3rd Part of my 8 Part Series – Leaving the Working World, Are you Really Prepared?
Do you own multiple homes?
How many vehicles you own? Luxury cars?
Toys? Rv’s, boats, yachts, ATV’s, UTV’s, motorcyles?
How many lessons and sports activities are you children in?
Have you started saving for child’s college fund yet?
Have you ever figured out what it is costing you to live? Well, if you and your spouse are both pulling in six figure incomes and you are thinking about making a lifestyle change such as downsizing or retiring. You really need to consider what you are spending.
Let’s begin with what it really cost to live.
- Health Insurance – When we decided to take the gigantic leap. We figured $20,000-$30,000 per year as costs rise. If you are self-employed, you can take it as a tax deduction. In 2016 alone, our premium increased $2000.00 alone. (Remember I am not planning on Medicare being around and have years before I get there. Also, don’t forget you will need a supplemental insurance. If you are you use to good coverage.)
- Mortgage – Debt free is awesome! Are you? According to an article by Victoria Stilwell, Retiring Boomers Still Have Mortgages to Pay Down The majority of Americans 65 and older are still paying off a mortgage rose to 30 percent in 2011 compared to 22 percent in 2001.
- Taxes – Will your drop down a bracket? This is something to consider.
- Cost to Live – let me break down your cost of living. Can you do it?
- Housing 35%
- Utilities 5%
- Food 7.5%
- Transportation 15 %
- Clothing 5%
- Healthcare 15%
- Savings 5%
- Personal 5%
- Debts 5%
- Charitable Gifts ?
These are just percentages that you can play with but it gives you realistic values.
The cost of living will be unique to each individual. Some people may have a mortgage while others may not large portion of income go transportation as they use public transportation. You also will realize that certain items in life will no longer be necessary such as an expense wardrobe.
When you start playing with the numbers. This is a true test.
How serious are you about leaving your six figure job to take care of your family, move back to your hometown, start a business of your own or semi-retire?