How much to live on

[Deleted User]

As usual I will say it's not all about the money! Quality of life, health and lack of stress are vitally important.
As I mentioned a while back, I was asked once again to return this September to do some teaching. So, I continue to be semi-retired. (After 5 years ) I suppose I work about 20 hours a fortnight. However, I know, and so do they, if I stop enjoying the work I can simply stop without financial pain! This also ensures I am treated very respectfully at work! Very difficult to recruit staff at this moment in time.
This work has also enabled me to keep paying NI to ensure I receive the 'new' state pension from July 2024 minus just a few pence. I am now in my 46th year of contributions with just one more year to go. I will pay voluntary contributions for that final year as I definitely will finish completely at the end of this academic year if not before. So,47 years for me owing to the fact that I was contracted out for many years.

Kim1965

Like Roger i feel the need for one more year or so. Albermarle also did a few more years. I think its the done thing when partially reliant on dc funds.
 Ukraine, recession, inflation (especially) has me in a flap.. In reality there will always be something which causes doubt.
 The danger as i see it, is if i keep working too close to state retirement i shall have more than i need and potentially too little time to enjoy it. 
 I think by 60 it should be tipped welll enough in my favour. At this moment in time i feel my income would be marginal. Two more years accumulation, two less years drawing make huge differences to the numbers.
 Many on this thread seem to live well on modest retirement incomes. Sea Shell lives on less than 20k as a couple as I recall. I would expect a few contributors to be feeling the pinch, but none as yet have said so. 

Time4T_Accounts

The energy price rises leave us all feeling pinched, I think, but it’s very difficult to understand where we’ll end up.  Personally, when we changed our boiler umphhh years ago to a more efficient Condensing one, I started putting away the monthly savings for ‘as and when’ energy prices rose.  Well, here we are, and, boy, do we feel pinched and vulnerable.  The thing is, with those umphhh years’ savings, plus paying council tax over 10 months instead of 12 (dedicating months 11 and 12 to Energy bills) then the situation is nowhere near as pinched as it might be.  Add in government support, and life is nowhere near as pinched as it might be.  Yes, we’re going to be spending down savings, but then this is actually the purpose of those savings.

Ask the same question in two years’ time and my answer may well be different! 

I suspect that many - being rather astute folks, I reckon - on these boards will have their own strategies to manage these difficult times without feeling too pinched…

blue.peter

[Deleted User] said:

As usual I will say it's not all about the money! Quality of life, health and lack of stress are vitally important.

Yes, but these are interrelated. If there's a shortage of money, it generates stress and so reduces quality of life. Believe me, I've been there (though, fortunately, not for many years). You're not going to have a decent quality of life or lack of stress (or, maybe, good health) without enough money.

(What "enough" means will vary from one person to another.)

Albermarle

blue.peter said:

[Deleted User] said:

As usual I will say it's not all about the money! Quality of life, health and lack of stress are vitally important.

Yes, but these are interrelated. If there's a shortage of money, it generates stress and so reduces quality of life. Believe me, I've been there (though, fortunately, not for many years). You're not going to have a decent quality of life or lack of stress (or, maybe, good health) without enough money.

(What "enough" means will vary from one person to another.)

Yes it's easy to say money is not that important, when you have plenty of it. Baron Dale has a fully inflation linked teachers pension of £20K pa,( which to replicate with a DC pension you would need a pot of around £700K) So along with other income streams, this no doubt helps to reduce stress !
It is true that money can't buy you happiness, but living on the breadline  is almost guaranteed to make you miserable/stressed.  

Albermarle

Kim1965 said:

Like Roger i feel the need for one more year or so. Albermarle also did a few more years. I think its the done thing when partially reliant on dc funds.
 Ukraine, recession, inflation (especially) has me in a flap.. In reality there will always be something which causes doubt.
 The danger as i see it, is if i keep working too close to state retirement i shall have more than i need and potentially too little time to enjoy it. 
 I think by 60 it should be tipped welll enough in my favour. At this moment in time i feel my income would be marginal. Two more years accumulation, two less years drawing make huge differences to the numbers.
 Many on this thread seem to live well on modest retirement incomes. Sea Shell lives on less than 20k as a couple as I recall. I would expect a few contributors to be feeling the pinch, but none as yet have said so. 

Your comment in bold exactly mirrored my thinking. It will vary from person to person but working an extra 2 or 3 years can actually have the effect of working double that, in terms of your eventual retirement war chest. So effectively like doing 5 more years for example.
For me this has meant that the 'bad start' to my retirement ( Ukraine, inflation etc ) has not caused me any sleepless nights, which it may have done otherwise.

BooJewels

Albermarle said:

blue.peter said:

Baron_Dale said:

As usual I will say it's not all about the money! Quality of life, health and lack of stress are vitally important.

Yes, but these are interrelated. If there's a shortage of money, it generates stress and so reduces quality of life. Believe me, I've been there (though, fortunately, not for many years). You're not going to have a decent quality of life or lack of stress (or, maybe, good health) without enough money.

(What "enough" means will vary from one person to another.)

Yes it's easy to say money is not that important, when you have plenty of it. Baron Dale has a fully inflation linked teachers pension of £20K pa,( which to replicate with a DC pension you would need a pot of around £700K) So along with other income streams, this no doubt helps to reduce stress !
It is true that money can't buy you happiness, but living on the breadline  is almost guaranteed to make you miserable/stressed.  

I don't think it's even as simple as the bit in bold.  I have more money in the bank now than I've ever had (or imagined having, but it's come at a cost) and I've also spent time with a few pounds in my purse, trying to make it buy enough food for a week (having audited the cupboards and deciding what extra I needed to convert stores to meals) or actually doing a happy dance as I ended the month with 9 pounds left!

Both extremes have different worries.  I have enough money today that I could have a very nice day out on a spending spree - but every pound I spend now might be money I'll need when I'm 79 - so I don't.  My worry currently - especially with rampant inflation - is that it just won't stretch as far as I need it to - having projected forwards with 5% inflation some time ago, my sums are now in tatters.  So money worries take on different forms at different times.  My long term plans didn't include my husband dying too young and totally changing my future.

PennyForThem_2

I worked beyond pension (potential start) age in order to ensure I had a good margin of income to pay for a comfortable living.  One of my red lines was enough excess income that hiccups like we are going through now would be affordable.

Another was that if I needed help such as cleaner/gardener, jobs done I would not have to worry about the cost.  

I was lucky - I enjoyed my job, my colleagues (mostly) and the work was neither physically or mentally demanding.  

Albermarle

 My worry currently - especially with rampant inflation - is that it just won't stretch as far as I need it to - having projected forwards with 5% inflation some time ago, my sums are now in tatters. 

It seems likely (not certain of course) that inflation will start to fall back sometime in 2023. Also the government support on energy bills for the public and business, have already meant that the projected peak of inflation is significantly lower than it was. So an average of 5% inflation in the years ahead (including the higher figures this year and next) is quite possible still, and may even be lower. 

Your projection of 5% inflation was higher than most peoples projections of 2 or 3 %, so looks like you already made a good call by erring on the pessimistic side and I would not start recalculating with a higher figure. Not yet anyway.

BooJewels

Thanks @Albermarle - that was my thinking too.  The reading I did a few weeks ago suggested that this is a relatively short term blip in inflation and that it should come back down - perhaps jumping a bit more first after the winter.  I think, over about 10 years, a 5% average is perhaps going to be pretty close.  As I don't have any private pension provision (my husband did, but I got it back as a lump sum after he died) my main worry is what happens to state pensions - as I'd projected them forwards based on 2% increases - also being pessimistic.