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  • Speaking of post-retirement income...

    Insurance thread and the $67k cutoff has me wondering what you're targeting as your post-retirement income?

    My FIRE goals are based around needing $3,100 in monthly passive income - $1,200 for bare expenses, $900 towards savings and investments and $1,000 for travel (which could obviously easily be scaled back for other unplanned expenses). Total of $37,200/year. Granted I do intend to and have the ability to continue to work, at least part time, after I achieve FIRE and I don't know exactly what my numbers will look like when I fully retire, but I imagine I'll be on a beach hut in a VLCOL foreign country and my expenses will be even less because I'll be done traveling.

  • #2
    We budget for $140-150k annual spending. Might exceed that on years where we have a big purchase such as a new automobile or a major home project.
    We have passive income from real estate, etc. that provides roughly $90k, the balance comes from savings, retirement accounts, etc. We have pretty high overhead due to lots of real estate, but that same real estate also provides significant income.

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    • #3
      This is a complex question because well for one are you including SS income, and what about any RMDs after you are 70 (though they are looking to up the age to 72 to start them)? If I include the GF and look to after we turn 70... well our numbers as far as income reporting for taxes will be crazy. Our combined SS income should be in the 60k's, maybe 70k's. Our combined pensions will be over 70k/year and both have COLAs. And then the RMDs will be, well hard to say, but may start at 100k / year at age 70. So we are looking at well over $200k/year at that point. But you can't use us as a guide for what is normal or needed. We won't need this type of cash flow (there's no way we will need even 100k/year) and my main goal for the coming years will be setting up our money to avoid taxes as best as possible.
      Don't torture yourself, thats what I'm here for.

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      • #4
        Originally posted by bennkar View Post
        This is a complex question because well for one are you including SS income, and what about any RMDs after you are 70 (though they are looking to up the age to 72 to start them)? If I include the GF and look to after we turn 70... well our numbers as far as income reporting for taxes will be crazy. Our combined SS income should be in the 60k's, maybe 70k's. Our combined pensions will be over 70k/year and both have COLAs. And then the RMDs will be, well hard to say, but may start at 100k / year at age 70. So we are looking at well over $200k/year at that point. But you can't use us as a guide for what is normal or needed. We won't need this type of cash flow (there's no way we will need even 100k/year) and my main goal for the coming years will be setting up our money to avoid taxes as best as possible.
        Interesting. If you know you won't need even half of what you're potentially going to have coming in, why is it important to you to avoid taxes on that money?

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        • #5
          I'd like our retirement income to match our pre-retirement spending plus an extra $1,000/month or so for travel and such. Based on current numbers, that would be about 90K/year. Not counting SS and using the 4% rule, that means needing about $2.2 million. Adding in SS obviously makes the needed nest egg smaller but I don't want to have to collect until at least full retirement age of 67 or whatever it is by the time we get there.

          Assuming my current job remains as is, I do have the option of dropping down to part time at 20 hours/week. I'd pay more for health insurance but would still have good coverage and I'd be making a little over 130K/year gross. That would make my take home pretty close to that 90K number if I stopped contributing to the 401k or about 75K if I kept contributing. That way I wouldn't have to draw that much from the nest egg, maybe 1-2K/month tops.
          Steve

          * Despite the high cost of living, it remains very popular.
          * Why should I pay for my daughter's education when she already knows everything?
          * There are no shortcuts to anywhere worth going.

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          • #6
            Originally posted by riverwed070707 View Post

            Interesting. If you know you won't need even half of what you're potentially going to have coming in, why is it important to you to avoid taxes on that money?
            Just the principle of it all. I don't think I have been rich, but instead I was able to save my money because I was extra careful with my finances, and took a lower paying job so I would have a pension. I would feel like I am being penalized for taking care of my finances. Not only taxes, but other things too - Look up IRMAA to see how the gov't penalizes you for being careful with your money.
            Don't torture yourself, thats what I'm here for.

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            • #7
              Expenses:

              $139k including

              $71k base budget
              $32 irregular expenses (home repair, real estate tax, new car fund, gifts)
              $11k taxes
              $25k travel

              Income:

              $46k COLA pension
              $56k SS starting at 70

              I need $2M in savings @ 4% withdrawal rate to support this. And a paid off house.

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