Pensions Planning: The NUMBER

houseboatdream

Gatser wrote: »

.
It's not just a money thing...it is also about health and fitness.
No point in achieving one's financial goals and being too old and unwell
to enjoys the fruits of our labours.

This is a very good point.

One thing that really struck me, when I sat down recently and looked hard at our pension situation was the age gap between OH and myself and how this would affect our retirement plans. Thats the other thing about retirement planning - facing up to your own mortality!

There is 7 years between us and OH is already semi-retired, having been able to start a company pension at 50. That was how we funded our travels. However, this pension isn't really enough for a proper, house owning lifestyle hence I am back at work.

If we achieve the goal that I retire at 55, OH will be 62 - hopefully we will have health and be able to enjoy retirement. On our travels we met many early retirees enjoying life whilst they were still reasonably fit and active.

Another thing I have noticed is that you spend less as you get older. I've certainly noticed this from my own mother who is now in her 80's. Her income is about the same as our travelling money, but she lives in a bigger house than us, eats well, runs a car and still saves into an ISA! I keep telling her to spend it but

weezl74

Hi there,

thanks for a very interesting thread. I have been working on a number of £14k per annum shared between the two of us,and a cash lump sum of £75K. I see now that this is much lower than the norm, so I'm going to do a lot more research.:o

My number was based on doubling our current non mortgage spends and allowing extra for large capital expenditure like car replacements.

Thanks for being so thought-provoking.

Weezl x

houseboatdream

Hi Weezl

I don't think there really is a "norm". So far we've had NUMBERS ranging from my £20k to WF's £44K!

I arrived at our figure by monitoring spending very closely over several years. I still do have lots of spreadsheets and can usually tell where every last penny has gone to.

Human nature seems to dicate that you will always want more. You can always say you need more money...a bigger house..a new car..more holidays.

Being mortgage free is very important as NearlyRich has pointed out. Also, the size and running cost of your house. We had a period without a property when we were travelling but we missed the stability and safety of a base. When we came back we deliberately bought an apartment (ok, a flat!), council tax band A. It isn't the sort of property that any of our peers live in and my mother is horrified, she keeps asking me when we are going to buy a proper house. The answer is we're not, it suits us fine and the monthly running costs (utilities etc) excluding food are less than £300.

weezl74

houseboatdream wrote: »

Hi Weezl

I don't think there really is a "norm". So far we've had NUMBERS ranging from my £20k to WF's £44K!

I arrived at our figure by monitoring spending very closely over several years. I still do have lots of spreadsheets and can usually tell where every last penny has gone to.

Human nature seems to dicate that you will always want more. You can always say you need more money...a bigger house..a new car..more holidays.

Being mortgage free is very important as NearlyRich has pointed out. Also, the size and running cost of your house. We had a period without a property when we were travelling but we missed the stability and safety of a base. When we came back we deliberately bought an apartment (ok, a flat!), council tax band A. It isn't the sort of property that any of our peers live in and my mother is horrified, she keeps asking me when we are going to buy a proper house. The answer is we're not, it suits us fine and the monthly running costs (utilities etc) excluding food are less than £300.

Hi HBD:)

are you guys quoting a joint income figure in your number?

I agree with the mortgage free part, and all going well we have 2-2.5 years left of ours.

Downsizing to reduce costs sounds good. Do you mind space issues when guests come? i think that's the main reason i want a big house in retirement, but maybe that's not so important as I've been feeling.

BACK TO MY SPREADSHEETS (oops caps lock on!)

Gatser

houseboatdream wrote: »

..... the monthly running costs (utilities etc) excluding food are less than £300.

I included £4500 for household bills in a 4 bed house.
Council tax is about £1600 of that.

Gatser

weezl74 wrote: »

Downsizing to reduce costs sounds good. Do you mind space issues when guests come? i think that's the main reason i want a big house in retirement, but maybe that's not so important as I've been feeling.

Another consideration.
I have seen friends and relatives "rattle around" in mansion houses just so they can offer accommodation to visitors 5 times a year.
I think we will settle on 3 beds in the end.
It seems such a waste especially regarding Council tax.

Gatser

nearlyrich wrote: »

Our household bills excluding food cost around £600 per month.

Quite abit higher than mine...but we are all different.
Our TESCO shopping helps perhaps

How about other areas of expense?
Thanks for the feedback...

nearlyrich

Gatser wrote: »

Quite abit higher than mine...but we are all different.
Our TESCO shopping helps perhaps

How about other areas of expense?
Thanks for the feedback...

The house is a 4/5 bed detached and the bills account covers everything we pay monthly, includes water rates which are high here (over £500p a) and a high council tax band in one of the most expensive areas in the country for council tax. My DD is still at home so gas, electricity, water etc are for three not two and she likes long soaks in the bath, long showers and the heating on LOL. I also work from home some days so need heat, light etc and a stable BB connection etc. plus it bumps the house insurance a bit. We shop at a local market, Tesco and Aldi mainly but we do like our food and we can afford to eat well, we also like eating out and going on holiday, I want to do more not less in retirement so would probably spend some time bulk cooking to save money and time.

I also have some skills which would enable me to make some money on projects if I wanted to and I have a lot of contacts who would be able to help me find these projects so I don't feel finishing paid work is the final straw, if I need some money I can get a contract etc...

It is all quite worrying but if you ony live once you have to have some fun whilst you are young enough to enjoy it.;)

gallygirl

weezl74 wrote: »

Hi there,

thanks for a very interesting thread. I have been working on a number of £14k per annum shared between the two of us,and a cash lump sum of £75K. I see now that this is much lower than the norm, so I'm going to do a lot more research.:o

My number was based on doubling our current non mortgage spends and allowing extra for large capital expenditure like car replacements.

Thanks for being so thought-provoking.

Weezl x

Weezl your number is no doubt much lower than the rest of us because you lead a very frugal lifestyle, so I'm sure it is accurate. You want less therefore you need less. Will this still be the same in 30 - 40 years though? Will you maybe get the travel bug? What happens if you are less fit & able so can't prepare all meals in the way you do now? Also as you get older you feel the cold more & will spend more time in the house so maybe haven't factored in enough spending on heating?

My own NUMBER is around 19 - 20k, based on living abroad (already have a place). I would not want as many holidays but have allowed around 4k for these plus coming back to UK a few times a year, hiring a car etc. Heating much lower (& not offset by air con costs in summer), would not be doing much mileage so less need to update car regularly etc. On the other hand I do want to be able to eat out when I choose etc.

Am currently well short of target (at least till 65), but this is ok as I have something to aim at. This is based on my own income & expenditure, I am not taking into account OH's income at all as I need to feel financially independent. However, assuming we haven't killed each other in the interim, we would be fine as he has an excellent pension . love you hon if you're reading this :kisses3:

If I was remaining in the UK & lived in an expensive area for housing I'd be inclined to downsize to release equity rather than have upkeep of a large house for use a few times a year. I'd sooner take the equity & pay for family to stay in a (reaonably priced ) nearby hotel.

whiteflag_3

Gatser wrote: »

The NUMBER should really be calculated based on what you want to achieve
in retirement. This will consist of 3 elements:
* Essentials
* Desired
* Luxuries
(I did not include any Luxury element in mine though!)

So its not your number . Why advise others when you dont know what your talking about?

btw thanking a post accusing someone of being a wife beater just about sums you up.:rolleyes:

Sorry better let you ladies get back to your chatter.:D

Bye Bye