How much do you spend in retirement ?

Albermarle

I've been surprised how pessimistic many posters have been regarding the state pension, some not even factoring it in to their planning as they feel it won't exist.

The doom mongers about the state pension are not thinking straight. What government is going to abolish or even reduce the state pension . A very rapid way to instant and dramatic  electoral suicide . Even removing the expensive triple lock of increases has been avoided so far, in fear of a grey backlash from the people who vote the most .

crv1963

Jaco70 said:

badmemory said:

I think one big mistake about retirement is to assume that your expenses will decrease as you get older because you won't do as much.  Factor in the "body is letting you down" costs such as physio/chiro prices, the "can't manage the hedge cutting" costs - the list is endless.  It may not be as significant if you are part of a couple as one can probably pick up any slack, but if you are single it is just down to you.

I also think that if you are part of a couple you need to factor in how both of you are going to survive without the other.  Another thing to remember is that the value of property, like shares, can go down as well as up.  If so many are now able to work from home (let's see how that goes!) then the value of homes in the London commuter zone should come down which may affect some plans.

That's very interesting, I have tended to think holidays, meals out, nice car, when considering retirement, but health issues are definitely something else to consider. My parents are reasonably comfortable and when they've needed anything medical we have told them to pay if it speeded things up, but this isn't cheap.
Part of my planning is a few low-end BTL properties and I'm quietly confident that the demand for rental houses in the £ 500 pcm bracket is likely to remain strong. It has many and varied hassles obviously, but I can't see the housing crisis easing very quickly, so people will need houses to live in. I've been surprised how pessimistic many posters have been regarding the state pension, some not even factoring it in to their planning as they feel it won't exist.

My Mum (81) is still fit and active, obviously she does take care of herself and loves her large garden, she has had to pay at times for very high hedge to be cut and decorators to do the wall papering. I think as long as the physical doesn't become too onerous then just live the best life you can.

I think her spending is probably around 12k pa, uses savings for new big items, bathroom, carpets and sofas last year, this year all her time during lockdown has gone into dog training and gardening- thankfully the weather has been kind so far this season. She misses her social group but they all (age 80 +) have taken to facetime, zoom and do their keep fit at home, apart from days out she doesn't feel at all "locked away".

I think lockdown has shown us all where we can cut spending in my case quite hard and still have a reasonable life.

ratechaser

Health costs can to an extent be insured against (although of course that insurance itself can be costly). We've already got 'home help' in the sense of a cleaner and a window cleaner (although we're between gardeners right now), so some of that is also already factored in. If I look around at our little neighbourhood, we are the youngest by some margin, and our 'more senior' neighbours all appear to be coping well with big houses and gardens - there's even a rota for putting out the recycling bins and mowing the grass on the green in the middle our cul de sac... so I hope to be in the same position 30-40 years from now!

Zagfles - coming back on your points on travel economies.... yes I'm well aware of the options there, learnt a lot from FlyerTalk. But the reality is that while we currently go in peak times because of the children, that has to a certain extent been offset by staying in slightly less 'classy' places than I'd have chosen if it was just the 2 of us. Plus far too much travelling economy/premium economy... and we're already pretty active when we go places, not really a 'lying on the beach' family, although I don't mind the odd week of AI in the Caribbean... So although the MSE in me will be looking for good deals on J class travel (wife isn't going to buy into tricks like ex-EU or convoluted indirect routings so that's out), and nicer hotels, it's likely to net off versus the relatively cheap and cheerful family holidays we have right now. And I haggle hard when booking them, believe me!

Plus the kids have got wise to the fact that mum and dad pay for nice holidays and have suggested they'll be happy to tag along for some years yet 

tigerspill

What we have done is track every penny we spent/spend for a number of years.  We have a spreadsheet with carious categories and we update this each day (takes a minute).
So we know to the penny what we spend and how we spend it.  We then tried to adjust this (upwards) for what we would spend in retirement.  Upward due mainly for travel.
So OP, you have plenty of time to understand your spending and how it changes over time.
We are working off £45k net.

MallyGirl

I have health insurance in our expected fixed costs - for as long as is affordable. I have used the company BUPA cover more than once and there is sill one cataract to come.
We have tended to do family holidays in the UK with the occasional city break as DD has got old enough to enjoy them. Last year we did the first luxury holiday in a long, long time - DD was on a trek in Nepal so we went to Vancouver Island to see bears and whales. We flew club and it was worth every extra penny to do so. We would love to go back and DD has certainly indicated that she will happily come along in uni holidays if we are paying
The holiday we are waiting on being cancelled was a safari - that had the compromise of her sharing with us on the safari and then having her own room at the all inc beach resort. All our travel desires involve wildlife and big open spaces.

eastcorkram

I guess some things are nailed on to rise in retirement. Maybe energy higher energy bills for example, if two people who have previously been out at work all week, are suddenly at home. Commuting for work expenses should move to zero. For me personally, holiday expenditure will stay the same. It's zero now, and will still be zero in retirement. Expenditure on days out would rise, simply as there will be more of them . Will almost certainly drop from two cars to one. Eating out is currently under £300 a year. That might double in retirement. Viruses permitting! Going to aim to get the house ready to take it through retirement if possible. All electric so at least no boiler to worry about. 

Albermarle

Also in work benefits can be costly to replace, especially if you have a company car, free mobile, free broadband  etc . Plus of course if you have an expense account at  work ,your food and beer/wine bill will go up in retirement 

fred246

I expected to reduce my spending on lunches but it didn't happen. It's  hard to beat a nice country walk and then a pub lunch with a pint or two. Still not an expensive activity overall though.

Albermarle

It's  hard to beat a nice country walk and then a pub lunch with a pint or two.

Money better spent though than on a sandwich/snack & drink from Greggs/Subway/Costa etc 

zagfles

Albermarle said:

I've been surprised how pessimistic many posters have been regarding the state pension, some not even factoring it in to their planning as they feel it won't exist.

The doom mongers about the state pension are not thinking straight. What government is going to abolish or even reduce the state pension . A very rapid way to instant and dramatic  electoral suicide . Even removing the expensive triple lock of increases has been avoided so far, in fear of a grey backlash from the people who vote the most .

That plus all pension policy over the last decade or so has relied on less means testing, not more. If the state pension were means tested, or abolished (in which case there would have to be an equivalent means tested benefit as starving pensioners wouldn't make good headlines), it would be completely pointless for most people to save in a pension as all/most of it would just replace the means tested state pension.

Age might go up, but very very unlikely to be abloshed or means tested.