This is why SS is so vital to so many!
I donāt know about that link, sherpa, it addresses the savings of working age people between age 32 and 61. When talking about retirement savings, it doesnāt seem realistic to group young people right there with people soon to retire. The 56-61 group looks far better. I would imagine that people with low savings just continue to work, if they are able.
I agree with HImom about social security. Unless we want to see seniors living in the streets, this program is critical. I can see means testing for it if necessary as opposed to cutting it, (though unfair to those who paid into it). It is the only thing many people have.
The median savings figure in each age range is quiet sobering, confirming the suspicion I posted on the last page, that most retirees have almost nothing saved.
The figures reported on that chart are a bit out of date, and I am guessing that the account balances continued to rebound since 2013, as they had been doing from 2007 to 2013, but still, not a lot of money. Report does not reflect non-retirement account savings (post-tax monies), but I am skeptical those balances are high.
āI often wear the same clothes till theyāre long gone, but itās not because Iām spartan like TiggerDad, itās because I truly hate to shop. I canāt imagine living on 30K, right now I think we spend 10X that. This sounds like an obsession of sorts. Nothing wrong with obsessions, but you have to make sure they donāt become unhealthy.ā
Decades ago as a young man, I was heavily influenced by H.D. Thoreauā āWaldenā and Emersonās essays, in particular, āSelf-Reliance.ā From early on, I was naturally drawn to simplicity in life. Still to this day, I love nature, outdoors and cherish and guard my need for solitude. One thing Iāve learned in my life is that there comes a point in oneās life that material glut can actually harm oneās soul. Those folks with more money than they know what to do with it seem to me to be unhappier folks than those with modest means.
Donāt get me wrong, I havenāt done āa single loaf of bread on peanut butter for a monthā experiment ever since. But the experiment was extremely valuable to me. Itās not like I ration a bowl of rice per day today. No, living a simple life doesnāt mean a gloomy or, as you put it, āunhealthy,ā life. Hereās a snapshot of my āsimpleā yet happy life at $30K annual budget (only limiting to those ācontrollableā cost):
Dining Out vs. Home Cooking: the main reason why I donāt dine out as often as others is simply because I love cooking and my cooking is better than the ones cooked in restaurants, not to mention a whole lot healthier AND cheaper without sacrificing quality of food ingredients. Depending on where you dine out, I calculate that dining out once is worth about two weeks or more of grocery cost. A visit to a local Japanese restaurant for us with a family of four cost about a month of grocery. I make my own sashimi and sushi. My Udon is better than any local Japanese restaurants WITHOUT those damaging high fructose syrup that they heavily use in making Udon soup. I donāt use crap the way many restaurants do. Theyāre not interested in your health or your enlarging girth, only the bottom line: profit.
Cost of Hobby: My biggest passion in life is photography, and because I love nature and wildlife, I take photos of landscapes, wild animals, etc. I own about $30,000 to $40,000 worth of photography equipment, acquired years ago. Expensive habit, but once youāve acquired these equipment, it cost hardly anything to maintain the hobby from then on since allās digital now. I might upgrade to a newer camera body every five years or so, but I already have enough equipment to last the rest of my life. I have a DIY photography studio set up in my basement, and it came very handy taking photos of my family members from passport photos to my sonās portraits with his violin for various concert programs and family X-mas photo cards, etc. etc. My photos were used by local newspapers on several occasions.
Travel: sure, we all travel out of necessity (funeral, wedding) or for pleasure in our retirement years. Doesnāt cost me much, though, because I use points using a variety of travel credit cards that I use to pay utility, cable, phone, grocery bills with to earn points. This past August, our entire family of four traveled to South Korea, my native country, for three-weeks on vacation ā all on points. In Seoul, we stayed at Hyatt and Hilton ā all on points. Upon returning from this trip and went on another trip to NJ to drop off my son at his college in early September, we traveled on Southwest ā all on points. I rented a car at National and stayed at a Hilton hotel for three nights ā all on points.
Shopping: I, too, hate shopping, especially for clothes.
Health Clubs: nope, I prefer playing Pickleball or taking nature hikes. During winter seasons, I still hike. When Iām cooped up in my house, I use my treadmill set up in front of my HDTV and watch āLife Below Zero.ā Canāt stand football, basketball, baseball ā okay, so Iām not a typical American.
Home Repairs: in the spirit of Emersonian self-reliance, I learned to fix just about everything around the house. The only things that I donāt fix are those I consider dangerous, involves heavy and expensive equipment to do the job, and physical labor not worth killing myself over. Several years ago, I transformed the main carpet floor into laminate wood floor. This past summer, after dropping off my son at his college, I did the same with the upper floor as well as the basement.
This is my simple and self-reliant life style. So what do you think? Is $30K annual budget doable?
@TiggerDad, Im so glad you have found what works for you and your family! It sounds like you are very happy with your life and fulfilled. Thatās pretty much all that matters.
We are happy with our lives as well, even though the annual cost is significantly higher than yours.
Tiggerdad, Iām also very impressed. But what about housing expenses? Even if you rent, thereās a cost there. And evn if you no longer have a mortgage, there are taxes and insurance to pay for.
And what about transportation? Our cars need gas, insurance, maintenance.
I provided a breakdown annual cost of such unavoidable cost in earlier post of mine, #13967. The figures are, of course, estimates, and although I tried to be on a bit of conservative side with inflation factors built into those figures, I could be off somewhat. The figures are my rough estimate.
Thank you @HImom, yes, Iām very happy with my life, but Iām HAPPIEST when alone in the woods with my camera and enjoying the blissful solitudeā¦ Isnāt it great that what makes you happiest doesnāt cost you a thing? 
We do not live as inexpensively as @TiggerDad, but I have kept an annual spreadsheet broken down monthly that tracks every penny weāve spent for the past 19 years. For 2017, the last year that I can report expenses for an entire year, here is what we spent on all our āabove the lineā obligations:
All housing (no mortgage)ā¦$11,502
(property taxes, homeownerās insurance, home warranty, HOA,
landscaping/irrigation, pest control, maintenance/repair)
All utilitiesā¦$6009
(electric/solar, gas, water, Internet, phones)
All auto (two cars, no payments)ā¦ $5326
(gas, washes, parking, insurance, AAA, registration, emissions,
maintenance/service)
All foodā¦$7245
(grocery and alcohol)
All healthcareā¦$13,079
(doctor/drugs/dentist/vision co-pays, vet, LTC,
company-extended HC premium until 65)
Our discretionary spending includes:
All dining outā¦$7155
(including club expenses)
All clothing/personalā¦$3389
(clothes, dry cleaning, shoes, jewelry, hair/nails, cosmetics)
All entertainmentā¦$14,038
(travel, gifts, theater/movies/rentals, books, music,
hobbies, memberships)
These are our main buckets; there a few more. Our retirement budget assumes a new car every ten years, even though our pattern with cars is almost twice that. We will go down to one car when my Corolla dies. We have also forecasted an appliance replacement budget as well as increasing health and home maintenance and repair costs as our bodies and home age.
So, we currently require roughly $45K to handle our non-negotiable obligations which should eventually fit closely within our SS footprint, and weāre currently spending roughly $25K on fun and extras which will fluctuate based on our whims. Our retirement planning scenario is based on $100K (post tax, plus COL increases) annual cash flow. We did not figure SS into our base nut as we canāt assume it will always be there or be there at any predicable amount, so our portfolio balance is quite a bit higher than what this scenario suggests, but itās what weāre comfortable with.
I do admire those who live happily on less, and I continue to comb our expenditures for waste. If I could get us down to $30K without feeling pinched, I would do it in a heartbeat. In the meantime, I continue to subscribe to Mr. Money Mustache for general tips and guidelines that might apply to us, and I will listen to any advice @TiggerDad offers.
@ChoatieMom: Those categories are very helpful and logical.
This link https://dqydj.com/net-worth-by-age-calculator-united-states/ provides an interesting calculator where you can see where see net worth by percentile of all American households for all age ranges.
According to the article the median net worth of households headed by someone aged 65-69 is $209,575.26.
Take a moment to think about that fact. Half of Americans in this age bracket have a total household net worth, including all savings, investments, retirement accounts, and home equity, of less than $210,000.
" Our retirement planning scenario is based on $100K (post tax, plus COL increases) annual cash flow. We did not figure SS into our base nut as we canāt assume it will always be there or be there at any predicable amount, so our portfolio balance is quite a bit higher than what this scenario suggests, but itās what weāre comfortable with."
My spending on @ChoatieMomās categories varies slightly but we operate under a similar budget and philosophy. We probably have a bit more than we need to live comfortably but that provides room for error/unexpected items/bad markets and we can cut back and live more sparsely and still make ends meet if needed. Iād rather err on the conservative side and leave $$ to our heirs than wind up on the opposite side in our elderly years.
Regarding @sherpaās link about appalling amount of retirement savings the average Americans have, Iām not at all surprised. People donāt have any fiscal disciplines anymore and use credit cards to live it up today on borrowed money like thereās no tomorrow. My wife is a pharmacist and would often tell me how her technicians on barely low minimum salary live more luxurious lifestyles than herās with their weekly manicure, pedicure, massage, daily dining outā¦ Just living it up! Not that thereās anything wrong with such lifestyle, but the problem is that people have lost the ability to live within their means. Theyāre what I call the āgrasshoppersā as in Aesopās timeless fable of āThe Ants and the Grasshopper.ā
My lifeās philosophy, in its most simplified version, is this: if you have a fiscal discipline, you will not go hungry in the winter years of your life.
The first lesson I systematically embedded deeply in the unconsciousness of my kids when they were barely comprehending of those childrenās books I read to them when they were very young was āThe Ants and the Grasshopper.ā I read the fable to them over and over and over. As they grew, they could independently identify the meaning of the fable in their own ways. Theyāre now young college students, and I can see them applying the fableās lessons on their disciplined study habits as well as their spending habits. Their similar aged cousin, on the other hand, uses his social media to boast how well heās living it up on a daily trip to fancy restaurants, bars, night clubs, to the point where my younger son told me the other day that āheās sick.ā I told my son, āheās sick AND with $200,000 on debt.ā Yet, I donāt think their cousin is an exceptional case. It seems everyone wants to live a certain lifestyle and credit cards can conveniently provide just that.
Our life expectancy is getting longer and longer. Weāre sure to witness many old aged grasshoppers.
Iām frugal, too, but some people just donāt earn enough money.
Iāve always told my kids, āitās NOT how much you earn, itās how you spend what you earn.ā
I believe the homeless epidemic is partly due to a lot of grasshoppers and not enough ants. Social media and sitcoms show a very nice lifestyle with folks sitting around in their very nice apartment,home, coffee house, bar or whatever. They seem happy, well-dressed, well-fed, and work (or lack of it) rarely seems to interfere with their socializing or ability to pay bills.
All of this culture reinforces entitlement and unrealistic expectations. Oh well, climbing down from soapbox nowāno sense preaching to the choir.
@ChoatieMom Thatās an excellent list. I think I can finally look at my expenses using your list. I never knew where to start. For us, more than half of expenses are to pay taxes. $30K will pay the property tax and maybe insurance, nothing more. I should think about downsizing.
ChaotieMom, I didnāt see federal/state/local taxes in your very helpful list. Is that the only regularly occurring thing you havenāt included?
@sherpa, among my four other sibs, that would be three out of four who are significantly under that amount, and one who is right around that range. Scares the %$#@ out of me.
As a working professional, the two best pieces of advice I received were a) max out your 401k retirement contributions each year (including taking advantage of any company matching) and b) pay off debt as soon as possible. The other key was/is setting up a 529 college savings plan when each kid was born so i wouldnāt have to saddle my family with a lot college debt. With the above financial planning and good fortune of purchasing a home in an area with much equity appreciation, I hope to retire by age 62.
āI believe the homeless epidemic is partly due to a lot of grasshoppers and not enough ants.ā
The homelessness in our country is mainly due to mental health issues and a huge percentage of that population are military veterans.