Pensions Planning: The NUMBER

westv

And then you have to decide do you include all the discretionary spending in a total figure for annual income or do you have a separate pot for "fun items" which you dip into as required?

Northamptonblue

I find that having pots works well for us. I have pencilled in £3k pa for entertainment outside the house and the same for holidays. There are a couple of major holidays we would like to take but the cost of these will come from capital. I would be grateful for views on this budget. Bills etc are easy enough to forecast, but I am finding discretionary spend more difficult to estimate.

Stubod

...we are both about to retire and I am in the process of setting up a budget. We actually intend to spend more in retirement, (at least for the first few years). We have saved pretty much half our earnings for most of our working lives and I have kept an expenditure log in excel for the last 20 odd years so that I now have a good handle on where all the money goes. I plan to use this as a basic "budget" factoring in inflation at 5% per year. I then intend to add in a "capital" pot which we can use for "other" expenditure, just not decided how much this should be, but initially around £6k per year.

penwise

When getting the number for a couple do you just double the figure for a single person or what?
When googling it's often not even clear whether the figure being given is for one person or a couple.

Linton

penwise wrote: »

When getting the number for a couple do you just double the figure for a single person or what?
When googling it's often not even clear whether the figure being given is for one person or a couple.

If you are half of a permanent couple you always need to think in terms of a couple. In my view the best way of getting the number is to start off with what you are spending now, rather than sum your expenses, so you never have to multiply the number for one person to get the value for a couple.

jerrysimon

Agree, work out what your primary outgoings are and use that as part of your number maybe adding individual expenses for each of you as applicable.

For me it was simple my wife went down to part time work eventually stopping a year ago (she does do 4 hours adhoc work now) so working the number out has been easier. Our number is £1600/month plus 60K in the bank. I leave work in March. No mortgage no kids at home etc. We will will have another £1000/month at SP age but may have moved house by then anyway.

Yesterday I ordered a green house. As much as the number is important it is essential to look at all areas. I have hobbies, DIY, growing vegetables (I started doing it for the first time last year) and voluntary work (begin 6 months training for the samaritans in March) and one day looking after our first grandchild.

My wife is 55 and I am 56. I started work at 16 so am very much looking forward to this next new job call "retirement".

Of course all the above will be influenced by our health which of course no money can buy or guarantee.

Jerry

Linton

jerrysimon wrote: »

Agree, work out what your primary outgoings are and use that as part of your number maybe adding individual expenses for each of you as applicable.

...

I would include all current outgoings and then subtract only the major ones that wont be applicable when you retire. The reason being is that at least at the start of the planning process you presumably want to keep your current standard of living, profligate though it may be.

frugal90

Good luck Jerry, enjoy!

chiefie

As I get more stressed from work my number goes down ��

robin61

chiefie wrote: »

As I get more stressed from work my number goes down ��

Well yes. There is no point starting retirement with your health shot to bits because of years of pressure.