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Saturday, September 25, 2010

Good Question: How Little Do You Need?

Although I am not particularly interested in attaining Early Retirement Extreme, the blog of that name gives me comfort. That is because the blogger, who has a definite philosophical bent, sometimes asks questions that I need to ask. To wit: not how much do you need to retire, but how little do you need?

How little do you need to retire? So though I do not aspire to early retirement, or to extreme frugality, or to living in a trailer, or to eating beans and rice for a week straight, I am so happy to know it can be done. SOMEONE is doing it.

Isn't it nice to know that in a time of on-going Employment Uncertainty Extreme?

Have you asked yourself any "How little" questions of late?


Anonymous said...

Thank you for this link. It puts an entirely new spin on my thinking about a subject that could become very real for me in a year or two.

Frugal Scholar said...

@Terri--For the same reason as for me? Scary times.

Gayle Ann Berg said...

An excellent, thought-provoking post...

A very interesting question! We have always asked ourselves "What do we need to be comfortable?".

Duchesse said...

We are seriously thinking of selling our large house in one of the world's costliest cities and moving to another large but less expensive city, small house or condo. We're going there for a week, next week to look. We do not need to stay in our city for our business, but cost is not the only criterion. Exhilarating and scary.

So this question is "THE question" for us right now.

Marcela said...

Between 1994 and 1996 my family lost it all, except for a house at the country side where my father started to live. We- my mum, my brother and I- moved in with my grandmother and for about 6 months survived on her pension (210 dollars). My father, in turn, sold everything from the country side house (plates, glasses, sheets, everything). We kept our books but had no shelved to put them on. And we survived and found happiness anyway. We learnt resilience to the point where I thank what happened because, if it hadn't been for it, I wouldn't know how little I need. I need very little. I know that now and it gives me great freedom!

Marcela said...

BTW, very interesting blog!
I know how to save but I want to learn to invest and it is full of ideas. Thanks for sharing!

FB @ said...

Goodness I don't know how much I need..

If I were to live for 30 years after I retire (65 to 95 years old), I spend about $25k a year now... which I think I could go back to if I were retired, so that's about $750,000

This is not including inflation, cost of living increases, or whatever else.

I'd say $3 million would do it.

FB @ said...

Sorry, I mean $3 million to be SUPER secure, but at least today's equivalent of $1 million.

Anonymous said...

I like the How much is enough? question from Your Money or Your Life.

Funny about Money said...

Hmmm... Thanks from moi, too, for posting the link. It looks very interesting! I definitely will be visiting this site regularly.

Well, you know, as a reluctant early retiree, I do have to say that it doesn't take nearly as much as you think.

And SDXB's motto, "Money Happens," is weirdly true. I just added up what I actually will earn this year: not the $29,000 I imagined, but (hang onto your hat), $37,200. That doesn't count the money that will remain in the S-corp into 2011. And, since the new accountant tells me that because the college calls me a "contractor" on its pay statements provides office space for adjuncts, I can deduct mileage; this led to an amazing calculation: by the end of this semester I will have driven to work all of 85 trips to campus, during none of which did I hang around the place longer than three hours.

Well...I take that back. There were four afternoon-long workshops, maybe four hours long, during which most of what we did was socialize and play on the computers.

This year I drew down $500 a month from retirement savings, because I was told I had to have a regular "pension" to get the state to disburse the $18,000 in unpaid earned sick leave it owes me. Having recently learned that a drawdown of a dollar a month will suffice, and having discovered that I don't need the money to live just fine as long as a little teaching income flows in, I'm now planning to draw down no further retirement savings until I'm too old to dodder into the classroom on the odd occasion. I figure this will delay drawdowns for about another five years, maybe more depending on luck and health.

Pretty clearly, a part-time income from an occupation that amuses you and doesn't require undue amounts of work can stave off use of your retirement savings for quite a while. The longer you can delay a regular drawdown, the less you'll need in savings to retire.

Frugal Scholar said...

@Gayle Ann--You are so nice! Thanks.

@Duchesse--Wow! I'm hoping you will share your thinking on this, since I'm thinking about it too.

@Marcela--You know how much I admire your attitude and spirit. Thanks for a thought-provoking comment.

@FB--I'm sure you'll get there.

@nandm--That's really the same question, of course. But the "how little" is more of a wake-up call, I think.

@Funny--Money is happening. I wonder if your mileage deduction will wipe out your pay--that would be a good thing.