derrick
The Glue that binds us together.
- Location
- On the edge of London
To be mortgage free when you retire helps a lot, 
Retirement, how much?
- Thread starter oldfatfool
- Start date
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PaulSB
Legendary Member
- Location
- Chorley, Lancashire
@oldfatfool I think your £20k pa is realistic and your scenario matches our actual situation. My wife retired May 2016 and I did March 2017. We are 61 and 63 respectively, my wife has a small NHS pension and I have a private pension which I can draw from. On top of this we have a good level of savings.
TBH I’m reluctant to give the size of my pension fund or savings as I feel that’s private. We live comfortably and while I know we are fortunate would say we are a long way from being wealthy.
When our state pensions kick in we will have an extra £16-17k pa which will put us in a strong position. I did make an error in my calculations as I thought my state pension would start in July 2019 but in fact it will be May 2020. Be careful on that one.
My wife paying tax in future, when she reaches state pension age, is unavoidable - NHS+state. As I will be private+state I’m trying to maximise my tax free allowance now. Therefore I’m taking the maximum tax free income from my fund and will continue to do so until my state pension kicks in. I then plan to only take sufficient privately to top up the state pension to the tax free allowance. This means my private fund is diminishing faster now than it will in the future. From a tax view it balances out well.
We will spend from our savings for major trips and other “treats” as that is why we saved.
Once retired I’ve found life is cheaper in many ways but more costly in others - 3 cafe stops a week instead of one!!! It’s a question of balance, so I am, to follow that example, more careful in the cafe and in other areas.
On the other hand the food shop reduced dramatically now there is more time to shop properly, meal plan etc. In our case we are fortunate to have a Booths supermarket who offer great quality but is expensive. However every time I’m in town I pop in to rummage through the discounted end of sell by date shelves and regularly come home with large amounts of high quality foodstuffs at 50% off. The rest of our shop is generally in Aldi where prices are very competitive. I reckon our food bill is around £45 per week. Poundland and similar stores offer great value. The weekly supermarket run used to be £90-100 minimum.
Plenty of other ways to save money as well. Always going for the cheapest petrol in town when passing Morrison’s etc.
I do find it difficult to get used to the idea of savings declining and have to remind myself this will stop in May 2020.
Overall though we live on the principle tomorrow could be our last day. We are fit, healthy and live life to the fullness we desire. Not excessively though. I’ve watched others decline quite rapidly and if that is going to happen to me I want to be sure I’ve enjoyed retirement before I’m less able to do so.
TBH I’m reluctant to give the size of my pension fund or savings as I feel that’s private. We live comfortably and while I know we are fortunate would say we are a long way from being wealthy.
When our state pensions kick in we will have an extra £16-17k pa which will put us in a strong position. I did make an error in my calculations as I thought my state pension would start in July 2019 but in fact it will be May 2020. Be careful on that one.
My wife paying tax in future, when she reaches state pension age, is unavoidable - NHS+state. As I will be private+state I’m trying to maximise my tax free allowance now. Therefore I’m taking the maximum tax free income from my fund and will continue to do so until my state pension kicks in. I then plan to only take sufficient privately to top up the state pension to the tax free allowance. This means my private fund is diminishing faster now than it will in the future. From a tax view it balances out well.
We will spend from our savings for major trips and other “treats” as that is why we saved.
Once retired I’ve found life is cheaper in many ways but more costly in others - 3 cafe stops a week instead of one!!! It’s a question of balance, so I am, to follow that example, more careful in the cafe and in other areas.
On the other hand the food shop reduced dramatically now there is more time to shop properly, meal plan etc. In our case we are fortunate to have a Booths supermarket who offer great quality but is expensive. However every time I’m in town I pop in to rummage through the discounted end of sell by date shelves and regularly come home with large amounts of high quality foodstuffs at 50% off. The rest of our shop is generally in Aldi where prices are very competitive. I reckon our food bill is around £45 per week. Poundland and similar stores offer great value. The weekly supermarket run used to be £90-100 minimum.
Plenty of other ways to save money as well. Always going for the cheapest petrol in town when passing Morrison’s etc.
I do find it difficult to get used to the idea of savings declining and have to remind myself this will stop in May 2020.
Overall though we live on the principle tomorrow could be our last day. We are fit, healthy and live life to the fullness we desire. Not excessively though. I’ve watched others decline quite rapidly and if that is going to happen to me I want to be sure I’ve enjoyed retirement before I’m less able to do so.
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OP
OP
oldfatfool
Guru
But you get sunshine, and great cycling roads without drivers that try and kill you!I live on state pension and since brexit have lost over 100 euros per month. i make do on about 7000 euros per year dont drink or smoke but its very tight !! i go into my overdraft every month
food parcels gratefully recieved !!!!
I am retiring next April aged 60 after 43+years. Without going into specifics MrsP and myself will be quite comfy. £20K per year is a good estimate for retirement as long as there is some savings as a fall back for unseen occasions. Obviously everyone's situations are different depending on whether you are renting or own your own, but for a happy retirement, not having to scrimp that is a good starting figure.
delb0y
Legendary Member
- Location
- Quedgeley, Glos
No pockets in a shroud and all that. In an ideal world you'd use up all your savings just as you shuffle off this mortal coil. Give or take a day. That's what I'm hoping to do anyway (whilst leaving the house to the kids, unless the government has already got dibs on it).
Slight edits 
70 yrs now. For various reasons I never started had a private pension. Started one aged 55 but that only built up to £3K per year
Had lots of jobs over the years so no real pensions there.
Fortunately I started my own business aged 55 and that took off so managed to retire with a lump sum.
I dont have a mortgage or any debts
But........
addressing the original question....I could live on but really struggle on OAP.
So.....
With no debts & no mortgage I feel anyone could "manage" on £15k.....be comfortable on £18k.
OMO of course......a lot depends where tou live.
70 yrs now. For various reasons I never started had a private pension. Started one aged 55 but that only built up to £3K per year
Had lots of jobs over the years so no real pensions there.
Fortunately I started my own business aged 55 and that took off so managed to retire with a lump sum.
I dont have a mortgage or any debts
But........
addressing the original question....I could live on but really struggle on OAP.
So.....
With no debts & no mortgage I feel anyone could "manage" on £15k.....be comfortable on £18k.
OMO of course......a lot depends where tou live.
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This might be a helpful link http://www.telegraph.co.uk/financia...-pensions-service/what-is-a-good-pension-pot/
Or this one that uses figures from a Which survey
https://www.theguardian.com/money/blog/2017/apr/22/save-40-a-week-retirement-which-report
Tl;dr three income levels:
£18,000 - Covers essentials
£26,000 - Covers essentials plus nice to haves such as holidays abroad
£39,000 - All the above but additional stuff like luxury holidays/car
Or this one that uses figures from a Which survey
https://www.theguardian.com/money/blog/2017/apr/22/save-40-a-week-retirement-which-report
Tl;dr three income levels:
£18,000 - Covers essentials
£26,000 - Covers essentials plus nice to haves such as holidays abroad
£39,000 - All the above but additional stuff like luxury holidays/car
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Drago
Legendary Member
- Location
- Suburban Poshshire
Some antibiotics should fix that.
oldwheels
Legendary Member
- Location
- Isle of Mull
I am pretty ancient, do not smoke and have modest alcohol consumption. No mortgage as house paid off long ago but currently run two vehicles, an 04 motorhome and an 05 car which is scheduled for trade in as probably problems coming up soon. My wife died 2 years ago so am on my own. I do not pay income tax as my income is below the tax threshold ( just ). I seem to manage but keep a fair savings buffer in case of unforeseen problems. In fact I am below the official poverty level so cannot imagine how I manage to live comfortably but I do. When retired you seem to need less money. Oh and I live on an offshore island where in theory everything is more expensive. Mebbe I should just keep quiet.
PaulSB
Legendary Member
- Location
- Chorley, Lancashire
Absolutely agree and reading the bit you quoted I see what I’ve missed out.
Currently we make up the shortfall between our pension income and the circa £20k we need to live from our savings. It’s spending this money on day to day living which will stop in May 2020 as income rises. That means all the savings are there for fun times.
Any of my pension pot goes to the kids in second death. We’re in the process of giving the house to the kids now to avoid the government getting any of it.
.....edited now
delb0y
Legendary Member
- Location
- Quedgeley, Glos
Yes, that's how I envisage structuring my retirement PaulSB. When it happens...
I went to a financial workshop a few weeks ago and the subject of gifting (including gifting houses) came up. That in itself is a very complex subject, that was only briefly touched on, but one of the things the presenter said was a gift is only a gift if the giver no longer has any call on the gift (those weren't the exact words, but I've had a sleep since and have forgotten the exact phrase). The example given, was that if someone gave their house to their kids but continued to live in it, then (in the government's eyes) it wouldn't count as a gift and could still be liable to inheritance tax. Of course, that's inheritance tax only, it might very well avoid the issue of being forced to sell the house to fund Monday night bingo, singalongs on a Thursday morning, and a chair in the corner that smells of wee...
I went to a financial workshop a few weeks ago and the subject of gifting (including gifting houses) came up. That in itself is a very complex subject, that was only briefly touched on, but one of the things the presenter said was a gift is only a gift if the giver no longer has any call on the gift (those weren't the exact words, but I've had a sleep since and have forgotten the exact phrase). The example given, was that if someone gave their house to their kids but continued to live in it, then (in the government's eyes) it wouldn't count as a gift and could still be liable to inheritance tax. Of course, that's inheritance tax only, it might very well avoid the issue of being forced to sell the house to fund Monday night bingo, singalongs on a Thursday morning, and a chair in the corner that smells of wee...
You just have to careful that.....
a) you never fall out with your kids.
it has happened
b) you dont pop your clogs withi 7 years
otherwise your kids will be liable.
The secret is to know exactly what date you will both die and how much pa you will need.
