Stemming from lemc6125 discussion. I thought to myself what would be the minimum amount (without being too greedy) you'd need to retire today.
I understand that everyone would be at different stages in their life and have different aspirations. But if miraculously you received a lumpsum amount at which point you'd say, yep that's good enough for me to retire without having to worry money for the rest of my life.
Surely everyone would have a number, right?
PS: Some elaboration would be good.
I would give you a number - but that would be solicitation. ;)
25 times your current living expenses. Invested in safe funds it should keep you going as long as you live.
Add to that any extra spending (new house, boat, etc) and you've got your number.
I'd go with $2m without actually doing the numbers.
1.5m
1.3m gets me through until my super kicks in
200k just for a bit of fun.
Any more than that would be gratefully accepted.
Put it this way, I'd be tempted if I won $50 on a scratchie…
I might starve after a fortnight, but they would be two good weeks.
In the vicinity of $3m - maybe $2m at a push.
20 mils…. there's no tax on dream…
Great question.
We are mid 30s with 2 toddlers and no plans to have more kids.
Currently, I'd say our net worth is $1.5m outside super.
Ideally by 60 years of age I hope to have outside super:
1 PPOR house - paid off
2-3 IPs paid off
Half-Mill in shares/ETFs/funds/cash
I also hope that combined, wife and my super will be approx 3/4 - 1 million.
Here's a calculator/spreadsheet to work out how much you need.
http://lifehacker.com/5925077/how-much-is-enough-a-formula-f…
My plan is to work until I have around $100k in liquid funds, then sell my house and move to Thailand.
I can buy a much newer / better house over there, near beaches and markets… and cost of living is 75% lower over there
More than 75% lower I would imagine… But it varies a lot depending on what you want to do.
It's a one-way choice though: you can't really move back to a developed country after that.
Depends on age and age of kids and your assumptions about:
What investment returns you can get over time on a lump sum if you had it now
Cost of living increases over time - how much to live nicely in 20 or 40 years?
Work and lifestyle - many people would not cease working entirely - some would or some may do something new for a lower wage
At the last State Super info night I went to (last year) the presenter actually put a figure on the requisite amount for a comfortable retirement. Surprisingly ( to me ) he said about $570,000. Mind you at this amount you are entitled to a part pension and that has been factored in. Also you own your own residence and intend to live a comfortable , but modest lifestyle i.e. not jetsetting the world first class every 6 months.
Adding to that, studies show that even though we are getting older more slowly (physically rather than numerically), the needs for someone in their 60's and early 70's are considerably different for those over 80. The presenter suggested that spending more of your super during your 60's and 70's might make sense for some.
As we are both coming to the age where we have to put serious thought into this - I would agree with the $2 - $3 million that others have mentioned.
I no longer work but hubbie does ( & he's over retirement age ). At the moment most assets are in my name for tax purposes. WHEN he retires we will probably downsize to ensure continuity of our lifestyle & holidays. We have no kids - just dogs - so as long as they are provided for @ the end of our days we shall continue to enjoy life to its fullest. We've both worked long & hard to reach the level achieved & there's no way the government is getting any of it when we both finally go to meet the master tax man in the sky - or his counterpart down below - whichever the case may be. Personally they could bury me in our back garden, along with some of our dogs who have passed away over the years - I'd be a lot happier with them than scattered somewhere!!
What a morbid subject - bring on the next cruise !!
I could either die before 60 like my mum and aunt, or live well into my 90s like all my dad's side of the family. I would hate to work until I have enough to last until 90 but then only have 2 or 3 years left to live instead of the 30 I thought I had.
Working on a figure of $30k a year in retirement after house paid off so I either need $60k or $900k!
How could you possibly live on that figure? -30k= apx. $600 per week.
Do the figures -
Food per week
Household expenditure such as electric,gas,water, rates
Running & maintaining a car or two
Household maintenance such as appliances that suddenly break down on you or house maintenance that has to be fixed.
Having any enjoyment time such as even a meal out together could not be put into the equation let alone a holiday.
You have to plan ahead. No use thinking that you might die before you're 60 or live until your 90's or beyond- that decision is only one that you will find out eventually somewhere down the track.
Meanwhile always remember that you are not living your life on this planet as a dress rehearsal - THIS IS THE MAIN EVENT - so make the most of it !!
Not suggesting you are ridiculously out of touch, but the single pension that millions of Aussies live on as their only income is $20k p.a. and the pension for a couple is just over $30k p.a. (and scandalously, the dole is $14k p.a.!)
Remember you expenses are significantly lower - probably no mortgage, maybe no car and almost certainly no need for more than one, less need for time saving stuff like take away etc. Plus discount public transport, movies, club membership etc.
THIS IS THE MAIN EVENT - so imagine if you deferred all your spending so you could have two cars in retirement, then discovered you were too old to get the benefit.
There are many vested interests who are very keen to see you devote significant resources to your retirement. Be sure you think about what you will need now and in the future before you devote too many current resources to old age.
I probably shouldn't come back to this, but consider all the enjoyment you get in your life for free.
Walk in the park, go fishing, visit a library, go on a bushwalk, play some music, visit a friend, hug a relative, help a friend, watch some sport, grow some flowers, pat a dog, push a kid on a swing, etc, etc, etc.
If you have plenty of time for all that, how much would you feel you are missing out if a restaurant meal or fancy holiday is a rare treat? I think a huge advantage OzBargain visitors have is they have considered that spending money unnecessarily in not desirable (and I meet plenty of people who genuinely seem to like 'spending' regardless of value).
I find a big issue in the world is the idea that you can buy happiness, or that money is necessary to achieve it. I find myself succumbing to it too often.
Planning a bit for the future is wise, overdoing it is shortsighted.
"always remember that you are not living your life on this planet as a dress rehearsal - THIS IS THE MAIN EVENT - so make the most of it !!"
This is really something that made me think…
I think you may be right there, but then again why are there so many people on ozbargain prepared to spend so much time and sometime go through so much trouble to save a few dollars?
Because they don't have a forward thinking attitude for the future -Today is their only priority in life.
Great to save a few dollars here & there - but it won't really help in the long haul of life without forethought & planning for the future years.
Unfortunately age does come to us all & needs to be addressed when still young enough to provide for later years + still enjoying life today - but with a mature outlook for the next amount of decades that you will have to survive with little to no help from the government eventually & only what YOU have provided for yourself & your family.
"but then again why are there so many people on ozbargain prepared to spend so much time and sometime go through so much trouble to save a few dollars?"
I consider the effort it would take elsewhere to earn another dollar (which is more like $1.50 to $1.80 when income tax is being deducted).
Sometimes its FAR easier to obtain that dollar on the purchasing end of the equation, then the income side.
Edit - I recalled a quote i like that relates to your question
"The average American millionaire owns less than 6 bottles of wine in his or her home, and paid $13.09 to $14.54 or less for each bottle. They shop at stores like Costco, Target, and Wal-Mart."
With 3 children we are usually spending around $65k a year including mortgage payments but excluding overseas holidays and one-off big expenses. Going overseas to family in Europe costs over $14k for the 5 of us, with just 2 it will be a lot easier (cheap flights to Paris $1500 each).
My youngest will be 23 when I am 60.I am lucky in that I have a job that I could still work an occasional day now and again if a big bill came up that couldn't be covered with liquid funds.
Meal out? Ha ha ha
Haven't had one for 6 years-the downside of no local relatives to babysit. When it eventually happens we'll be like rabbits in the headlights!
I'm estimating $30k/yr aswell (assuming mortgage is taken care of or the payments arent huge). Maybe $40-50k for a couple.
Most of the money I blow is on house/cars/investing. If i'm retired i shouldn't need to put $ towards any of those, and I struggle to see where I could blow $600/week.
I spent 6 weeks in america last year doing everything short of hiring a lamborghini for a day (didn't have room on the cc for a $5k deposit). Excluding flights it worked out to $1200/week. Did all the expensive touristy stuff, disneyworld, cruise to the bahamas etc.
I don't really see how I can perpetually blow $600 week in, week out for the rest of my life
Try doing the following expenditure test for outgoings - forget holidays - this is for day to day living :-
1* Your weekly food expenses
2* Cost of both your electricity & gas broken down into weekly amounts
3* Cost of your water bill broken down into weekly amounts
4* Cost of your house rates ( presuming you own your own property) broken down into weekly amounts
5* Cost of your phone,broadband,foxtel( if you have it) broken down into weekly amounts
6* Cost of running even one car with insurance,rego. & fuel broken down into weekly amounts
Then factor in maintenance for an ongoing period on your home, appliances, phones,car(s) as you would need contingency there to cover all these.
You would need to be extremely frugal to survive as a couple on $600.00 per week without a major unwanted "Hiccup" occurring ever!
Estimate all you want idjces but if you don't plan ahead you will find that life catches up with you & bites you very hard on the bottom & you will spend the rest of your life saying comments such as " If only" , " what I should have done is …" etc.
1 - $150
2 - $50
3 - $15
4 - $33
5 - $24
6 - $100
Not sure how a couple could spend substantially more in these categories? I guess if you drive a costly new car the depreciation would bite in 6.
There are plenty of other expenses, such as home insurance, health insurance, home repairs, home renovations, pet costs, entertainment, gifts, vacations, new computers/phones every now and again etc. but considering millions of Australians currently live on less than this, it isn't a bad estimate.
And some of those costs will decline, as when my kids are grown it is unlikely I will want to keep such a large house, meaning lower utilities/rates etc.
I was implying $600 for a single person, for a couple yes that could be a stretch depending on frugality.
$600/week for myself, $800-1000 for a couple who both had a working life.
There's so many variables it seems a bit fruitless trying to get too specific - sure, you could if you're happy to forward plan all expenses.
I would think take home pay - sum of mortgage payments - sum saved/invested would give a rough idea, hence i estimated $30k for myself as an individual, add extra for what you like to spend on expensive toys/holidays.
I do everything DIY, and relate more to the early retirement/engineering types, so I skew towards the lower end of the bare cost of living scale.
This is about a 'minimum'. So…
My opinion is an older single man (me), could live off $500k nestegg comfortably in Oz. So $25k p/a.
As example, buying a house outright in a large remote WA towns like Norseman, Mullewa or Mount Magnet, for outright $15k to $45k is easy to find (Buying an old converted church can mean no council rates for life I've read). Grow your own veges etc, and live simply. You'ld have plenty of moolah to spare.
For younger couples with kids, $4billion a year won't quite do it I guess (exagerating), but realistically living well below the poverty line is not that bad, if you adjust. I've done it for years. Had two friends who have spent a long time under or next to bridges in tents. No biggy just carry a knife I heard.
Also there are lots of people with mobile homes as their primary residence. Including very old coaster buses fully equipped. Travel 50 to 100 kms most days (P to P parking) to charge the batteries and fuel may cost about $100 p/w. Gypsy lifestyle may grow more popular I think in future.
I met a retired US couple living our their final years in Laos. They stayed with a local family and helped the family set up a small accommodation business. Bungalows on the river for $2aud per night.
When I met them, they had been with the family for a few years and bought so much business to the family that they were building a bigger house. They could afford to send their kids to school (across the river) and were learning English.
The older couple would spend their days playing guitar, laying in the hammock on the riverside, cycling around the island etc. It looked like such a beautiful retirement.
That's what I'd love to do. It would cost so little,considering when we (as guests) were spending $10 a day.
I'll start…without being too greedy, i'd say 3 Million for me should probably do it.
1M - Operating income
1.5M - Half decent house House + Other little Investments.
500k - for my children fund/ancillary spending/holiday/charity.