Sensible income for retirement

barnstar2077

Another thing to think about is that most of the money seems to be coming from your husband, where would you be financially if anything were to happen to him? I know it is a bit grim to think about such things, but if it is possible to do something now to shift the balance a bit then I am sure you would both feel better about it.

BoxerfanUK

That is the $64,000 question which only you can really answer.

Work out what your net monthly retirement income will be and subtract what your proposed monthly spending will be. Will you be happy to live with what (if anything) is left over each much to put into savings for a rainy day.

Be REALISTIC about what your monthly spending will be. You will no doubt need to spend money in the future on home improvements, repairs, car replacement, holidays etc so do you have enough in savings to cover these costs over a protracted period? If not, will what you have left over each month allow you to save for these types of contingency.

As others have said, what is the balance of retirement income should one of you die, will the survivor be able to 'survive'.

Advice4sue

Some very helpful comments here. Much appreciated.
Unfortunately I can’t quote as I use my iPhone and it doesn’t allow.

So Deleted_User- thanks for number crunch offer but husband tax codes are 457L for employment and BR for forces pension. So I don’t think they are quite the standard ones. But basically our current combined net is about £4500 per month which is a good amount. It is very clear there would be a substantial difference with a retirement income but we would expect it to be.

But going on our recent pension quotes,
our combined income per year would be £23600. Im assuming our tax situation would be quite simple after retirement.
Can anyone give me an indication of our net income per month?

Incidentally our mortgage has only recently been paid off so that situation is fairly new. Another reason why I’m looking into retirement.

I think it’s a good idea to live within our potential retirement means for awhile. So will put that into practice. And also ask other half to look at increasing pension contributions. Until recently our financial obligations with kids/uni etc restricted it.

With regards to the comment that our income is mainly from my husband, I would agree but I have only mainly worked part time to bring up children, the youngest now clear from uni and living away. Then I was helping my elderly parents so my career has always taken a back seat.
But I understand I would receive half his pension if something happened (painful to think about but needs to be taken into account) and he still has life cover at the moment.
Whilst it wouldn’t be easy I guess I would have to move to reduce outgoings.

MEM62

Advice4sue wrote: »

But going on our recent pension quotes, our combined income per year would be £23600. Im assuming our tax situation would be quite simple after retirement.

If you can position your income so that it is split evenly between you then you could fall under the tax threshold altogether. You can each have an income of £12,500 tax free.

BoxerfanUK

If you want to find out your net income put your individual gross incomes and tax codes into this calculator for each of you and it will tell you. For pension income don't forget under the 'additional options' tab to check the box that says 'I do not pay NI'

https://www.thesalarycalculator.co.uk/salary.php

BoxerfanUK

Have you both obtained state pension forecasts?

https://www.gov.uk/check-state-pension

bostonerimus

Do a detailed budget to see if your 23k income is enough! Start by tracking every penny you spend for a few months. It's good to do this over a full year to capture seasonal costs like winter fuel bills and summer holidays, but if you do this for 3 months over the winter you should get a good idea of how much you spend,

You should also consider what happens when one of you dies. As most of the income comes from your husband you need to know how the pension would change if he dies before you.

westv

The bank I use allows you to download a spreadsheet showing the last 12 months transactions.

Advice4sue

Yes, have both obtained state pension forecasts. . Both full state pension but of course can’t get it until 66 and 67. So it really it’s the intermediate years.

But yes I will also do a really strict spending review looking back in our expenditure last 6 months and our bills/utilities etc.
Work out our retirement net income and review against expenditure and then live off the amount we would actually have!

bluenose1

If one of you will have income of over £12,500 and the other less than £12,500 you can apply for marriage allowance.

you can transfer £1,250 of your Personal Allowance to your husband, wife or civil partner - if they earn more than you.

This reduces their tax by up to £250 in the tax year (6 April to 5 April the next year).

Also if one of you has income below the personal allowance is you may be able to put £2880 into a SIPP and withdraw up to £3,600 to take you up to your Personal Allowance.