How much do you need to retire?

Marine_life

The key message from every post here is 'horses for courses' ie. you need to tailor to your own situation.

Where we live (in central Europe) health insurance alone absorbs around €6,000 per annum.

I've posted this link before and i still think its useful - the australian government is the only organization I am aware of that aims to predicts spending for singles and couples using two models, a "basic" and a "comfortable" retirement. There a reasonable amount of dtail behind each.

http://www.superannuation.asn.au/resources/retirement-standard

Broadly they estimate a couple at between $33,784 (£17,172) and $58,326 (£29,647). i think you can take their categories and customize for your own needs but its nevertheless a good starting point.

I suspect we will be at the "comfortable" end in terms of the basics but I anticipate spending another chunk (maybe £15,000) on travel.

System

Triumph13 wrote: »

In my case my target retirement income is actually quite a bit higher than my expenditure pre-retirement as I plan to do an awful lot of travelling the world.
Many people want to take a lot more holidays when they retire and very few can afford to do them in the style they would choose 'in a perfect world'.

True, but aren't they more in the nature of one-off capital expenditure items, perhaps treats earmarked out of the pension lump sum?
They would surely not affect the underlying income requirement, which is what you would need throughout retirement.

Triumph13

Clifford_Pope wrote: »

True, but aren't they more in the nature of one-off capital expenditure items, perhaps treats earmarked out of the pension lump sum?
They would surely not affect the underlying income requirement, which is what you would need throughout retirement.

That rather depends on how you picture your retirement. Once the kids are off to Uni, we plan to spend the great majority of our time 'on holiday' until we get too old and decrepit to continue. 'Holidays' are therefore a very major part of our ongoing budget indeed the budget has to be designed to be able to cover most holidays from within our standard monthly budget. Things like 2 month breaks to cheap long haul destinations (Ecuador, SE Asia, etc) where local costs are cheap and we can amortise the cost of the flight over the length of the holiday should be pretty easily achieved. It's only the more expensive items on the list such as hiring a camper to go round New Zealand or the USA that I would expect to be budget breakers and so these will have to be financed by a frugal period either at home or on a 'cheap' holiday such as travelling Europe in our own little camper or canoe camping our way down a river somewhere.
Most of the pension lump sum goes on financing retiring early and the rest into S&S ISAs for ongoing expenditure. Travel for us IS our planned lifestyle, not a 'treat'.

Cornucopia

I accept that people can get into spending habits (sometimes bad ones) but I really do think people are doing themselves a disservice if they feel compelled to put off the retirement they deserve for want of a few extra pounds for luxuries.

Each to their own, but I much prefer the idea of a long, frugal retirement than a short, luxurious one.

... semi-retired at 49.

Triumph13

Cornucopia wrote: »

I accept that people can get into spending habits (sometimes bad ones) but I really do think people are doing themselves a disservice if they feel compelled to put off the retirement they deserve for want of a few extra pounds for luxuries.

Each to their own, but I much prefer the idea of a long, frugal retirement than a short, luxurious one.

... semi-retired at 49.

I'd agree with you completely if we'd had the kids younger as I'd probably retire right now If not for them. As it is, I'll be 58 by the time the youngest finishes school so no epic travelling will be possible until then. My compromise plan is to live reasonably frugally now to support a 55% to 60% savings rate then retire at 53 when my endowment policy matures which will finance the two years until I can access the pension funds. That's all budgeted to give me 10 to 20% above my current spending for life which for me is a good balance, but, as you say, each to their own.