How much money do you need to retire?

[Ms Jade]

I find it hard to fathom that I will want LESS in retirement than I do now. I'm not talking mortgage, either. Yes, theoretically I could live on 50k p.a. but that means ramping down my lifestyle. Not exactly what I'm looking forward to retirement for. I would rather keep working than sit around in a tracksuit watching TV and patting myself on the back for having achieved financial "freedom."
OK, I'm (partly) joking.
I intend to be travelling a lot more - and I have no plans to retire & then travel economy class, sorry. I hope I will be going out, seeing shows, entertaining - and doing all of it in European clothes, LOL.
I don't intend to develop a taste for daihatsus, cheap wine & "family" restaurants, either. I know what this must sound like but I'm not a spendthrift. I buy very few things of very good quality. I do curb some of my passions at this stage of my life so I can work towards enjoying them later.

 

[travelbug]

I find it hard to fathom that I will want LESS in retirement than I do now.

I don't think people mean you'll necessarily WANT less but you'll need less.
Eg we have 2 cars and a motor bike.

One car will go= less insurance etc ($20 a week).
No driving to work ($50 a week)

That's just one example.

We can live now on $50k a year so that will do me for retirement.

 

[virgo]

Retire

Virgo nothing much came up on google re golden passports?

Can you please provide a direct web link.


Sheryn

Hi Sheryn

The address is www.12retireinmalaysia.com

Good luck!

 

[Mooze]

I have no desire to leave retirement until old age. As such I'd see my expenses as being higher than rather than lower than current, unless we purchase and payoff a PPOR (currently renting).
We'd need approx 200k to "retire" happily. That allows for toys, luxuries, travel, race entry fees, good food and often, cleaner and gardener etc. Add 50k per child once we get around to having them.

 

[Dazz]

theoretically I could live on 50k p.a. but that means ramping down my lifestyle. Not exactly what I'm looking forward to retirement for. I would rather keep working than sit around in a tracksuit watching TV and patting myself on the back for having achieved financial "freedom."

hahahahahaha. That's a classic mental image.

Now I must be away, to turn that damn TV off and get outta my tracksuit.

 

[Dazz]

I'd see my expenses as being higher than rather than lower than current, unless we purchase and payoff a PPOR (currently renting).
We'd need approx 200k to "retire" happily. That allows for toys, luxuries, travel, race entry fees, good food and often, cleaner and gardener etc. Add 50k per child once we get around to having them.

Sounds fantastic Mooze, but you've just set the goalposts so far away, it will be even harder to achieve.

If you have 2 kids, that'll make your "need" 300K p.a.

At 5% return on your funds - the way all the pro's work this stuff out - you'll need about 6m fully paid off investments sans PPoR to fund that 300K p.a. wish.

Sounds great. If the Banks allow you to gear at 50 or 60%, then you'll need to have under 'control' about 10 or 12m, which is 10x your stated goal in your signature.

So as I see it, to achieve your 300K p.a. goal, you've got a very long, risky and arduous road to hoe after you reach your first 10% mini-goal. There's nothing wrong with that of course, but you may find, like others before you have, once you get a sniff / taste of freedom, sometimes your coat will be wound in to meet your cloth.

At this stage however, you are so far removed from being in a position to fund your desired income, perhaps it's a case of being so far out of sight - what's another couple of hundred yards away when it's that far over the horizon ??

 

[VYBerlinaV8]

I think there's a big difference between what you CAN live off and what you WANT to live off. I figure I am living more simply now than I otherwise would because I'm delaying gratification.

To be quite frank, I expect to spend MORE in retirement than I do now, simply because I don't expect to hang around home all day when I'm retired.

And if I end up spending less, that's fine. I'll have more to give away to worthy causes.

 

[kissfan]

Eg we have 2 cars and a motor bike.

One car will go

Hi travelbug.

I noticed hubbys motorbike stays, did you find out what bike it is

Regards
Marty

P.S Enjoy that trip

 

[terrence]

5 million 'in the bank';
$1500 per week after tax from investments;
No debt.

Seems easy enough to me.

 

[HiEquity]

How much?

More than we have now!

How much more? Dunno - I'm told we'll know when we get there but of course we can't test that theory until we actually get there... so we'll just keep plodding along in the knee deep mud until the path hopefully gets a bit easier, the rain stops, the clouds clear and we come over the hill to the beach... (where our inflatable tender is sitting and our 44ft Fountaine Pajot catamaran can be seen at anchor out in the bay!)

I just know we need to keep investing - if we stop putting one foot in front of the other we will never get there. So onward it is...


BTW to those without kids yet, I suggest the option to stay at home with them in the early years is very valuable indeed. Even worth sitting around in your tracky dacks for! We are lucky enough for one of us to stay home with them and very grateful for that privilege. It is worth an awful lot for us...

 

[devo76]

For me.
Ppor paid off
investment costs covered
$1200 to $1500 pw to spend

very comfortable, very achievable , very realistic

5 properties should cover it and I have another 18 years to make it before 50.

But this is just me. My wife and I don't have overly expensive tastes.

 

[BV]

don't have overly expensive taste.

It comes with age.
Around that age 50yo men usually start to like expensive cars and to look for young mistresses

 

[jaycee]

Damn....making real good money must be hard...

I thought I was aiming too low with my current wage as the benchmark compard to the norm amongst more seasoned investors.

 

[RedCat]

RedCat,

You need a lot less in retirement than you do when you're working. All those car expenses for the trips to work reduce significantly. You could probably even do away with one car. All those work clothes / suits etc gone. Boozy lunches with work colleagues not expensed, gone. $4 latte's 3 times a day, gone. All those take-away meals as you're both too tired to cook something delicious, gone. Once your residence is owned then that's another third of your expenses accounted for.

I think I calculated around $100K pa gross would do the trick for both of us. Almost $10K a month would be plenty given our reduced expenditure. We just got back from a three week holiday in Phuket and Malaysia and it cost us under $3,000 including flights, accommodation and all expenses. I'm thinking about buying a nice big yacht and trying the cruising lifestyle on for size. I've read that $30K pa net is plenty for cruisers to survive on but I'd want double that... But if the yacht only costs me $100K and it results in another IP being available to rent as I'm not living in it anymore then the income effect is +$40K pa rent -$7K pa interest servicing on the yacht for net +$33K pa income from that change in abode. Malaysia here I come!

Cheers,
Michael

Disagree completely. I don't drink coffee, work from home and the car did a massive 3,000k last year, don't buy work clothes and can work in jeans and a t-shirt with bare feet. Lunch is usually a quickly made sandwich at home. Once I retire I intend travelling and doing a lot of fun stuff that my work hours haven't allowed for. That's why I want a really good income - making up for lost time as such. Expensive holidays and spending $$$ enjoying life - that's what I'm working towards

 

[VYBerlinaV8]

Once I retire I intend travelling and doing a lot of fun stuff that my work hours haven't allowed for. That's why I want a really good income - making up for lost time as such. Expensive holidays and spending $$$ enjoying life - that's what I'm working towards

I hear you, and agree. Keep plugging away!

 

[Mooze]

Sounds fantastic Mooze, but you've just set the goalposts so far away, it will be even harder to achieve.

If you have 2 kids, that'll make your "need" 300K p.a.

At 5% return on your funds - the way all the pro's work this stuff out - you'll need about 6m fully paid off investments sans PPoR to fund that 300K p.a. wish.

Sounds great. If the Banks allow you to gear at 50 or 60%, then you'll need to have under 'control' about 10 or 12m, which is 10x your stated goal in your signature.

So as I see it, to achieve your 300K p.a. goal, you've got a very long, risky and arduous road to hoe after you reach your first 10% mini-goal. There's nothing wrong with that of course, but you may find, like others before you have, once you get a sniff / taste of freedom, sometimes your coat will be wound in to meet your cloth.

At this stage however, you are so far removed from being in a position to fund your desired income, perhaps it's a case of being so far out of sight - what's another couple of hundred yards away when it's that far over the horizon ??

Hey Dazz

I realise I've set the bar quite high. Whilst it may end up coming down a touch, it's also not something I believe I'll achieve with property. We're year .9 down a path that will allow us the income we want with minimal work. I've changed that sig now (ta for reminder).

Edit to add: Had my taste of possibility of retirement (or at least moving to a coastal town and doing minimal work and lots of fun stuff), but can see what a couple more years of hardwork will supply me with. As such I'm stepping out of our business and handing it to hubby, going back into full time work (for something different and to explore new businesses), and starting on looking at Project 2.2

 

[Luv2Travel]

I guess it depends what lifestyle you've become accustomed to, which I pressume is largely dependant on your salary, and also what your current and future goals are. I am not on a 6 figure salary, so live a fairly modest life (and fortunately not into making designers rich and showing myself up), however there is nothing I'm not doing that I wish I was doing (except perhaps travelling a bit more). Some people scrimp and save every cent they can, planning for an extremely comfortable retirement and delay many things in life in order to do so which is fine. I, however want a nice balance between living now and living when I retire, I see no point working 80 hour weeks when I'm 30-55 years old (my prime) so I can enjoy the ages 55-75+. So my goal is simply to maintain my current lifestyle when I retire.

 

[weg]

I guess it depends what lifestyle you've become accustomed to, which I pressume is largely dependant on your salary, and also what your current and future goals are. I am not on a 6 figure salary, so live a fairly modest life (and fortunately not into making designers rich and showing myself up), however there is nothing I'm not doing that I wish I was doing (except perhaps travelling a bit more). Some people scrimp and save every cent they can, planning for an extremely comfortable retirement and delay many things in life in order to do so which is fine. I, however want a nice balance between living now and living when I retire, I see no point working 80 hour weeks when I'm 30-55 years old (my prime) so I can enjoy the ages 55-75+. So my goal is simply to maintain my current lifestyle when I retire.

I've found many that scrimp and save, don't suddenly spend up big in their retirement at all.

I know a couple of wealthy older couples that although they have money are as tight as.

I live around the corner from one and she goes to extrordinary lengths to get me, or another family member to give her a lift so she doesn't spend money on a bus fare, or taxi. Her net worth would have to be over 10M.

The other gave my youngest son some used baby clothes (wrapped) as a gift when he was born. Their grown kids live it up big, and are always broke, while they also collect items from the sidewalk . These people are probably worth under 10M but look poor.

These are extremes, but many others I know that are wealthy and at retirement live well, but nowhere near what their worth would allow them to.

One friend very close to retirement age, could have retired years ago but says she enjoys her life as it is.

She still travels once a year and has a nice car and house, but doesn't need a large amount to live on and enjoys her work.

My point... habits are hard to let go of.

 

[peastman]

What is retirement anyway?

If its doing nothing to earn an income, I cant see that happening. Different projects and opportunities just seem to constantly come along. I will always be tempted to investigate them even if I don't need to financially.

If it's freedom to do as I please, I suppose I have been retired for the last decade or so. Still working in my business, but thats what I enjoy doing.

As far as income is concerned, We live comfortably on about $75k net. Nice home paid off, 3 decent cars (including the obligatory midlife crisis sports-car), overseas holiday most years. Eat out whenever we want. Really don't need more than that.

 

[Luv2Travel]

I live around the corner from one and she goes to extrordinary lengths to get me, or another family member to give her a lift so she doesn't spend money on a bus fare, or taxi. Her net worth would have to be over 10M.

I hope you don't do it! Oh my goodness, I don't care if people want to live tight, have no life etc., that's their business. But when they start to use people and become selfish that's when it angers me (have seen a few examples of this in my life), and as for the woman above, I'd tell her where to go. It's ok for you to pay to run a car, but this woman who could afford a personal chauffeur wants you to pay for her transport...