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Join Date: Jan 2006
Location: Mountain View CA
Re: What do you need to retire??
I'm in California, San Francisco Peninsula, and with no debt but property taxes, homeowners dues and medicare payments along with car insurance I figure you can't take in less than $1K per month just for those. So that's 12K per year.
Younger wife requires health care but we have found that a very high deductible plan ($6K) which is a "sharing" plan is lower cost than regular "health insurance". Even with my wife having some back issues and a broken ankle this year it has still been FAR less money than the regular insurance people want. You need to negotiate with the clinic before doing anything though and pay cash. The clinics' love cash. 30% discounts!
An MRI for her back started at $1600, then after saying it was cash it was $1200, then we say we're going somewhere else they made it $900 and in the end, we did go somewhere else, and it was $500.
Then with the basic 12K per year and 4.5K for health we are at 16.5K and have not bought food, gas, a night out, trip to Europe, etc. Bottom line is I believe that you need in my geographic location about $30K per year to get by. All these things will go up every year so even at a small inflation rate, say 3%, it will be 40K or so in 10 years.
By then the bathroom will need a redo, the kitchen will need a redo, the Chevelle will need a redo.. it is hard to estimate. I believe that you need a minimum $30K free cash flow after taxes if you have no debts. Thus with a 3% return on $1,000,000, yes ONE MILLION DOLLARS! you can easily slide by. You can get better than 3% in a lot of conservative bond funds but if there is a recession maybe not.
Notice that SS is not included here. I have always bet that the government will screw me on this one. If not now sometime in the future. What SS I do get will pad enough that I will be able to get the 40K in 10 years.
Note that I'm not trying to spend down principal but just get by on returns; children will get what seems a lot but in 30 years it won't be.
My car is here:
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