Pensions Planning: The NUMBER 14 December 2009 at 2:44PM in Pensions, annuities & retirement planning 2.3K replies 622.6K views

whiteflag_3

Gatser wrote: »

I agree on all points.
Planning is essential to know if you are going to achieve your NUMBER
and gives an early warning if not, so you can do something about it.

So why do you dismiss a software system that helps you to plan much more accurately, given as you correctly state planning is essential?

btw - can you explain why an income of £42K keeps you under the hrt threashold.. I have many clients with retirement income in excess of £50K per annum that pay basic rate tax?

whiteflag_3

Linton wrote: »

On the positive side, the plan avoids the temptation to skimp unnecessarily. For example our actual expenditure for the past few months is well below budget so we have no qualms about taking a relatively expensive holiday in the sun to recover from the past few weeks of grim weather.

Excellent post Linton - its a joy to see someone that truly understands the concept of the number.

The real enjoyment I get with my clients once they realise that they are not going to run out of money, is discussing where and when they can spend their cash or give it away!!!

Gatser

whiteflag wrote: »

Excellent post Linton - its a joy to see someone that truly understands the concept of the number.

...like most people on here !

whiteflag wrote: »

The real enjoyment I get with my clients once they realise that they are not going to run out of money, is discussing where and when they can spend their cash or give it away!!!

...to their IFA as well earned fees. :beer:

whiteflag_3

[QUOTE=Gatser;28395481

]...like most people on here !

Dont flatter yourself dear!

...to their IFA as well earned fees. :beer:

Is that the best you can do now - you are obviously dodging the serious questions.

Gatser

Linton wrote: »

My Number for 2 is £42404

How is your NUMBER comprised, Linton?

So we learn a little more from your experience...
The NUMBER is not interesting in itself, its useful to know what others have included...or not.

As you say, we can be pleasantly surprised by how little we need to have a happy retirement :j

tartanterra

Gatser wrote: »

Some people say their NUMBER is "two thirds of salary" but the principle
of the NUMBER is that you should calculate (estimate) how much you NEED
to live comfortably (happy). Not a proportion of your current salary.

Not sure what your getting at here.
I live comfortably (happy) on what I earn. The kids take up about a third of my income, so therefore I calculate (estimate) that I need two thirds of salary in retirement, to carry on living comfortably.:D

As I will no longer be saving towards retirement, but have more time on my hands, the money I now save towards retirement should be sufficient for all those extras (like more holidays) in my free time.:D

It's an estimate. It really doesn't have to be that scientific, as no one can really predict what will happen in the future. For starters, I don't even know if I will be around to pick it up, or I may emigrate and then the exchange rate crashes; - look at all those people in Spain who are now regretting moving. What about divorce, disability etc?

The main thing is, I know what I am aiming for, and this figure will probably change depending on hundreds of different factors, which haven't been forseen yet.

I will adapt and overcome!:rolleyes:

Linton

Gatser wrote: »

How is your NUMBER comprised, Linton?

So we learn a little more from your experience...
The NUMBER is not interesting in itself, its useful to know what others have included...or not.

As you say, we can be pleasantly surprised by how little we need to have a happy retirement :j

The number is based on what we actually spent for the previous 6 years, so its top-down rather than bottom-up. The figure was then upped by 10% as we wanted to enjoy our retirement as much as reasonably possible.

Our expenditure on basics is about £10000 and has barely changed in the past 12 years despite inflation. Basics includes food, bills & utilities, house and car insurance, car tax, clothing, and healthcare. It also includes cash, but that is minimised by full use of credit/debit cards as this aids expenditure data collection.

The remaining £30K has to cover everything else ( holidays, house repairs and redecoration, running our boat, electrical goods, furniture replacement etc) except the 6-yearly car replacement which has its own budget.

The PLAN reduces our expenditure by about 20% after we are 80 as we presumably wont go on so many holidays nor run a boat, but it does ensure that we have a sufficient cash fund left over in our extreme old age to cover any care costs.

I do not allow us to exceed our budget in any running 12 month period, but do consider it our duty to get as close as reasonably possible.

I would not claim that my NUMBER and PLAN guarantees happiness, but it does minimise the stress of financial worries.

property.advert

I guess I could struggle by on £50,000 a year net of any (don't intend to pay any) taxes. Anything less would be a real compromise. I don't really expect this to come from a pension but rather from the Lottery. If I buy 100 tickets a week for 25 years and reinvest the proceeds of any winnings (around 35% say), then I'll have put in 100*52*25*1.3=£169,000 and my chances of winning the jackpot will have been ,................ too much

Seriously, 50k a year from a business or property is what I'm aiming for. If I sell either, then I'll have enough.

Couldn't think about living on £200 a week.

peterg1965

A thoroughly interesting thread and it a subject to which I have given significant, but not scientific, thoughts to over the last few years. My aim (along with my wife of course) is to maximise income in retirement in order that we can enjoy the finer things in life - travel, good standard of living, nice cars . Our game plan, supported by a variety of occupational pensions and personal pensions, as well as intended savings, is to be mortgage free at 55 (my OH will be 58) and to have pension income at that time of about £55K (todays figures) with a £100K savings pot, increasing to £65K in pensions two years later (wifes pension kicks in at 60) and increasing again when the State pensions kicks in at age 66 for both of us. I may continue working beyond 55 if the right opportunity arises.

By the time I am 55 the children will all be through University and financially independent (I hope) and with the lack of a mortgage and not paying pension contributions we should be in a healthy financial position to realise a comfortable, and god willing, a long retirement. A lot can happen in the next 11 years though!

I wish I was organised enough to maintain a spreadsheet of past living costs and outgoings in order to conduct a more scientific analysis of retirement needs, but I am not!

Gatser

tartanterra wrote: »

Not sure what your getting at here.
I live comfortably (happy) on what I earn.
It's an estimate. It really doesn't have to be that scientific, as no one can really predict what will happen in the future.

Not trying to be too scientific... I just meant that the NUMBER is best calculated as bottom up...adding up all one's needs and desires.
Also, more interesting to compare with each other then.

But if two thirds of salary is good for you thats all that matters.
If we start using salary as the benchmark, it will make comparisons more difficult too because we don't like revealing our salaries (generally)

Totally agree on the unknowns... just had a close (youngish) death as a solemn reminder...it brings some reality to these NUMBER debates