How much do I need in bank?

nobby24

I am 61 and I took early retirement. I receive a company pension of £1250 per month (RPI linked). I don't have a mortgage or debts. How much money do I need in the bank to live reasonably comfortably for the rest of my life?

de1amo

i would guess the place to start is doing a SOA so you can judge your budget for the lifestyle you want to live.--there are things that get cheaper when you stop working but there are other things that increase--for instance you no longwer have to travel to work but you have to spend more on heating etc because you are at home more.

somethingcorporate

If you can live comfortably off your income then nothing.

Is post retirement not a little too late to consider how much you need to be comfortable?

dunstonh

Is post retirement not a little too late to consider how much you need to be comfortable?

I know its not funny but I'm afraid I couldnt help laught at that.

I had someone recently seek advice after commencing their pension. They had taken max lump sum from the occ scheme and had a small personal pension they didnt need capital from. I explained to them that they should have taken no lump sum on the occ scheme and that they should take the max lump sum on the personal pension. Over a typical life expectancy, their decision will probably cost them about £40,000. It is not uncommon for people to seek advice after making the decision.

somethingcorporate

Not like it's going to be the most important decision they make that will affect them for the rest of their life....oh wait...

atush

Closing the barn door after the horse has bolted?

Anyway, only the OP can say how much they need to live on comfortably, although with no mtg or debt that will help.

Dont forget to take into account capital expenditure such are car replacments, home maintenance, holidays. And do take into acct the date of your State pension commencement.

Then take into acct how you will pay for it from your 'bank acct'. Will you rely on ISAs or bank acct savings returns (which at the moment are really covering inflation much leass returning any growth) or wil you consider some equity exposure?

If you can't live on the 3% or so you can expect from bank interest, then yu do need to consider other things such as equities.

de1amo

the OP has a pension income of 1250!! is that net?--many live on a lot less but it all depends on the standard of living!

atush

yes, 15K per annum isn't too bad, esp when you figure in one (or possibly 2 if there is a spouse) state pensions to add in later. I certainly wouldn't want to live on 15K per year though.

de1amo

15k isnt a lot when you're working because of all the stoppages--Nİ, pension contributions and more than likely a mortgage. whereas the OP no longer faces those.

ViolaLass

OP, if you don't like how much you have in the bank, what do you propose to do about it at this stage?

nobby24

Thanks for all the replies. The reason I am asking the question is because we have approx £200,000 in savings and we are thinking of buying a property in Italy, near my daughter for approx £140,000.

PS the £1250pm is net income.