Forum Home» Pensions, Annuities & Retirement Planning

It's time to start digging up those Squirrelled Nuts!!!! - Page 2

New Post Advanced Search
Important update! We have recently reviewed and updated our Forum Rules and FAQs. Please take the time to familiarise yourself with the latest version.

It's time to start digging up those Squirrelled Nuts!!!!

1.4K replies 193.6K views
24567138

Replies

  • BoxerfanUKBoxerfanUK Forumite
    584 posts
    Part of the Furniture 500 Posts
    ✭✭
    The best of luck to you both Sea Shell. Enjoy your retirement:j
  • AudaxerAudaxer Forumite
    2.4K posts
    1,000 Posts Third Anniversary Name Dropper
    ✭✭✭✭
    One difficulty with drawdown planning is spending variability. It's easy enough to do a budget for regular items like food, utilities and taxes etc, but irregular large costs are often missed. You need to have a plan to replace your car, do major home renovations and the worst one of all, pay for long term care. So if your budget is 20k could it stand to be 30k or 40k for a couple of years when you need to buy a new car and replace your central heating?
    That's a good point. I'm surprised in retirement planning that a specific annual spend amount is often quoted as if that amount, increased with inflation, is likely to be the spend each year. I'm interested to know how people on a tight drawdown, budget for large purchases like cars and large home improvements etc.

    A total annual spend of £15k to £20k in retirement seems very low for a couple in my view, even not taking account of occasional very large purchases that may be needed.
  • Sea_ShellSea_Shell Forumite
    4.2K posts
    1,000 Posts Fifth Anniversary Name Dropper Hung up my suit!
    ✭✭✭✭
    At least you can all learn from our mistakes if it all goes spectacularly wrong!!!;);)
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow ":beer: JOB DONE!!
    This should now read "It's time to start digging up those Squirrelled Nuts"!!! :j:j:j
  • Sea_ShellSea_Shell Forumite
    4.2K posts
    1,000 Posts Fifth Anniversary Name Dropper Hung up my suit!
    ✭✭✭✭
    Audaxer wrote: »
    A total annual spend of £15k to £20k in retirement seems very low for a couple in my view, even not taking account of occasional very large purchases that may be needed.

    For some perspective, our year to date spend is currently a whopping £11,748.

    So if we gave ourselves a £20k spend, that's almost doubling our current level of spending. Who gets to do that in retirement!!?? It's all relative.;);)
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow ":beer: JOB DONE!!
    This should now read "It's time to start digging up those Squirrelled Nuts"!!! :j:j:j
  • bostonerimusbostonerimus Forumite
    3.8K posts
    1,000 Posts Third Anniversary
    ✭✭✭✭
    Sea_Shell wrote: »
    For some perspective, our year to date spend is currently a whopping £11,748.

    So if we gave ourselves a £20k spend, that's almost doubling our current level of spending. Who gets to do that in retirement!!?? It's all relative.;);)

    Well you seem to be on track to be around budget. But you need to plan for periodic significant over spends. As an example I get $36k/year in pension and rent and my spending budget is $30k/year, but this year I had to paint the house and that cost $14k so that came out of my "slush fund" that I build up with the $6k/year that I have left over from the pension and rent.
    Misanthrope in search of similar for mutual loathing
  • Important update! We have recently reviewed and updated our Forum Rules and FAQs. Please take the time to familiarise yourself with the latest version.
  • edited 1 July 2019 at 2:55PM
    p00hsticksp00hsticks Forumite
    8.3K posts
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    ✭✭✭✭
    edited 1 July 2019 at 2:55PM
    Audaxer wrote: »
    A total annual spend of £15k to £20k in retirement seems very low for a couple in my view, even not taking account of occasional very large purchases that may be needed.


    Median household income in the UK is around £28k.

    If you are a homeowner and have repaid your mortgage by the time you retire then for many households £15k to £20k will be comparable with what they were taking home when working and paying off a mortgage, particularly when you factor in that spread across two people there will be no NI or income tax to pay.


    We're currently spending about £15k - £18k a year, although we have a separate savings pot put aside for any large spends such as a new car etc (although we may do away with the car altogether when the current one reaches the end of it's life)
  • AudaxerAudaxer Forumite
    2.4K posts
    1,000 Posts Third Anniversary Name Dropper
    ✭✭✭✭
    p00hsticks wrote: »
    Median household income in the UK is around £28k.

    If you are a homeowner and have repaid your mortgage by the time you retire then for many households £15k to £20k will be comparable with what they were taking home when working and paying off a mortgage, particularly when you factor in that spread across two people there will be no NI or income tax to pay.
    That's true. In my case I was lucky to be able to pay off my mortgage years ago, so our total annual spend hasn't reduced by much in retirement
    We're currently spending about £15k - £18k a year, although we have a separate savings pot put aside for any large spends such as a new car etc (although we may do away with the car altogether when the current one reaches the end of it's life)
    I'm amazed as our annual spend is much higher than that even although I do monitor our spending closely, and I do not consider us as big spenders.
  • JonBrJonBr Forumite
    8 posts
    First Post First Anniversary
    MoneySaving Newbie
    Good luck Sea Shell! Your situation is much like mine, only the Mrs has not retired yet as she is 5 years younger than me. Me, I'm FIRE at 54, as of this coming Friday....
  • Busy_Mee1Busy_Mee1 Forumite
    1K posts
    ✭✭✭
    A great new thread. I will be really interested to see how you get on. My OH retires in 3 months and I retire in 12 months. We both have Civil Service Pensions with lump sums, so no drawdown dilemmas for us.

    We intend living on our pensions but supplementing this from our capital in the early years to enable us to travel and for any big purchases. The hardest thing for us will be changing our mindset to start to spend capital rather than saving it.
  • frugal90frugal90 Forumite
    308 posts
    Ninth Anniversary 100 Posts
    ✭✭
    Moving to de-accumulation is quite hard.
    We stopped 1 year ago and even though we have done everything in the year we wanted to We have spent less than we budgeted for.
    Better that I suppose than the other way. You only get one chance so enjoy it while you can!
    Early retired in summer 2018 and loving it
Sign In or Register to comment.

Quick links

Essential Money | Who & Where are you? | Work & Benefits | Household and travel | Shopping & Freebies | About MSE | The MoneySavers Arms | Covid-19 & Coronavirus Support