Yes. Its numbers for NYC seem realistic in most cases.
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Thinking about retirement?
- Thread starter ahofer
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These are very critical points raised by @Soandso! While cost-of-living is the first pass, and @Salt's "where can I imaging living" is the second pass, after that is a whole range of issues regarding longer-term residency rights, medical insurance, health-care access, taxation, how many days you can be out of country each year (if aiming for permanent residency / citizenship), etc.
And equally important, as also noted by @Soandso, is whether you will be welcomed by the community — which is increasingly important as backlashes against expat-driven gentrification are growing in many of the traditional retirement havens. (e.g., Portugal is off my list for this reason.)
The other aspect is that "retirement abroad" can be mean very different things, depending on each person's situation and preference:
- Tourist visas in various countries, where you may need to shift from country to country every 3 to 12 months.
- Long-term resident in a country (e.g., 2 to 5+ years), where you are subject to residency requirements including taxation but have no right to remain. Typically need to renew every 1 or 2 years.
- Permanent residency (5+ years), typically available after 5 years residency in country; now 10 years in some countries.
- Citizenship (5+ years), also typically available after 5 (or 10 years) but requires passing national citizenship test including some level of language fluency (which are often increasing in some countries as a way to stem ex-pat growth).
Mort
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For a 30 year retirement, the commonly planned length, a withdrawal rate of 4% is considered reasonably conservative for an index portfolio of stocks and bonds.
To get to your number, multiply the yearly income you need (don't forget taxes and social security if USA) and multiply by 25.
For example: A million invested in stocks and bonds 60/40 should throw off about $40k a year and be exhausted after 30 years.
These are rules of thumb and have many assumptions and caveats.
To get to your number, multiply the yearly income you need (don't forget taxes and social security if USA) and multiply by 25.
For example: A million invested in stocks and bonds 60/40 should throw off about $40k a year and be exhausted after 30 years.
These are rules of thumb and have many assumptions and caveats.
Just to be sure of my own understanding and calculation:
1 million invested in a portfolio with a 3% annual return would yield a yearly 50k gross income over 30 years. A 4% return would yield 57k. Excluding inflation.
I find assumptions on the rate of return is the biggest differentiator. Get it right and I could retire "with ease", get it wrong and I could end up under the poverty line
1 million invested in a portfolio with a 3% annual return would yield a yearly 50k gross income over 30 years. A 4% return would yield 57k. Excluding inflation.
I find assumptions on the rate of return is the biggest differentiator. Get it right and I could retire "with ease", get it wrong and I could end up under the poverty line
Not my experience. Every guy I know who retired complained of still never having any time to explore their projects.
Rick "still working but investing in his retirement now by equipping his shop" Denney
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Nice to hear.
Well now you know one who doesn't
I love being retired.
Wake up. Thinks - "What will I do today?"
Answers - "Whatever the hell I want"
Been retired almost exactly 5 years. I have been bored precisely zero times.
The phrase used by everyone I know who's retired, including me, is I don't know how I managed to fit work in. The list of projects I made before retiring hasn't been touched, next year for sure.
There is a pet shop boys lyric that's something like we were never bored, because we were never being boring.
I don't know about you - but I only managed it by being stressed a lot of the time.
I liked working, didn't like having a job, it was the job bit that was stressful, even though I was mainly left alone to get on with my own thing.
I never felt stressed by work even though in my last job I was very busy, all the time.
One thing though, I used to eat indigestion tablets like they were smarties. Retired back in February, not needed a single one since.
Not been bored yet. I don't know where the day goes even though I'm up and moving by 0730 latest.
One thing though, I used to eat indigestion tablets like they were smarties. Retired back in February, not needed a single one since.
Not been bored yet. I don't know where the day goes even though I'm up and moving by 0730 latest.
Soandso
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Maybe I'm missing that reference strategy (like if one is drawing down x% annually from the original financial nest egg). I calculate 1 million at 3% annually is 30,000. That affords 2,500 per month (before any income tax) if one never touches that 1 million principal. [Obviously this comment has no relevance to pensioners' (including USA Social Security) finances.]
Personally, as a retiree, I think it imprudent to count on spending from one's principal and it is better to delay such a financial strategy as long as possible. This is both from having lived through variations regarding % return on investment and (like everyone) inflation related increases in expenditures. However, I am most reticent regarding a pre-determined draw down from principal since retirees may be confronted with untimely massive expense of age associated decline from medical events that require daily living assistance. That kind of situation to me is the only time when a retiree should dig into their principal for spending (there's an old adage: don't outlive your money. Then there's the aphorism: live long enough to be a burden to your children).
antisuck
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I've been retired a year as of a couple weeks ago, and I'm still wrapping my brain around it. The real estate market is absolutely insane here (PNW USA, less than an hour from the Seattle/Redmond metropolitan area) so it was a fairly easy decision to remain in my small-ish 100 year old craftsman house and I stay somewhat busy keeping it maintained and working on endless improvements. I guess my new "job" is to be steward of the home and property and modest estate, all of which (whatever is left) will go to my stepson and his family some day. It's frightening how tough kids have it these days.
Further to the discussion of "how much does it cost": with well-managed investments, it starts to feel like you still need to begin with something on the order of 2M USD for a couple living together, if you want to not deplete the principal at all. I'm sure someone else has run the numbers in better detail. I wish that were a more easily attainable goal.
Further to the discussion of "how much does it cost": with well-managed investments, it starts to feel like you still need to begin with something on the order of 2M USD for a couple living together, if you want to not deplete the principal at all. I'm sure someone else has run the numbers in better detail. I wish that were a more easily attainable goal.
respice finem
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Speaking of aphorisms - a Jewish one: To make God laugh, just make a plan.
But seriously: Investment should be diverse, like stocks and real estate, not "or", and still, nothing is ever certain.
So, don't outlive your money either, always have a "buffer" for unexpected situations.
My rule No. 1 as an early retiree: don't overspend. Rule No. 2: The less visible your wealth is, the safer you will be.
But seriously: Investment should be diverse, like stocks and real estate, not "or", and still, nothing is ever certain.
So, don't outlive your money either, always have a "buffer" for unexpected situations.
My rule No. 1 as an early retiree: don't overspend. Rule No. 2: The less visible your wealth is, the safer you will be.
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Yes. I live in a rural exurb on six acres with a house and a large shop. I paid about one-quarter for it what the house alone would have cost in the inner suburbs of my metro area, but now it's probably worth about two-thirds of that close-in house.
Regarding those who like cities, I note the cultural differences between the Navaho people and their pueblo neighbors. The Pueblo peoples have lived in their villages for far longer, being town-oriented farmers rather than nomadic herders. Their towns, which are still occupied, are the oldest occupied town areas in the U.S. I'm thinking of Old Oraibi in the Hopi Reservation and the Acoma Pueblo and Taos Pueblo, among others. Their towns are highly compact and their culture is one of mutual interaction and dependence as a village, with many traditions centered around communal activities. The Navaho people, on the other hand, spread out in the land between the pueblos, and their preferred residential setting requires their door to face the rising sun in the east preferably with no other dwelling in view.
I identify with the Navaho on this axis, except that my door does not face east
As I age further and eventually become infirm, I hope to sustain my semi-rural life with hired help--assisted living, if you will. My wife's uncle followed that strategy until his last week at age 91. My own father passed at 92 in the house my mother still occupies (my mother is currently 90), though that house is decidedly suburban compared to where I live. My one fear is a severe disability, such as might be caused by a stroke, for either me or my wife. When that happens, one must do what one must. I don't figure that's any more or less likely no matter where I live while still capable, and one can't live in fear. Neither of us can presently tolerate the idea of a retirement community.
But cost of the dwelling notwithstanding, it's still an expensive area. When my house is paid off, I'll still pay more in taxes and insurance than my entire house payment for my first house. At least the mortgage will be gone by that time, barring the unforeseen.
Rick "definitely not hoarding money" Denney
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Probably so but where one lives may be highly relevant in determining the ability to obtain good medical support.
respice finem
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Generally, fear, if not irrational, is rather good, in the sense of not ignoring danger.
The most heroes are soon found in cemeteries.
The most heroes are soon found in cemeteries.
Is it common for people to retire with a mortgage in the US? I paid my mortgage off 3 years ago and that has really opened up the possibility of retiring within the next couple of years (10 years before I reach the state pension age). I would not be able to contemplate retirement if I still had a mortgage.
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We have long fixed rate mortgages, so sometimes it makes sense. My current mortgage is 3% for the remaining 25 years. It wouldn’t make sense to pay it off, although I could. I know in the UK locked rates tend to be for shorter periods with a prepayment penalty. In the US you can refinance without penalty, so many people have locked in rates like mine through the long low-rate period we exited in 2022 (mine was locked in 2020).
I didn't think so ? I paid off a 30 year mortgage when I was 55 (about 3 years early) and retired at 60.
Never could have done it if I still that that note hanging over my head. Then to actually retire I had to move away from the ridiculous property tax
levels of Chicago IL I sold it all and moved to suburban FL. NO MORE FRICKIN SNOW YEA
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