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Living on less and loving it

By Jennie L. Phipps ·
Monday, August 4, 2014
Posted: 10 am ET

Last week T. Rowe Price released a study showing that nearly 90 percent of recently retired people who have a 401(k) are satisfied with their retirements even when they have modest incomes.

© Lisa F. Young/

The study seemed to touch a chord with many readers because it confirmed that it is possible to live happily on a modest amount of money. On average, these retirees were replacing just 66 percent of their pre-retirement income and living on a median annual income of only $58,000.

Several dozen people who read the blog about this report commented on it, affirming satisfaction with their own similar situations and offering tips for achieving a frugal but happy life.

Here are some of their good ideas, culled from their comments:

Madge Miller: "I am 84 years old, and live entirely on my Social Security, which is $1,748. I have investments and an estate worth approximately $350,000, but I do not touch my investments and let my dividends accrue. I give myself a $500 cash allowance each month and live on that, charging only gas for my car, and occasional expenses like doctor visits (my doctor doesn't accept Medicare), dentist, "unnecessary" things like household enhancements. I own my house, paid cash for my car, and absolutely do not run a credit card balance. I love my life!"

Beverly: "Our biggest savings occurred when we sold our home of 46 years, used part of the money to purchase a lovely condo and enjoy a country club lifestyle. We invested the rest in three conservative mutual funds. Because the homeowners association fees cover landscaping, snow removal, water, garbage removal and gas, they are substantially lower than what we were paying as single family homeowners. Our insurance fees and real estate taxes were cut in half. All in all, we are living in a more age-appropriate setting and saving $9,000 yearly. Who'd have thought [we could do such a thing]? The key to our success is that we sold before we bought so we knew how much we had to work with."

Gene: "The biggest elements to my retirement success were paying off my house and relocating to a tax- friendly state. I went from property taxes of approximately $7,000 per year to $710 per year. The house I bought has the same square footage. Utilities and food/gas are about the same."

Joe: "My wife and I live on half what I made in 2004. We planned and saved for 'rainy days' and we trimmed our expenses to meet our budget. ... We now go on day trips, sleep in our own bed, eat good food, enjoy being together in the evenings. A three-day trip to the beach instead of a havoc-filled and hurried seven-day trip (returning to the mad rush of work). No, we won't see Paris, Lisbon, London or Hong Kong, or ride in a $4 million yacht, but we are enjoying living."

Barb: "I worked for a major corporation and got laid off at age 52. I could not find a job even though I sent out over 400 applications the first year. After my unemployment ran out, I had to live on my 401(k), and took the hit at tax time. I took my (small) company pension at 55, and then struggled until I reached 62 and Social Security. Believe me, I know how to stretch a penny until Lincoln screams. My 401(k) is gone, but I am living well on Social Security and my small pension. No world traveling, but no struggles either. It makes me laugh that people think they have to have a $1 million to retire. Grab a fishing pole and a picnic lunch and really enjoy life!"

Read about what's behind the gap in U.S. retirement styles.

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Carol Mannchen
August 04, 2014 at 6:30 pm

I am a widow living on Social Security and a state pension. My income is just under $3,000. Like the fortunate people quoted here, my home is paid for and so is my car, and I have no debt. I have three IRA's which I do not have to draw from yet. I use the Roth IRA for travel.
I am writing this because I think it is insulting to people to imply that $58,000 is skimping by. Maybe this is true in New York City, but probably not in most parts of the country. Teachers here in Tennessee earn much less than that, as do most workers. I just went on a short trip with an 85 year old retiree whose income is about $1000 a month. Somehow, she is doing fine. You should be writing about people like her who really are skimping by.

Richard Gottlieb
August 04, 2014 at 4:43 pm

We're living on 48k per year.

Own the house, and the car. We believe those are keys to a good retirement.

Will sell our home shortly and downsize both living space and expenses.

Living within your means is the key.

Mary Ann Teague
August 04, 2014 at 4:31 pm

I wish I had $58,000 a year to live on. I have no pension or annuity, but I saved every penny I could after my husband walked out on me and our children. He refused to help them in college, even though he made a BIG salary. I have the money I saved and live in a house free of mortgage and have an older car that has low mileage and was paid for before I quit work. My savings will see me through if I don't live too long, but my message is to save, save, save. Fewer and fewer companies have pensions, and jobs disappear before you are retirement age. Good luck!

Mary Corrway
August 04, 2014 at 1:05 pm

I agree with comment from get real yes please do get real after a life of hard work body broken You $10000 per year and a full fist of pills am and pm happy waiting room to death yes government esp Please Get Real

Get Real
August 04, 2014 at 12:49 pm

Yeah, that's great to hear people skimping by on just $58K per year in retirement with a paid off home and cars. Try living on $10K per year without owning a house. That's where many hard working Americans have ended up through no fault of their own. It's down right insulting to imply that people living on $50K plus per year in retirement are skimping to get by. They may have cut back from their $100K lifestyle but they have no idea what a lot of seniors are suffering through.