How much can a retired couple get by on each month?
What do you estimate monthly living expenses are for retired people who either rent or don't own their own home. In spite of various costs of living per state, what would you say, ON AVERAGE, a retired couple would need to just "get by" - just basic food, clothing, electricity, gas, transportation. Let's say, estimate from the lowest number to the highest number, between what amt. and what amt.?
I can tell you after 2 decades of financial planning that their is a very wide disparity across couples. This is affected by where you live regionally and other lifestyle factors. As an example, to estimate something like transportation depends on mileage. My client base ranges from middle class to some very wealthy families. Among the average middle class family, they spend 5-7k per month for a combination of essential and discretionary expenses. I would make a guess-timate and say 3500-5000 is essential spending. An example for a renter excluding discretionary items such as holidays, gifts and traveling might look as follows:
Renters Insurance $300 (Annual)
Cell Phone $100
Car payment $200
Auto Insurance $100
Auto Fuel $200
Auto Maint $50
Auto Registration $120 (Annual)
Auto Inspection $75 (Annual)
Medicare Premiums $200
Supplemental Plan $300 (Annual)
Life Insurance $100
Dental $1000 (Annual)
Vision/New Glasses $200 (Annual)
Clearly this is specific to the couple. And much of this can be quite a bit more or less depending on how you choose to live.
Excellent breakdown, L! These numbers seem quite "right on" For young people who shy away from financial planning, all I can say it "Don't! Force yourself to do it." I like the guess-timate and think that is quite accurate. Very helpful! Thank you.
You're Welcome. If you are having any trouble...Sometimes groups like NAPFA and the FPA have local advisors that due pro bono work. http://napfa.org/ or http://www.plannersearch.org/What-is-FP … ut-Us.aspx
You can live on whatever you have, the more you have the more you spend. There are so many things you can do to control this. By the time we are retired we've all the frills,fun, toys, act. So, it's really pretty easy to live on a thread, Heck even our appetites are smaller. My husband and i are 3 years and 1 month from retirement. We have it all planned out. On modest retirements we will be living better than now.Get creative, plan ahead, get ready, write it down research it, read, read, read.
It really depends on where the couple (chooses) to live. Naturally one's money will go further in southern states like MS, AR, TN, KY, and AL. The more rural the area is typically the lower the rents are.
Assuming the couple has paid off their cars they'd most likely be able to live in the above mentioned states on $1800 to $2000 per month. Odds are the couple could easily find a one bedroom apartment in the $600 to $800 range in these southern states. Naturally other factors come into play such as (hidden rental offers) that one learns about through word of mouth rather through large rental magazine advertisements where the landlord owns a unit and is primarily looking to have a good long-term tenant and is willing to charge less than market value rent. There are also other rental properties specifically designed for people age 55 and over in some states as well. Overall I'd say housing is the most expensive living expense.
As for major cities like NY, LA, Chicago, (without owning a home) it would be difficult to live in a nice (safe) area and meet your living expenses for less than $2500 per month. The further out from the city the lower the rents tend to be. The best options are in small towns with less than 10,000 residents.
D, Thank you! That's what we found out when we were living in SC about 10 yrs ago. A furnished apt was $800. You can stay in an RV in southern CA for $1200 and under. We essentially live in 460 sq ft., but u don't need much when u can be outside
Know your expenses well. Write them down then spend less than you make in income. Invest with a simple discipline that will provide about a 3-4% income that increases every year. Being debt free with your residence paid for is helpful.
Dear TMM, very helpful to know that percentage. We sold a house to be debt free and only have our RV payment. I also feel like I want to soar in our business and INCREASE our income. There IS an audacity to hope, but I'm becoming audacious!
Difficult to answer. If on a state program for medical assistance like in Calif being Medi-Medi (Medicare-Medical), or Medicare and no supplemental insurance, modest living arrangements, no major catastrophes, minimal transportation with savings to cover new tires and maintenance over 4 years, then I would think between 24K to 28K would work.
What would the neighborhood be like and such as that is a question. That is planning on 800 - 1050 for rent. Where I live that gets a single bedroom in an atypical neighborhood. The question is comfort and unforeseen or unable to plan for catastrophe. Those are just as in regular life hard to plan for and much less able to recover from when in retirement. IMHO
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