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Retire Now on a Very Modest Budget

March 30th, 2019 at 11:50 am

I love to crunch my numbers this way and that. Recently I have discovered that if I retire right now, it looks like this:

- withdraw $1,400 per month beginning 4/1/19
- give myself a 2% COLA every Jan 1st
- hold off on SS until FRA (67)
- at age 67, reduce monthly withdrawal by $750 (realistic SS benefits estimate)
- assuming 5% IRR, run out of money at age 96

Even though I cannot live my desired lifestyle on $1,400 per month, it is a very liberating feeling to know I can cover my basic needs come what may.

I have built a spreadsheet and will continue to fill in actual numbers and re-calculate each month. At some point, the monthly withdrawal is going to become enticing enough to pull the trigger on retirement.

7 Responses to “Retire Now on a Very Modest Budget”

  1. starfishy Says:

    very interesting! from where would you withdraw the $1400/month if you retired right now? and what is COLA? fun to think about!

  2. NJDebbie Says:

    Starting November or December, we will be living on $2,500.00 a month. Ten months after that our income will increase about $1,300.00 more since my husband is taking early social security benefits. It will be tight but we are frugal and we feel that we can make it work.

  3. creditcardfree Says:

    @starfishiy, COLA, is cost of living adjustment.

    @NJDebbie...good luck!

  4. CB in the City Says:

    That's basically what I am doing. I'm living on a $1,120 from Social Security, plus $305 interest payment from TIAA. And whatever I can scrape up from mystery shopping, etc. In August my SS will go up, because I will turn 70 and I will claim the full benefit (getting the spousal benefit now). Not sure how much it will go up -- it will be welcome, but I have done all right on this small income, with a backup of savings.

  5. Wink Says:

    I will be living on a similar monthly income when I retire from full time work next year. I tested it out all of last year by trying to live on $1000 a month (even though I am still working) and still have an enjoyable life. I was mostly successful!

  6. Susan M. Steiner Says:

    That’s mostly what I’m doing, living on SS of just under $1800 in a HCOL area. Except for expensive home repairs and such, it worked!

  7. Petunia 100 Says:

    Hi Starfishy, if I were to retire today I would use 72t rules to withdraw from my traditional IRA, then supplement from Roth and 457 to get to $1,400.

    Hi CB, and you are paying a mortgage! I enjoy how you chronicle each purchase, it is helpful to read what others do to make it all work.

    Hi Wink, I would like to read more about your day to day life on 1k per month.

    Hi Susan M., have you considered writing your own blog? I would like to read more of your particulars.

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