Could you retire on half your current income?

clairehi

margaretclare wrote:

Nor do I look at what other people have or do - it's up to them.

I couldnt agree more. That way madness, or at least discontent, lies!

ReportInvestor

A someone more eloquent than me put it:

"If you compare yourself to others you may become vain or bitter, for always there will be greater and lesser persons than yourself.

........

Be cheerful. Strive to be happy."

margaretclare

wotsthat wrote:

For younger people like me (39 - ok youngish!) I've a choice, I can say "sod it, it's not worth saving because the Government will give me £115 a week or so in pension credit" or I can say "£115 a week, that's rubbish I'm going to save hard to make sure I'm well above this level".

My plans for retirement don't include worrying about non-savers getting something I'm not - I want more from retirement and I'm willing to do without now to save for it.

I agree with you, wotsthat. My philosophy exactly. It's what I tried to say to someone on another thread recently who was talking about 'losing some assets so as to bring me under the means-testing threshold'. I've lost count of the number of times I've been asked 'are you claiming all you're entitled to, I'm sure you should claim pension credit, haven't you thought about it?' Yes, when it was first proposed, we did the sums then and worked out that, because of our income level, we come nowhere near it. Our response hasn't been to 'lose assets' even if that was possible. I'm just glad that means-tesing is not something we'll ever have to worry about. We want to have more than what the Government says we need to live on - £115 a week? - forget it, our income is 4 times that, we live simply but comfortably, we live well, we do all that we want to do and we still save (a) partly because it has become an enjoyable habit and (b) because we just do not know what the future may hold.

Margaret

benood

benood, the government pension plans are to try to make sure that the pension level is above the means-tested benefit level so that there is an incentive to save.

Sorry, my rant was wide ranging about benefits and means tests in general it's the overall morass of complexity that I believe discourages people from taking responsibility and making their own arrangements. For instance if you choose to fund part of your retirement income through ISA's my understanding is that they will count as savings on a means test for nursing care whereas investments in a pension fund won't in the same way. So the source of your "pension" can be very important when you're hoping to generate a steady income of say 30/60ths final salary.

wotsthat

Sorry, my rant was wide ranging about benefits and means tests in general it's the overall morass of complexity that I believe discourages people from taking responsibility and making their own arrangements.

Hi Benood

I can only talk for myself but I'm encouraged to save exactly because of the means testing and complexity of benefits. People who don't save either have their heads in the sand or don't give a monkey's; either way you are unlikely to see them on this board. Moaning about 'all' the people getting something for nothing is simply an excuse not a reason.

Life's too short to worry about people who haven't saved and are then awarded £115 a week as a 'reward' - what sort of retirement are they going to have on that?

I can see what you mean about the source of retirement income being important if care is needed but again life's to short. If I'm say, 85, and have got to pay for care then so be it - at least I'll have more options if I've got a nice big ISA pot. Yes, there'll be someone, because there's always someone, who didn't save getting similar treatment but that's not going to stop me saving (although I might have a quiet chunter to myself about it!).

margaretclare

wotsthat wrote:

I can only talk for myself but I'm encouraged to save exactly because of the means testing and complexity of benefits. People who don't save either have their heads in the sand or don't give a monkey's; either way you are unlikely to see them on this board. Moaning about 'all' the people getting something for nothing is simply an excuse not a reason.

Life's too short to worry about people who haven't saved and are then awarded £115 a week as a 'reward' - what sort of retirement are they going to have on that?

I can see what you mean about the source of retirement income being important if care is needed but again life's too short. If I'm say, 85, and have got to pay for care then so be it - at least I'll have more options if I've got a nice big ISA pot. Yes, there'll be someone, because there's always someone, who didn't save getting similar treatment but that's not going to stop me saving (although I might have a quiet chunter to myself about it!).

I completely agree with you!

I keep hearing about people who're at the younger end of the retirement years who are already stressing about 'how do I prevent my assets being snatched if I have to go into care?' The likelihood or even the possibility of this happening is 10, 20 or even 30 years away, and they're making their lives miserable about something that may not happen.

My friend whom I wrote about yesterday is 70, he and his wife have just splashed out on a new motor-home because, he says, there are a lot of beautiful parts of the British Isles that they haven't seen yet, and he tells me, they're never going to be at home! Good for them, life is for living after all.

Margaret

Jake'sGran

margaretclare wrote:

I agree with you. Nor do I look at what other people have or do - it's up to them.

Today I sent an email to several friends and relatives saying 'don't bother sending us a Christmas card this year, we won't be here, we're going on a Rhine cruise over Christmas'. And I got a response back from an old friend, who says ditto - he and his wife have just bought a motor-home because going away was difficult with the dog, they've splashed out on this motor-home because, as he said 'what's the point of being the richest person in the graveyard?' I agree entirely, and although we're still saving, we're not worrying about IHT or who to leave assets to, we intend to enjoy it while we've got it.

Margaret

I always wanted a motorhome. There arte lots of other things we would like to do too like a trip to Australia again but in club class. These things are all possible too as, due to our quiet style of life, the savings seem to keep growing like Topsy, without any effort. Unfortunately, five years ago things started to go pear shaped for me so that I am no longer able to undertake anything even mildly considered as arduous. I am not complaining. I have had some wonderful treatment from our wonderful NHS. Just wanted to say that it does happen to some, like me. who planned for a comfy retirement that the unexpected happens. A two hour trip to Spain is as much as I can consider but hey! I can do this as many times as I like. As a result of being unable to spend as much as I would have liked to, unlike you, I now have to worry about IHT but won't begrudge my family enjoying some of it. I like to think of my grandsons being the first in the family to go to university and not coming out with huge debts. Still prefer all this than having relied on the State.

novice-saver

margaretclare wrote:

Government says we need to live on - £115 a week? - forget it, our income is 4 times that...
Margaret

I'd imagine a lot of the regulars here would be glad of 4 x 115 per week - it's not far off my wage as a high rate tax payer _pale_

Plasticman

novice-saver wrote:

I'd imagine a lot of the regulars here would be glad of 4 x 115 per week - it's not far off my wage as a high rate tax payer _pale_

£115 per week is £5980 per year
£115 per week x4 is £23920 per year

a high rate tax payer must earn £33,300 + £5,035 personal allowance = £38,335

how are you a high rate tax payer?

jamesd

Since the lowest net weekly pay for higher rate tax is about 537, that 460 is pretty close (38355 pa, tax 7078, NI 3183). Deduct 15% for pension or other retirement provision and it's the same.

Since you need more than 15% to achieve that 460 it's more than the lowest paid higher rate taxpayer would be getting if trying to match that retirement income.

margaretclare could give prudent retirement planning and equity release a good name!