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

Anonymous101

JoeEngland wrote: »

For me retirement will be more about time even if I did have more money then we do. Our big luxury is foreign holidays, but apart from that I don't spend much on non-essentials apart from books and an occasional DVD or CD.

Time is THE thing in life but especially retirement. I love the idea of learning a language and really taking my time travelling abroad.

Thrugelmir

Sea_Shell wrote: »

Not aimed at anyone in particular, large pot or small...but in these times...

Do you consider your environmental impact when making purchases of "stuff", especially if it's on the nice to haves, rather than essentials.

Nearly everything we buy needs manufacturing, shipping, packaging so obviously the more ones buys or consumes the more impact it has.

Little time for "stuff" generally. Often wonder is quality is poor to encourage one to buy more often. As far as possible buy produce from local/regional suppliers.

Terron

Sea_Shell wrote: »

Will having this item or doing this thing etc. really make me happier or healthier?

That is the question I ask. Sometimes that involves apending more and using more resources, e.g. going to a specialist to get comfortable shoes (I have very wide feet). Sometimes it saves money and resources, e.g. I buy beef from a local farm - it is tastier than the supermarket stuff and cheaper as it has been transported less.

ratechaser

Thrugelmir wrote: »

No allowance for additions to the vinyl album collection or tri-annual HI-FI upgrade?

Way off target, my Bose wave radio is good enough for me. Not one of those people that obsesses over getting a 'perfect sound'

On the other hand, a debenture for Twickenham, or finding a way to buy myself into MCC membership (apparently they sold memberships once in the past to raise money?) - that's the sort of thing that would swallow up any surplus in a heartbeat!

hugheskevi

Do you consider your environmental impact when making purchases of "stuff", especially if it's on the nice to haves, rather than essentials.

Absolutely, and usually it is entirely compatible with health and money saving.

My wife and I have been vegan for several years. We mostly make our own food at home, eating out is rare and we do not purchase take-aways. My main hobby is running. I cycle to and from work. I try to minimise flying, going on only a single overseas holiday a year and refusing anything like a weekend city break overseas. We travel a lot around the UK, mostly camping.

We buy very little 'stuff' - mostly just replacing things as they reach the end of their life. Although we could easily afford (within reason) anything we like, we share a 6 year old small car as we live in London and just having a car is something of a luxury, our TV is 9 years old, as are most of our white goods, and we use fairly basic mobile phones.

Wherever possible I try to ensure goods are reused as much as possible, so donate to charity shops and freecycle if I think something I no longer need can still be used, and diligently recycle everything.

Gin_and_Milk

Marcon wrote: »

What help would this be for anyone else? Their circumstances aren't going to be identical to mine.

It's certainly been very useful to me, as it's made me realise that I don't have to keep working until SPA at all.

atush

ratechaser wrote: »

Oh go on then, it's a rare early day home from work for me and as I'm one of 'those' people...

Let's say 90k (ish) net of tax if
its worked efficiently (between 2 people):

- 25k on travel (likely including an annual big family thing)
- 15k on food and basic household expenses (across let's say 3 properties, one where we are now, one in the West Country, one somewhere warm)
- 10k on eating out/entertainment
- 5k on clothes/shoes
- 5k on sports events
- 5k on wine (as in good stuff, like to lay down a few bottles)
- 10k on various philanthropic stuff (mostly local)
- 5k on presents/treats for family

And 10k for anything else I've not thought of yet

Obviously fag packet numbers, some under or over reality.

We have 3 properties now, but I expect to go down to 2 once OH retires

Clive_Woody

ratechaser wrote: »

....a debenture for Twickenham

Given the cost and the T&Cs around buying a debenture at Twickers you may well be better off buying hospitality packages for games you want to attend and then you get pre and post match drinks and food into the bargain.

The RFU hospitality folk on Linkedin are always pushing the packages they have for sale for every game. I would have thought connecting with one of them would give you access to tickets for home games.

It's certainly part of my future plans rather than buying a debenture.

JustAnotherSaver

ratechaser wrote: »

- 10k on eating out/entertainment

Hell fire! Save me a place at the table. I want to taste some of what you're having

hugheskevi

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.

For my wife and I, our annual gross income is around £150,000. That excludes employer pension contributions to a good Defined Benefit scheme. However, our income level whilst working is not connected to our retirement income aspiration.

To determine our retirement income target level, I monitor our annual expenditure. I do this by each year taking our net income and removing all the items such as mortgage payments, pension, ISA and other saving, ie, things which are not part of expenditure I will have in retirement, to leave our expenditure on everyday living. That figure has consistently been around the £30,000 p/a for us, and is the minimum I would be happy with in retirement. Keeping this amount constant in earnings terms until age 70 (assuming earnings growth in line with Office for Budgetary Responsibility assumptions) would result in a retirement income target of about £50,000 in today's price terms.

I expect our expenditure on everyday living to be higher in retirement, as our working costs are minimal due to cycling to work and not having to wear expensive clothes and not traveling much with work (and all expenses paid when we do travel). However, we do live in London but plan to retire to rural Wales, and a lot of things will be cheaper in Wales, helping to offset things such as higher council tax, higher utility bills and so forth. So our central target retirement income is roughly somewhere between about £40,000 to £60,000. That figure gets refined and the range reduced each year, as retirement gets closer and more information about latest expenditure on everyday living is obtained.

In terms of pension planning, we are both fortunate in still being members of an open Defined Benefit pension scheme - that helps immensely. Due to the massive instability of pension policy over the last decade, we have been taking advantage of whatever pension benefits we can, eg, voluntarily enhancing Defined Benefit pensions whilst they remain open to us, and using DC contributions to exploit the full pension contribution allowances so as to benefit from higher rate relief. That has resulting in us putting a bit more into a pension than is ideal, but I would rather have erred on the side of caution given the policy instability could easily have given different outcomes.

So it happens to turn out that our likely pension outturn of £60-£65,000 p/a (gross) will be about 40-45% of our current gross income. The DWP/ Pension Commission benchmarks (see page 11 of this link) suggest 50% should be the target. Personally I am very content with £60-£65,000 as an outcome. Retiring very early at age 45, I want to err on the side of caution in the calculations and I feel that looking at both what I think I could need and also at what I can efficiently accrue over the last decade has put us in a good position.

A few years ago I stopped making DC contributions (which will fund the 10 year period before State Pension age) as the balance of probability meant that I was in significant danger of over saving, and I have from 2019/20 ceased to make some of the DB voluntary contributions, only retaining those which I can derive some benefit from once I reach age 50.

I think the key to retiring both early and comfortably is to break the link between income and expenditure, ensuring expenditure increases by much less when income increases so as to increase saving rapidly as income grows. Pensions are great value for a lot of people, with matched employer contributions, higher/additional rate income tax savings, NI savings (via salary sacrifice) and Child Benefit and Personal Allowance taper savings (where relevant) making pension a key consideration for almost anyone as soon as they reach higher rate tax if not before.

My salary went above higher rate tax threshold in 2002/03, but I only significantly exceeded the higher rate threshold once until 2016/17, when I stopped making DC contributions. The one time was due to buying a house and getting married putting a lot of pressure on finances, besides that I deliberately managed my tax position via taking unpaid leave to travel and through pension contributions to avoid higher rate tax. The financial efficiency this achieved has been fantastic and the bedrock for very early retirement.

That was quite a long post, but thought it might be of some use and perhaps give some ideas to, probably, younger planners reading this thread.