Hundred grand in 23 years

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  • jdw2000
    jdw2000 Posts: 418 Forumite
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    It's quite easy to work out how much you need. Just use the figure of 3% as a rough guide.

    £100,000 in your pension pot will give you £3000 per year (without denting the pot, after fees, and allowing for inflation).


    That is £250 per month. So combine that with whatever you expect the state pension to be and that's how much you will be living on.


    Considering that some people live on the state pension, an extra £250 per month on top of that is probably doable. But won't be great.
  • masonic
    masonic Posts: 23,276 Forumite
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    edited 17 March 2017 at 11:41PM
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    sparkychris wrote: »
    The reason I don't buy my home now is because I could never afford to live in a house I'd enjoy living in but can afford the rent. The house I live in is worth about 250,000 and the rent is 650... (ish)
    I could afford a terraced home but I'd be miserable.
    sparkychris wrote: »
    Semi poverty is the best I can go for at the minute!

    Am 41, in a rented home with 20k in the bank!
    There seems to be a worrying conclusion reached when these two posts are taken together.

    I hate to break it to you, but £100k (today's money) is not going to allow you to keep renting a home at £650 per month in retirement, especially since you intend to retire several years before you will qualify for the state pension. You will presumably want some money to feed and clothe yourself as well.

    If you can only save £80k over the next 23 years, then buying a home is going to leave you unable to save much at all for retirement. I think some lifestyle changes are warranted.
  • ViolaLass
    ViolaLass Posts: 5,764 Forumite
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    masonic wrote: »
    There seems to be a worrying conclusion reached when these two posts are taken together.

    I hate to break it to you, but £100k (today's money) is not going to allow you to keep renting a home at £650 per month in retirement, especially since you intend to retire several years before you will qualify for the state pension. You will presumably want some money to feed and clothe yourself as well.

    If you can only save £80k over the next 23 years, then buying a home is going to leave you unable to save much at all for retirement. I think some lifestyle changes are warranted.

    Indeed. sparkychris appears to be opting for deferred misery.
  • masonic
    masonic Posts: 23,276 Forumite
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    jdw2000 wrote: »
    Considering that some people live on the state pension, an extra £250 per month on top of that is probably doable. But won't be great.
    I'd imagine most if not all who manage on the state pension alone can do so because they own their own home or live with relatives.
  • jdw2000
    jdw2000 Posts: 418 Forumite
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    sparkychris wrote: »
    I rule out pensions because the idea that my money is inaccessable if a disaster should occur is really scary... My slightly less scary idea is a buy to let so that a tenant would help pay for my property over 20 years or so. Should the property be empty then I'd be paying the mortgage and just think of it as paying into my pension .. should disaster strike I could sell... Or I could retire into it and live rent free, perhaps

    The reason I don't buy my home now is because I could never afford to live in a house I'd enjoy living in but can afford the rent. The house I live in is worth about 250,000 and the rent is 650... (ish)
    I could afford a terraced home but I'd be miserable.

    I know it's not great thinking but pensions scare me to death.

    And a hundred grand wouldn't be enough but it's better than nothing!

    "...if a disaster should occur..."

    "... scary..."

    "... should disaster strike..."

    "... I'd be miserable..."

    "... scare me to death..."

    Use positive language. Internally, as well as externally. I'd be a bag of nerves too if I used that sort of language everyday.
  • jdw2000
    jdw2000 Posts: 418 Forumite
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    masonic wrote: »
    I'd imagine most if not all who manage on the state pension alone can do so because they own their own home or live with relatives.

    Not all of them, surely. The council provide must provide accommodation too.
  • masonic
    masonic Posts: 23,276 Forumite
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    jdw2000 wrote: »
    Not all of them, surely. The council provide must provide accommodation too.
    Then they'd not be relying on the state pension alone, they'd be making use of housing benefit as well.

    I don't think this will be any good for the OP if living in a terraced house is beneath him ;)
  • jdw2000
    jdw2000 Posts: 418 Forumite
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    masonic wrote: »
    Then they'd not be relying on the state pension alone, they'd be making use of housing benefit as well.

    I don't think this will be any good for the OP if living in a terraced house is beneath him ;)

    Good point!
  • Fatbritabroad
    Fatbritabroad Posts: 573 Forumite
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    sparkychris wrote: »
    I rule out pensions because the idea that my money is inaccessable if a disaster should occur is really scary... My slightly less scary idea is a buy to let so that a tenant would help pay for my property over 20 years or so. Should the property be empty then I'd be paying the mortgage and just think of it as paying into my pension .. should disaster strike I could sell... Or I could retire into it and live rent free, perhaps

    The reason I don't buy my home now is because I could never afford to live in a house I'd enjoy living in but can afford the rent. The house I live in is worth about 250,000 and the rent is 650... (ish)
    I could afford a terraced home but I'd be miserable.

    I know it's not great thinking but pensions scare me to death.

    And a hundred grand wouldn't be enough but it's better than nothing!
    So you won't get a pension but you're happy to invest in shares and hold a chunk of illiquid cash in a property that might not "just sell" with all the hassles of being a landlord and the initial upfront costs like 3% stamp duty :eek:
  • Eco_Miser
    Eco_Miser Posts: 4,708 Forumite
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    masonic wrote: »
    Then they'd not be relying on the state pension alone, they'd be making use of housing benefit as well.

    I don't think this will be any good for the OP if living in a terraced house is beneath him ;)
    Round here the social housing (there are no council houses) are semis with gardens, or apartment blocks. The terraces are privately owned.
    Eco Miser
    Saving money for well over half a century
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