How much is enough?

ben_m_g

I'm having a very hard time with this all, each calculator give a different amount and I really struggle to understand percentages involved.

I current have around 20k in a managed fund and pay £100 a month raising to £180 in 2017 and £300 in 2018, (all with employer contributions.)

Our bills for 2014 average out to 9k before mortgage, gifts and holidays, so if I assume 15k for both of us, I don't think this would be way off the mark. (Being mortgage free at that point).


I don't understand if i'm on track or way behind, as no calculator will take the lump sum into consideration as it is a separate amount.

It's all very confusing.

mlv-1967

Linton wrote: »

Are you talking from experience?

I am retired: Yes you have different needs and priorities, but they arent necessarily cheaper. Also, being retired you have a lot more time to enjoy them. Pre retirement, in a stressful job, one's enjoyments were limited by the time available and one's state of mind. I was too tired and couldnt be bothered to live in the fast lane. Once retired the only limitation is money.

You are right having cash isnt everything, but its a lot better
than not having any after spending it all in one's 40's.

I'm not advocating spending all your cash in your 40s but you need balance. Obviously if your earn a lot then you can save a lot, but the average Joe Bloggs on, say, £40k a year cannot do this. If you were on £100k a year or more then I'm not surprised that you had a stressful life. And you are incorrect in stating that money is the only limitation in retirement - health is another limitation. You might be able to live the life of Riley while your health holds good, but you can't take it for granted.
And what are you needs and priorities: world cruises? Eating at Michelin rated restaurants? Buying a new Jaguar every three years? These are luxuries, not needs.

mlv-1967

ben_m_g wrote: »

I'm having a very hard time with this all, each calculator give a different amount and I really struggle to understand percentages involved.

I current have around 20k in a managed fund and pay £100 a month raising to £180 in 2017 and £300 in 2018, (all with employer contributions.)

Our bills for 2014 average out to 9k before mortgage, gifts and holidays, so if I assume 15k for both of us, I don't think this would be way off the mark. (Being mortgage free at that point).


I don't understand if i'm on track or way behind, as no calculator will take the lump sum into consideration as it is a separate amount.

It's all very confusing.

The Hargreaves Lansdown website has a very good pension forecast calculator. I suggest you check it out.

Linton

mlv-1967 wrote: »

I'm not advocating spending all your cash in your 40s but you need balance. Obviously if your earn a lot then you can save a lot, but the average Joe Bloggs on, say, £40k a year cannot do this. If you were on £100k a year or more then I'm not surprised that you had a stressful life. And you are incorrect in stating that money is the only limitation in retirement - health is another limitation. You might be able to live the life of Riley while your health holds good, but you can't take it for granted.
And what are you needs and priorities: world cruises? Eating at Michelin rated restaurants? Buying a new Jaguar every three years? These are luxuries, not needs.

Why should you be restricted to needs in your retirement when you feel you must have something more in your 40s? My point is that you should aim to live the same standard of living in retirement as you have for the previous say 20 years.

For many people these days health isnt a significant problem until their 80's. When it becomes a significant problem visiting carers and ultimately, for a minority, a care home are expensive if you want a good choice.

Triumph13

mlv-1967 wrote: »

The best thing is have a balance - saving enough to avoid the poorhouse without causing yourself too much pain earlier in your life.

I wouldn't call avoiding the poorhouse a balance. Balance is looking at your lifetime sustainable income and modifying your spending patterns accordingly.
If you overspend in your working years then you face a double whammy at retirement - not only will you be forced to adopt a cheaper lifestyle than if you'd saved, but you'll also have got used to a more expensive lifestyle, doubling the pain.

jem16

mlv-1967 wrote: »

Not necessarily. If the £60k a year earner was paying £££ in mortgage, pension contributions and looking after the kids, his/her net income after paying all these would not be as high as you might think.

The lower earner would still be paying all of those things too, albeit at a lower amount.

This is arguable. It all depends on how much you spend on all these things - the basic essentials are food, housing and utilities. Everything else is a matter of choice.

Utilities will usually cost more as you're at home more in retirement.

The main point is why you should aim to have a less comfortable life in retirement than you do whilst working? Having worked all my life I still want to be able to enjoy life when I'm now able to through not working and having more time to do what I want to do.

mlv-1967

Linton wrote: »

Why should you be restricted to needs in your retirement when you feel you must have something more in your 40s? My point is that you should aim to live the same standard of living in retirement as you have for the previous say 20 years.

For many people these days health isnt a significant problem until their 80's. When it becomes a significant problem visiting carers and ultimately, for a minority, a care home are expensive if you want a good choice.

In order to have the same lifestyle in retirement as you did earlier on you need to save an awful lot, unless you are lucky enough to have a final salary pension for 40 years. Most people won't have this in the future. And your statement about health is complacent - my parents both died of cancer in their 70s.

mlv-1967

jem16 wrote: »

The main point is why you should aim to have a less comfortable life in retirement than you do whilst working? Having worked all my life I still want to be able to enjoy life when I'm now able to through not working and having more time to do what I want to do.

It's about living within your means. We would all like to live the life of Riley in retirement but increasingly fewer and fewer people will be able to afford this. The 'baby boomers' born between 1945 and 1965 are the golden generation of retirees who have and will have more wealth than both their parents and their children. For those born later it will be much harder to have enough money in retirement to maintain the same lifestyle. And why should the government subsidise the final-salaried better off retired when young people are struggling to get on the housing ladder and the NHS is in such a mess?
Frankly, it's time that the 40% tax threshold should be lowered for the over 65s.

mgdavid

mlv-1967 wrote: »

I'm not advocating spending all your cash in your 40s but you need balance. ......

which is what Linton said back in post #85. Are you arguing for the sake of it as it does rather sound like it!

mgdavid

mlv-1967 wrote: »

.....
Frankly, it's time that the 40% tax threshold should be lowered for the over 65s.

Are we now into the politics of envy?