Retirement, how much?

[SpokeyDokey]

How did you get those figures?

The full state pension is currently £179.60/week but will rise by 3.1% to £185.17 for 2022/2023.

Many people, self included, get extra due to SERPS or S2P contributions.

My forecast (due in November) is around £13500.

This is then reduced by £3000 to a net £10500 as I was contracted out of the State Pension scheme for a number of years.

HTH.

 

[SpokeyDokey]

A lot depends on how you spend you money, and how much.

About 20 years ago SWMBO challenged me as to what we actually spent money on. I did a budget on paper, then onto Excel. She was surprised at how much it actually costs to live what we think is an average lifestyle (basic car, main holiday plus 1 or 2 breaks, and to be able to buy something should we need it.

Our retirement budget is something between £40-50k pa depending upon inflation. That'll include helping children/grandchildren, travelling to family, holidays, and a fairly decent lifestyle. The lump sums will go on moving house, if we do, and a newer car for each when we retire, plus a holiday. That's obviously more than most, but should be manageable if we keep planning towards it.

You must help you offspring a heck of a lot - good for you too.

That's a heck of a lot pa to budget for.

Is that for 2 people?

We have a great lifestyle, and whilst we can easily afford to drop that sort of money every year we would have to try very very hard to hit those numbers.

 

[oldfatfool]

It does amaze me how much people spend or think they need in some situations and makes me wander if I am wrong in my calculations when folk are talking at the 40k + a year expenditure, or if I lead a more frugal life.

We run 2 cars so allow £1500 for insurance tax and servicing. House outgoings (water, rates, leccy, insurance) 300pcm, phones £65pcm = 4400pa. Rates insurance, gas and electric on caravan 3000pa, food + petrol 175 pw =9100 pa, monthly subs, Netflix, zwift, etc 40pm = £500 pa which gives a grand total of £18600pa throw in 100pm for a meal out and a couple of takeaways brings me upto 20k pa. So long as I have an income from swmbos pension and p/t work of circa £24k then I think I should be well covered for all eventualities given both oap and wage are index linked? What am I missing?

 

[DCLane]

You must help you offspring a heck of a lot - good for you too.

That's a heck of a lot pa to budget for.

Is that for 2 people?

We have a great lifestyle, and whilst we can easily afford to drop that sort of money every year we would have to try very very hard to hit those numbers.

It is for just two of us. The numbers look OK for now but I do work a stupid number of hours (my children describe it as "your sidekicks have sidekicks") and SWMBO is 1.1FTE these days plus running her own company and working for her professional body to enable us to put quite a bit into savings.

 

[Slick]

It does amaze me how much people spend or think they need in some situations and makes me wander if I am wrong in my calculations when folk are talking at the 40k + a year expenditure, or if I lead a more frugal life.

We run 2 cars so allow £1500 for insurance tax and servicing. House outgoings (water, rates, leccy, insurance) 300pcm, phones £65pcm = 4400pa. Rates insurance, gas and electric on caravan 3000pa, food + petrol 175 pw =9100 pa, monthly subs, Netflix, zwift, etc 40pm = £500 pa which gives a grand total of £18600pa throw in 100pm for a meal out and a couple of takeaways brings me upto 20k pa. So long as I have an income from swmbos pension and p/t work of circa £24k then I think I should be well covered for all eventualities given both oap and wage are index linked? What am I missing?

Nothing.

 

[SpokeyDokey]

It is for just two of us. The numbers look OK for now but I do work a stupid number of hours (my children describe it as "your sidekicks have sidekicks") and SWMBO is 1.1FTE these days plus running her own company and working for her professional body to enable us to put quite a bit into savings.

It was the expenditure estimate that I was surprised at tbh.

 

[DCLane]

It was the expenditure estimate that I was surprised at tbh.

SWMBO's got family and friends across the world = a lot of travelling. That adds quite a bit of expenditure.

We've a 4/5 bed detached house, like the odd luxury and at least one nice holiday a year. The bike events I do add a surprising cost in terms of kit, entry fees, travel, accommodation, etc. That all adds up. We could drop the expenses massively; i.e. less travel, fewer luxuries, not put money into grandchildren's funds (if we ever get any! ), but I can't see us doing that. If anything I'm guessing it'll increase - I'm hoping to do some proper bike tours and we'll travel more than we've been able to in recent years. At the moment neither of our main jobs allow this to happen.

The bit I've not included in income calculations, as they'll be sold as needed to top up funds, are the collections of pre-1700 books, paintings and watches I've gathered over the past 30+ years as an 'alternative' pension fund. I've no real clue what they're worth currently anyway as most were bought over 20 years ago before my children were born.

 

[ebikeerwidnes]

View: https://youtu.be/um4gHsMxXKo

Yup - great video of costs
If you want pedantic attention to detail - he is your man

yes - I have subscribed to all his videos - great bloke

 

[Jenkins]

I was looking at taking early retirement this year because the shift work & weekend attendance hours have really been getting to me for the past year or so. I'm mortgage free, the car is paid for and won't need replacing for some time, I don't do expensive holidays (just the occasional night away) and there's just me so no expensive dependants. With 10 years until I get the state pension, I worked out that my work's pension of around £15k would just about be sufficient for normal living costs with the £37k lump sum going into a separate account to pay the regular bills of council tax, energy, etc for the 10 years until the state pension kicked it. I also have around £100k of various savings as an emergency fund.

After discussions with management, they're allowing me to take partial retirement with full payment of the pension & lump sum, but to do 3 days per week on normal office hours instead. This will leave me only around £5k per year worse off while still building up an extra, small pension pot and having the lump sum to invest for a few years for when I do go for full retirement.

 

[numbnuts]

40k + a year expenditure

I must be on the wrong forum, I only get £14,615 pa and still have to pay £453.92 in rent per month

 

[ColinJ]

I must be on the wrong forum, I only get £14,615 pa and still have to pay £453.92 in rent per month

So about £9k a year after your housing costs are deducted... Slightly better off than I will be from next month. Not bad, eh!

I have been paying almost that amount of rent out of £9.5k, so £14.6k should be ample, surely?

 

[PaulB]

Get an IFA, obviously, and do not depend on the internet to advise you what you should be doing. OK, it's a leap into the unknown and a large(ish) initial outlay but still represents the best thing I ever did (that costs money). It has paid enormous dividends and my only regret is that I didn't do it ten years earlier.

One thing you need to also bear in mind is something that's becoming more likely every day. Once you're retired, it's unlikely you'll be covered by private health care unless you're prepared to lay out the premiums yourself. With the current state of the Health Service, it's entirely possible you will be faced with an unexpected medical outlay to save you facing a ridiculously long and debilitating wait.

So don't be in a 'just-getting-by' zone if you can possibly help it.

 

[Alex321]

It does amaze me how much people spend or think they need in some situations and makes me wander if I am wrong in my calculations when folk are talking at the 40k + a year expenditure, or if I lead a more frugal life.

We run 2 cars so allow £1500 for insurance tax and servicing. House outgoings (water, rates, leccy, insurance) 300pcm, phones £65pcm = 4400pa. Rates insurance, gas and electric on caravan 3000pa, food + petrol 175 pw =9100 pa, monthly subs, Netflix, zwift, etc 40pm = £500 pa which gives a grand total of £18600pa throw in 100pm for a meal out and a couple of takeaways brings me upto 20k pa. So long as I have an income from swmbos pension and p/t work of circa £24k then I think I should be well covered for all eventualities given both oap and wage are index linked? What am I missing?

I don't think you are missing much.

We are pretty well off - net household income over £50K, but we manage to save quite a bit. We moved house 18 months ago, and were down to 12K in savings account after the move - but now have about 52K.

Which implies that between us, we are spending less than 30K per year. OK, that has been without any foreign holidays in that time, due to Covid, and no commuting costs (which we also wouldn't have in retirement). But to counteract that I have spent about 2.5K on a new bike (including GPS computer), plus we spent about 3K on getting the garage tarted up a bit and 1500 on a new cooker which hopefully will last 10 years+. And we've already paid 5K of the 20K total that solar panel/battery installation is costing us (we're going for the biggest that will fit on our roof).

Obviously, some people lead more expensive lifestyles, but others are significantly more frugal than we are. So I don't think your estimate that you can manage reasonably comfortably on £24K.

My wife is already retired, I've probably got 7-8 years to go. Oh, and we have no mortgage - that was paid off about 10 years ago, and when we moved it was to a house of the same cost.

 

[byegad]

Going back a number of decades, newly divorced, two children to pay support for, a mortgage, car for work, debts to service, etc.etc. I had an interview with a financial advisor.

It turned out I 'needed' twice the income I actually had to break even.

I bought nothing from her and somehow managed to pay for the house, pay for the boys' holidays, university fees and even afford to marry again!

It's surprising how little you can live on.

 

[cougie uk]

Will be permanent nomadic and it only needs taking out the water every three years or so.

I love the idea of the narrow boat retirement - but I don't fancy all the hassle with doing the locks single handed.
And once you're out of the property chain - you will struggle to get back. A boat is only going to depreciate in value compared to bricks and mortar.

I'm guessing you know what you're doing though.