Pensions Planning: The NUMBER

k6chris

I have come to the conclusion that 'the number' consists of 2 parts; the cost of bills / day to day living etc and the cost of the activities and pursuits that you want to do, now you have more time. The first is relatively easy to calculate, as you are already incurring those costs and can adjust up or down, the latter almost by definition has more unknowns in it. For us, the first number has been achieved, but am now planning for the second.

barrieroberts

I retired end June ,with 2 small final salary pensions plus my wife,s pension and my SP payable from mid Jan ,we find ourselves £2000 above our requirements based on my last 3 years, but problems with my wife,s health has after building a large pension pot and no heirs put me in a quandary ,a good one I know but still things change ?

ibizafan_2

We are spending a lot more in retirement on holidays now that we aren't limited by work holiday entitlement. We are doing expensive long haul travelling while we are still in our early to mid sixties, and I also have a son in Australia who I would like to visit pretty much annually. I have deferred my state pension for a year now and will probably carry on for another year as I have a part time job which enables me not to dip into my savings any more than I have to. Our projected income when we both claim our state pensions in a year's time is £40,000 gross, which includes three DB pensions. Sounds quite a lot, but I still expect to dip into savings for travelling. Neither of us are interested in buying new cars regularly or acquiring stuff. I feel fortunate to be in this position but I am sure that some people would not think this number is adequate for their circumstances.

bigadaj

ibizafan wrote: »

We are spending a lot more in retirement on holidays now that we aren't limited by work holiday entitlement. We are doing expensive long haul travelling while we are still in our early to mid sixties, and I also have a son in Australia who I would like to visit pretty much annually. I have deferred my state pension for a year now and will probably carry on for another year as I have a part time job which enables me not to dip into my savings any more than I have to. Our projected income when we both claim our state pensions in a year's time is £40,000 gross, which includes three DB pensions. Sounds quite a lot, but I still expect to dip into savings for travelling. Neither of us are interested in buying new cars regularly or acquiring stuff. I feel fortunate to be in this position but I am sure that some people would not think this number is adequate for their circumstances.

That number would put you comfortably above the vast majority of pensioners, others will have more but it certainly should be comfortable, it's more than many working families will be earning after all.

AnotherJoe

k6chris wrote: »

I have come to the conclusion that 'the number' consists of 2 parts; the cost of bills / day to day living etc and the cost of the activities and pursuits that you want to do, now you have more time. The first is relatively easy to calculate, as you are already incurring those costs and can adjust up or down, the latter almost by definition has more unknowns in it. For us, the first number has been achieved, but am now planning for the second.

Yes good points, I'm wondering if I'll end up "budgeting" for the second category, eg here's our holiday spend, here's our days out spend, our eating out spend, gliding spend (zero ) etc and have an allowance for each of those so I keep track of it and if things are getting tight at least i can clearly see what to balance out.

To date all I've done is work out if i can match my post tax income (minus elements such as saving for holidays, general savings, ISA and SIPP top ups) with my pension income, and I can, (according to retireeasy and firecalc) but i think i will need to get a bit more structured about what i'm spending my money on.

Serious spreadsheet time I think. 6 months to go as of next week :T

kazt2006

Assuming I stay in my current area of employment, I have excellent occupational pension. I have over 20 years to go to my planned retirement date at 60. There is no way I could continue to do my job at 68/69 when as it stands I'd finally be allowed to take whatever the state deems a universal pension. I'm planning to be mortgage free between 55 to 58, I have an investment property that will either be additional income or sold for a lump sum. And my number is £20,000 in today's money - net salary after current mortgage payments!

barrieroberts

When my Father and mother died they left us nothing (told them to spend it) and my wife,s died we had to pay a third of the funeral costs as they were both in ill health so now we have a healthy retirement pot I say spend spend spend ,

ianthy

I am just approaching age 55 and preparing to stop - so I am pretty clear about our number. We enjoyed a career break a few years ago and got a good feel for how we would spend our time and how much it would cost. I agree with the earlier posting - the number comprises of 2 parts - cost of living - food, bills, home repairs, essentials. The 2nd part - travel, discretionary spend. We like travel, comfortable home and days out. Not fussed about a posh car but it needs to be reliable so 3-4 years old max. I am planning for £50k net per annum. It may sounds alot but we have no kids and plan to enjoy what we have. I don't see that number decreasing, only the way in which we will spend it will change. At some point we will need more health care and who knows what state the NHS will be in.

Rheumatoid

I'm 55 and have been doing some projections and talking to a like minded mate with a similar employment history who has been retired for a few years and it looks like my number is around £36k to maintain our standard of living and up the spend on leisure and holidays. Another couple of years work for me and OH and we should be there with our final salary schemes without having to draw on any savings/investments.

maximumgardener

AnotherJoe wrote: »

Yes good points, I'm wondering if I'll end up "budgeting" for the second category, eg here's our holiday spend, here's our days out spend, our eating out spend, gliding spend (zero ) etc and have an allowance for each of those so I keep track of it and if things are getting tight at least i can clearly see what to balance out.

To date all I've done is work out if i can match my post tax income (minus elements such as saving for holidays, general savings, ISA and SIPP top ups) with my pension income, and I can, (according to retireeasy and firecalc) but i think i will need to get a bit more structured about what i'm spending my money on.



Serious spreadsheet time I think. 6 months to go as of next week :T

Indeed.....
it may be summed up as two things..... pretty much as described
1. Fixed costs (bills, council tax , food, energy) ..probably "largely fixed" about 80%?

2. Variable costs ....these discretionary things / wants , some can be reduced , some may increase .eg take up a new hobby / go more holidays......probably largely Variable ??

thing is most people (not all!) do tend (eventually) to spend less in retirement. i.e. costs go down