Is my income enough to retire on?

rosierunner

Hi All,  I'm wanting to retire next September (2021) at 58.  I've worked full time for 40 years and want to enjoy some well earned 'me time'. I've done extensive calculations on what my retirement income will be.  I have a public sector db pension and a separate SIPP which I plan to draw down to bridge the gap between retiring and receiving my state pension.  Therefore my income will be £27,000 per year (after tax) basically for the rest of my life (unless state pension changes).  Question is how does this compare to other single peoples retirement income?  I don't have much in the way of savings having been working to pay of my mortgage by the time I retire, I don't have other debts.  I am single and live a moderate life style.   I know its like asking 'how long is a piece of string' as it depends on what kind of life style you lead but I was wondering if other people managed to have a 'comfortable' retirement at this income level?    I have done my calculations and thought of everything I might need and more importantly want to do with my time and it looks good on paper.  It just feels scary to give up my salary but I SO want to have some 'me time'  Advice needed! Many thanks

Stubod

£27k per year is more than we normally spend in any one year, (I would say we have a comfortable lifestyle) so depending on your lifestyle and "costs" I would think that it would be more than enough for most people. But again it depends on what you want out of life during your retirement and whether you have any family commitments...

cobson

https://www.which.co.uk/money/pensions-and-retirement/starting-to-plan-your-retirement/how-much-will-you-need-to-retire-atu0z9k0lw3p

ZeroSum

£27k after deductions is well above average workers income, so as long as mortgage is clear it should be more than enough to have a comfortable lifestyle 

barnstar2077

It sounds good to me, but as you say it is completely dependent on the individuals outgoings and lifestyle.

There is however no way of knowing how much longer you have left on this earth, and you can't take it with you.  There will be many people who will say you should be financially prepared to live to a hundred, but my mum retired at 68 and was dead a year later having spent most of that year in and out of hospital.  So why not retire as soon as you can and enjoy your new found freedom?  Although, I still think that even if you live a long life you still have quite a sizeable income to live on.  Especially if you don't feel obligated to spend the full 27k every year and are able put a bit aside for later in life or big expenses / treats.  

You have put the years in, enjoy your retirement as soon as you can!

Plus next September still gives you loads of time to triple check your calculations and see if you have missed anything.

rosierunner

ZeroSum said:

£27k after deductions is well above average workers income, so as long as mortgage is clear it should be more than enough to have a comfortable lifestyle 

Stubod said:

£27k per year is more than we normally spend in any one year, (I would say we have a comfortable lifestyle) so depending on your lifestyle and "costs" I would think that it would be more than enough for most people. But again it depends on what you want out of life during your retirement and whether you have any family commitments...

Thank-you so much this is very reassuring

rosierunner

barnstar2077 said:

It sounds good to me, but as you say it is completely dependent on the individuals outgoings and lifestyle.

There is however no way of knowing how much longer you have left on this earth, and you can't take it with you.  There will be many people who will say you should be financially prepared to live to a hundred, but my mum retired at 68 and was dead a year later having spent most of that year in and out of hospital.  So why not retire as soon as you can and enjoy your knew found freedom?  Although, I still think that even if you live a long life you still have quite a sizeable income to live on.  Especially if you don't feel obligated to spend the full 27k every year and are able put a bit aside for later in life or big expenses / treats.  

You have put the years in, enjoy your retirement as soon as you can!

Plus next September still gives you loads of time to triple check your calculations and see if you have missed anything.

Thank-you sound advice!

theoretica

How much are you spending now? Not counting the mortgage or any major work costs like commuting.  Will you expect your costs to go up in retirement with more time for holidays and hobbies? 

Audaxer

rosierunner said:

Hi All,  I'm wanting to retire next September (2021) at 58.  I've worked full time for 40 years and want to enjoy some well earned 'me time'. I've done extensive calculations on what my retirement income will be.  I have a public sector db pension and a separate SIPP which I plan to draw down to bridge the gap between retiring and receiving my state pension.  Therefore my income will be £27,000 per year (after tax) basically for the rest of my life (unless state pension changes).  Question is how does this compare to other single peoples retirement income?  I don't have much in the way of savings having been working to pay of my mortgage by the time I retire, I don't have other debts.  I am single and live a moderate life style.   I know its like asking 'how long is a piece of string' as it depends on what kind of life style you lead but I was wondering if other people managed to have a 'comfortable' retirement at this income level?    I have done my calculations and thought of everything I might need and more importantly want to do with my time and it looks good on paper.  It just feels scary to give up my salary but I SO want to have some 'me time'  Advice needed! Many thanks

Around £27k is thought to be enough for most couples in retirement which means it should be more than enough for a single person, dependent of course on your lifestyle. You will know how much you currently spend on average each year, and you may make some savings in say, commuting costs when you retire, while you may plan to spend more on other things, so you should be able to calculate whether £27k is enough for you.

The only other thing you need to consider if you have not already done so, is whether there is definitely enough in your SIPP to bridge the gap of 8 years or so until you get your State Pension. Assuming it is invested, are you satisfied there will still be enough if there is poor sequence of returns in the stock markets over the next few years?

comeandgo

The bit that concerns me is "I don't have much in the way of savings".  Are you taking any of the  tax free lump sums?  Do you have a car?   Owning a car and house can eat slowly into any savings.  

rosierunner

Audaxer said:

Around £27k is thought to be enough for most couples in retirement which means it should be more than enough for a single person, dependent of course on your lifestyle. You will know how much you currently spend on average each year, and you may make some savings in say, commuting costs when you retire, while you may plan to spend more on other things, so you should be able to calculate whether £27k is enough for you.

The only other thing you need to consider if you have not already done so, is whether there is definitely enough in your SIPP to bridge the gap of 8 years or so until you get your State Pension. Assuming it is invested, are you satisfied there will still be enough if there is poor sequence of returns in the stock markets over the next few years?

Thankyou i have worked out my SIPP income based on what the capital value is now rather than assuming any growth.  I suppose the question is with the current uncertainty with COVID that this can't be guaranteed but the market seems to be gaining some ground fingers crossed!  I'm feeling fortunate, the youngsters must be feeling very concerned about their future but they are resilient and we 50+ year olds survived the Maggie Thatcher years!