the other 50%.
But then, unlike some, I don't scrimp on spending, but work on improving income stream (so our combined in $210K (~140K after tax)). Spend $70K (discretionary + essential), invest $70K, --> retire $70K passive income. (ie, 50% of current income).

I read what you wrote, and it was claear enoguh to be understood, even by me.

I just don't beleive that MOST of many people save 50% of their wage....

It is ok with you that I have a differnt opinion to you right ?

 

[Rickardo]

My goal is 100kpa gross.

What i 'need' currently is around 45-50k net to live a fulfilled but not extravagant lifestyle, so i chose 50-80k.

 

[bluestorm]

I just don't beleive that MOST of many people save 50% of their wage....

It is ok with you that I have a differnt opinion to you right ?

Most people aren't married to a Chinese spouse The family CEO makes sure this happens. I'm just the minion CFO reporting up
Russel Peter Impression of Chinese

But, like many have said, the amount you need to live every year depends on how extravagant your life is, or you want in to be in retirement. But I think most agree 100K gross is enough for a comfortable retirement.

 

[Highlygeared]

I've modelled this ad nauseum. You'll be surprised when you factor in personal insurances, mdeical, car expenses, internet, phone, etc etc

Basically living expenses alone (2 adults, 2 kids) is $70K minimum in today's dollars with a cheap international holiday thrown in, say Bali for 2-3 weeks. I wouldn't say we're extravagant either, maybe eat out once a week and that's a $60 bill max. That excludes mortgage or rent (we rent by choice, invest rest).

Once you factor in schooling fees (private) it will only get worse. It does depend on how on board your spouse is too with cutting corners everywhere. I used to live on $20K when I was single and vigorously saved/invested whilst partying but now find that amount impossible.

$70K will only get worse from year to yr so my calc is $150K LOR AFTER TAX for a decent retirement. With some luck I'll be there in 10 yrs Could do earlier with LOE but the last couple of yrs has taught everyone a lesson or 2 about possible risks with that strategy so will be going down the path of most resistance.

 

[Dazz]

will be going down the path of most resistance.

Nice one - never heard that twist to an old saying....

 

[Deltaberry]

Hmm how weird I can't see some posts

 

[Corey Batt]

Could easily live off 30-40k, however investment cashflow goal of 150k in 2010 dollars.

 

[Blacky]

It is interesting.
I currently lead an extravagant lifestyle, and live off under $1,000pcm (after property holding costs).

How, well everything is paid for by my company. As part of my package I get travel, living costs (meals, housing etc) and phone. I dont need a car, so dont have one (and when I do need one it is for work, so company pays).

All I need to cover is my personal entertainment expenses, and this comes to about $800-1,000pcm. If I take a trip somewhere this jumps to about $1,000/week (happens for about 10 weeks a year).

So I guess my answer is about $20,000/year. Obviously this doesnt cover the retirement question cos then I wont have a company to pay my bills for me

Blacky

 

[Ridin-High]

i voted 50-80k

I want to achieve a passive income of circa 60k P.A in todays money (i'll want that income to be indexed with inflation, so will require it to be coming from RIP/CIP/Shares)

Time frame from now to achieve 15yrs (will have me @ 38yrs of age)