Thursday, August 11, 2011

Extreme Frugal Retirement-In The US?

One of the advantages of having almost nothing means that you have nothing to lose. With little savings and investments, I consider the stock market fluctuations more of a "pulse of America" thing than a "What's happening to my money".  Not that the first isn't as important as the second, it just allows me to be lightly removed from the day to day heart palpitations of some.

That said, retirement on $30,000 isn't a lot. It certainly would be more if there wasn't a $1200 mortgage in the mix, and the attendant house expenses. Even if you add in streams of income which range from $500 a month slightly upward, life can be a bit tight.

Looking around the web, there are all kinds of solutions on how to live on this kind of retirement. Advise ranges from selling the house (a reasonable alternative in the long term for me, but not necessarily in the short term) and renting, to living in an RV or on a boat, to traveling overseas-or a combination of all of the above.   The general consensus seems to be that on my base income, I should run away, or live in a tent. Wisdom seems to say that without $500,000 in investments, in this country at least, I am doomed. At one time, I probably would have thought so myself.

One of my daily reads is the blog Get Rich Slowly. Although I think the blog concentrates more on income and less on frugality and simplicity, it has a wide range of articles.  Today's subject is the Kaderlis, who retired at 38 and live on about $30,000 annually.  While neither I nor my husband (who loved his job) would have necessarily been interested in early retirement, the fact that they live on an amount similar to mine caught my eye.  I'm always interested in seeing how others live, especially when they live with joy.

Here's the thing though. I love travel as much as the next adventurer. Seven years in Europe and being a road trip warrior should show that. But for me (and for many I expect) being a nomad is not a reasonable course of life all the time, through all of retirement. Does a trip to Thailand sound great?? You bet. Does spending my life on a boat in the far east sound like a solution? Not for me. The same with an expat lifestyle at this point in my life. When my husband was living, we had intended to retire in Germany. I've pretty much decided that's too far for me alone, with kids in the Cayman Islands and Texas.  I like being able to visit family easily when the mood strikes, having a home and home base, have regular activities and a routine-others may call it a "rut". I call it comforting, especially for a single retiree (more on those of us singles later on).  It may be that because of those expat, traveling years, I'm more into routine and home now, who knows.

I believe that with planning and foresight, one can live on limited income in the US.  Many people do this, some with more grace and ease than others.  It may (and has) require short term sacrifices and the willingness to make required changes. I probably could not live this lifestyle in Washington DC these days. Were I there, I would probably have had to sell my house and walk away. But it can be done. When people comment on my lifestyle and say "well, but you only spend (fill in the blank)", my answer is simply this: for lack of a better phrase, I positioned myself in a place that I knew I could manage financially.

Do I have everything I want?  Yes. Do I have everything I want all the time?  Absolutely not.  Do I live the same pre-retirement lifestyle as before my husband died?  Nope.  But none of that means that life now is not good, manageable, even enjoyable. Most of the time I manage to live extremely richly on my limited income. I manage to eat out (just not every day), to travel, to have a pet, to enjoy various recreations and hobbies, to have a life for lack of a better phrase.  While I regret the personal decisions and life events that got me to this place, the place itself is manageable and full of enjoyment.

So I'll keep my extreme retirement right where I am, and let that other couple hop on the boat and sail off into the sunset.


  1. You are right, it would be nearly impossible to live in the DC area on 30,000 a year, unless you owned your home outright. Even then, things are expensive.

  2. If you wake up with joy in your heart,you are rich.
    You have family,friends and activities you enjoy. Love your blog. I look forward to your post on single retirees.

  3. Sharon, I agreee it would be tight, but in that case the house would have been paid off (we would not have sold when we moved overseas). I believe I could hve managed without that, we lived on a single in come in Arlington for 20 years.............creatively

  4. Barb,
    I too moved to a less expensive area, whereby $30K a year makes living a decent, good life,probable. If I were back in NYC, that $30K would get me a nice cardboard box near Grand Central Station. :(

  5. I'm so glad you found my blog and I therefore found yours. I am totally in favor of living frugally and think it's wonderful you can do this in the U.S. I know you expressed not being interested in the expat life and I'm not sure of your age, but I always said I would do peace Corps work or teach abroad to live more frugally. Have you considered that? Just curious.

  6. Sonia. I would actually love to do such a thing. Unfortunately, I in jured a knee years ago, and tissue damage on the outside limits mibility-so much as I would like to go, I dont want to be a burden, ya know? I would love the expat lifestyle if I had the funds to get back and forth to my kids reasnably (retiring with hubby would have meant space available flights(. Meanwhile, while I review my options, I begin a degree in non profit administration,,

  7. I seem to be dropping comments folks, even though I published them. If yours isnt here, be patient, .....

  8. I have looked into moving to DC on our pension. We could sell our house here and buy a small townhouse . Our pension is not much higher than yours.
    The thing is- we don't WANT to live in a small townhouse. Nor do we want to travel full time. Being comfortable where you are. Enjoying the day. Enjoying family. That is what we want.

    BTW- Don't bemoan the Space A flights too much. They are very difficult to get on as retiree. Unless he was a retired general officer---you both would be at the back of the line - behind the school kids and cattle:>) We have some friends who do it, but they have houses in the places they are traveling to and from. The war(s) has booked almost every other place.

  9. I have a post coming up soon on this same subject. Too many "experts" and articles claim that if you don't retire with $1 million in the bank you are doomed.

    That would be true if your lifestyle demands that type of support. But, for most of us, we can live comfortable, satisfying lives on a whole lot less. It all comes down to priorities.

    You have yours in proper order, Barb.

  10. I got in to your blog from a comment left at GRS. your story seems interesting. Will you like to contribute with one of your articles on my blog? I am interested to know about your spending habit. I am 35 and earning decent money, but I don't have any experience with how people live in US with an income of $30K per year. Looking for someone who can share how it is like on my blog.

    This is not another attempt at securing a guest post, I did read few of your old articles as well, and curiosity grew.

  11. We do make compromises in order to stay within budget in a lifestyle we find acceptable. Ideally, I'd like to live in NYC (Really, ideally, I'd like to live in my sister's Park Avenue apartment!), but there's no way I can manage that. I know that I want a city--had enough of small towns when I was a child, and for the first 18 years of my working life. But I also know that in order to swing retirement in the city where I now live, I will have to have my mortgage paid off. Sigh. So, Hi Ho, Off to work I go!

  12. I agree all of your points. I have passed through post retirement phase and recognized how it matters to have early retirement plans to set of secured life. Questioned raised in my mind - investments does really help out?
    lpl financial services


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