Pensions Planning: The NUMBER

jerrysimon

chiefie wrote: »

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

Lol chiefie definately true for me, hence why I am now leaving early.

Jerry

peterg1965

chiefie wrote: »

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

So true. I don't want to wish my life away, but a couple of years back i was looking at a retirement around the 57-58 age bracket. now, i keep crunching the numbers to see if they will work at 55, three years in september, so 2020, and I cannot wait. Work is becoming much more stressful and difficult and options just open up at 55.

CFrog

Although I didn't read all 45 or so pages of responses, I found the thread interesting reading with your various thoughts on post-retirement requirements, areas of spend and lifestyle. It was a helpful cross-check for my own thinking.

Myself, as I'm looking to retire in 18 months or so (@60) I've been playing around with monthly budgetary requirements for a while now to see how this stacks up with my retirement 'pot' and whether this is sufficient to see me and my wife into our twilight years (and have something to pass onto our children). I've got loads of Excel spreadsheets / models covering all sorts of scenarios.

As I make frequent use of my credit card, I found it difficult to split out spend into stuff like groceries, petrol, wife’s hair etc. So I’ve had to present this as one ‘lump’ sum; I’m comfortable with monthly average figure. I’ve also considered how my monthly expenditure will (hopefully) change as I move from the current 3 person household to me and my wife and (say) 70 plus. I know I can make further economies here and there but for now, it is what it is ….. (excuse the untidy presentation. It should show 3 columns for spend now / 2 of Us / Post 70).

* - Includes: Food / Meals / Petrol / Leisure / Hair / Clothes / Animal Feed / Repairs / Gifts

Credit Card * £1,300 £1,000 £1,000
Milk £45 £20 £20
Council Tax £190 £190 £190
House Insurance £30 £30 £25
Mobile Phones £100 £50 £30
Elec / Gas £115 £100 £80
Water (ave) £20 £20 £15
Wood (ave) £20 £20 £15
Life Insurance £55 £55 £0
TV Licence £10 £10 £10
B Band (Internet) £120 £60 £60
PC Insurance £10 £0 £0
Car Service £20 £20 £10
Car insurance (3 to 2) £125 £75 £75
Car loan £175 £150 £0
Car Tax - DVLA £40 £20 £20
Car Replacement (Notional Sum) £250 £200 £150
Holidays (Notional Sum) £250 £250 £250
Cash / Incidental(s) £200 £150 £100
Monthly £3,075 £2,420 £2,050

Triumph13

CFrog, are you planning to downsize your house at 70? Otherwise why would you expect your heating costs to go DOWN when you are older? I would have thought you'd be more likely to want to keep the place warmer?
And I have to say I am very impressed by the milk consumption of your third person - you're not living with a veal calf are you?

CFrog

Triumph. Fair comment ref the heating costs. Although downsizing is a bridge I will have to cross at some point (as upkeep of the house and garden will become become a physical challenge), I had not factored this into my numbers. I see any downsizing as a bit of a bonus as I would expect to pocket some of the capital from the sale and find some way of giving some of it to my children.

Regards the veal calf .... :rotfl:

AndyAdams

My number is around £24000 pa (joint income).

Based on my current spreadsheet basic living costs, which inlcude golf membership :-), is £1400 per mth so I think 24kpa is about right. I would also like to have a capital account of around 100k.

If I want to retire at 55 how much do I need saved, I'm thinking around £800,000?

Triumph13

AndyAdams wrote: »

My number is around £24000 pa (joint income).

Based on my current spreadsheet basic living costs, which inlcude golf membership :-), is £1400 per mth so I think 24kpa is about right. I would also like to have a capital account of around 100k.

If I want to retire at 55 how much do I need saved, I'm thinking around £800,000?

I'd have said closer to £500k than £800k assuming it's split between the two of you. Two full state pensions is £16k pa leaving you £8k short. That would need £200k at a 4% withdrawal rate.
You don't say how old you are, but assuming your SPA is 68 that would give you 13 years of 'missing' state pension to bridge. 13 x £16k = £208k. Add that bridging fund to your £200k drawdown fund and your desired £100k capital buffer and that's £508k as your ballpark figure.
I've ignored tax as your number is so close to two lots of SPA.

ex-pat_scot

CFrog wrote: »

Although I didn't read all 45 or so pages of responses, I found the thread interesting reading with your various thoughts on post-retirement requirements, areas of spend and lifestyle. It was a helpful cross-check for my own thinking.

Myself, as I'm looking to retire in 18 months or so (@60) I've been playing around with monthly budgetary requirements for a while now to see how this stacks up with my retirement 'pot' and whether this is sufficient to see me and my wife into our twilight years (and have something to pass onto our children). I've got loads of Excel spreadsheets / models covering all sorts of scenarios.

As I make frequent use of my credit card, I found it difficult to split out spend into stuff like groceries, petrol, wife’s hair etc. So I’ve had to present this as one ‘lump’ sum; I’m comfortable with monthly average figure. I’ve also considered how my monthly expenditure will (hopefully) change as I move from the current 3 person household to me and my wife and (say) 70 plus. I know I can make further economies here and there but for now, it is what it is ….. (excuse the untidy presentation. It should show 3 columns for spend now / 2 of Us / Post 70).

* - Includes: Food / Meals / Petrol / Leisure / Hair / Clothes / Animal Feed / Repairs / Gifts

Credit Card * £1,300 £1,000 £1,000
Milk £45 £20 £20
Council Tax £190 £190 £190
House Insurance £30 £30 £25
Mobile Phones £100 £50 £30
Elec / Gas £115 £100 £80
Water (ave) £20 £20 £15
Wood (ave) £20 £20 £15
Life Insurance £55 £55 £0
TV Licence £10 £10 £10
B Band (Internet) £120 £60 £60
PC Insurance £10 £0 £0
Car Service £20 £20 £10
Car insurance (3 to 2) £125 £75 £75
Car loan £175 £150 £0
Car Tax - DVLA £40 £20 £20
Car Replacement (Notional Sum) £250 £200 £150
Holidays (Notional Sum) £250 £250 £250
Cash / Incidental(s) £200 £150 £100
Monthly £3,075 £2,420 £2,050

Excuse morbid thoughts, but why the life assurance after you are retired?
Broadband of £120 pm / £60pm looks awfully high.
TV licence fee is £12ish but stops (75?)
You note hair cuts in the credit card info. I would expect you to be completely bald by 70, and hence to reduce your outgoings.
Mobile phone bills are high when you are expecting to be retired.
Remember Council Tax is payable in 10 instalments, not 12.

AndyAdams

Thanks for the response. I'm 52 so 3 years to go and have a split of around 50:50 in ISAs and pensions so I shouldn't have to pay too much tax.

The problem is the closer I get to the retiring the more apprehensive I become about taking money out of any accounts. I will have to break a habit if a lifetime and I'm not comfortable with it!

Linton

AndyAdams wrote: »

My number is around £24000 pa (joint income).

Based on my current spreadsheet basic living costs, which inlcude golf membership :-), is £1400 per mth so I think 24kpa is about right. I would also like to have a capital account of around 100k.

If I want to retire at 55 how much do I need saved, I'm thinking around £800,000?

I assume you arent a couple.....

£800K looks slightly high - have you taken account of State Pension?

£800K properly invested should safely and sustainably give you around £28K broadly inflation linked, possibly rather more if you are flexible with your drawdown amounts. Assuming it is mainly in a pension rather than an S&S ISA there is tax that would bring it down to around £24K which will meet your requirement without allowing for State Pension.

State Pension is perhaps equivalent to a lump sum of around £200K or more considering the triple lock.