What are you aiming for as an annual pension for you?

Sea_Shell

billy2shots wrote: »

I sincerely hope that earlier posters on circa £100k a year don’t regret their choice.

We are all in different positions but I would choose the years over the amount (after a certain financial point).

I struggle to see how retiring 5 or more years earlier with £60k a year wouldn’t be a better life decision.

I suppose if you have lifestyle where you're used to spending £8000+ a month, then i guess you still need that level, if that's what you want to maintain. :eek:

Personally, if someone gave me £8000 per month, and said off you go "spend that", i'd struggle to know where to start, unless you just buy stuff for the heck of it because you can!!! - Not very enviromentally sound either IMO. ;) Even if it was all spent on Travelling, that's got to include a lot of flights!!!

I suppose on the flip-side, they might be giving a large proportion of it to charity, or family, or other worthy causes rather than on "consumption". :A

crv1963

Sea_Shell wrote: »

How do all these figures posted compare your "final" salaries as a %.

We keep hearing that you should aim for XX% of your earnings in retirement. Is that what you're all aiming for, or are you settling for a lot less, or actually planning on having more!!?

Our monthly income varies, but our figures averaged over the past few years show that we're aiming for between one third and two thirds of current income as pension income. Given that costs should go down (Mortgage, Pension Savings and Work Related Cost all take over 50% current income) overall we think that it is manageable for us.

Spreadsheetman

Sea_Shell wrote: »

....

We keep hearing that you should aim for XX% of your earnings in retirement. Is that what you're all aiming for, or are you settling for a lot less, or actually planning on having more!!?

...

That % of earnings is a nonsense metric though. My spending has always remained pretty constant while my income has increased a lot. The two were only close in my first job after university and when I left my first career to start my own business. The gap got even wider when I started actively working & saving toward retirement.

I'd say I'm aiming for 125% of current SPENDING in retirement as I add in and upgrade the holidays that I haven't had the time to take, or have economised on.

BoxerfanUK

Sea_Shell wrote: »

How do all these figures posted compare your "final" salaries as a %.

We keep hearing that you should aim for XX% of your earnings in retirement. Is that what you're all aiming for, or are you settling for a lot less, or actually planning on having more!!?

For us, we're looking to, on the whole, maintain our current spending levels, with maybe 20% uplift for those little extras.

So we're actually looking at a "pension" of 125% of our current annual earnings!! (We've basically been living on my PT salary for the last 3 years)

The % of final salary thing doesn't really work for us as with my DW's pension the last few years we are really making up for lost time in terms of investing in her pension.

We look at it in terms of what our outgoings are now compared to what they will be when we are both fully retired.

She is currently a high earner well into six figures, but it hasn't always been that way and so although earnings are high a lot goes into her DC pot at present, e.g. last tax year she paid over 78K into her pension using C/F, so net income after pension contributions, large mortgage O/P's and ploughing money into savings keeps us grounded.

Yes there's still a larger than average amount left each month which keeps us very comfortable but not the amount it could be if we just wanted to ignore investing for retirement and blow it on fast cars and world cruises. I guess you could say we are currently living well 'below' our means.

When we hit our magic date and figures in three years, yes she could then carry on working and blow her full salary on a Lamborghini etc then, but that's not us.

As others have said you have to reach a point and say we are still young enough to enjoy life so lets call it a day and retire now. Why carry on working when you have enough money to maintain the lifestyle that you are happy to live with.

Our figures are based purely on pension income alone we have not factored in any income from savings or investments.

Johnnyboy11

Spreadsheetman wrote: »

...I'd say I'm aiming for 125% of current SPENDING in retirement as I add in and upgrade the holidays that I haven't had the time to take, or have economised on.

I think that's a sensibe approach, since a lot of big outlays fall away when you retire: mortgage, pension conts., Income Tax/ NI, work expenses and commuting, kids education etc.

Be mindful that your first year in retirement may have a lot of one-off costs around the house and garden as you get things the way you want them. Having said that, you'll have time to look more closely at your outgoings and to optimise them for your new lifestyle. My experience, anyway.

Spreadsheetman

Johnnyboy11 wrote: »

I think that's a sensibe approach, since a lot of big outlays fall away when you retire: mortgage, pension conts., Income Tax/ NI, work expenses and commuting, kids education etc.

Be mindful that your first year in retirement may have a lot of one-off costs around the house and garden as you get things the way you want them. Having said that, you'll have time to look more closely at your outgoings and to optimise them for your new lifestyle. My experience, anyway.

That's good advice. I've built up a substantial cash slush fund outside my investments to cover the big upheavals of the first 2-3 years. That includes a move to our (lower cost) retirement area and various property juggling to end up with one low maintenance house. The end result will have lower running costs than our current situation, but with increased discretionary spending on travel and entertainment.

Anonymous101

I view it the same way as you Speadsheet man. Measuring as a percentage of income is irrelevant whether that's of net or gross income. Many people have high savings rates towards the latter years of their employment whilst others are striving to pay mortgages off or fill pensions.


Working on percentages of net expenditure is a much better measure and aiming for a similar or slightly higher amount is a sensible way to go.

MallyGirl

I worked out what our 'fixed' costs are but quite a lot of the costs won't change that much in retirement. I work from home so won't need to heat/power the office at the bottom of the garden any more but I will need to heat the house instead (and that is astronomical). DH won't spend nearly as much on petrol and we won't need business use insurance on the cars. Maybe in later life we will drop one of the cars but certainly not immediately - we won't want to be in each others pockets. Both employers are smart casual so there won't be much of a saving on work clothes. We will join a gym/health club that we don't have time for at the moment.
The biggest savings will have come during the uni years that start in 2020 - no more music lessons, ensemble fees, drama lessons, school fees. Maintenance loan top up will be much less.
We do intend some big travel so the budget shows fixed costs and variable ones separately. If we don't spend on all the variables then it will stay invested.

fred246

Just looking at my budget. The only real fixed cost is council tax. Everything else is controllable.
Gas, electricity and water we could reduce.
When I calculated what we could get down to it was about the same as state pension around the £9K mark.
I don't think many people would choose to live at that income level. So it's just a balance of how long you want to work for vs the income level you want.

MallyGirl

my fixed costs list includes
council tax
tv license
contact lenses
car tax
landline & BB
variable costs:
water, gas, elec
house, pet, health & car insurance
mobile phone
car & property maintenance, MOTs
food
entertainment
holidays