Sensible income for retirement

Dazed_and_confused

Don't forget if you have the right mix of income from pensions (or wages), savings interest and dividends you can now have an annual income of £17,250, still apply for Marriage Allowance and pay no tax.

Not easy to achieve with interest rates so low at the moment but savings interest can be very tax efficient for some people.

daveyjp

As you have suggested analyse where your income is currently going.

Just keeping yourself in a job: commuting, parking, lunches, etc can soon mount up, but it gets forgotten.

bertiewhite

Advice4sue wrote: »

He also is due to get an additional lump sum of 30k at 65 .

This suggests that he was a member of the 05 scheme? If so, his annual pension should also increase at age 65 and again at 67.

Has he used the Armed Forces Pension Calculator for a forecast?

[Deleted User]

To the OP I have crunched some numbers
Assuming your partners tax code goes to normal when he retires (there are probably work related benefit in kinds in there at the moment which will reduce it, but those will be gone if he retires)
I think he will earn (with your allowance transferred) £1,629 pcm (based on £21k a year and no NI) and you will have £300 pcm (based on £3,600 with no tax or NI to be paid)
You can take some of your savings and do the £2,880 into a SIPP each and reclaim £720 tax relief straight away (and then take it out as cash), each, which will give you an extra £1,440 per year.
So in total you will have income of £2,049 pcm
You current net income is £4,500 pcm
So what seems a drastic jump (ie 75k gross to 24.6k gross) when you crunch the net it's not as bad as it looks

Somebody might want to check my calculations.
I have ignored interest or dividend payments on the savings and lump sums. Which would probably end up as £70k so say @1%-2% minimum an extra £50-£100 pcm, which will be tax free (best to distribute them between yourselves to be certainly tax free)
I have also ignored the cost of the SIPP, which will be approx £10 pcm each (please check various comparison tools)

AnotherJoe

jeepjunkie wrote: »

Yeah it's amazing how able bodied people regularly spend spend spend on house cleaners, window cleaners, ironing, grass cutting, car washes, expensive lunches and coffee's, child care, expensive cars driven un-economically etc then go out and work long hours...

Nothing amazing. If you could earn (say) £100/hour in an office based job whilst someone else cleaned your house or cut the lawn at £10/hour or decorated your rooms at £25/hour, etc, then why not.

Advice4sue

Many thanks. It’s really reassuring actually and of course we wouldn’t have the ‘going to work’ costs which as my other half travels 37 miles each way 5 days a week, is considerable petrol costs!
I even pay £20 per week just for my dogs to be walked whilst I’m at work!

But I’m not sure about SIPP, I don’t know anything about them or even what they are! Sorry! Would the £2880 be an annual pay in?

[Deleted User]

SIPP is self invested personal pension. There is a thread on this topic on exactly what you need to do. I am on a mobile in the doctors surgery ry so can somebody link it please.
And yes, that is per year

[Deleted User]

OP - SIPP thread is here
https://forums.moneysavingexpert.com/discussion/5580163/paying-2880-into-pension-when-retired&highlight=2880+sipp

newatc

Plenty of good financial advice particularly those related to pension contributions.
On the emotional side, I saw a number of my colleagues retire at 65 and not have a very long retirement to say the least. I then determined I was going to try to retire early which I did at 53 and I've never regretted that for a moment particularly earlier this year when i had serious health issues(aged 70).
Admittedly the equation changes if you actually enjoy working (which I didn't) but otherwise I would recommend planning ahead to retire early particularly when health concerns are present.

PennyForThem_2

Do a budget spreadsheet of exactly what you spend now. DO NOT leave anything out. Do it for 3 or so years in the past. Yes, you will need to go through bank statements and cc statements but it will give you a really good idea what you spend that 75K income.

Do you save? On 75k income that should be a biggie. If you don't, why not?

I don't care what anybody says above - from 75K to 23K is a big drop. I am single widow so I have half pensions (DB and annuity with 4% my lifetime increase) from husband plus my own pensions and in the house (large) I am in plus my outgoings I would struggle to live on 23k. I want to enjoy my retirement and not to stress/worry about the next bill or the next luxury.

Yes, I have a DB NHS pension and I deferred my state pension. But I also saved into a SIPP and added voluntary contributions to my NHS pension while I was working. I did work for 3 years beyond pension age (65). However I was the saver, my deceased husband the spender.

I wanted to make sure I had a choice in later life if I needed care. If I don't, hey-ho my children benefit.

Read Which Guidance on retirement.