The (other) Number

Sanxxx

There’s a lot of discussion about when to retire and about the ‘number’ each person/couple would like to retire on.

I’m interested in opinions as to how long you’ll need the money, in blunt words when do you anticipate dying?

To me, this is the third key planning variable, if I decide that I need £25k/year and wish to retire at 60, then, in simple terms a £500k pot would last 20 years which is fine if 80 is my ‘end date’ however I would need a £750k pot if I thought I’d get to 90.

Now I recognise that there are major considerations in later life costs, general health, care homes, spouse/partner outliving you, kids inheritance etc. but putting that aside ‘end date’ is a key variable.

As a 60M, according to the ONS my life expectancy is 85 with a 1:4 chance of 93 and a 1:10 chance of 98. On that basis I would think planning to 90 would be more than prudent.

How did ‘end date’ affect your planning?

GunJack

TBH it doesn't/didn't...I am lucky enough to have 2x DB pensions plus full SP when they all become payable (at 60, 63 and 67 respectively).

I do, however, intend to live tll at least 95 to get my money's-worth out of them

OldMusicGuy

My long term spreadsheet goes up to age 92 for both of us. The plan is to reach that age with enough money left to fund care for one person for 5 to 10 years and also for us to be in a retirement flat which we can afford to run. The assumption is that after 90, one of us is likely to go and the other may need care.

Of course there is a chance that one/both of us will die before then but we will readjust plans if that happens. Well if one of us dies before then we will readjust plans, if we both die we don't care....

If both of us have health issues and need care before age 90 that could cause us problems but I can't plan for that. We are both reasonably fit and healthy and plan to stay that way as long as possible (part of the reason I gave up work earlier than planned!).

We cannot rely on SP or DB pensions to cover all our costs, so my plan is to gradually annuitise what is left in my DC pot as we get older

Spreadsheetman

This is the question that can't be answered; just think how much easier retirement planning would be if it could!

My family are mostly long-lived and the on-line predictions are 90 for me so I'm planning to 95, or rather that should be "planning" as there are just too many variables to really predict anything that far out.

crv1963

It is the big unknown, hence the debates about safe withdrawal rates, what you need to take into account is while you are drawing down the capital doesn't sit still, it works (or should) too.

Some use a combination of assets to try to cover as many possibilities as they reasonably can. Those who have DB plus SP are not necessarily better placed than those with DC plus SP or ISAs, savings, bonds etc, it all depends on variables beyond the individuals control.

All we can do as individuals is attempt to build assets that can provide income/ spending down and do this at a rate that does not exhaust them before we croak it.

Linton

The only answer I can see other than a pre-booking to Switzerland is to assume a moderately unusually long life. Anything even longer should not be a serious problem as a drawdown rate that can safely last say 30 years must be pretty close to one that would last 40, at least within the fairly large error bounds we have anyway. Another sensible strategy may be to plan to purchase an annuity in your old age and pass the risk to the people who are set up to handle it.

[Deleted User]

This might help

https://www.death-clock.org/:rotfl::rotfl:

SuiDreams

My Dad is 80 and still healthy, one Grandma was 92 the other 98, my Granddads both died in their 70's, so its very likely I'll live into my 90's. I believe the pot I am aiming for will be sufficient, I expect to have full state pension and have no requirement to leave anything for others to inherit.


I still plan to enjoy myself as much as possible now though no one knows what's around the corner.

atush

Your indvidual LE will be made up of a number of factors: genetics- what did your parents grandparents etc die of and at what age? This could be genetic or not.

Your lifestyle re smoking, drinking, general diet and exercise and weight.

Luck or fate: you could of course be run over by t he no 12 bus, you could be driving down a motorway somewhere which then collapses etc.

So you can use these to subtract from or add to your own LE.

enthusiasticsaver

There are too many variables to calculate so an educated guess is the best any of us can do. We have DB pensions each and DH has a DC pension too and I have a SIPP. Both of us will get state pensions. As our DB pensions plus investment income provides us with all the income we need for now the other investments and our SP will be extra on top of that. Ultimately we could downsize or sell up our house. Consequently we do not worry about end date.


Are you just going with a DC pension to fund retirement or do you have stocks and shares isas, a property you could downsize later or state pension?

michaels

Hmm, thought experiment

If you had the choice of living to 100 (including the last 10 years in pretty considerable decrepitude, possibly constant pain and or alzheimers) and spending 20kpa in retirement or living to 90 (and dying of a quick and hopefully painless condition) and spending 30k pa which would you choose?