Also, let's consider what 30k will actually be equal to in 40 years. I'm thinking it will be quite a bit below poverty, which is tough even with a paid off house (you have equity, but you still have taxes and maintenance to consider). I know plenty of people live on 25k a year after taxes, but most don't do so by choice. Which I guess is the point, but... Eh.
Actually, the 4% Safe Withdrawal Rate builds in cushion for inflation, so it shouldn't change much in 30 years.
I'm a fan of Mr. MM. I can also understand why others would not be fans. I think it's all about your perspective. If a reader is taking his advice prescriptively and wants to retire early without any other plans for passive income, it could be a bit risky (and quite frankly, depending on what makes you happy and brings you joy, could be pretty boring). Especially depending on one's spending habits.
I read his blog with the mindset of finding tips to cut expenses and ultimately reach financial independence earlier (instead of with the goal of straight up "retirement"). The whole "retirement" thing gets blown way out of proportion. At the end of the day, if you are financially independent, it could free up your time to pursue projects of interest because you are passionate about them and enjoy them rather than out of necessity to pay your mortgage. If you are passionate about your career, you could continue the daily grind because you love it. If you hate your job, you could quit and try something else that may be a bit risky but would be rewarding. Regardless of your definition on "retirement" the point is reaching financial independence and gaining more control and freedom in your life. (At least from my perspective .
Some people in his forums - and even some of his advice - is a little whacky and out there, but by all means the general principles at least make you stop and think a bit about money.
At the end of the day, love him or hate him, I can honestly share that his blog has influenced me to make some pretty big changes to my spending and saving habits that have really paid off financially. Maybe one day I'll be brave enough to share details.
And FWIW, I love my cleaning lady, international vacations, monthly "fun money," and wasn't a big fan of Republic Wireless so I'm still on Verizon.
gardengal, my retirement budget is based on my current budget, adjusted up / down depending upon what I expect.
For healthcare, I went in and priced out a plan I would be comfortable with, pretending I was a 50 (or maybe it was 55) year old person. So, that's the price I ended up using. I don't have it handy, but I believe it was around $450 monthly for the two of us? Mr Money pays under $300 for insurance for him, his wife, and his little one.
ETA: I do not use inflation in any of my retirement planning, since you fight inflation by keeping money in the market, and I am going to be keeping my money in the market (versus, say, CDs or some other such low-interest / low risk stuff.)
gardengal, my retirement budget is based on my current budget, adjusted up / down depending upon what I expect.
For healthcare, I went in and priced out a plan I would be comfortable with, pretending I was a 50 (or maybe it was 55) year old person. So, that's the price I ended up using. I don't have it handy, but I believe it was around $450 monthly for the two of us? Mr Money pays under $300 for insurance for him, his wife, and his little one.
ETA: I do not use inflation in any of my retirement planning, since you fight inflation by keeping money in the market, and I am going to be keeping my money in the market (versus, say, CDs or some other such low-interest / low risk stuff.)
Gotcha. So, you just went onto healthcare.gov or something?
Sorry if I'm sounding dense. Healthcare feels like this big black box to me!
gardengal, no absolutely no worries! Insurance is a big, slimy mess for most Americans right now.
I went to one of the comparison shopping websites - I believe it was ehealthinsurance.com, actually. I found a Kaiser plan there I would have been comfortable with, so priced that out for me and my H to get the cost of insurance. Knowing myself, I probably added a little buffer, but not much (probably just rounded up to the next full hundred or so.)
I feel so, so lucky for my healthcare plan. As long as H and I stay married, and as long as he works a few more years, we'll have comparatively low cost health insurance for life. Yes, when I am 50 miles or less from a military base I have to use government doctors. But I love them. I prefer them. I hate to have to use private docs right now because I know I'm costing America more money. But it's on them for stationing us here!
I think Tricare is why I'm so "Socialist" about health care. It's been so great for me and so many others. Yes it takes awhile to get an appointment for routine stuff, yes the bureaucracy can get frustrating. But everything is covered, I haven't had to pay out of pocket for anything in years besides dental (I wish dental was fully covered, it's so integral to your overall health). I wish everyone had the freedom from health care costs that active service members and their family has. I'd even be comfortable with an increase in costs for dependents, or less choice (prime only, no standard), but I'm starting to ramble.
Oh, trust, I am jealous. I don't really understand why some people are SO against "socialized" healthcare...except for the oldz & the military. Then it's OK.
Having healthcare tied to employment is dumb (said as a self-employed person reliant on spouse's healthcare benefits). I'm positive health insurance is a deterrent to entrepreneurship & small business, especially if you have kids (so, guaranteed regular check-ups, higher likelihood of random accidents, etc)
I'm a fan of Mr. MM. I can also understand why others would not be fans. I think it's all about your perspective. If a reader is taking his advice prescriptively and wants to retire early without any other plans for passive income, it could be a bit risky (and quite frankly, depending on what makes you happy and brings you joy, could be pretty boring). Especially depending on one's spending habits.
I read his blog with the mindset of finding tips to cut expenses and ultimately reach financial independence earlier (instead of with the goal of straight up "retirement"). The whole "retirement" thing gets blown way out of proportion. At the end of the day, if you are financially independent, it could free up your time to pursue projects of interest because you are passionate about them and enjoy them rather than out of necessity to pay your mortgage. If you are passionate about your career, you could continue the daily grind because you love it. If you hate your job, you could quit and try something else that may be a bit risky but would be rewarding. Regardless of your definition on "retirement" the point is reaching financial independence and gaining more control and freedom in your life. (At least from my perspective .
Some people in his forums - and even some of his advice - is a little whacky and out there, but by all means the general principles at least make you stop and think a bit about money.
At the end of the day, love him or hate him, I can honestly share that his blog has influenced me to make some pretty big changes to my spending and saving habits that have really paid off financially. Maybe one day I'll be brave enough to share details.
And FWIW, I love my cleaning lady, international vacations, monthly "fun money," and wasn't a big fan of Republic Wireless so I'm still on Verizon.
Very well said. And I hope one day you share the details, or at least some of them. I can never seem to get onboard with the more "hard core" advice I've seen on MMM (and here, frankly) but financial independence is a huge goal of ours. We intend to be ABLE to retire by 55 and I think, based on what I know today, that it's quite doable. We could do it much earlier if we wanted to give up more now, but we have a competing goal of living our life fully right now, knowing retirement is not promised.