How much money is needed to retire

**Auroria** · 01-11-2016, 11:52 AM

Take what you currently spend in a month.

Double it.

That's the income you'll need.

**redhaze** · 01-11-2016, 12:05 PM

I think a million dollars should be more than adequate for any retirement of any length so long as you don't spend that much. It depends almost entirely on how much you spend right now. Take your current annual spending, multiply it by 30 and that's basically how much you need. It doesn't matter how long you live for 30x is the number. Something to do with compounding interest taking care of any year beyond 30.

I personally figure the wife and I need 40k US a year to retire and live well (that's a cushion for other stuff like medical, since wife and I actually only spend 30k living in the US currently and there are certainly cheaper places to live in the world).

Take 750k of that million invested in real estate (not now though in a bubble) should generate the 40k we would need to live forever including hedging against future inflation. 250k in cash or whatever low(ish) interest bearing/safe garbage accounts for healthcare and other unexpected expenses. We could eventually sell back those houses and have our whole investment back at some point when the rental numbers no longer add up to the lump sum. Be old(ish) at that point.

So yeah, a million should do it. Some could do it for less I think. If I wanted to stay in LOS my whole life $500,000 and the same plan would probably cover it. But I don't...

**Simon43** · 01-11-2016, 07:42 PM

Take what you currently spend in a month.
Double it.
That's the income you'll need.

So that's 14,000 THB in my case

**fishlocker** · 01-11-2016, 07:59 PM

It's all good until the better half takes half. Leaves you with a maintenance payment and your paying her so she can raise your kids in your house while you live in a van down by the river. Sad but it happens all the time. I hope I didn't just describe your situation. If so I'm sorry, they say it's cheeper to keep her.

But then I've heard divorce is so expensive because it's worth it.

I know of more than one in that situation. Obi-Wan Kenobi once said choose wisely young Skywalker.

**UrbanMan** · 02-11-2016, 12:26 AM

Originally Posted by Barty

I planned on having a net annual income of USD 250,000

And then your real life happened.

**UrbanMan** · 02-11-2016, 12:29 AM

Originally Posted by cyrille

The unknowable factors no matter how frugal you are ... 2) how high your medical costs will be.

A wise article I read eons ago made a statement along the lines of, having healthy habits is a financial investment, because people who have such habits aged 25-50, have a great shot at having lower medical costs at age 50+.

**Barty** · 02-11-2016, 12:45 AM

Originally Posted by UrbanMan

Originally Posted by Barty

I planned on having a net annual income of USD 250,000

And then your real life happened.

Yeah, you are correct, then my real life happened. It didn’t plan out as I expected, last year I made much more and this year I will most likely make more also.

**UrbanMan** · 02-11-2016, 02:21 AM

Originally Posted by Barty

last year I made much more and this year I will most likely make more also.

Good outcomes, in what are hard times for many. Forward progress is not happening for many if not most.

**redhaze** · 02-11-2016, 08:23 AM

Two tiered economy, more people making big money than ever. And less people making good money than ever

**Auroria** · 02-11-2016, 08:26 AM

Originally Posted by fishlocker

It's all good until the better half takes half. Leaves you with a maintenance payment and your paying her so she can raise your kids in your house while you live in a van down by the river.

Sure.

I'm very happy that I left the West without having spawned or married there.

**Auroria** · 02-11-2016, 08:28 AM

Originally Posted by redhaze

It depends almost entirely on how much you spend right now. Take your current annual spending, multiply it by 30 and that's basically how much you need.

60 by that logic.

If you spend x amount p/a when you're at work for 40 hours every week, you'll need xx when you're spending that 40 hours per week playing golf, drinking, shagging, playing dominoes in the local square.

Unless your retirement is spent entirely on the sofa doing nothing and spending nothing.

**redhaze** · 02-11-2016, 09:05 AM

Originally Posted by Auroria

Unless your retirement is spent doing nothing and spending nothing

Do you do nothing and spend nothing during the week as a worker? Most people don't. Most people spend a shit ton of money blowing off steam, buying consumer products they probably don't need to justify their hard work, etc. Plenty of ways where costs should be reduced in retirement. Eating out versus having the time to cook is just one obvious example.

People typically spend less during retirement. That is a fact. Individual mileage will vary of course...

For me, I plan on doing all those things I wish I could do more now but just can't ever seem to get to. Jogging/hiking, working out, laying by the pool, going to the river/beach, playing guitar, reading more, BBQ on the weekends, maybe planting an old person garden, shagging more (for free), playing video games more, watching more movies (ok that one involves the couch), doing some writing or blogging, starting a small home based business. All kinds of things that are free that I just don't have the time for now. Too many things, no shortage of it actually. Just depends on what you value and want.

But no, don't plan on increasing my spending or laying on the couch.

**Auroria** · 02-11-2016, 09:42 AM

40 hours more to kill during the week.

Cost more money.

Take a month off work to chill out and see how much you spend.

Multiply that by 12.

**redhaze** · 02-11-2016, 10:23 AM

I've taken many, many months off work multiple times. I spend those months in Thailand or other locales. I work in the West. I spend less during months off. Much, much less. I've also taken months off in the west as well. A year actually one time. Spent less.

Try googling how much people spend in retirement, I know it seems counter intuitive but the average person spends less. Convenience costs a lot of money, and convenience is something that floats away when you don't need it.

Plus I'm not lame so I don't golf

**Auroria** · 02-11-2016, 10:32 AM

Average person = boring.

Double that cash up!

**redhaze** · 02-11-2016, 10:33 AM

LOL, ok I think its clear you will need double the cash. Some of us actually want to retire before the age of 75 though lmao

**cyrille** · 02-11-2016, 11:00 AM

Originally Posted by Auroria

If you spend x amount p/a when you're at work for 40 hours every week, you'll need xx when you're spending that 40 hours per week playing golf, drinking, shagging, playing dominoes in the local square.

Did welldone make it over?

**redhaze** · 02-11-2016, 11:07 AM

lol, yeah didn't think about that. Seems as if he did though

**Auroria** · 02-11-2016, 11:10 AM

Originally Posted by cyrille

Originally Posted by Auroria

If you spend x amount p/a when you're at work for 40 hours every week, you'll need xx when you're spending that 40 hours per week playing golf, drinking, shagging, playing dominoes in the local square.

Did welldone make it over?

Insider joke?

**cyrille** · 02-11-2016, 11:14 AM

He was a poster on ajarn.

Way more downmarket than you though, tbf.

But yeah, he also seemed to believe that his sixties would be spent as a priapic 25 year old.

**Auroria** · 02-11-2016, 11:18 AM

Oh right. On ajarn? I take it he was a teacher then.

Maybe it's just me, I can't sit at home and do nothing all day, gotta go out and do something. That will usually include nice lunch, movie, shopping, driving, whatever, not really interested in sitting in park all day everyday. Multiply the cost by 5 and that's an expensive week compared to when working.

**cyrille** · 02-11-2016, 11:20 AM

As I see it the only way you'll really be spending a shitload of money in retirement is if you can't stand where you live.

Of course offloading a million dollars that landed in your lap would not be problematic, but the reality is that what you'll need in retirement is gonna be a lot less than what you'd be able to spend on holiday next month.

Sadly the fly in the ointment is the potential cost of medical treatment, not of heading off for a week of debauchery in Vegas.

**redhaze** · 02-11-2016, 11:29 AM

^Yeah tell me about it. Just found out today that mine and the wife's health insurance costs is going up 150% from this year to the next. We are healthy, haven't really ever needed medical care, in our 30's, and our premiums will cost over 10k US next year. And this is for a basically totally unusable plan with a 14k deductible before it covers anything whatsoever.

I mean....fuck.

**Auroria** · 02-11-2016, 11:32 AM

Originally Posted by cyrille

As I see it the only way you'll really be spending a shitload of money in retirement is if you can't stand where you live.

Not really. If you're happy to sit in your house or condo all day and not go out the front door, great!

I don't think that going out to do things, meet people, eat lunch, equates to hating where you live!

**UrbanMan** · 02-11-2016, 11:33 AM

Originally Posted by redhaze

People typically spend less during retirement. That is a fact. Individual mileage will vary of course...

It costs money to work. Transportation, clothing, convenience foods, for some even where you live (as in short commute to work, which can be costly).

Originally Posted by cyrille

he also seemed to believe that his sixties would be spent as a priapic 25 year old.

Observation suggests there is a reality of being over a certain age. Sleep minimum rises, majority tend to avoid most nightlife (certainly of the long duration, into the wee hours, money flaring sort), and so on.

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