The Retirement Thread

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classic33

classic33

Leg End Member
PaulSB said:
We planned to go to the local council fireworks display. Then it started raining....................we had a G&T instead.
Click to expand...
Any "pretty" arial explosions?
 
PaulSB

PaulSB

Squire
Location
Chorley, Lancashire
Moodyman said:
I guess the usual factors: kids grown up, mortgage-less (probably), no commuting costs (i.e. 1 less car), etc are offset by the costs of increased leisure time (travel, eating out) and possibly ill-health for some (retirement home).

It's just that we're constantly told we're not doing enough for retirement and I wonder how much of that comes from those with vested interests - Government wants to reduce the state pensions burden and pensions industry for its private/employer pension scheme incomes.

£800 per month contributions seems a little high.

As ballpark figure for aspirational income in retirement, the 'experts' reckon two thirds your take home pay when working should suffice.
Click to expand...

You're asking a very big question. I'll give you what I know in a minute. I agree your first three points but dispute the "one less car." I would argue if a household has been used to two cars dropping to one is difficult. My wife retired before me. I had a company car for 40+ years. When I retired I argued long and hard we only needed one car. My wife said this is fine as long as I remembered it is her car, which it is. I lasted six weeks of only being able to drive or go anywhere when my wife wasn't using her car. After being retired three months I bought a car from my lump sum.

"Increased costs of leisure time" is a myth. Retirement does not have to be expensive. Walking and cycling are cheap as are numerous other activities. Sure if one wants to spend retirement eating and drinking it will prove expensive but there is no need for this. I think you have an impression gained from wealthy, probably southern, retirees and TV ads for cruises. Most of us don't do this.

The £800 figure is one I've never heard before and I think is astonishingly high. There is a rule of thumb for the amount one should save - subtract one's age from the state pension age and divide the answer by two. I think the state pension age is 66. So for a thirty year old the percentage of salary to save is this 66-30 = 36/2 = 18. A 30 year old should save 18% of salary for the rest of his/her working life. If your £800 is correct this means the 30 year old is earning +/- £4500 per month - £53,000pa. Highly unlikely. Clearly the size of pension this creates is entirely dependent on the individual's earnings.

I've read a report recently which argues a private pension fund of £250,000 on top of the state pension is needed for a comfortable retirement. I've no idea what standard of living this assumes people need.

I'm not willing to discuss my personal finances other than in percentages. When I retired, my wife retired two years earlier, our household income dropped to 40% of that which we enjoyed when we both worked. Our income is my wife's small NHS pension and my smaller private pension. I will get my state pension in May 2020 and my wife hers in 2022. When I get my state pension we will be up to 50% of our working income and 60% when my wife gets hers. I would not suggest living off 40% of one's previous income is easy, it requires discipline and taking advantage of every saving available. However I do know our standard of living has not reduced and that we do make significant savings just by having more time available to shop carefully, spend time finding the best deals for insurance etc.

Our house runs off our income. That is the agreement we made. If we want to go on holiday, other than a B&B for a few days, this comes out of our savings. We literally have a book in which we note the weekly budget of, for example, £100. Everything spent is noted. If we only spend £80 then we have an extra £20 the following week. If we spend £120 then the following week we have to reduce spending by £20. I know to the nearest £1 the cost of each annual bill for insurance, MOT, Christmas, spectacles etc. and we save one twelfth of our income every month so when those bills come round we have the cash available to pay them.

Answering your question is impossible for an ordinary person like me. I'll offer the two pieces of advice I've given my sons. Find a decent financial adviser and discuss what one wants to achieve and by when. Secondly do not look at your Mum and I and think you will be able to do the same. If you want to retire at 60 start saving now as the state will not look after you in 30 years time.

I come from a golden generation. We had everything. Free education, work, affordable housing, etc. etc. That no longer exists. People have to look after themselves today.
 
Dave7

Dave7

Legendary Member
Location
Cheshire
PaulSB said:
You're asking a very big question. I'll give you what I know in a minute. I agree your first three points but dispute the "one less car." I would argue if a household has been used to two cars dropping to one is difficult. My wife retired before me. I had a company car for 40+ years. When I retired I argued long and hard we only needed one car. My wife said this is fine as long as I remembered it is her car, which it is. I lasted six weeks of only being able to drive or go anywhere when my wife wasn't using her car. After being retired three months I bought a car from my lump sum.

"Increased costs of leisure time" is a myth. Retirement does not have to be expensive. Walking and cycling are cheap as are numerous other activities. Sure if one wants to spend retirement eating and drinking it will prove expensive but there is no need for this. I think you have an impression gained from wealthy, probably southern, retirees and TV ads for cruises. Most of us don't do this.

The £800 figure is one I've never heard before and I think is astonishingly high. There is a rule of thumb for the amount one should save - subtract one's age from the state pension age and divide the answer by two. I think the state pension age is 66. So for a thirty year old the percentage of salary to save is this 66-30 = 36/2 = 18. A 30 year old should save 18% of salary for the rest of his/her working life. If your £800 is correct this means the 30 year old is earning +/- £4500 per month - £53,000pa. Highly unlikely. Clearly the size of pension this creates is entirely dependent on the individual's earnings.

I've read a report recently which argues a private pension fund of £250,000 on top of the state pension is needed for a comfortable retirement. I've no idea what standard of living this assumes people need.

I'm not willing to discuss my personal finances other than in percentages. When I retired, my wife retired two years earlier, our household income dropped to 40% of that which we enjoyed when we both worked. Our income is my wife's small NHS pension and my smaller private pension. I will get my state pension in May 2020 and my wife hers in 2022. When I get my state pension we will be up to 50% of our working income and 60% when my wife gets hers. I would not suggest living off 40% of one's previous income is easy, it requires discipline and taking advantage of every saving available. However I do know our standard of living has not reduced and that we do make significant savings just by having more time available to shop carefully, spend time finding the best deals for insurance etc.

Our house runs off our income. That is the agreement we made. If we want to go on holiday, other than a B&B for a few days, this comes out of our savings. We literally have a book in which we note the weekly budget of, for example, £100. Everything spent is noted. If we only spend £80 then we have an extra £20 the following week. If we spend £120 then the following week we have to reduce spending by £20. I know to the nearest £1 the cost of each annual bill for insurance, MOT, Christmas, spectacles etc. and we save one twelfth of our income every month so when those bills come round we have the cash available to pay them.

Answering your question is impossible for an ordinary person like me. I'll offer the two pieces of advice I've given my sons. Find a decent financial adviser and discuss what one wants to achieve and by when. Secondly do not look at your Mum and I and think you will be able to do the same. If you want to retire at 60 start saving now as the state will not look after you in 30 years time.

I come from a golden generation. We had everything. Free education, work, affordable housing, etc. etc. That no longer exists. People have to look after themselves today.
Click to expand...
Ready for bed after reading that^_^
Only one question.........
You refer to your wifes "small NHS pension". I thought NHS pensions were generous??
 
welsh dragon

welsh dragon

Thanks but no thanks. I think I'll pass.
It's not strictly true Paul that we had everything and today they have to do it all on their own. We had the 3 day week,
We had 15 per cent Interest rates that left many with negative equity which resulted in thousands just walking away from a home that was worth half what they paid for it. People were left traumatized by the experience. Marriages ended, and kids were effected some people never recovered from the experience.

We didnt have childcare help, nor did we have family credit, working tax credit, child credit. People these days have a lot more help financially than we ever had. We were hung out to dry so to speak.
 
Drago

Drago

Legendary Member
Location
Suburban Poshshire
Whereas I've got 2 cars and can't be bothered to drive either of them :laugh: I despise driving, gain no pleasure whatsoever from it, and more and more recently have found myself getting on the bus rather than behind the wheel. I look set to have driven under 1200 miles this year, and it'll be under 1000 next year if the trend continues.
 
welsh dragon

welsh dragon

Thanks but no thanks. I think I'll pass.
Drago said:
Whereas I've got 2 cars and can't be bothered to drive either of them :laugh: I despise driving, gain no pleasure whatsoever from it, and more and more recently have found myself getting on the bus rather than behind the wheel. I look set to have driven under 1200 miles this year, and it'll be under 1000 next year if the trend continues.
Click to expand...


I don't mind driving.
 
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