Bad news re what I spend

lisyloo

I’m aiming for £700k pot min (which at 4% would produce 28k) BUT I’m putting 60% of my income into a pension and my employer is putting 6% in.
So it’s possible but you have to make plans for it if you want to retire early and/or be comfortable.

justme111

Would not there be another option- to calculate drawdown with capital consumption? Leaving 800 k behind does not make much sense

justme111

crv1963 wrote: »

I . You say retirement is a long way off for you, so you have time to save but that can only start when you decide.

You assumed I have not started - I have, a while ago.

crv1963

justme111 wrote: »

As I have been avregilar reader of this board for a few of years I feel I can complaint on it about it. In real life really there us nobody but my partner I could whinge about about it to :
Just tracked my expense and it looks like the part of my expenses that would stay after retirement is much higher than I thought it would be - I would need for everything to be the same to have 28 k net in retirement which is completely non realistic so I would need to do something , otherwise I would not be able to retire ever

Your original post.

I'm now unsure if you simply want to vent or whinge, or do something realistic as you have already said achieving 28k net in retirement is unrealistic for you, or you do not retire.

I wish you luck in making your mind up.

pimento

lisyloo wrote: »

You do realise that private health is going to be incredibly expensive as you get older?

I'm retiring today (yay!) and was quoted £400 a month to continue my private health insurance (me and my husband).

I plan to (if I have to) pay for an initial private consultation and then go NHS.

lisyloo

justme111 wrote: »

Would not there be another option- to calculate drawdown with capital consumption? Leaving 800 k behind does not make much sense

Please tell us how you would calculate this to ensure you don’t run out of money?
It’s not spending the capital that’s an issue, it’s ensuring it doesn’t run out before you die.

An annuity is the closest you’ll get i think which with rpi is nearer 2% which needs a pot of £1.4 million which is above the current lifetime allowance (so you’d be outside of what HM govt is prepared to give you tax relief on).

I think what I’m saying is a fairly well trodden path but quite happy to hear alternative ideas.

Please do let us know how you would provide for £28k For life and perhaps take a look at the link and let us know which annuity you’d choose then we’ll have an exact figure.

Once you’ve got a figure between £700k and £1.4m you can then work out whether you are going to save more, work longer or change your lifestyle.
Happy to hear any other alternative options.

lisyloo

pimento wrote: »

I'm retiring today (yay!) and was quoted £400 a month to continue my private health insurance (me and my husband).

I plan to (if I have to) pay for an initial private consultation and then go NHS.

This sounds somewhat affordable at retirement.
My point (which I didn’t make very well) was that it’s probably completely unaffordable at 75, 80, 90 as it will escalate with age especially as (most likely) at least one of you has some condition ( most people do).

Yes there are ways to pay for the slow (cheaper) bits i.e. tests.

Marine_life

Just to offer a contrary view (and being fully aware this is not typical)......last year we spent £90,000. Gulp.

The good news is that slightly more than half was non-recurring (it includes paying one child through university and buying a new - second hand - car as well as some furniture for our new house)

Of the remainder, £15,000 was discretionary i.e. holidays and weekends away.

Which leaves £26,000 as recurring. When I look at this bucket, the big lumps are:

Food (including cleaning etc.) - c. £7,000
Council tax and utilities - c. £4,000
Car, petrol, travel - c. £3,000
House Maintenance - c £2,500
Clothes c. £1,500
Private medical / dentist c. £1,500

The remainder is spread over a number of things including insurance, TV, telephone plus presents and gifts.

I think the key message is - whatever your financial position, you need to get a grip on what you are spending!

justme111

lisyloo wrote: »

Please tell us how you would calculate this to ensure you don’t run out of money?
It’s not spending the capital that’s an issue, it’s ensuring it doesn’t run out before you die.

An annuity is the closest you’ll get i think which with rpi is nearer 2% which needs a pot of £1.4 million which is above the current lifetime allowance (so you’d be outside of what HM govt is prepared to give you tax relief on).

I think what I’m saying is a fairly well trodden path but quite happy to hear alternative ideas.

Please do let us know how you would provide for £28k For life and perhaps take a look at the link and let us know which annuity you’d choose then we’ll have an exact figure.

Once you’ve got a figure between £700k and £1.4m you can then work out whether you are going to save more, work longer or change your lifestyle.
Happy to hear any other alternative options.

Why not calculate it till you are 100 for example - drawdown not forever but for 45 years let's say if you retire at 55. Surely one would need less money for 45 years than to sustain it forever ? I will not consider annuity so I am not going to look at them .
Re health insurance - past certain level it is simpler to pay as you go. Beyond some cancer treatments I am not even sure why I bother. Just in case I guess

[Deleted User]

I do believe that putting funds into an annuity makes sense sense once you reach a certain age, eg 90. This allows to handle the longevity risk, besides Investment is less fun once senility sets in.

Annuities are not without risk, but at 90 that risk is smaller than going senile/outliving your money.