How much do you spend in retirement ?

Jaco70

ratechaser said:

Jaco70 said:

crv1963 said:

michaels said:

hugheskevi said:

MrSaver96 said:

hugheskevi - great read. Care to share the secret to getting to such a positive financial position at a young age? Was it just a case that you have always maximised savings or is it the result of a very well paid job - or both?!

Roughly in order of significance...No children, a couple both in full time work,  Defined Benefit pensions with Normal Pension age of 60, house price growth and a helpful period of strong investment gains after fortunately missing 2008 falls as my investment started after that.

A certain level of income is necessary, but I could have earned a lot more if I wished. Back in about 2014 I decided not to seek any more career progression, as the extra responsibility and stress would not be worth the extra cash - I worked out back then that a promotion would reduce my time left in work from about 10 years to 9.5 years and it just wasn't worth it and settled with a salary of about £65K which I knew wouldn't go up much. My wife back then earned something like £55K and that increased faster than me, so we both earn around £70K now. I did set up my own company as an additional sideline, but that was more for the challenge than the financial gain although it did roughly give me what I would have got had I been promoted another one or two times.

As well as a clear long-term plan, it has always been helpful to have smaller goals - at first those were to put all income subject to higher rate tax into a pension for both my wife and myself. Later it became make maximum ISA contributions each year for us. That was very good both for discipline and never having much cash lying around to fritter away - once it went into pension or ISA it wouldn't be coming out again except in a dire emergency. I generally made maximum mortgage overpayments too, although mortgage was never a priority so took 10 years to repay. It has been fun playing around with 0% credit cards to get liquidity to meet these challenges, and those debts are the last debts we have after paying off mortgage recently.

So I think rather than maximising savings, there was a lot of efficiency in the plan too. A huge help was deciding it was about a 10 year plan, probably slightly longer, and just settling down into a house for that period. We never felt inclined to move, refurb house significantly, get an expensive car, etc, because there has always been a finite horizon.

Oddly, living in London has rather counter-intuitively helped a lot. Although house prices were high, house price growth has helped a lot as we will be moving to a cheaper house for retirement. The other costs of living in London don't affect us too much as we cycle to work and make our own food and prefer to go running and play musical instruments rather than spend lots in restaurants and pubs. Meanwhile we benefit from higher London salaries.

So just really a case of taking advantage of what is provided rather than anything particularly insightful

Hmm - you have one extra income and three fewer dependents than me so I guess I am not doing too badly in comparison after all.  For example our 'downsizing fund' is earmarked as house deposits for the DKs rather than being part of the pot.

Michaels- You may have a surprise in the future- my youngest accepts £100 pm while furloughed towards his living costs but has declined a major contribution towards a house deposit. Oldest declines any help towards house deposit too. So you may be prepared to help but it may be declined in the nicest possible way as I was told- "No thank you Dad, it is your money, you worked for it not me. If I really need your help I'll ask, probably when neither of us expect it".

This is nice to hear. I do think that I sometimes think that my kids will always be that, i.e. kids, but the truth is that I can already see that my 16yo will have a good work ethic and probably a decent job. Much less confident about my 13yo, but that could well change. My parents have helped my sister and I plenty of times, but we've never asked, and we both see our commitments as something for us to sort out. My mum regularly mentions leaving us an inheritance (she worries that if they go into care it'll all be gone) but neither of us factor this possible windfall into our future planning.
I also think that we worry a little too much about youngsters futures. I'm 49 and can clearly remember getting on the property ladder. Yes deposits were lower but nobody was saying then that "its so easy to buy a house, you don't know how lucky you are". And people older than me, say 70 plus, get a lot of stick because pensions have worked well and house prices have gone up. Remember that most of them had to save for what they needed (unthinkable now that a young couple wouldn't completely furnish their house on credit before they move in, or that they'd accept second hand items), and were often the first generation in their families to buy property. I hate the carping I hear about this age group, many of whom have never claimed anything from the government and who's wealth has been established over a very long period. And if its over a certain level the exchequer will want his share of that too.

I'm 47 and clearly remember that as well. It was a 3 bed property in London and cost 1.333x my first ever 'proper job' salary. Lucky timing and a decent job admittedly, but I really don't see that ever happening for my children - so one reason I do want to give them more help than I had (or needed) myself

Yeah, I should've made the point that I live in Wales, where the prices are very different to London. I do really feel for kids living in the capital. My kids may well not be able to afford to buy in the village we live in, and I didn't mean to give the impression that I don't intend to help them. Nothing would make me happier than to buy them a house each, but obviously this isn't at all likely. Its just that even if they have to move twenty minutes up the road, its not ideal, but its a first world problem. They'll most likely do a few years and then be able to move back to Cardiff.

Jaco70

MallyGirl said:

That was good timing. My first property was a flat in Didcot where I borrowed exactly 3 x my £14k salary which was the max possible back then (1991). I had to put down a 5% deposit and the interest rate was 14% on the mortgage. I sold it several years later for £36k

I bought a house for 177k (my second house), didn't spend much on it other than decoration and  5k on a retaining wall that started collapsing, sold it ten years later for 174k.

fred246

Your command of English seems very good Jaco70. Have you always lived there?

Jaco70

fred246 said:

Your command of English seems very good Jaco70. Have you always lived there?

Haha. Yeah I'm one of the forgotten 90%. Those of us who don't speak Welsh. It gets rammed down our throat at every opportunity though. We even had the Covid letter from Boris in two languages. I'll leave it at that because it gets me wound up.

MallyGirl

Jaco70 said:

MallyGirl said:

That was good timing. My first property was a flat in Didcot where I borrowed exactly 3 x my £14k salary which was the max possible back then (1991). I had to put down a 5% deposit and the interest rate was 14% on the mortgage. I sold it several years later for £36k

I bought a house for 177k (my second house), didn't spend much on it other than decoration and  5k on a retaining wall that started collapsing, sold it ten years later for 174k.

Property is a funny old game. I sold my flat at a loss to buy a house with my boyfriend (now husband of 20 years). Friends described it as a 'hard hat zone' but we preferred the phrase 'do-er upper'. Paid £165k, did a fair bit of work but nothing too structural, and sold 8 years later for £417k. Timing and location.

kinger101

fred246 said:

The whole idea of business class is that you only do it because someone else is paying. It's not meant for retired people. It's nice but very poor value for money.

I've enjoyed BC when work pays (or my charm a computer algorithm hands me an upgrade), but there is an even bigger rip-off.  Premium Economy.  It used to be about 20% more, but now they're sometimes over 100% more than economy.  In fact, on the last flight I booked (now cancelled), BC was cheaper than premium. 

zagfles

kinger101 said:

fred246 said:

The whole idea of business class is that you only do it because someone else is paying. It's not meant for retired people. It's nice but very poor value for money.

I've enjoyed BC when work pays (or my charm a computer algorithm hands me an upgrade), but there is an even bigger rip-off.  Premium Economy.  It used to be about 20% more, but now they're sometimes over 100% more than economy.  In fact, on the last flight I booked (now cancelled), BC was cheaper than premium. 

Only from the UK it seems. Look at Murphy's example earlier in the thread - from Sweden PE is about 20% more than economy, BC is 100% more. Whereas from the UK, PE is 100% more than economy and BC is 200% more!!

I think companies in general find it easy to rip of the British. There is this myth that "you get what you pay for" which a lot of people seem to believe, seemingly more so here than abroad. Of course any decent MSE'er knows it's rubbish; if it were true, there'd be no need for MSE! There was an academic study many years ago which tried to assess the value of premium products in general, and the findings were quite staggering, something like a 10% increase in quality correlated with a 50% increase in price! Of course quality is often subjective which makes this sort of study hard, but where it could be objectively analysed those were the sort of results they got.

There was a supermarket (can't remember which - one of the big ones) which got found out by Watchdog for selling "economy" eggs for about 50% less than regular eggs, where was no difference whatsoever between the eggs! They obviously wanted to compete with cheaper rivals, while still ripping off the snobs who never buy anything "economy"! Use of cheap looking package is another trick, like Tesco's infamous economy blue and white stripes which seemed to be designed to scream "I'm a cheapskate". And the use of things like fancy italic writing to indicate a posh premium product. Of course all of us on MSE are far too savvy to fall for such obvious marketing tricks.

GunJack

Jaco70 said:

fred246 said:

Your command of English seems very good Jaco70. Have you always lived there?

Haha. Yeah I'm one of the forgotten 90%. Those of us who don't speak Welsh. It gets rammed down our throat at every opportunity though. We even had the Covid letter from Boris in two languages. I'll leave it at that because it gets me wound up.

I fully concur - we're still part of the celtic bretheren even if we can't speak Welsh....in my bit of North Wales there's absolutely no need to be able to speak it...good job really as languages were never my thing 

cfw1994

GunJack said:

Jaco70 said:

fred246 said:

Your command of English seems very good Jaco70. Have you always lived there?

Haha. Yeah I'm one of the forgotten 90%. Those of us who don't speak Welsh. It gets rammed down our throat at every opportunity though. We even had the Covid letter from Boris in two languages. I'll leave it at that because it gets me wound up.

I fully concur - we're still part of the celtic bretheren even if we can't speak Welsh....in my bit of North Wales there's absolutely no need to be able to speak it...good job really as languages were never my thing 

Reminds me of a business trip to Dublin with a colleague many years ago.  
We were there a few days, & decided to see "Death of a Salesman" at a nearby theatre to make a change from eating & drinking the evenings away. 
As we stood in the queue, he suddenly said to me "Wait - what if this is spoken in Irish?"   
A broad Irish voice behind us boomed out "If it's in Irish, we're ALL f***ed!" 
Good show.   Love Dublin, had some great craic there over the years!!

ratechaser

MallyGirl said:

That was good timing. My first property was a flat in Didcot where I borrowed exactly 3 x my £14k salary which was the max possible back then (1991). I had to put down a 5% deposit and the interest rate was 14% on the mortgage. I sold it several years later for £36k

My first place was quite a bit cheaper, but to be fair this was in 1995, the pit of the last real property recession, and it was a grotty repo on a grotty council estate in a grotty bit of north London. Offloaded it 8 years later for more than 4x what I'd paid. 

Looking back, that was the time to get into BtL - I saw loads of similar places, all 2/3 bed, all around 30k. Wish I'd been in the position to buy them all...