Pensions Planning: The NUMBER

pterri

Sarahspangles said:

LL_USS said:

Likewise, I don't think I have the need to "upgrade" kitchen, bathrooms that already look fine for us... just repair and replace what's broken or change a few things for hygiene reasons.

We’re moving soon and I know the estate agent is going to put ‘needs updating’ on ours. It’s a family house so I know the next owners will want another toilet and maybe an en suite, and in some of the scenarios the reconfiguration would include a utility room. It’s pointless us updating it.

We're likely to buy a ‘needs updating’ ourselves and as I’ve never had a new kitchen or bathroom I’m hoping to have that experience and then live long enough for it to be back to ‘needs updating’ by the time the next owners are viewing.

Yep, I think the standard advice that upgrading a kitchen has the lowest payback (if any) when selling. So long as it’s functional

having said that, mine was 20+ years old and I had a very small fire(!) this tome
last year. Not written off but needed an expensive repair so I took an insurance payout and did the whole thing. Not the most expensive but not a budget job. I love cooking so was happy to indulge that before I retire. We don’t just buy what we need, I take the point that you need to think a little differently on retirement unless you are very flush. I’m good with that. 

Ibrahim5

Our house was new when we moved in 25 years ago. Someone was saying to me that our next door neighbours would never sell because it was for sale and still had the original bathrooms. In my mind ours were new. Sure enough someone has moved in and skip after skip of bathrooms have been removed.

MarriedWithKids89

michaels said:

Not the OP and not yet retired but I have an 'accrual' for this sort of spending - so my 'repairs/replacements' line would not just be typical spend but would say include 1/30th of the price of a new roof, 1/10th the price of a new bathroom, 1/15th the price of a new kitchen etc etc.

I don't actually do a physical accrual into a 'pot' so most years it seems like we spend well under budget.

This is exactly what we do. For what it is worth we have allowed £9K/year for repairs, replacement boiler(s), replacement window(s), white goods, new carpets, etc., etc., etc. This also includes renewing the car every 4 or 5 years. As someone has also said it is very much finger in the air though. 

SouthCoastBoy

I have come to the conclusion I most probably won't use all my money, which I'm very happy about. It means I don't really need to budget for one off capital expenditure items. I know it is a fortunate position but I've worked and saved hard for a very long time.

So much so I'm paying for 6 of us to go to australia next Christmas I'm budgeting 25 to 30k 

kimwp

SouthCoastBoy said:

I have come to the conclusion I most probably won't use all my money, which I'm very happy about. It means I don't really need to budget for one off capital expenditure items. I know it is a fortunate position but I've worked and saved hard for a very long time.

So much so I'm paying for 6 of us to go to australia next Christmas I'm budgeting 25 to 30k 

Presumably you've had to estimate the one off things to know that they won't use up your money though?

SouthCoastBoy

kimwp said:

SouthCoastBoy said:

I have come to the conclusion I most probably won't use all my money, which I'm very happy about. It means I don't really need to budget for one off capital expenditure items. I know it is a fortunate position but I've worked and saved hard for a very long time.

So much so I'm paying for 6 of us to go to australia next Christmas I'm budgeting 25 to 30k 

Presumably you've had to estimate the one off things to know that they won't use up your money though?

Not really got an estimate, I have a spreadsheet that has modelled expenditure and growth up to 100. This gives me an amount still available at 100 which I see as a reserve bucket. In my plan this is more than enough to cover unplanned expenditure. The risk to my retirement affordability is equity growth, and inflation, rather than unplanned expenditure.

In my planned monthly expenditure I also have a contingency of about 20% so that will also help. 

We also have a contingency of the contingency, as planned spending is 2650 per mth, but currently we are running a surplus of about 5k a year on that.

In my modelling I have also assumed income tax thresholds never increase, which should help, however I have also assumed state pension will keep up with inflation, which it may not.

trevjl

SouthCoastBoy said:

I have come to the conclusion I most probably won't use all my money, which I'm very happy about. It means I don't really need to budget for one off capital expenditure items. I know it is a fortunate position but I've worked and saved hard for a very long time.

So much so I'm paying for 6 of us to go to australia next Christmas I'm budgeting 25 to 30k 

I could have written this - substitute Oz for USA last year 10 of us, and it did come out top end - I don't have any reserve, pot, budget for cap ex. I have never quite understood on here the obsession with a new roof !
I am fortunate to have a decent DC & ISA and a DB in 3 years. I work on the theory that if I cant afford a cap ex then I should not have retired. I can't think of any cap ex that would make a life changing hole in my budget. New car ? what is that, most expensive car I have ever paid for was a  Ford Granada MkII in 1986 £2700, last car 2009 Astra £1900 !!

barnstar2077

trevjl said:

SouthCoastBoy said:

I have come to the conclusion I most probably won't use all my money, which I'm very happy about. It means I don't really need to budget for one off capital expenditure items. I know it is a fortunate position but I've worked and saved hard for a very long time.

So much so I'm paying for 6 of us to go to australia next Christmas I'm budgeting 25 to 30k 

I could have written this - substitute Oz for USA last year 10 of us, and it did come out top end - I don't have any reserve, pot, budget for cap ex. I have never quite understood on here the obsession with a new roof !
I am fortunate to have a decent DC & ISA and a DB in 3 years. I work on the theory that if I cant afford a cap ex then I should not have retired. I can't think of any cap ex that would make a life changing hole in my budget. New car ? what is that, most expensive car I have ever paid for was a  Ford Granada MkII in 1986 £2700, last car 2009 Astra £1900 !!

A good friend of mine just found out he needs a new roof on his place, he's been quoted £15k by a guy he trusts.

Not everyone will need to replace a roof in their lifetime, but it is one of those things that you need to at least have a rough idea where you would find the money from if it did become necessary.  If for no other reason than for peace of mind.

barnstar2077

trevjl said:

SouthCoastBoy said:

I have come to the conclusion I most probably won't use all my money, which I'm very happy about. It means I don't really need to budget for one off capital expenditure items. I know it is a fortunate position but I've worked and saved hard for a very long time.

So much so I'm paying for 6 of us to go to australia next Christmas I'm budgeting 25 to 30k 

I could have written this - substitute Oz for USA last year 10 of us, and it did come out top end - I don't have any reserve, pot, budget for cap ex. I have never quite understood on here the obsession with a new roof !
I am fortunate to have a decent DC & ISA and a DB in 3 years. I work on the theory that if I cant afford a cap ex then I should not have retired. I can't think of any cap ex that would make a life changing hole in my budget. New car ? what is that, most expensive car I have ever paid for was a  Ford Granada MkII in 1986 £2700, last car 2009 Astra £1900 !!

Are you saying that you don't have a separate pot for one off purchases, like new cars, white goods etc?

When I retire I plan on having a separate pot so that I know exactly what I have as spending money every month.  Otherwise a new boiler etc would mean having to cut back on fun activities for a few months.

The only way it would work differently for me would be if my monthly spending allowance was exceptionally high to start with.  Which would be inefficient, as I can retire earlier on less with a separate pot for one off big expenses. 

DT2001

SouthCoastBoy said:

I have come to the conclusion I most probably won't use all my money, which I'm very happy about. It means I don't really need to budget for one off capital expenditure items. I know it is a fortunate position but I've worked and saved hard for a very long time.

So much so I'm paying for 6 of us to go to australia next Christmas I'm budgeting 25 to 30k 

What are you aiming to do? A Barmy Army trip to the Test matches?

We’ve just had a month in Oz/NZ, admittedly staying with friends/family and doing house swaps, on less than £5k for 2 of us