How much do you spend in retirement ?

Robert_McGeddon

kuratowski said:

An alternative source of retirement income figures from October 2019:

			SINGLE		COUPLE
MINIMUM			£10,200		£15,700
MODERATE		£20,200		£29,100
COMFORTABLE		£33,000		£47,500

(NB There are different figures for London/SouthEast.)
The report (linked to on here https://www.retirementlivingstandards.org.uk/details) explains what 'Minimum', 'Moderate' and 'Comfortable' mean for various types of spending, e.g. food and drink, and holidays.  'Comfortable' is probably a better description for it than luxury, IMHO.

Edit: Maybe Which? called it luxury rather than comfort, because it's out of reach for most?

Interesting.  Figures are post-tax.

The background explanation (at https://www.retirementlivingstandards.org.uk/How-to-estimate-likely-RLS.pdf) is perhaps more practical than the summary for those wanting to estimate the sufficiency of their DC pots - page 3 in particular.

bigfer

Jaco70 said:

bigfer said:

I think most of these numbers quoted are vastly over egged. 
As a couple we budgeted on 30k pa and that included half a dozen Airbnb/budget flight holidays to Spain/Portugal.
Obviously current situation is much different, with virtually zero holiday spend.
If you are not extravagant with your cash pre retirement, I believe you will take the same position during post retirement, certainly for the first couple of years......but then I'm as tight as a gnat's chuff.

LOL, I'm not especially extravagant. For instance I'd be happy if I never travel further than Europe for the rest of my holidays, with maybe a rare trip to USA. My wife probably has slightly grander ideas but not ridiculously so. So have you found that 30K is about right for you as a couple ? 

I think so. I understand your question/concerns as I was trying to convince myself what I would need post retiring. As others will go out of their way to say it is a pointless question as everyone has different expectations and circumstances. 
I don't have a mortgage, live in NE of England, drive a 15yo car and drink homebrew. However, the wife does the coffee shops, has weekends away shopping and drinks wine for Scotland. But after a 12 month review of the bills, we can see where the cash is going.....down her pie hole.
If you shop at Aldi/Lidl you will be fine. Shop in M&S Food Hall, then you may need a bit more. 

Sea_Shell

The trick is knowing "exactly" what you're spending and on what, now.

Then deciding if you'd be happy with your current lifestyle in retirement, or if you want to be more extravagant?

Once you have "a number" you can set about trying to achieve it.

But then no good asking me, as our number is £15k...and I've still got most of it left!!  

fred246

They used to always link pension to your previous salary eg you will need 60% of your salary as a pension or similar percentages. I know that as you earn more you probably spend more but I never thought that was helpful. These latest calculators all ignore previous salary which I think is more logical.

mollycat

Always intrigued by these threads, especially the amounts posters feel they need to have adequate or comfortable retuirements.

Our household comprises 2 retired NHS workers, a dog and a cat; income is around £30K after tax, (we had modestly paid jobs) and we find this is far in excess of what we need. We eat well, don't scimp on what we need, and in normal times have frequent (but not exotic holiday's). We both run older but well maintained cars, and are dilligent with the maintenance of the house. A big chunk of our pension income is either saved or invested, much as we did when working, leading to us having an adequate amount of savings.

Of course, I appreciate that lifestyle choices help us not need more; we have no kids, the morgtage was paid off early, we live in a cheap part of the UK, and we have always rejected a "keeping up with the Jones" approach to consumerism.

A recent thread caught my attention when someone had "worried"*, that £40-£50K might not be enough to fund a comfortable retirement; IMVHO that would be an invalid "worry"......* Possible not quite what that OP had meant, can't see that thread right now.....as with everything though, different strokes for different folks.

TLDR, we spend hardly anything; this might not suit everyone! Good Luck.

georgehere

hours of fun available here digging into the details of household spending in the UK - you just have to adjust it for you/your future/changes in the economy/climate change/government/taxes etc etc
https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/expenditure/bulletins/familyspendingintheuk/april2018tomarch2019
as referenced, there are a couple of long threads here where folk quote their number or target, £30-£35k seems quite a popular range for couples with no mortgage/rent (ah, there's another thing to consider).
All that said, I believe you are doing absolutely the right thing in setting a target and going for it and I commend you for that. I never bothered to do that , so my planning now has become more like 'how much income can I generate' rather than' how much do I want'

kuratowski

I agree with Sea_Shell, if you know exactly where your money goes then the retirement income you desire will quickly become apparent.  I would have a very comfortable retirement on 30k after tax, I can see that by looking at what I spend now and subtracting the mortgage, pension contributions, season ticket, life insurance, etc.  However, if I put my mind to it, I could easily spend more!!

Robin9

In my experience a little of a roller coaster.
Assuming good health on retirement then there is spend on cars, holidays etc - you do the garden, DIY and repairs.  Then you continue with the cars and holidays but find that you have to pay for the garden, DIY and repairs - ie you need more income (or draw from reserves).   Then the hols perhaps become closer to home, no longer drive but you still need help with the garden, DIY and repairs  and your spend goes down.

The challenge is to work out when this all happens !

Jaco70

mollycat said:

Always intrigued by these threads, especially the amounts posters feel they need to have adequate or comfortable retuirements.

Our household comprises 2 retired NHS workers, a dog and a cat; income is around £30K after tax, (we had modestly paid jobs) and we find this is far in excess of what we need. We eat well, don't scimp on what we need, and in normal times have frequent (but not exotic holiday's). We both run older but well maintained cars, and are dilligent with the maintenance of the house. A big chunk of our pension income is either saved or invested, much as we did when working, leading to us having an adequate amount of savings.

Of course, I appreciate that lifestyle choices help us not need more; we have no kids, the morgtage was paid off early, we live in a cheap part of the UK, and we have always rejected a "keeping up with the Jones" approach to consumerism.

A recent thread caught my attention when someone had "worried"*, that £40-£50K might not be enough to fund a comfortable retirement; IMVHO that would be an invalid "worry"......* Possible not quite what that OP had meant, can't see that thread right now.....as with everything though, different strokes for different folks.

TLDR, we spend hardly anything; this might not suit everyone! Good Luck.

Thanks for that mollycat, that's interesting and somewhat chimes with what I've read online, and a conversation I had with my accountant, i.e. that people tend to overestimate what they'll need in retirement. That said, it isn't the same as saying that people actually generate too much income for retirement. Those two things are quite separate as far as I can see. Lovely to hear that your retirement is going well, and tbh I don't come across many pensioners who do seem to be struggling. I think I'm just at an age where you start thinking in a more focused way on retirement. 

cloud_dog

Bravepants said:

For my retirement, I plan to live on my current take home pay minus what I currently save toward my retirement, adjusted for inflation (CPI).

I pretty much use this method, increasing items where I believe in retirement we would spend more, i.e. energy costs.

I am old school and use MS Money but I have set up a report that categorises expenditure in to two categories, 'ongoing' and 'not ongoing'.  This way I can easily review what our current net expenditure would be in retirement (as of today), export to Excel and then factor in any likely increased costs (again energy is a good example; there are obviously others).  I balance this against what I had previously calculated to be 'Our Number' to asses what if any differences, do they matter, do I need to adjust anything etc.  By doing this items like (normal) holidays are accounted for and any additional holiday considerations (more lavish / longer / more frequent) would be catered for out of a savings pot (again, which can be monitored).

For the OP, my number and your number, and indeed the numbers published by other organisations really have no meaning to me (or you)