The cost of living

Well_excuse_me.

chiefie wrote: »

I'm one, like some others on here, who's views of what is needed is not in line with my OH. She can't quite get her head round not spending on "stuff". Especially for the grown up kids it gives her pleasure. However, this is going to have to stop if we are to retire early ��

That would scare me.
In fact it should scare you, because if your beloved continues to gift money, you will be working for ever.

missbiggles1

Arkers wrote: »

Ironically as fatbeetle currently lives in oz, there is a good link from the Australian Gov about the income required for differing lifestyles, obviously it applies to those retiring in Australia, however, I actually think that this is a very good benchmark for those wishing to get a good idea of the amount that might be required over here.


I think it was originally posted by Marinelife
http://www.superannuation.asn.au/resources/retirement-standard

If those figures are correct, it sounds as if the cost of living in Oz is quite low.

Arkers

Hi Missbiggles, I am sure that the parameters the Aus gov have used are quite comprehensive to cover all aspects of the more common cost of living, I think there is a separate section for this part. It makes the assumption that there is no mortgage and the retirees are in good health. A quick calculation based on an up to date rate of exchange works it out at approx. £31,667 for a comfortable standard. As a mean, this appears to work out to be more then a lot of people on this thread have suggested.
To be fair, as has been alluded to, there is no one size fits all. I just happen to think that an approach like this is a good idea and it would help guide people planning their retirement.


Arkers

Murphybear

saver861 wrote: »

If you are getting 13 years out of a fridge freezer you are doing well. I really don't think that would be the norm. While a fridge might last longer than a washing machine they are in the 5-7 year bracket. Sure some will last longer but for budgeting estimates I'd be inclined to go with the worst case scenario e.g. 5 years.



As stated above, I have 10 year old double glazing and its not near needing replacement at this stage, however, I am expecting to replace it within the next 10 years. So while 10 years for double glazing might indeed be low - make it 15-20 years if thats better. It still has to be replaced at some stage and has to be budgeted for. However, I'm guessing not many consider this in their overall costing when calculating cost of living.



There are a couple of different ways to do it. As you say, one option is to look at current income and assuming for the last 5 years or so, that was sufficient to maintain your current lifestyle which you want to keep, then it is clear that current level of income needs to be maintained. That may well be a combination of actual annual income and some annual drawdown from a capital sum.

The other option is to cost 'everything' up - clearly it is necessary to make estimates so it can never be scientific. But it will give someone a clear idea of what they need to maintain their current lifestyle if thats what they want to do.

We are both retired for a few years. My OH cashed in a pension and with a small part of the lump sum we kitted out the kitchen with large fridge, large freezer, small under worktop freezer, washer-dryer and dishwasher. All Miele products, we got a good deal from a specialist supplier. We expect these appliances to see us out. Our last Miele washer-dryer lasted 18 years, you get what you pay for:A

margaretclare

Murphybear wrote: »

We are both retired for a few years. My OH cashed in a pension and with a small part of the lump sum we kitted out the kitchen with large fridge, large freezer, small under worktop freezer, washer-dryer and dishwasher. All Miele products, we got a good deal from a specialist supplier. We expect these appliances to see us out. Our last Miele washer-dryer lasted 18 years, you get what you pay for:A

We have a Bosch fridge freezer, over 10 years now. Just replaced a Hotpoint washer with a Bosch one.

missbiggles1

Arkers wrote: »

Hi Missbiggles, I am sure that the parameters the Aus gov have used are quite comprehensive to cover all aspects of the more common cost of living, I think there is a separate section for this part. It makes the assumption that there is no mortgage and the retirees are in good health. A quick calculation based on an up to date rate of exchange works it out at approx. £31,667 for a comfortable standard. As a mean, this appears to work out to be more then a lot of people on this thread have suggested.
To be fair, as has been alluded to, there is no one size fits all. I just happen to think that an approach like this is a good idea and it would help guide people planning their retirement.


Arkers

I did actually read the article and do the conversion, but thanks for doing it again.:D

However, unless the cost of living is lower than here, I can't see how those figures can cover the things that are listed as being included. My retirement income is higher than listed for a single person living at a comfortable level and I certainly cannot manage

"to be involved in a broad range of leisure and recreational activities and to have a good standard of living through the purchase of such things as; household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel."

I manage perfectly well, would certainly not plead poverty and go without very little on a day to day basis but "private health insurance, a reasonable car, good clothes,", definitely not.

Arkers

Hello again Miss Biggles :wave: I'm sure you did read the article, but there is a separate document which gives a breakdown of the categories, I hadn't posted this link:p.


I am sure you know what you can live on and cut your cloth accordingly. As a single person a comfortable standard comes out at just over £23k. Not sure private health care in this country is a necessity...not just yet anyway, so you could discount this. Good clothes....hmmm yes not sure exactly what this means but I suspect quality high street, may be a capsule wardrobe but no high end designer. As for a good car, I am surprised at this one, as someone with this income could surely afford to run a good car, but I agree not necessarily a sporty little number.:rotfl:


However, I am not a retiree yet, so can't actually comment on how much I might need, just what I'd like to aim for. My mum who is now sadly on her own has a pension of between £40/£50k and is living the life of riley, and I for one hope she enjoys every minute! However part of this is a war widows pension which is about £9k tax free. So you could say part of this money came at quite a high price.
Arkers x

saver861

Murphybear wrote: »

We are both retired for a few years. My OH cashed in a pension and with a small part of the lump sum we kitted out the kitchen with large fridge, large freezer, small under worktop freezer, washer-dryer and dishwasher. All Miele products, we got a good deal from a specialist supplier. We expect these appliances to see us out. Our last Miele washer-dryer lasted 18 years, you get what you pay for:A

Well .... life expectancy of humans is increasing while life expectancy of white goods is decreasing ... soooooo..... they might not see you out ....

Miele definitely good product .... the point about old products, regardless of make, is that they are likely to be uneconomical in terms or efficiency.

fatbeetle

We're now looking at taking my super as a "lump sum" that will give us 8 years of living at £25k pa. After 3 years of this my wife's super will be available, and that is rather huge, possibly double mine. After 7 years I will be entitled to a UK state pension.

It's looking rather nice!

Murphybear

Our income as a couple is ~ £18,200 after housing and council tax costs. This enables us to eat out and tour round the West Country (we live in Devon). We run 2 old cars, mine is paid for from a small annuity I get yearly. We have one holiday in the UK a year, don't go on cruises etc. As we are retired and live in a wonderful part of the country we don't feel the need to travel long distances and as I have a number of health issues I prefer to remain at home. I did lots of overseas travel as a child then in my 20s/30s.

I am sure a lot of people would think £18000 would not be enough but it suits us. We have adequate savings and don't smoke, drink, have no loans and one emergency credit card and emergency PAYG mobile. Since we retired we spend a lot less than we did:rotfl: