What Income Would You Need to Convince You to Stop Working?

Dacs on 16/09/2016 - 14:20
Last edited 16/09/2016 - 15:45

A post for pondering and discussion.

ASFA (Association of Superannuation Funds of Australia) gives these figures for people 65 years old:

  • Single, Modest lifestyle: $23,767
  • Couple, Modest lifestyle: $34,216
  • Single, Comfortable lifestyle: $43,062
  • Couple, Comfortable lifestyle: $59,160

The figures in each case assume that the retiree(s) own their own home and relate to expenditure by the household. This can be greater than household income after income tax where there is a drawdown on capital over the period of retirement. Single calculations are based on female figures. *

I think most people believe that they life fairly modestly (maybe more true on Ozbargain than most), though would like to have "just a little more" income than they currently receive. But if you look at the range of incomes of those people it's clear that that's really more a perception than a fact.

A couple living on $40k might think it's alright but that $60 would be fantastic, whereas a couple living on $60k would think it's alright but that $80k would be fantastic.

So here's the question:
What guaranteed annual income-for-life (increasing with inflation) would you have to be offered to permanently give up working for money right now?
Edit: Assume renting, or if you own a house then factor in an equivalent rental value into the number.

*Edit 2: Just seen that these figures assume home ownership, which would be worth, say, an extra $20-$40k per year, but would also have costs for rates, water, maintenance, insurance, etc

Edit 3: For anyone interested in this topic, Mr Money Mustache is a blog really worth following!

Financial

Comments

  • pyramid on 16/09/2016 - 14:25
    +5

    2 Million.

  • BigTed on 16/09/2016 - 14:37
    +16

    If I was getting $100,000 pa in the hand guaranteed and indexed for the rest of my life - I think I would be ok to stop work now. But more would always be better.

    • Dacs on 16/09/2016 - 14:48
      +12

      More always seems like better but I think it's interesting to consider when enough is enough

      • doodo477 on 20/09/2016 - 23:16
        +1

        When your mistresses can't spent it faster than you make it.

    • MATTDAMON on 18/09/2016 - 21:37
      -7

      100k isnt that much, its only 65k or so after tax which is 1250 a week give or take.

      Not that much at all, especially if you consider a family to support etc.

      If you double or tripled it you would be getting close to the mark to be comfortable.

      • BartholemewH on 18/09/2016 - 23:00
        +11

        "In the hand" means after tax, so 100k would be 100k.

      • mooboy on 19/09/2016 - 14:11
        +9

        There are many people who would be happy to make 100k before tax and would consider that comfortable.

    • johnno07 on 20/09/2016 - 19:21

      Yep. I reckon 100k is about right. You'd need to be particularly careful though, given you'd have a lot of spare time to use that money…

  • Looking4Bargians on 16/09/2016 - 14:43

    $1M PA guaranteed income-for-life (increasing with inflation) and NO TAX.

  • StewBalls on 16/09/2016 - 14:44
    +7

    I smell a get rich quick scheme coming…

    • Dacs on 16/09/2016 - 14:50
      +4

      Ha ha, not at all.
      It was actually inspired by my own long-term planning and this post about Patrick who sold up and bugged out to be a nomad with just $300 in his pocket.

      • StewBalls on 16/09/2016 - 14:52
        +4

        Well, I hope that the executor of Patrick's estate divvied up the three hundred bills fairly and impartially…

    • [Deactivated] on 19/09/2016 - 20:07
      +1

      Kyanï

  • sien on 16/09/2016 - 14:50
    +10

    It depends on what you own. If I owned a house in a major city that was paid off I'd stop working for 40K a year for life.

    Without a house I'd keep working until I got a house and then had that kind of income.

    Housing prices in Australia are terrible. If you look at the US and see what you can get in places like Portland, Austin, Sacremento, DC, Chicago and other good sized cities with jobs you wonder if it's worth leaving.

    • Dacs on 16/09/2016 - 14:59

      Yeah, owning your own house would be a significant factor so assume renting (I'll edit the post).
      The cost of a house is usually around 15-25 times annual rent. Currently in Australia it's in the upper part of that range which is why I'm happy rent until it moves to the bottom of that range.

      • virhlpool on 18/09/2016 - 13:54

        Has it moved towards bottom of the range in the past? I don't see it happening if population growth (including new immigration) and therefore housing purchase demand doesn't decrease significantly.

    • ozkiwi75 on 17/09/2016 - 20:28
      +8

      I'm sorry, but you're not comparing apples for apples. And these things tend to go in cycles. If you had gone to the States during the mining boom, you probably would've lost your job and your house over there. Remember just a few years ago we were the envy of the world. But if you think we've got it bad here with home prices, take a look at what the house prices are in Auckland just across the ditch!

      Housing is one thing, but how much you get paid in the States depends on your profession. I can tell you I get paid close to twice as much doing what I do here in Aus vs the States. Also, my parents used to live in one of your example cities and they also got paid less than they would have here in Aus, even taking tax into account. Heck, everything is cheaper in the States. It's all relative. One thing for sure though, the health care system and associated costs are a nightmare over there.

      A word of advice, from my experience the grass always looks greener somewhere else. But until you make a move you won't know for sure. Every country has it's pros and cons. Make sure you do your research and make your choice wisely. Aus is not perfect, but still one of the best places in the world to grow a family.

      • EyyBanane on 18/09/2016 - 12:32
        +1

        @ozkiwi75,
        What do you do, if I may ask, that pays you twice in Aus than US? And when you say that, are you comparing top tier cities in US say NYC, SFO) or others?

        Also are you considering current exchange rate or that of 10 years ago?

        • virhlpool on 18/09/2016 - 14:06
          +2

          And when you say that, are you comparing top tier cities in US say NYC, SFO) or others?

          This makes sense if we are talking abt Sydney or Melbourne here. Apples to apples. Entry level grad engineering position typically pays $55k AUD here and the similar positions (many more in numbers due to bigger economy and more robust job scene) pay $75k USD there. Leave aside living expenses, I wish even $55k AUS were equal to $75k USD in absolute sense. (Source: Friends and relatives in both countries.)

        • ozkiwi75 on 18/09/2016 - 14:11

          Man, you have a lot of questions… Just remember I'm not a financial adviser and I didn't build a spreadsheet to give my statement above! I'm just giving my point of view. I do like spreadsheets though…

          The point I was trying to make was that it wasn't a fair comparison and it depends on many factors which need to be researched on a case by case basis, including some of those factors which you have also raised. eg. SYD vs SFO is not the same as SYD vs SAC.

          I am an engineer and on average we are paid much more here than in most other countries. You can thank our politicians' ineptness for politicising the delivery of much needed infrastructure in a timely, methodical manner for that, but I digress. In my case, I am much better off financially here in Aus.

        • ozkiwi75 on 18/09/2016 - 14:15

          @virhlpool: FYI, we used to hire top tier grads at around $70k just a few years ago. Again, depends on company, city, etc.

        • virhlpool on 18/09/2016 - 14:21

          @ozkiwi75: But even then, the US grad positions pay higher in absolute numbers, and with MUCH lower living expenses (read cars, electronics, parking, petrol, grocery, clothes, alcohol - every damn thing), one would be in a much better financial position there. Isn't it?

        • virhlpool on 18/09/2016 - 14:26
          +2

          @ozkiwi75:

          I am an engineer and on average we are paid much more here than in most other countries.

          Any Tom, Dick and Harry working in s/w industry in Silicon Valley gets paid at least 30% higher and in USD. Plus, much less struggle to find a job at the first place. I don't know what makes you believe that we are paid higher here when most of the top companies are concentrated there and they literally fight to get the best talent at no matter what cost. Forget about pay, here one struggles to find even another job after the first contract is over. Not sure, why my observation of engineering job market here is too different from yours. May be you are seeing far more offices of Fortune 500 companies and therefore many more positions here that unfortunately I don't see somehow. :(

        • StewBalls on 18/09/2016 - 14:51
          +6

          @virhlpool:

          Any Tom, Dick and Harry working in s/w industry in Silicon Valley

          He said Engineer…that might not necessarily mean Software Engineer.

          I've got family working at Google ATM, it ain't all beer & skittles mate, I can assure you. Do they get paid well, yes; do they work their arses off in a high pressure, cutthroat, backstabbing environment doing hours long beyond their contract just to stay ahead of the competitors…you bet your arse they do. If they could get Aussie PR they'd be here in a heartbeat!

          Honestly, if you reckon it's so great over there just go & live the dream…think of us from time to time & send us a postcard. ;)

        • virhlpool on 18/09/2016 - 14:55
          +1

          @StewBalls: Who am I to decide which is a greater place to work and live. The world recognises it and we just follow the most people. Why would the brightest of ALL engineers move there then? Why are 70%, if not more, of all fortune 500 companies there? Why are their unis the most competitive in the world? Why is there job market so much better when half of our grad class struggles to even get into grad jobs here? They even had the highest number of Olympics medals, on a side note. God knows the answer. I am a naive. I am not saying things are better there. They seem to be better apparently.

        • ozkiwi75 on 18/09/2016 - 15:06
          +1

          @virhlpool: We're obviously talking about different professions. I was talking about real engineers as in Civil Engineers, no offence! I believe you're talking about software engineers. Those dudes coding Ruby on Rails or iOS in the Valley easily earning US$150k+ per year. In which case, the Valley beats most places hands down. I read somewhere a facebook intern earns $7k per month. Not bad for an intern!!

          But this is exactly my case in point. It depends on the demand for the profession.

        • virhlpool on 18/09/2016 - 15:08
          +1

          @ozkiwi75: Agree. But, for recent grads though it makes sense to take up a profession which pays more (even if his education was different) and go and live where he gets paid the most. Right? I am too old to be called a recent grad though. :)

        • ozkiwi75 on 18/09/2016 - 15:35
          +2

          @virhlpool: Well, yes and no. I can get paid much more if I go work on a major construction project in Saudi Arabia, but I'm not rushing to get on the next plane to Riyadh! As for grads, they should be looking at future/long term trajectory of income, not just the highest initial pay.

          On another note, it is unfortunate that we blew away the mining boom on tax cuts and handouts when the government could have put it towards a future industry by creating the same environment and incentives that has influenced investment in the Silicon Valley.

        • Geekomatic on 18/09/2016 - 15:50

          @ozkiwi75: I also think that the average person looking at this doesn't truly understand that there's a HUGE difference in so many things, AU vs. US….like guns everywhere, for one. I consider that an extremely important consideration!

          2nd, is lousy US public transport (we're spoilt in AU).

          US Healthcare system is a nightmare.

          Tax return gets complicated & likely will need an advisor (more expenses).

          Lastly, no one seems to consider that in the US, there is a HUGE pool for employers to draw from— you're going to be competing with so many more for that coveted position.

          To each, their own- but I prefer my son to seek his employment right here in AU, if at all possible.

          Imho.

        • EyyBanane on 18/09/2016 - 16:01
          +1

          @ozkiwi75: Roger that you aren't a financial advisor, mate. I worked in NY for a couple of yers a decade ago, and still have friends/team mates working there.

          I couldn't relate to a time in past 10 years when US salary was <130% of Aus equivalent at least in software industry for comparable roles. Hence the questions.

          Leave aside the cost of living, work pressure etc., that's all a different discussion.

        • zeomega on 19/09/2016 - 00:17
          +1

          @virhlpool:

          Any Tom, Dick and Harry working in s/w industry in Silicon Valley gets paid at least 30% higher and in USD.

          Come on. Not ANY Tom Dick or Harry can find a Job in Silicon Valley. You need to be relatively elite, to be able to get a job there. The pay is thus justified. It's like comparing a friend who graduated first class hons and got headhunted by BP. $120k starting and he's in a team of 10, doesn't mean that every engineer gets to join BP at that level. The rest slog away at lowish rates.

          Your comment is skewed and biased.

          http://www.mtu.edu/engineering/outreach/welcome/salary/

          http://www.engineeringjobs.com.au/engineering-industry-salar…

          Not factoring in exchange rates. It's similar-ish.

        • ef on 19/09/2016 - 10:24
          +1

          @virhlpool: You might be in a better finacial position until you get sick or any family you have in USA get sick and have to goto hospital.

        • virhlpool on 19/09/2016 - 19:00

          @ef: Don't employers generally cover your health insurance there? It's very common. No?

        • Bunnyburger on 20/09/2016 - 09:44

          @StewBalls: So same thing in Australia but they get paid less for it?

        • jparga on 20/09/2016 - 14:05

          @Geekomatic:
          How long did you live in the US? what state? just to know……

      • Gorodemon on 18/09/2016 - 13:17
        +7

        So you're saying that the grass looks greener on the other side because it's been fertilised with bullshit?

      • Save Medicare on 18/09/2016 - 18:07

        I have a family friend who moved to the US to do her undergraduate maths degree. She's 23 now and make $200k USD last year at an investment bank in her 1st year out of uni.

        Meanwhile I (22) am still in school and will be lucky to make $200k USD as a fully qualified specialist doctor 30 years from now.

        • Trying2SaveABuck on 18/09/2016 - 18:49

          I just got back from visiting the USA and I'm telling you now money wise it is way better then Australia (assuming you are educated/or have higher level skills) thats without even taking into account the exchange rate. It doesn't matter what field you're in USA has a bigger economy and a lower cost of living.

        • zeomega on 19/09/2016 - 00:21
          +4

          To make 200k 1st year out of uni, she has to be something special, it's not the norm for investment bankers.
          Source: Have many investment banker friends located around the few major hubs worldwide. Brother is one as well and doing extremely well.

        • Save Medicare on 21/09/2016 - 17:11

          @zeomega:

          She's definitely one of the smartest and hardest working girls I knew growing up. But there are a lot of smart and hard working doctors in Australia who don't make nearly as much.

        • zeomega on 21/09/2016 - 17:15

          @tony abbott:

          Really? A few of doctors I know are doing plenty well for themselves and couple of them have admitted to earning way above the top tier tax bracket.

        • Save Medicare on 21/09/2016 - 17:17

          @zeomega:

          Doctors definitely have a comfortable income, but I think it would be hard to find someone who's not a surgeon making investment banking or hedge fund levels of money.

          Our head of paediatrics at my major hospital is making (inclusive of public and private income)about the same as my family friend made in her first year out.

        • zeomega on 21/09/2016 - 22:04

          @tony abbott:

          If you want to make $$, why did you bother becoming a doctor in the first place? But to put it into perspective, for every 1 successful hedge fund/ investment banker, there are 100s of average ones and thousands of people not earning big bucks in the banking sector. It's the same as for the 1 successful doctor, there are bucket loads of average GP level doctors. There are many investment bankers that don't even break the 6 figure sum. So stop concentrating on the few successful ones and realise there is always the elite few. Unfortunately in terms of earning power, yes bankers will out earn doctors, but don't forget… they deal with $$ day in and day out.

          And TBH, 200k is very very comfortable. I think your head of peds is doing much better than 90%+ of the Australian population. No right to whinge about anything.

      • sien on 19/09/2016 - 16:24

        In the GFC US unemployment went from 5% to ~10%. I.e. an extra 1 in 20 people lost their jobs.

        I've lived in the US and made more than working in Australia.

        I came back because while I actually think the US is a better place to live than Australia but family being far away doesn't cover the improvement.

        However, I look at friends who have stayed in the US in CO, CA & OR and they really have it better than we do.

      • MrMarket on 21/09/2016 - 08:42
        +4

        I agree Australia is pretty good, yes things are expensive like housing but if you are an action person and make things happen you will find ways to Live comfortably

        There are a lot of opportunities in a country like Australia all you have to do is work hard, invest and live a simple life and you have one heck of a good time.

        I have the advantage of coming from a much poorer country so I value hardwork and Australia way of life and see everything as an opportunity rather than obstacles.

        My kids will grow up and face the same challenges as everyone else with housing and cost of living but hopefully I install enough of my ethics in them so that they can over come any obstacles.

  • 2jzzzz on 16/09/2016 - 15:10
    +11

    With house paid off, would love around $60k a year for a couple.

  • tanoshiiki on 16/09/2016 - 15:33

    Are the amounts provided above assumed to be tax-free income?

    • Dacs on 16/09/2016 - 15:51

      Yes, but with those amounts tax would be minimal, especially if income is split between a couple and if some of it was coming from a tax-free portion of super.

  • altomic on 16/09/2016 - 15:33
    +1

    this much

  • idjces on 16/09/2016 - 16:20
    +1

    Seeing as you mention MMM, i'm shooting for 20k myself, after the mortgage is paid off. At least once I've hit that level, I could take an extended leave and see how things progress. I base 20k on my end, my partner is free to pursue whatever path she pleases. On a good month i'd spend $2500, half of which is pure interest charges. With another 5-10 years of financial data, I should have a good idea on what I can be looking forward to.

    $60k would be the magic number, I spent 6 weeks in the US and was spending $1000/week trying to experience everything on offer.

    • Dacs on 16/09/2016 - 16:25
      +4

      While I'm not as quite frugal or DIY-handy as MMM I think he has a fantastic philosophy and good advice. Good luck on your goal!

      • idjces on 16/09/2016 - 16:30
        +4

        Thanks!. Yes he does, people could learn a lot from him (and others)

    • fruit on 18/09/2016 - 13:58

      What does MMM stand for?

      • maximum on 18/09/2016 - 15:21
        +2

        Mr money mustache the links up the top in the post

    • mooboy on 19/09/2016 - 11:34

      Would you need to take extended leave to try it out? Can't you just restrict your spending to 20k a year now, and set the extra income aside?

      Or you'd need the spare time for DIY, odd jobs etc that you'd expect to do if left your work?

      • abb on 19/09/2016 - 13:20

        Spending patterns might be very different when not working.

        More free time to spend on expensive hobbies, for example.

        (May be balanced by more time for side gigs, as you say)

      • idjces on 19/09/2016 - 15:43

        I say extended leave in the sense that, i'd quit my job and 'retire', but I'm not ruling out the option of returning to work down the road (if I spend a little more than I earn), or just doing short stints to save up the funds for interesting (expensive) projects. If I have some 6 figure sum invested, spending a few thousand more than my income each year, is not going to ruin me during the first decade or two, the part of my life I want free from work commitments.

        The $ figure I would have invested is a lot smaller than most FIRE people would aim for. I'm not willing to put off FIRE past a certain date, I want to be around during my kids youth. Once they're adults, I would be less inclined to avoid work.

        I love DIY. Give me enough free time and I will find a way to fill it :). Be it projects, experiences, whatever. I work night shift so pretty much have every day free as it is. I still want the extra time back haha

  • [Deactivated] on 16/09/2016 - 16:22
    +4

    Just a small loan of million dollars…

  • tanoshiiki on 16/09/2016 - 16:36

    I think it really depends on stage of life. A top up is required for each kid I think.

    • Dacs on 16/09/2016 - 16:48

      What do you think is the effect of stage of life?
      I agree that extra would be required for kids, but other than that I don't think stage of life is so significant. People tend to spend more in their 30s, 40s, 50s because they're earning more and then feel that they deserve to spoil themselves.

      • tanoshiiki on 16/09/2016 - 17:03
        +1

        Factors

        Kids are a big factor. Some people may also need to care for people with certain conditions, e.g. health, elderly, etc, which will require more funds as well.

        Housing can also be a factor. If someone has fully paid off their mortgage, they will need less funds as opposed to someone making mortgage and rent payments.

        Standard cost of living varies too and that will change the minimum amount of what people can live off.

        • Dacs on 16/09/2016 - 17:11

          See post's edits and the comment) about rental & home ownership. It doesn't make too much difference which one you have. It makes much more of a difference if you're happy with a modest apartment in a mid-range suburb or "need" a mansion on the water at Rose Bay.
          "increasing with inflation" takes into account the changing cost of living.

  • PlasticSpaceman on 17/09/2016 - 07:44

    Something to keep in mind too is when I eventually retire and the kids have left home, sometime in 2085 at this rate, we would probably downsize our home and recover a lot of our investment to put towards the retirement funding…. Basically I look at what we have in our super now and initially think it's not enough, but when I consider the future downsizing it's actually not too bad….

  • [Deactivated] on 17/09/2016 - 10:15
    +15

    Working is not just to earn money.
    I was lucky enough to be able to retire very young and set up for life financially.
    I went back to work after two years because I missed all the other stuff; social contact, responsibility, pride in my work etc.
    Retiring from work sets the countdown clock ticking.

    • dp1 on 17/09/2016 - 12:05
      +4

      ^this. I don't ever want to retire. Lots of my colleagues are in the 65-70 age range, house paid off and children financially independent but it's good for their mental health to stay at work

    • Dacs on 17/09/2016 - 13:13
      +4

      I also stopped conventional working very early but love the lifestyle. Lots of travel, hobbies and doing unpaid volunteer work on things I believe in. Everyone's different though.

    • Donaldhump on 18/09/2016 - 08:20
      +1

      100% agree… i worked from home and missed the interaction.

      nothing like dropping a bomb on a colleague, and then walking off to the coffee machine.

    • FatBlanket on 18/09/2016 - 10:04
      +6

      I agree working is great for keeping boring people occupied.

    • Dacs on 19/09/2016 - 16:14

      Working is not just to earn money.

      Which is why the question was asking how much you'd need to give up working for money.
      However if you're not working with the aim of earning money then it becomes a bit vague as to what work actually means.
      Is someone working if they are enjoying painting a picture? Writing a book? Building furniture? Developing an app? Gardening?

      • Euphemistic on 20/09/2016 - 09:55
        +1

        Yup. It'd be great to go and do whatever your heart desired, but there are lots of 'dream jobs' out there that wont pay the bills.

        It looks like we are going to be close to debt free in the next couple of months as we sell an investment property, but we still need to eat, educate children etc and still want to holiday and enjoy ourselves. For that we will need an income, but we will not need as much income to support our current lifestyle. By keeping our current jobs we will be able to save more for retirement though and not have to worry if all of a sudden the house needs a new roof or the car blows up.

  • Brendoo on 17/09/2016 - 13:28
    +1

    The numbers quoted look fair, I'd live comfortably on $43k assuming house paid off, no debt.

  • simmos on 17/09/2016 - 13:59
    +4

    We are conservative spenders, own own home, grow all our own veggies, house paid off and like to do overseas holidays 2-3 times a year (at least two during Aussie winter). We stay in reasonably priced accomodation in off seasons and sometimes rent a place longer term. We are already retired and manage very well on $50k pa.

  • affable on 17/09/2016 - 15:22
    +9

    Thanks for posting, MMM is a great resource I'd never heard of, however I've been having similar thoughts myself.
    The problem with early retirement is if too many people realise and retire early, investments will dwindle rather than appreciate. So get in quick before it becomes mainstream…

    My issue is passive income streams make it very hard to use traditional estimates.
    So far I've managed -
    1. $9000pa nett granny flat rental (below tax threshold in "retirement")
    2. Free 10kW solar PV (thanks NSW gov) + 2 EV cars so very little petrol
    3. Free 22kl of water tanks (thanks NSW gov + council rebates) so very little water bill
    4. $4000pa Android & iOS app sales (10+ yr recurring stream)

    Aim is "retire" @ age 52 when the kids finish school.
    I am hoping to live on $36,000pa less passive $13,000 = $23,000pa from savings (considering no power, water or petrol bills I think this is reasonable?)
    My wife thinks we need more, lol….

    • Dacs on 17/09/2016 - 17:28
      +1

      Sounds like you're doing a lot of things right! Good luck.

  • HeWhoKnows on 17/09/2016 - 15:38
    -8

    Stupid hypothetical question. Its up to you! Depends on what lifestyle you want. Dont ask anyone else. As you mentioned in your opening remarks, everyone is different! And no income is guaranteed, especially adjusted to inflation. Just ask the poor old pensioners.

    • affable on 17/09/2016 - 16:20
      +13

      I disagree, I learn a lot from other people sharing their circumstances, and those that make sense to me I apply to my life.

  • Aceboy884 on 17/09/2016 - 18:01

    Without debt and home paid off

    I think $60k no tax is more than enough for a couple living a simple life

  • MustacheFire on 17/09/2016 - 20:26

    If we were a couple not planning for kids then 40k would be fine. But I'd say 60k min with kids and 80k to be comfortable.

    Good job promoting MMM :)

  • Talonparty on 18/09/2016 - 02:08

    I think those estimates are spot on. If I owned my own home and could get those amounts, the basic and comfortable levels seem great. Then again I've always been on the low income side of it all so I haven't got many expensive hobbies which would make it seem impossible.

    But if I could get that kind of money? I'd probably spend my time learning. I have studied science and there were so many things I'd love to study further or investigate but which I just don't bother since I have to make money. But it'd be so nice to indulge and I could totally do it on that level of money I reckon. It'd have to increase over time though because I'm fairly young :P

  • [Deactivated] on 18/09/2016 - 08:52
    -1

    3 times my annual income today.

  • Tasmaniac on 18/09/2016 - 10:04

    50k. Got there for the first time last year and I still miss work. Not working isn't all its cracked up to be, there's a sense of self worth you achieve when working. Don't forget many retirees get depressed and die earlier if they don't find rewarding ways to spend their time.

  • grabngo on 18/09/2016 - 10:08

    in order to have 40k a year income,u would need $2m in the bank.
    Man oh man,
    Do I have a long way to go !

    • Dacs on 18/09/2016 - 11:26

      Based on the last 150 years*, including wars, famines and economic depressions, you're almost certainly safe if you invest wisely and spend 2% (increasing annually with inflation) of your starting investment balance per year. You're probably safe if you spend 3%. And you might be safe if you spend 4%.
      Put another way, you're almost certainly safe if you start retirement with investments of 50x your annual spend. You're probably safe if you have 33x your annual spend. And you might be safe if you have 25x your annual spend.

      *Maybe the same for the next 150 years, maybe not. There again you might die of cancer or in a car crash, or be a survivor living a dystopian existance in a post-nuclear-holocast world.

  • nikey2k27 on 18/09/2016 - 10:59

    40,000 i would be happy with i am easy man. house pay off. i would most like still work on day a week just feel apart of it.

  • paloverde88 on 18/09/2016 - 12:30
    +4

    Pollies retiring gets over $200,000 per year plus bonus until death even pollies who have achieved nothing for the nation.
    Just look at Joe Hockey with no achievement whatsoever gets to be Australia diplomat living in posh at New York until the entire family have had a go at taxpayer money. This is also someone who abused tax rules by pretending to rent at Canberra his wife's property essentially making taxpayer pay his mortgage by claiming accommodation allowance.

    • StewBalls on 18/09/2016 - 14:25
      +1

      Don't forget, that $200k+ is also tax free IIRC…

    • bluesky on 18/09/2016 - 16:12
      +3

      I came across this petition: Stop payments for non-currently serving Politicians which has collected over 180,000 supporters, and to be handed to PM, Leader of Opposition etc. Not sure if such a petition will bring about change in this area. If the recent budget cuts will impact families, students, etc it does not seem unfair to address this as well.

      Having said that, I have not really study the reasons why things are setup this way… there could be compelling reasons, who knows? Maybe hard to entice people to become politicians, it is a tough job?

      • maximum on 18/09/2016 - 16:34
        +1

        It is to entice people to do the job. You have to compare Ceo salaries to the prime minister. The pm earns $508000 pa. the Ceo of Qantas earnt $12 m last year as did the Ceo of the commonwealth bank. I guess if there weren't other perks you don't get the best people for the job.

        • bluesky on 18/09/2016 - 16:58
          +1

          A fair point. But maybe instead of a blanket privilege, some way of correlating to length of service or contribution would be good. (Or perhaps it is already so? Do not know much of this area).

          Edit: Article suggests there is some correlation, since different pollies get different pension amounts.

        • RocketSwitch on 19/09/2016 - 12:37

          Would you say it's subjective though? Qantas as a business makes a profit to afford to give the CEO that. But, does the government in contrast make a profit to justify the pay?

        • Dacs on 19/09/2016 - 13:17
          +1

          Only a small part of Alan Joyce's remuneration was salary. Most was bonus tied to the company's share price.

          Perhaps politicians should be paid a living wage for their services plus a possible delayed bonus based on the economic and happiness indexes of the country for the following 10 years.

    • Dacs on 19/09/2016 - 13:07
      +1

      At least that scheme has been cut for more recent politicians, though it's grandfathered for politicians who were elected before 2004

  • congo on 18/09/2016 - 13:32
    -2

    If no debts & no private school fees, then $500 per day. So about $182K per year :-)

  • Tech5 on 18/09/2016 - 13:38

    100k/yr in hand if I own my house

  • UFO on 18/09/2016 - 13:42
    +3

    $50k for a couple… tax free with no debts, indexed with inflation… that's plenty to live comfortably anywhere 'normal' in Australia (normal being medium/average suburbia). If you're used to Point Piper Sydney or Forrest ACT, then obviously that wouldn't cut it. But for most people, that's plenty.

    We have 3 kids though- all of them school age. I know it sounds like a lot, but $15k MINIMUM for each child is required. I'd say closer to $25k if you are thinking even modest 2nd tier private schooling. Nothing fancy.

    Once they are 18yo, it drops to $10k each. You're still supporting them far longer these days, especially if they are continuing their formal education.

    So, $50k for parents.
    $20k for each child ($60k).
    $110k indexed to inflation would be bare minimum for RIGHT NOW retirement. Obviously most people aren't retiring whilst they have school aged children though. So on a realistic scenario of empty nesters? $50k would be fine.

  • chumlee on 18/09/2016 - 14:58

    I would be happy with what politicians and judges get. A pension indexed for life. No having to worry about your superannuation for these fine upstanding citizens

  • WillKillfor5Cents on 18/09/2016 - 16:35
    +1

    Perfect thread! I have only recently discovered MMM and really made think twice about life. I have always dreamed of traveling the Silk Road and I am quite comfortable with living a very simple life. As a single man without any wife/kids, 30k per year (after tax and assuming mortgage is paid off) would be the sweet spot.

    However, working in corporates now in my late-20s having spent my earlier 20s studying - perhaps for far too long - I am now confused with what should I do to reach this goal. Ideally, I would like to do the silk road in my mid-30s. I have no problems living frugally, but calculating optimistic projections on my annual income (inc. promotions and bonus) I would still be far away from reaching my capital target required to generate the necessary returns to retire in my mid 30s.

    I have been thinking of ideas to generate passive incomes on the side (such as referral marketing, blogging, etc) to supplement my capital as well.

    To the ozbargain's early retirement community, Any wisdoms you can pass on to people in my situation? Am I being delusional?

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