How much is enough?

ontrack · 22 December 2014 at 10:13AM

What a pointless thread. The OP asks a reasonable question then tells us he actually has 25 k income and 700 k in investments.. Presumably he is feeling very smug and is desperate to tell everyone how much money he has.. These threads usually become a !!!!ing contest
Let's see who can !!!! the highest:rotfl:
Anyway with OPs assets unless he has the secret of eternal life he can retire now
( preferably somewhere where he dosnt have access to a computer):T

atush · 22 December 2014 at 10:20AM

I agree, given the additional information not disclosed it was fairly pointless.

doshunta · 19 January 2015 at 9:27PM

Got to admit tha'ts how it sounded to me too.:rotfl:

Can I invite questions on our Strategy please?

I'm 52 and would like to retire in 4 years, spending a lot of time while we are healthy in Mallorca, which we love..

My current pot is £400k - planning on £550k for retirement pot at retirement. This will only pay us £27k pa so how can we afford to swan off to the sun?..

Our gameplan is to rent our main detached UK residence to:
a) generate an income of c £10-12k pa net of charges.
b) use £8k of this to rent our apartment in Mallorca
c) keep on the UK property ladder for our return.

So overall income just over £30k gross to live a simplish Med lifestyle - local bodega wine, cheap Menu del Dias etc.

(My wife will get a small £2k pa pension 2 years after reirement and we hopefully get some State pension later on.

Are we missing anything?

gallygirl · 19 January 2015 at 10:29PM

doshunta wrote: »

Are we missing anything?

A spreadsheet

.

30k is more than enough to have a very comfortable life in Spain - I know plenty people living there on less than 20k. I'd expect you to be able to have a good lifestyle plus put money away every month.

doshunta · 19 January 2015 at 11:35PM

I've done a retirement budget, net of mortgage and pension payments, and net of the impact of our two adult kids who are stretching wings before getting encouraged to fly this particular nest! :j

It shows we should be OK, my growth assumptions on the pension are 2% net of inflation, with the assumption that I'll pull 4.5% early stages,then 4% on arrival of state pensions and only 3.5 % from late 70s as we slow down.

I'm also thinking that we can switch an occasional month in Mallorca with other locations by renting out to family etc. We already rent the apartment there year round and spend decent hols there.

This way we only pay for the place we are living in and not for two assets, one of which will be a liability at any point in time. I realise that I'll be paying out rental for quite a few years and not building equity there, but it gives flexibility and in reality a 2nd home purchase costs a lot each year to run and maintain.

All advice welcome guys and these calcs we are all doing are never failsafe! :T

atush · 20 January 2015 at 12:02PM

Doshunta,

in general you should start your own thread rather than tacking on to another. Having said that, you finances look ok in part. But you have a few problems.

First of all, I read that the PA would be taken away from those who live abroad and rent their home, meaning your income will fall and taxes rise. Then there are void periods, maintenance etc to take care of. So could be your profit if any will be severely reduced.

How big is your current home? Would not selling it and downsizing, to perhaps a smaller cheaper to run place- even a flat be better? Still in the UK market, lower costs? Just a thought?

fizio · 20 January 2015 at 12:03PM

As everyone says, the answer is 'it depends' on personal circumstance/lifestyle etc. My goal is to stay just under the higher rate threshold i.e circa £40k income on retirement. Combination of partial final salary pension, large-ish DC pot due to max contributions each year, and a couple of buy to let property.

johnaka · 20 January 2015 at 12:28PM

what ever income you get you have to adjust to it whether its 7 grand or 20 grand.
personally I think most folks live a little beyond their needs.the question is what are your NEEDS not what you like.figure that out 1st then you can work out your own answer.
if I got 15 grand a year I'd be very happy but the tax man will take 20% off the 5 grand extra so leaving you 4 grand if single.
for the two of us I still think we'll manage just fine.
no mortgage or debts.
a lot of it depends where you live to if in London then its a different kettle of fish,the ice cream sellers wanted £2.50 for a small cornet with a free 99 chocky bar!! I told him he can stick where the sun doesn't shine.
here you can get a large conet inc a 99 bar for £1.20.
so that is just sample of living cost.
I pay £1200 a year rates so I would've thought you'd pay twice as much that in london for a 3 bedroom semi.

fizio · 20 January 2015 at 12:53PM

I guess it also depends on how desperate you are to retire versus working a couple more years to get an improved pension..
Almost impossible to give a general answer in my view

saver861 · 20 January 2015 at 12:56PM

doshunta wrote: »

Our gameplan is to rent our main detached UK residence to:
a) generate an income of c £10-12k pa net of charges.
b) use £8k of this to rent our apartment in Mallorca
c) keep on the UK property ladder for our return.

Are we missing anything?

Lots of 'depends' ... and how long you intend to rent for etc.

If it is £12k income net of 'all' charges, which includes the estate agent or other rental management charges, then I'd be inclined to double check those figures. Conversely, your non-rental periods could be expensive.

I have let out a house in the past and while I never had any problems, there are several potential risks. It really just takes one significant tenant problem to undue much of your rental benefits. If you are in a different country then sorting out some of these potential problems can be even more difficult.

So while your previous visits to Mallorca presumably were vacation visits - this would be a different scenario. The intended retirement relaxation might be peppered with the concern of your property at home.

Personally I would look at a number of different scenarios that might give you the same or similar benefits and then weigh up the pros and cons.

How much is enough?

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