How Much Is Just Enough?
Megan Reynolds

We’re a couple nearing retirement and we’ll need a minimum of 2 million to live a modest lifestyle.

If national figures are right, plan on spending $400,000 per person just to cover medical expenses during retirement. That figure doesn’t include long-term care or a nursing home ( currently 90,000 a year in our low cost area of the country).

If you’ve saved $2,000,000 and take the 4% draw traditionally recommended by financial experts, you’ll have $80,000 to spend, before taxes….if you went your money to last a lifetime.

That’s a bit over $6000 a month. Halve that if you’re likely to save only a million. A fair share of economists suggest a 3% draw is more realistic than 4%..

Depending on your current budget, that $80,000 could sound wonderful if you’re single. But if you’re part of a couple…not so much.

Medical costs and/ or rent will gobble 1/3 to 1/2 of your monthly expenses and you better have paid off your home, student loan, and credit card debt.

Add up your utilities ( electricity, gas, phone, water, recycling service, etc) Internet, food, clothing, auto insurance, life insurance, haircuts, auto maintenance and gas, home maintenance, etc…to the mix. Don’t forget condo fees, real estate taxes or rent (if you’re not planning to live in your home for life).

Add any planned leisure activities — from travel to health club fees to movies,sports events,dining out, etc — to your numbers. Plan on spending at least $700 a month on medical costs and insurance ( remember, you won’t have employer health insurance) .

If you’re paying for long term health care insurance ( if it exists) , you’ll be spending at least $2,000 a person a year- and probably significantly more. If it isn’t an option, count on living with family members or saving LOTS more.

If home maintenance becomes difficult ( and it most likely will) throw in the costs of paying someone to help.

We’re a couple spends $5,500 a month — and that’s with a modest lifestyle, no mortgage ( it’s paid) and very little debt. Cars are paid off. Even with good employer health insurance, we’re on the hook for dental and vision costs.

One of us gets $4,400 gross pay monthly. After all deductions ( retirement plan, health, vision, and dental insurance, HSA, Social Security and Medicare, etc…the take home pay is $2900. Until this year, we were contributing all but $700 of that pay to a retirement plan…and needed to because we were paddling hard to make up for the costs of raising 3 kids..$200,000 per kid according to national figures ( the 3rd kid was an oops…hey, it happens ..even with birth control..or after an extra drink too many.

Thank goodness for the other persons job!

Here’s what our paychecks cover: Internet access , Netflix, and a pro rated cost for Amazon Prime ( we don’t do bundled cable channel packages). electricity, heat, 3 mobile phones, family plan ( our son is on ours) clothes, $60 monthly for a 1 year no interest credit card payment ( we bought a new fridge but will pay it off early after a freelance job pays within a month , $250 a month for long- term health care premiums for 2 people (and will cover $297,000 of long- term care per individual), real estate and personal taxes, medical deductibles, haircuts, auto insurance and gas, real estate taxes, home maintenance, food, cleaning supplies and miscellaneous household stuff ( laundry detergent, etc…and no, we don’t bundle it with groceries), life insurance, gifts, tax prep, grooming stuff ( razor, hair care products, etc)