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  • FIRST POST
    • Gatser
    • By Gatser 14th Dec 09, 1:44 PM
    • 576Posts
    • 207Thanks
    Gatser
    Pensions Planning: The NUMBER
    • #1
    • 14th Dec 09, 1:44 PM
    Pensions Planning: The NUMBER 14th Dec 09 at 1:44 PM
    The NUMBER is how much income you need to "live comfortably"
    So What's your number?
    Very important for pensions planning, to know what you are aiming for.

    My Number? (for a couple)
    I calculated: £22,000
    based on
    Food £5,000
    Car/transport £5,000
    Bills/Utilities £4,500
    Holidays/Leisure £4,500
    Clothing/Cash/Xmas/Other £2,000
    Repairs/replacements £1,000
Page 1
    • zygurat789
    • By zygurat789 14th Dec 09, 1:58 PM
    • 4,236 Posts
    • 1,993 Thanks
    zygurat789
    • #2
    • 14th Dec 09, 1:58 PM
    • #2
    • 14th Dec 09, 1:58 PM
    What about the cost of your home. Rates, water, power, TV, phone, ins? Good for another £5k.
    The only thing that is constant is change.
  • Manual_Reversion
    • #3
    • 14th Dec 09, 6:47 PM
    • #3
    • 14th Dec 09, 6:47 PM
    What about the cost of your home. Rates, water, power, TV, phone, ins? Good for another £5k.
    Originally posted by zygurat789
    Covered entirely by:

    Bills/Utilities £4,500
    Originally posted by Gatser
    and:

    Repairs/replacements £1,000
    Originally posted by Gatser
    You agree on the numbers though!

    For me, 2/3rds final salary would see no drop in standard of living, assuming mortgage paid off as pension begins/employment finishes. I guess there's a reason why mortgage payments being 1/3rd salary is a good rule of thumb.

    Whether it'll happen or not, I'll tell you in 35 years. We won't be typing into keyboards then I suspect!

    Regards.
    • Gatser
    • By Gatser 15th Dec 09, 1:49 PM
    • 576 Posts
    • 207 Thanks
    Gatser
    • #4
    • 15th Dec 09, 1:49 PM
    • #4
    • 15th Dec 09, 1:49 PM
    QUOTE "Whether it'll happen or not, I'll tell you in 35 years. We won't be typing into keyboards then I suspect!"

    PLEASE tell me now... my financial planning spreadsheet says I will not be here in 35 years time! (...and I follow it religiously)

    Pleased we all agree....so far....
    (Thanks for your reply on household costs...spot on!)
  • whiteflag
    • #5
    • 15th Dec 09, 2:29 PM
    • #5
    • 15th Dec 09, 2:29 PM
    The NUMBER is how much income you need to "live comfortably"
    So What's your number?
    Very important for pensions planning, to know what you are aiming for.

    My Number? (for a couple)
    I calculated: £22,000
    based on
    Food £5,000
    Car/transport £5,000
    Bills/Utilities £4,500
    Holidays/Leisure £4,500
    Clothing/Cash/Xmas/Other £2,000
    Repairs/replacements £1,000
    Originally posted by Gatser
    Gatser now Ive picked myself off the floor can you perhaps explain where you came across So What's your number?

    Youve have hit the nail on the head- knowing what your aiming for is the single most important thing>
  • bendix
    • #6
    • 15th Dec 09, 2:36 PM
    • #6
    • 15th Dec 09, 2:36 PM
    Your number will be different depending on where you are in life.

    For me, the number is around £2700-£3000 per month after tax, and having my property paid for. It is also completely before my private pension plan becomes accessible in a few years later, hopefully adding another £1500 per month income to the pot.

    But, of course, for me this won't be about retiring in the UK. It will be in Thailand.
  • Harry Powell
    • #7
    • 15th Dec 09, 2:57 PM
    • #7
    • 15th Dec 09, 2:57 PM
    My figure tapers down from a larger income in the early years of retirement when I'm more active to the latter years when I'm slowing down. Given that I won't have a mortgage, pension payments and work related expenses but will have all the other expenses such as council tax, insurances, vehicle expenses, utilities (some of which will be more expensive if I'm at home more), I think the first 10 years of retirement would require 2/3rds of my current salary, tapering down to 50% of my current salary for the next 10 years and moving down to 25% on my current salary as I quietly approach death.
  • bendix
    • #8
    • 15th Dec 09, 3:07 PM
    • #8
    • 15th Dec 09, 3:07 PM
    as I quietly approach death.
    Originally posted by Harry Powell
    This is where you and me differ Harry.

    I have no intentions of dying.
  • Harry Powell
    • #9
    • 15th Dec 09, 3:19 PM
    • #9
    • 15th Dec 09, 3:19 PM
    This is where you and me differ Harry.

    I have no intentions of dying.
    Originally posted by bendix
    How could you not be looking forward to the quiet of the grave? :confused:
  • houseboatdream
    That is a key question Gatser and one that I have been pondering for a while...now that we are debt free, mortgage free and dependant free it is time for us to give very serious attention to the Retirement Question. Pensions have never seemed so interesting!!!

    I have been keeping very detailed budgets and accounts for the last couple of years so I know that our current requirements for a comfortable lifestyle is £20k per annum. That sees us living our current property, running a small car, and motorhome (and associated holidays in it) plus pocket money, presents etc.

    I recently did a review of our finances and reckon that if I can carry on working and saving for another ten years we'll have enough to retire. Not sure I can stand it that long, so I'm aiming for a frugal five years of saving to make it even quicker - bit like those guys over on MFW and DFW. I did think of posting a "Retire 10 years early thread" but its a bit serious over here on the pensions board.......
    Downshifted once.....saved up, sold up and travelled Europe in our campervan. Then bought a house in France......

    Now need to pay off the debts and devise a plan to live there full time
    • jonnyb1978
    • By jonnyb1978 15th Dec 09, 9:27 PM
    • 1,319 Posts
    • 374 Thanks
    jonnyb1978
    Still have not got the foggiest. My current statement states as it stands when i retire in 29 years (though more likely 32) i will have a pension of £9500 a year plus a lump sum from my AVC of £20000 plus the state pension on top if that still exists in the year 2042 (I won't hold my breath). Mortgage should be paid off by then etc and aim to be debt free so who knows that maybe enough. Im just concentrating on as much as possible with realistic targets. My contributions should increase each year as should my AVC contributions. Im paying in £9 a week on my AVC and my first main target is to be paying £20 a week into it by the time im 35 in 4 years.
  • TMFTP
    Gatser now Ive picked myself off the floor can you perhaps explain where you came across So What's your number?

    Youve have hit the nail on the head- knowing what your aiming for is the single most important thing>
    Originally posted by whiteflag
    It's a Prudential marketing campaign. Was run in Asia initially (has been since turn of year, perhaps even before), got pinched by another company for use in US, and has been copyrighted for use in Europe.

    May not be where he found it, of course - but it's fairly widespread now.
    • Gatser
    • By Gatser 16th Dec 09, 9:42 PM
    • 576 Posts
    • 207 Thanks
    Gatser
    Gatser now Ive picked myself off the floor can you perhaps explain where you came across So What's your number?

    Youve have hit the nail on the head- knowing what your aiming for is the single most important thing>
    Originally posted by whiteflag
    Touch of sarcasm Whiteflag?

    This is a basic and important question I agree, but I have spoken to hundreds of colleagues as a pension scheme administrator and it never ceases to amaze me how folks just ignore this estimation.

    I got THE NUMBER from a book written by Lee Eisenberg.
    The reviews suggest its $%$%$ (bad!) but I do agree with the concept of having some idea of what we are aiming for in life and knowing if we are on target.

    I appreciate we all have different standards and aspirations but I learn from talking to others and questioning my own standards and expectations.
    It takes my mind off depressing financial markets!
    • shadydaz
    • By shadydaz 16th Dec 09, 10:13 PM
    • 373 Posts
    • 775 Thanks
    shadydaz
    My number based upon my current investments is NOT Enough. I have created a plan to increase my pension contirbutions by an average of 3% a year by natural wage inflation and pumping up my AVC yearly by a five spot each year. I currently pay £13pcm but this will be going up to £20 next summer, then the additional fiver annually.
    The minimum aim is to have at least Two-thirdsof of my income as a pension on retirement plus various other savings/investments.

    I am not banking on a state pension to suppliment this either.
    Was in debt £23k- Not now (12/07-12/10)
    Did smoke- Not any more (26-02-11)
    I am not perfect but everyone loves a trier don't they??
    • jonnyb1978
    • By jonnyb1978 16th Dec 09, 11:05 PM
    • 1,319 Posts
    • 374 Thanks
    jonnyb1978
    My number based upon my current investments is NOT Enough. I have created a plan to increase my pension contirbutions by an average of 3% a year by natural wage inflation and pumping up my AVC yearly by a five spot each year. I currently pay £13pcm but this will be going up to £20 next summer, then the additional fiver annually.
    The minimum aim is to have at least Two-thirdsof of my income as a pension on retirement plus various other savings/investments.

    I am not banking on a state pension to suppliment this either.
    Originally posted by shadydaz
    Very similar to me and a good way to save (I hope).
    About a year ago i got advice off here whether to join my pension schemes AVC. As it offers the whole lot as a tax free lump sum i joined at just £2 a week. And like you through natural wage increase, or infact any extra source of income (A debt paid off) i have increased this to £9 a week. All money i have not missed as it has been tied up beforehand or i simply did not have it. As said above my AVC lump sum when i retire will stand at around £20000 and by increasing this to £20 a week over the next 4 years it will stand at roughly £40000 with 25 years still until retirement. Then i have my normal yearly and a state pension (cough cough).

    I only have a short term goal at the moment and that is by the time im 35 i want my pension planner to be roughly £10000 a year pension (normal company pension) with a lump sum of £35000 (AVC). After that i shall reset my targets for the next 5 years.
    • gallygirl
    • By gallygirl 17th Dec 09, 5:24 AM
    • 16,467 Posts
    • 108,121 Thanks
    gallygirl

    I recently did a review of our finances and reckon that if I can carry on working and saving for another ten years we'll have enough to retire. Not sure I can stand it that long, so I'm aiming for a frugal five years of saving to make it even quicker - bit like those guys over on MFW and DFW. I did think of posting a "Retire 10 years early thread" but its a bit serious over here on the pensions board.......
    Originally posted by houseboatdream
    Please do start this thread, I for one would subscribe, I feel a little intimidated by the talk on here sometimes

    I haven't worked out 'the number' exactly as I know I could live easily on just over 1/2 current salary due to the amount I overpay on mortgage at the moment, plus work related costs. So, around £1,400 a month net to be safe (that's based on me being on my own, once bitten twice shy on the 'joint income' front so I will not factor OH into equation). Depending on pension performance may we well over or well under Need to get rid of mortgages to concentrate on cash savings & also revisit pension payments. Don't have a SIPP but do control what funds my co pension is in, also about to transfer 10k of other pension into a SIPP so destiny is in own hands

    My time on the DFW and MFW has ingrained certain behaviour in me so I could survive better on the same income than some others do (e.g. friends mum who still shops in Waitrose & M&S and is subsequently harder up than her mil who has never had much money but makes it go much further).

    I agree with those struggling to project without an end date for their spreadsheet
    A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort
    Mortgage Balance = £0
    "Do what others won't early in life so you can do what others can't later in life"
    • Gatser
    • By Gatser 17th Dec 09, 8:41 AM
    • 576 Posts
    • 207 Thanks
    Gatser
    Mfw....dfw ?
    What does this refer to please?
  • Harry Powell
    What does this refer to please?
    Originally posted by Gatser
    MFW = Mortgage Free Wannabe, DFW = Debt Free Wannabe. They're two boards on MSE that attract quite a few people. The strategies there seem to consist of making your life miserable and scraping by in order to meet some financial target. In DFW the target is to get rid of debt and on the MFW the target is to get rid of a mortgage. It's been said many times before that it's the financial equivalent of crash dieting, and usually has the same outcome.

    Often you people on the DFW board confessing that they have 'fallen off the wagon' (and have blown a load of cash) just as crash dieters do when they participate on a super strict diet plan that they get bored with and end up gorging themselves.

    I can understand scrimping and saving and blitzing your finances for upto 1 year to get debt under control, but some of these guys are at it for 2 to 3 years with their debts and then move onto their mortgage for a further 5 years and then some of them realise that they have no retirement provision so spend a further 5 years or more blitzing that.

    All the time they're doing challenges like 'living off £1 per day" or "living off £4k per year" and IMHO are spending the better part of their lives living like paupers. In the example above, it could be that someone spends a total of 12 years 'blitzing' their debts, mortgage and pension and being miserable while they could have simply done what everyone else does and split their money and do all three at the same time, giving themselves a longer period for pension investment and therefore a longer period for the pension to grow. Plus they get to spend a little on themselves while they're young enough to enjoy it.

    They seem incapable of seeing that the net effect of spending 2 years exclusively paying down debt, 5 years exclusively paying down a mortgage and then 5 years exclusively paying into a pension is exactly the same as spending 12 years contributing to all three. Except that if anything goes wrong in year 6 in the second scenario, (say job loss or illness) at least they will have some pension savings that can grow while they look for work or get well.

    Much better surely, to save a little, overpay a little and spend a little to achieve your financial targets? :confused:
    Last edited by Harry Powell; 17-12-2009 at 9:30 AM.
    • Gatser
    • By Gatser 17th Dec 09, 1:17 PM
    • 576 Posts
    • 207 Thanks
    Gatser
    Good Common Sense Harry
    totally agree Harry.

    If more folks maintained a "Lifetime spreadsheet", they could see how their spending / saving / pensions were progressing and test this against their "NUMBER" to see if they were on target.
    Sadly....most just leave things until its too late to do anything about it, or (worse) do no planning whatsoever and just spend! (head in sand policy)
    • Gatser
    • By Gatser 17th Dec 09, 1:22 PM
    • 576 Posts
    • 207 Thanks
    Gatser
    All the time they're doing challenges like 'living off £1 per day" or "living off £4k per year" and IMHO are spending the better part of their lives living like paupers.
    Originally posted by Harry Powell
    if anyone can tell me how to live on £4k (and be happy)....I can retire.... 20 years ago!
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