How much is enough?

System

The starting point is your current income and your current lifestyle.

Then think:
What things am I not going to do once I retire?
What extra things do I want to do once I get the leisure time?

Then subtract the costs of the first and add on those of the second, and there you are.

PeacefulWaters

Clifford_Pope wrote: »

The starting point is your current income and your current lifestyle.

Then think:
What things am I not going to do once I retire?
What extra things do I want to do once I get the leisure time?

Then subtract the costs of the first and add on those of the second, and there you are.

Pretty much this.

I'd also factor in a few what ifs around inflation exceeding pension increases (my main income source has a 5% cap) and, perhaps, an assumption that one lot of grandchildren will move to the other side of the country.

But the basics of my sums are around no mortgage and no trip to work, but a bit more on heating and a need to do more with life than have a nice garden!

dunstonh

I find it interesting that this question comes up so often but there is no effort on the part of the pension authorities / government to provide a benchmark which people can then tailor to their own circumstances.

it is not for the regulator or government to do that. There are plenty of commercial ways of doing this and its not difficult to do if you are willing to create your own spreadsheet.

The Australian pensions authority provides a quarterly estimate for both singles and couples distinguishing between a modest and comfortable lifestyle.

Not that useful though is it. It is not regionalised and very generic. A lot of that information the person will already know as they are paying heating bills etc.

suse*

When people talk about "the number" as well it depends how far away you are from retierment, and if you're talking about it in present day amounts or future amounts. As obviously with inflation etc 15k now will be worth a lot less in the future. So how old are you? When do you plan on retiring? Would that sum work for another 20+ years potentially, and cover things like care home fees or carers if you don't have any other savings or assets?

Just if you think what inflation has done so far, even if you retire tomorrow 15k won't be worth the same in 20-30 years time when you might need more money to cover greater care needs.

http://www.telegraph.co.uk/finance/personalfinance/household-bills/9892984/How-prices-changed-over-30-years.html

atush

15K would be no where near enough IMHO.

downshifter98

Living in the South East and wanting a fairly comfortable lifestyle which doesn't involve counting the pennies constantly requires between £25 and £30k for a couple imho. But I have a feeling that by 75 plus this amount will reduce and if I can still afford (and enjoy) luxuries from that point onwards then it's a bonus.

I stopped working full-time at age 34 and now fully retired at 50. Wife still works part-time as she enjoys some financial independence and the social side - I've always been a home body and always hated the 'rat race' (that race is so ingrained now that most don't even realise they are in it) and happy to stay out of it. All of this means I love my spreadsheets - built the first one 18 years ago (I'm no wiz - just self taught) and I've monitored just about everything financial ever since and that geekiness gives a real insight into your 'cost of living' so my advice to anyone looking at threads like this one is get comfortable with spreadsheets (oh and embrace your inner geek).

colsten

£15K a year, growing with inflation, wouldn't be anywhere near enough for my liking if I was living on my own. Unless I would very significantly downsize on house, car, food, socialising, short and long holidays, clothing, and not to mention dentists bills.

£15K a year, growing with inflation, each for a couple sounds a little bit more realistic but it all depends on your own circumstances and expectations.

One other major consideration for me is the possibility of needing care in my later days. You don't get much care for £15K after you have paid for your food and other basics and if you want to stay in your own home.

bigfreddiel

Thanks everyone, I should add that my wife has a pension income of £10k making a total pension income of £25k and that's net ie after tax.

Also we own our house, no mortgage or any other outstanding debt.

On top of that we have about £700k invested in isa's, bonds, cash etc so I think we should be okay

Cheers fj

sandsy

I wouldn't be happy with 15k for me, never mind me and my OH!
It all depends on what you're used to before retirement and what lifestyle you want in retirement.


Personally, I don't want to give up much at all - I want to retire early and travel overseas several times a year. I want to eat out regularly, occasionally in very good restaurants.


We're putting enough aside to provide the same net income, after losing housing and private school costs, as we have today. That will actually give us a very comfortable standard of living given that the kids will have left home and we won't have to cover their every day costs.

Colin_Hunt

bigfreddiel wrote: »

Actually £15k household income means exactly that - £15k and not £15k each.

Cheers

fj

I wouldnt fancy £15k, we are a couple on £18.5 budget.
We dont take holidays and the budget doesn't include capital items.
I know people "need" holidays, but we don't, not going to work makes every day a holiday to me.
To actually live comfortably purely on income, we would want £20k, with holidays £25k.
We are in the east midlands.
*edit* nett amounts