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  • FIRST POST
    • Gatser
    • By Gatser 14th Dec 09, 1:44 PM
    • 578Posts
    • 213Thanks
    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 60
    • tony4147
    • By tony4147 15th Jan 18, 12:57 PM
    • 284 Posts
    • 45 Thanks
    tony4147
    A part time job appeals to me, I always think how something like B&Q would be quite good, but for years I've chased the money and I would need to change my mindset (easier said than done) as if I was working a B&Q I would be thinking what I would earn in working 2 or 3 days I could probably earn in half a day doing what I'm doing now, obviously stress levels would be completely different and I would like to remove the stress.
    • justme111
    • By justme111 15th Jan 18, 1:18 PM
    • 2,924 Posts
    • 2,820 Thanks
    justme111
    you have not accounted for a State pension or have I missed it ?
    even without accounting for it you have enough , you seem to need 8 k from 3OO k pot- more than enough if you ask me and you ma6 run out of years sooner than you run out of money.
    disagree with one needing work to have a sense of purpose, it is unfortunate that people tend to think about their life and purpose so little they have a hole they plug with working for wages.
    I am 44 ,I love my job . last year I had a year off work for health reasons - it was very stressful of course but I loved free time.
    One can spend time with family members , friends, hobbies , enhancing one's day to day life - decorating, cooking, gardening. What about entertainment- movies , card games , reading - all that we postpone till we have more time - if not retoring early there will be no time for it ...
    I do not even mention fitness - ideally humans should engage in some kind of muscular activity gor a few hours daily, not a measly half an hour 3 times weekly while feeling proud of it and believing one is a super fit due to it.
    • rebuswad
    • By rebuswad 15th Jan 18, 2:04 PM
    • 138 Posts
    • 83 Thanks
    rebuswad
    you have not accounted for a State pension or have I missed it ?
    Originally posted by justme111
    Thanks for the feedback. Yes good point over state pensions, I should have mentioned. The risk averse in me took the worst case scenario of the SP being means tested by the time we are there.

    Will update post.
    • justme111
    • By justme111 15th Jan 18, 6:41 PM
    • 2,924 Posts
    • 2,820 Thanks
    justme111
    you have to be realistic in your "worst case scenarios" .
    otherwise planning is not going to be possible as you would have to plan for tins and rifle scenario.
    • OldMusicGuy
    • By OldMusicGuy 16th Jan 18, 9:50 AM
    • 300 Posts
    • 569 Thanks
    OldMusicGuy
    OK, retirement is now just over 6 weeks away, so doing lots of planning and spreadsheets! Based on my work so far, we will need around £20,000 per annum to cover all living costs for 2 of us before any discretionary spending.

    We live in a 5 bedroomed house in the South of England, so things like council tax (currently £2,690 per annum) are high and utility costs are around £2,700. These will come down when we downsize and relocate to a cheaper part of the country. That number also includes nearly £1,900 on pet food and pet insurance.

    So our target annual income after tax (the "number") will be £32,000. I think allowing 12,000 on top of the 20,000 for discretionary spending should be plenty for the kind of lifestyle we want to lead. Of course, the £20,000 should go down a bit once we downsize so I think 32K should be adequate.
    Last edited by OldMusicGuy; 16-01-2018 at 11:02 PM. Reason: Corrected the "before tax" to "after tax"
    • AnotherJoe
    • By AnotherJoe 16th Jan 18, 9:59 AM
    • 8,251 Posts
    • 8,986 Thanks
    AnotherJoe
    Good for you !!! Enjoy. Your number isn't much different to mine, and so far its proving to be too much if anything, I'm not finding the need or wish to spend as much as I thought though to be fair I'm only 6 months in, which has flown by.
    • Mnd
    • By Mnd 16th Jan 18, 11:34 AM
    • 382 Posts
    • 408 Thanks
    Mnd
    Hi oldmusic guy. Your figure is a bit higher than ours, but we don't have pets and we are working on 2k a month.
    We live in Wiltshire near to where I seem to remember you are thinking about moving to.
    We got 3 bedroom semi in Corsham., and our council tax is 1550 approx but probably going up soon.
    Our experiment for 2k a month is based on the fact that I have given up work, but my wife works and with my pension we bring in 2100...6 months in so far so good
    • OldMusicGuy
    • By OldMusicGuy 16th Jan 18, 1:25 PM
    • 300 Posts
    • 569 Thanks
    OldMusicGuy
    We live in Wiltshire near to where I seem to remember you are thinking about moving to. We got 3 bedroom semi in Corsham., and our council tax is 1550 approx but probably going up soon.
    Our experiment for 2k a month is based on the fact that I have given up work, but my wife works and with my pension we bring in 2100...6 months in so far so good
    Originally posted by Mnd
    Thanks for the info. We are planning on moving to Gloucestershire/North Somerset region most likely but maybe other areas around there. We'll be aiming to get a smaller house to reduce the council tax and utility costs, so it's good to hear the kind of level you are paying. We'll also downsize the dog once it comes time for replacement (sadly the current one is 13 this year) so that will save a bit on food and insurance.
    • MallyGirl
    • By MallyGirl 16th Jan 18, 2:09 PM
    • 2,472 Posts
    • 7,465 Thanks
    MallyGirl
    We'll also downsize the dog once it comes time for replacement (sadly the current one is 13 this year) so that will save a bit on food and insurance.
    Originally posted by OldMusicGuy
    We have big and expensive dogs too. I think I might like to foster when they go as the costs get covered (if you want to pass them on). Insurance alone is £110 pcm for 2 dogs and a cat. Throw in the amount of food that two 35kg dogs can eat - and a car big enough to carry them, and a van kitted out for them - and they are an expensive hobby. Wouldn't be without them right now though.
    • Gatser
    • By Gatser 16th Jan 18, 3:08 PM
    • 578 Posts
    • 213 Thanks
    Gatser
    disagree with one needing work to have a sense of purpose, it is unfortunate that people tend to think about their life and purpose so little they have a hole they plug with working for wages.
    One can spend time with family members , friends, hobbies , enhancing one's day to day life - decorating, cooking, gardening. What about entertainment- movies , card games , reading - all that we postpone till we have more time - if not retiring early there will be no time for it ...
    I do not even mention fitness - ideally humans should engage in some kind of muscular activity gor a few hours daily, not a measly half an hour 3 times weekly while feeling proud of it and believing one is a super fit due to it.
    Originally posted by justme111

    I am with you, JustMe111 !
    Somewhat older, but I moved to part time at 55 (only 7days/month) and have found a positive cycle....
    It allows me to meet more people and from them comes more ideas for hobbies, interests and mini-adventures.
    Now I am about to fully retire and have no doubt I will fill the time. I do not need a job as a purpose in life, I suppose I have a job though, "Retirement Organiser/Planner"


    You are also spot on regarding fitness.
    Finding an hour most days to "walk somewhere" is no problem.
    We will walk to the supermarket (1.5 miles) now, instead of using the car ... but not for the BIG shop!
    THE NUMBER is how much you need to live comfortably: very IMPORTANT as part 1 of Retirement Planning. (Average response to my thread is £23k pa)
    My Other NUMBER: ZERO Working Days to SEMI-retirement: Achieved!
    • justme111
    • By justme111 16th Jan 18, 6:46 PM
    • 2,924 Posts
    • 2,820 Thanks
    justme111
    besides how often does it happen when one works that one's sexual life suffers because one does not have the whole time in the world to dedicate to it?
    methinks it is a very worthwhile reason to stop!
    • Esox
    • By Esox 16th Jan 18, 8:43 PM
    • 20 Posts
    • 19 Thanks
    Esox
    Did you mean?

    So our target annual income before after tax (the "number") will be £32,000. I think allowing 12,000 on top of the 20,000 for discretionary spending should be plenty for the kind of lifestyle we want to lead. Of course, the £20,000 should go down a bit once we downsize so I think 32K should be adequate.
    Originally posted by OldMusicGuy
    • OldMusicGuy
    • By OldMusicGuy 16th Jan 18, 11:01 PM
    • 300 Posts
    • 569 Thanks
    OldMusicGuy
    Did you mean? (after tax)
    Originally posted by Esox
    Oops yes! Although until we reach SP age they will be the same as we won't be paying any tax until then.
    • gallygirl
    • By gallygirl 17th Jan 18, 8:32 AM
    • 16,435 Posts
    • 108,610 Thanks
    gallygirl
    I am with you, JustMe111 !
    Somewhat older, but I moved to part time at 55 (only 7days/month) and have found a positive cycle....
    It allows me to meet more people and from them comes more ideas for hobbies, interests and mini-adventures.
    Now I am about to fully retire and have no doubt I will fill the time. I do not need a job as a purpose in life, I suppose I have a job though, "Retirement Organiser/Planner"


    You are also spot on regarding fitness.
    Finding an hour most days to "walk somewhere" is no problem.
    We will walk to the supermarket (1.5 miles) now, instead of using the car ... but not for the BIG shop!
    Originally posted by Gatser
    I used to go to an aquafit class when I was working. Mad dash home from work, get there at the last minute, stressed. Changed afterwards and straight home.

    Monday I left home at noon for a 1pm Pilates class. Walked in the sunshine (we've moved to Spain). Called in at supermarket and then a cafe on the way. After class my partner was waiting for me in cafe, where friends were also. Got home at 3pm, only because I had to be somewhere at 3.30.

    Having the time to do things at a more leisurely pace is wonderful. I do a lot of aerobics, Pilates and aquafit classes now - all stress-free as I'm not bombing about trying to fit everything in. Also averaged just over five miles a day last year.

    Time and health are the greatest gifts .

    Oh, and mini-adventures - off on one at the weekend .
    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"
    • OldMusicGuy
    • By OldMusicGuy 17th Jan 18, 9:10 AM
    • 300 Posts
    • 569 Thanks
    OldMusicGuy
    Time and health are the greatest gifts .
    Originally posted by gallygirl
    Well said. This was the realization that got me out of the OMY mindset, despite it meaning we will be in a weaker financial position.
    • Terron
    • By Terron 17th Jan 18, 3:11 PM
    • 148 Posts
    • 168 Thanks
    Terron
    Monday I left home at noon for a 1pm Pilates class. Walked in the sunshine (we've moved to Spain). Called in at supermarket and then a cafe on the way. After class my partner was waiting for me in cafe, where friends were also. Got home at 3pm, only because I had to be somewhere at 3.30. .
    Originally posted by gallygirl
    All I've done today is clear the snow from the paths to my front and back doors.
    • BOBS
    • By BOBS 17th Jan 18, 4:47 PM
    • 2,777 Posts
    • 2,122 Thanks
    BOBS
    Gallygirl - would love to retire to Spain / France even part time !! Did you keep house here as well ? Do you own property there.
    • gallygirl
    • By gallygirl 17th Jan 18, 8:10 PM
    • 16,435 Posts
    • 108,610 Thanks
    gallygirl
    Gallygirl - would love to retire to Spain / France even part time !! Did you keep house here as well ? Do you own property there.
    Originally posted by BOBS
    Yes we have kept house and let it out. If we were to decide to go back to UK I would want to sell it and buy something else. We have rental income from four (cheap!!!) UK properties.

    We bought in Spain, not necessarily something I'd recommend to others but it was right for us for various reasons. If you don't know an area well then renting first is best option - maybe even if you do know the area as living there is very different to visiting. I don't know about France, but buying in Spain is very expense (and stressful!) so a costly mistake if you don't get it right first time.
    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"
    • DCB1967
    • By DCB1967 6th Feb 18, 2:49 PM
    • 10 Posts
    • 17 Thanks
    DCB1967
    Calculating MY NUMBER






    Hi


    We are hoping to retire when we both reach 55, I'm 51 this year and my wife will be 52, she has special class status in the NHS and can retire at 55 on full pension. I have made the calculation below with my basic financial knowledge, and would appreciate any feedback on whether I am making some glaringly obvious mistakes or over presumptions. The £35,000 per year before SRA is about £9,000 higher than our predicted retirement but have used this figure to smooth the pre / post SRA incomes.




    Wife Retire at 55 with £21,945 / year NHS pension & £65,835 lump sum.

    Me Retire at 55 with pension pot of £362,000*.
    Take 25% lump sum = £ 90,500
    Balance = £271,500

    Need to fund 12 years gap until State Retirement Age (SRA).

    Total of £35,000 net / year, made up of:

    Wife £21,945 / year gross = £19,856 net**

    Total Lump sum value ranging from £145,835* to £184,085, use lower amount for investment calculation:

    £145,835 x 3% interest pa = £ 4,375

    £35,000 - £19,856 - £4,375 = £ 10,769 / year to be taken from my pot.
    12 years x £10,769 = £129,228

    At SRA of 67

    Me
    Pension Pot Starting amount = £271,500
    Minus 12 years bridge = £129,228
    Balance = £142,272
    = £142,272 x 4% draw down
    = £ 5,691 Private
    £ 8,300 State
    £13,991 gross
    £13,492 net

    Wife = £21,945 NHS
    £ 8,300 State
    £30,245 gross
    £26,496 net

    Total At SRA = £44,236 gross
    £39,998 net

    * Based on current (Jan 18) total pot value of £217,000 with annual contributions of
    £1154 x 12 = £13,848 and average growth of 5% per annum.
    If annual growth is 3% Pot Value = £320,000 £ 80,000 LS & £240,000 Balance
    10% Pot Value = £435,000 £108,750 LS & £326,250 Balance
    12% Pot Value = £473,000 £118,250 LS & £354,750 Balance

    ** Tax free allowance of £11,500
    • stoozie1
    • By stoozie1 6th Feb 18, 4:07 PM
    • 484 Posts
    • 366 Thanks
    stoozie1
    Do you need to take your lump sum immediately?
    Save 12 k in 2018 challenge member #79
    Target 2018: 24k Jan 2018- £560
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