Retiring on the Bare Essentials at $10,000 a Month

“The Fester Addams Offshore Retirement Fund?” – The Addams Family (1991)


When I retire, I just want to travel by plane when I want to.  A plane like this one.  That I own a fleet of.

I was at work the other day and a friend sent an Instant Message to me over the company system.  The message was as curious and enigmatic as an Easter Island statue:

“How much is enough?”

I responded.

“78 years.”

That’s what I thought the average life expectancy was.  I’d been intending to wear out all of the parts before the warranty expired, but in doing a bit of research, if you’ve lived as long as I have, the average life expectancy goes up to 81.  Meh.

78 is probably enough.  If I can’t finish binge-watching Breaking Bad on Netflix® by then, well, it’s on me.

A bit later we talked on the phone, and I got clarification – it turns out the question was really:

“How much money does a couple need each month to retire on?”

My friend’s working answer was $10,000 a month for the bare necessities.  $120,000 a year – cash, which would be equivalent to a job paying $180,000 before taxes.  A year.

I laughed.  “That’s insane!”

Is it?

I checked my own retirement spreadsheet – my model assumes that I’d spend ~$7,000 a month if I retired now (and I don’t have the money to do that, yet) rising to $8,500 a month by the time I’m sixty five.

All of a sudden, my friend’s ballpark number didn’t seem so large, after all.

Then my friend shared the family budget:

Property taxes:  $2,500/month.  Yeah.  They live in a pretty cool house, in a pretty high tax state.

Electricity:  $600/month.  Yup.  It’s hot there.

Natural Gas:  $50/month.  Seems legit.

Cable/Internet/Phone:  $350/month.  A big bundle, but you’ve got to get the Food Network® after you retire.

Car Insurance:  $250.  This seems low – they have kids and live in a major metropolitan area that looks like the Indy 500 most days.

Monthly Expenses:  $3,000 each for the Husband and Wife.

Add it up?  Pretty close to $10,000.

What do they have?  Heck, I have NO idea.  Again, they’re doing great, and in no hurry to retire.

It used to be that a financial planner would have said that you could pull out 6% of your stash of cash each year.  If you were 65.  I’m not sure, but I’m betting that none of them are saying that now.  Especially in your fifties.  Perhaps 3% or 4%?

Starting Amount %  Drawn
 $           4,000,000 3%
 $           3,000,000 4%
 $           2,400,000 5%
 $           2,000,000 6%

The lower the amount that you draw down, the less risk you are taking.  Me?  If I was in my fifties and wanted to be sure that I was going to have $10,000 a year until I died?  I’d want at least $3,000,000, and $4,000,000 would be nicer – remember, this has to last you for at least thirty years, and the longer you live, the greater the chance of significant risks, like those that hit Rome (LINK) or stupidity like the Dutch over flowers (LINK).

What has inflation done in 30 years?  $10,000 today would be worth roughly $5,000 in 1988 dollars.  And medicine, something you’ll be needing more of as you grow older has been especially prone to inflation.  Especially medicine that keeps older folks alive.  And as I’ve said before (LINK), we are soon due for a reckoning in medical costs.  My plan is to force my cells to evolve through sheer willpower to create all the drugs a doctor would have given me.

My budget varies, and is a lot more detailed.  That $3,000 has to pay for maintenance, painting, new cars, homeowner’s insurance, clothing, cell phones, food, mowers, PEZ®, vacations, eyebrow rings, good wine, everything.  Oh, and health insurance.  And medicine.  And Christmas gifts.  And ammunition.

After reviewing their number and their proposed lifestyle, I guess I have to unlaugh.  It seems legit.

It seems . . . prudent.

And it also seems very much in their power to get there (easily).

Sure, they could move away from their great neighborhood in the big city they live in, but why?

Now, I’ll note that this is more than three times the average household income of $59,000 a year.  But my friends are very much above average in every way – they’re smart, they have great jobs that they love, they’re raising kids you’d be proud to call your own, and they’re nice.  You would like them.  I mean, you might not like them as much as you like me, but there really only can be on John Wilder.  Okay, there are at least a dozen others.  But we all know I’m the only one for you.

Anyhow, these are great people.  But, they’re also frugal – they do buy nice stuff (they have better taste than I do) – but they don’t waste anything.  They’re responsible with their income and resources.  But they don’t want to be a burden on society or their children as they age.  They’re prepping against the Iron Triangle (LINK) of retirement – Time, Money and Lifestyle.


Time:  They’re young, and healthy.  They’ll probably retire whenever they want in their fifties.  They’ll have a longer retirement than most, but as you have seen, they’ll be ready for it.

Money:  They’re in great jobs that require smart, trained people with advanced degrees.  People like them are in demand, and they work in strong sectors (LINK) of the economy.  Low probability they’re be replaced by A.I. (LINK).  They’re doing well.  (Yay, them!)


Lifestyle:  They could probably retire right now if they were willing to retire to Sedan, Kansas (LINK).  They could still eat steak whenever they wanted and they and their kids would never have any real need that couldn’t be met.  They’re not choosing the Mr. Money Mustache or Early Retirement Extreme path (LINK).


But why should they?  Again, they’re working jobs they love.  And if they retired, they’d probably start a side business that would garner more money than IBM® in a year or two.  If they keep working at their current jobs into their fifties?  Yup, no worries.  Ever.

The above describes about seven or eight married couples that I’m friends with.  They’ve got great talent.  They’re smart.  They studied hard for an undergrad degree in an elite field at a tough school, then got grad credentials (most of them, but not all) and then burned decades of 60+ hour stressful weeks and have succeeded.  They married a single spouse and then stayed married.

Is that what they call lucky in 2018?  Hmmmm.

How come everybody I know who did all those things . . . is doing great?

Also, I’ll leave retirement alone for a while.  Probably.

This is not financial advice.  Really.  I’m a blogger.  I’m not a licensed therapist, doctor, lawyer, oregano peeler, shrimp boat owner, or financial adviser.  Talk to a pro.  Or a psychic.  Or your TV.  Or Miss Cleo.  I really don’t care.  It’s your money.

Author: John

Nobel-Prize Winning, MacArthur Genius Grant Near Recipient writing to you regularly about Fitness, Wealth, and Wisdom - How to be happy and how to be healthy. Oh, and rich.

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