Pensions Planning: The NUMBER

Gatser

Spirit wrote: »

This question may have been asked before, but is the number for the household or is it (if you are married etc) for each individual?

As we have always managed our "household income & expenditure", that's how we are seeing our NUMBER.
Far easier to work that way I feel.

So what's your NUMBER then? please.... always interested...

ognum

Gatser wrote: »

As we have always managed our "household income & expenditure", that's how we are seeing our NUMBER.
Far easier to work that way I feel.

So what's your NUMBER then? please.... always interested...

I am interested in this number, surely, well at least for our household, there are variable.

There is a number which involves the commitments we have now like a holiday home abroad, two cars etc and there is also a number if life had to be cut down to a more basic but probably no less enjoyable life.

Which is the number or can you have more than one?

atush

Yes, I have this problem with my 'number' in that I have holiday homes abroad so that will raise my number (esp one where I rent it in winter now, but will use it in peak winter season in future).

So at the moment, my number is higher than I like.

looking to refine the number, when my 3 expensive boys are a- out of uni- and b- out of the house.

Hope to bring it down sharply

My_life

I have used microsoft money for 5 years and have used this to come up with our number.

What did I discount from our spending to come up with our number? Well that included the contributions to both our son and daughters wedding and the help with deposits for their homes. Our mortgage payments. 50% of our clothes spending as most of it was work related suits, etc and the money spent on building work to 'future proof' our forever home (new central heating, replaced all electrics, downstairs shower room, etc) and all NI/ pension contributions.

What did I keep in? Holiday spending and all car related costs, including current spend on fuel for two cars, even though most is getting to and from work - we are planning on getting around once we have more time. Not forgetting the normal household bills of course and some isa contributions.

The total was then increased by a 15% safety margin and the figure came out at just under £24k Our pensions include CPI and jointly will easily cover this. The problem is that if one goes, the individual income is around 23k for the remaining person (including the spouse payment from the deceased pension), so we do also have a single number that reflects reduced costs (food, clothes, single car, etc) of £19k. But both of these figures are generous and can be scaled back if necessary and don't included interest from savings.

We have decided to test our figures for the next 12 months and see if we can live on this (excluding the mortgage payments of course). All the residual will go into increasing savings, additional pension contributions and paying off the mortgage in less than 2 years. If it works - then the plan is in 4 years to join the ranks of those who have put life before work and leave before retirement. In our cases it will only be 5 years earlier - not a lot when our normal age would be 65, but it's still better than staying until the bitter end!

My Life

Gatser

The planning and review of reality to plan goes on!

Semi Retirement was achieved this year and I can recommend the dual benefit of 4 day weekends and a continuing (albeit reduced) salary!

THE NUMBER for us still stands at £28k

Probably looking to start some pension DRAWDOWN in 2014, but using some savings to top up income at the moment (all part of the plan)

Like to keep busy and active so not rushing to fully retire...yet!

Are you happy with your NUMBER ?
What's changed most within your retirement planning?

gadgetmind

I won't feel happy until I know I can knock work on the head and still have £60kpa after tax between us, This is with a 5% drawdown pre-SP and less afterwards.

This may seem like a fair bit but it's less than the take home pay of a couple who are each just into HR tax.

We don't have any FS/DB pensions, and my wife doesn't work, so I'm sure you'll all understand why I'm a wee bit focussed on efficient investing!

Linton

8 years ago when Mrs L and I retired early I calculated our number as £37K which was what we were spending at the time upped by 10% . This still forms our annual budget, increased each year by CPI inflation (now about £46K).

In practice we are living (and running our narrowboat) within £35K, the remaining money being used for new kitchen and bathroom and the occasional expensive holiday although most years we have failed to use all the budget. This, added to my estimates for inflation and investment return both proving to have been pessimistic have done wonders for our finances despite the intervening credit crunch crash.

After living mainly on savings and investment returns until now I have just sorted out our various pensions and set up his & hers SIPPs for drawdown.

Wilkins

I reckon ours will be around £25k, once the kids have left HE in 2-4 years and allowing for inflation. Income from pensions and investments ought to be around £32k by then.

Hopefully, that margin of safety will remain. If not, downsizing or staying employed are options.

kidmugsy

Gatser wrote: »

Repairs/replacements £1,000

Your house must be in perfect nick and your car immortal.

Wilkins

kidmugsy wrote: »

Your house must be in perfect nick and your car immortal.

OP has upped that to £2k. Even that might be too low. It's OK for me, though --I don't have a car.