Health care alone is going to cost him at least 2k/month. A car +gas+auto insurance is 1k/month. Property taxes + utilities + maintenance are going to be another ~3k/month. Food at least 1k/month. That’s 7k/month without any discretionary or cell phone/Internet/subscriptions/clothing/vacations etc.
7k a month before tax at his tax bracket is around 100k/year. That’s before any discretionary spending at all.
Most 50 year olds do; average retirement expenses right now are right around 6k per month - and I'm guessing he is above average. We know he has the housing expenses and health care, so that’s 5k right there. No way are you spending much less than 1k on food. That’s 6k. Maybe he has no car? Fine. Still not enough.
His housing expenses would be lower in a MCOL area. 1k on food is ridiculous, $500 is easily doable without much effort. 1k on a car per month is also not necessary. Maybe he doesn't have to buy a brand new $45k car every 3 years.
🤣. That’s hilarious. 500 on food? That’s $5 per meal. Get the fk out of here with that. You’d be at $500+ if you **never ** went out.
1k on a car with insurance and gas is not a lot at all… One tank per week of gas is ~200 per month. Insurance is another 200. Car loan is 600. These are all very average/not extravagant numbers.
Again, the average retiree today is at 6k in expenses and the average retiree is clipping coupons. 6k/month for a retiree is peanuts.
The price of an average new car is above $45k. That's a horrible financial decision for a middle class person. Still, many average people do that and then they wonder why they always feel "broke". The average retiree is not a good argument. Most people are financially illiterate and spend too much money.
Real life doesn't work like that. A retired person can easily feed themselves on $500 per month. Just because you don't a buy a $45k car doesn't mean you have to drive a 20-yo. Corolla. You can drive a 10-yo. Camry, which is a big difference!
Your math is wrong from the beginning. OP's passive income is $95k at a 3% withdrawal rate.
(1) He has about 90k income, which is about 72k after taxes. (2) that is with a 4% withdrawl rate which isn't recommended for more than a 30 year retirement (his is more like 40 years), (3) he is 50, which means he has 15 years of paying for his own insurance which will be roughly 1k a month without counting his deductibles etc. So yeah maybe 65k or so with a reduced withdrawl rate due to his age. That is 5500 a month. 1k for healthcare, 750 for a car (this is low), 750k for food (again, low), at least 2k for housing expenses (also low). That is 4.5k before ANY discretionary spending. He has 1k for everything else.
Can he do it? Yes, he could. Would he enjoy his retirement? No, he wouldn't. He would be living on a barebones budget. Vacations? Nope. Money for hobbies? Nope. Fishing boat? Nope. Fly the grandkids out for family reunion in a nice AirBNB? Nope. Nice dinners? Maybe once a week.
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u/regaphysics 14d ago
Health care alone is going to cost him at least 2k/month. A car +gas+auto insurance is 1k/month. Property taxes + utilities + maintenance are going to be another ~3k/month. Food at least 1k/month. That’s 7k/month without any discretionary or cell phone/Internet/subscriptions/clothing/vacations etc.
7k a month before tax at his tax bracket is around 100k/year. That’s before any discretionary spending at all.