What is a GOOD pension Pot to retire on??

gadgetmind

Pennysmakepounds wrote: »

Making money is not easy, that's a simple fact of life.

That depends on your level of skills and your desire/ability to acquire more.

Highly skilled people find themselves in massive demand, which is why salaries ramp upwards as quickly as they do.

Pennysmakepounds

Worried_of_wakefield wrote: »

On the same subject, for the purpose of my spreadsheet what age would you feel is aceptable to assume our spending requirements will start reducing?. I've plucked age 75 and simply stopped factoring in inflation.

In response to the OP, I retired in December allowing myself £25k/annum( nett), 8 months in I suspect I shall fail miserably! - I guess the response to your original question would be 'accrue as much as possible'

so what would have been a GOOD figure in your view, knowing what you know now?

Linton

Worried_of_wakefield wrote: »

On the same subject, for the purpose of my spreadsheet what age would you feel is aceptable to assume our spending requirements will start reducing?. I've plucked age 75 and simply stopped factoring in inflation.

In response to the OP, I retired in December allowing myself £25k/annum( nett), 8 months in I suspect I shall fail miserably! - I guess the response to your original question would be 'accrue as much as possible'

I think one's 70's is rather young for a serious drop in spending. Many people these days are healthy enough to go on cruises or whatever into their 80s. And as you get older you should leave yourself the option of paying for visiting carers. Many people prefer to live for as long as possible in their own homes, spare cash gives you more options to achieve that. Council support is limited as to time and quantity of home visits.

With those considerations you may not want to plan on a drop in spending.

ex-pat_scot

Linton wrote: »

I think one's 70's is rather young for a serious drop in spending. Many people these days are healthy enough to go on cruises or whatever into their 80s. And as you get older you should leave yourself the option of paying for visiting carers. Many people prefer to live for as long as possible in their own homes, spare cash gives you more options to achieve that. Council support is limited as to time and quantity of home visits.

With those considerations you may not want to plan on a drop in spending.

From FIRECalc:


Bernicke's Reality Retirement Planning: A New Paradigm for an Old Science describes extensive research showing that most people see significant reductions in spending with age (not related to reduced assets or income). If selected, this option will reduce your inflation-adjusted yearly spending by 2-3% per year starting at age 56, and then stabilizing at age 76 to keep up with inflation. You should read his article for details if you plan to use this option.




http://www.firecalc.com/

westv

It's not always the size of your package but what you do with it.

Dird

westv wrote: »

It's not always the size of your package but what you do with it.

I'm afraid Mrs westv was just being polite

Worried_of_wakefield

Pennysmakepounds wrote: »

so what would have been a GOOD figure in your view, knowing what you know now?

I'm hoping its just a case of first year naivety, following 45years of earning more than enough to meet my needs I need to quickly change my mindset and spending habits. £25k I have and £25k (inflation) I shall manage on, I'd rather stick pins in my eyes than return to the coalface.

atush

You didnt do a budget/find your number before you took the plunge?

If you do this, you can try and live on t he smaller income for 6 months/year before you take the jump just to be sure?

Marine_life

You’ve asked the question what is a “good pot” to retire on and most people seem to have answered with what they expect as income.
Of course income is one part of the equation but actually a “good pot” will be one that produces the right level of income but which correctly reflects your risk tolerance. You should also think about whether the composition of that pot changes, particularly if you are going into early retirement e.g. in my case my initial retirement earnings will be funded from income / capital drawn from savings and therefore in the initial stage of retirement I want to be quite cautiously invested. However, over time as my direct benefit and other pensions take up the slack then reliance on that pot will reduce meaning I could potentially be more adventurous.
In conclusion therefore a good pot would be one that meets your income needs without giving sleepless nights that you might lose it all!

shinyuk

Aim to live off The interest rather than the capital. So your pot whether it be ISA, pension or other income generating instruments needs to generate approx 30K before tax. The actual figure will be different depending on mix of taxable and non-taxable investments. Annuities are a nogo with current rates IMHO.
So to generate 30K with stock market average dividents @ 3.4% you need
£882K, whilst preserving capital, everything else being equal , which of course it won't be :-. Market peaks and troughs etc.