How much to live on

SuperSecretSquirrel

Kim1965 said:

many of the posts in this thread report retirement annual spend of sub 20k for a couple. I wonder how many are accurate, if I thought we could live on this (and i am frugal... And do not have a dog), I could retire right now. 

We monitored every penny of household spend between 1st April 2017 and 1st April 2018. We don't have dogs, but we do have two small children 😁 Excluding childcare and mortgage costs (both of those costs are now history, and probably are for most early retirees), we spent £17,403 in total on everything that year. We didn't feel the least bit hard done by, and it was a normal year for us (some years a big holiday or home improvement could absolutely throw things out of whack - capital savings can help smooth that kind of thing out).

Inflation has been pretty minimal for most of the time since then, it's only really reared it's ugly head this year, so I'd say we're still likely to be well under 20k for a normal year today. Neither of us relishes the thought of monitoring the pennies again as we did that year, it's not a fun process, but it was worthwhile getting a very real figure to work with.

It's up to individuals/couples to set their own priorities in life. A sub 20k lifestyle isn't for everyone, but neither is a working to normal retirement age lifestyle either. Don't worry too much about other people's figures, closely monitor your own for a year, then you can make some informed decisions.

Lummoxley

I've been following this thread for a while and wanted to thank everyone who posted as you've pushed me to reassess my plans.

I'm 56 and have handed my notice in and will finish before xmas as I've realised I should have accumulated more than enough pension provision. I've gone over the numbers and realised I only actually need approx. £13-15k per annum. By my reckoning I can fund around £18k per annum between now and 67 from a mix of SIPP and DB. From 67 I'll be on £24k per annum so continuing with work will only provide more money than I can spend.

Happy days.

Kim1965

Lummoxley said:

I've been following this thread for a while and wanted to thank everyone who posted as you've pushed me to reassess my plans.

I'm 56 and have handed my notice in and will finish before xmas as I've realised I should have accumulated more than enough pension provision. I've gone over the numbers and realised I only actually need approx. £13-15k per annum. By my reckoning I can fund around £18k per annum between now and 67 from a mix of SIPP and DB. From 67 I'll be on £24k per annum so continuing with work will only provide more money than I can spend.

Happy days.

But do you have a lump sum for one offs? Afford Ing a new boiler/roof/replacement car out of £20k annual budget could be a challenge..

Lummoxley

Kim1965 said:

But do you have a lump sum for one offs? Afford Ing a new boiler/roof/replacement car out of £20k annual budget could be a challenge..

I initially plan to a drawdown a £40k SIPP over the next 2-3 years, if I need additional funds during that time it will come from there. After that I will access a DB which has a £35k lump sum which will cover any one-offs ongoing.

I don't drive so the biggest potential expense is a new roof which on my small terrace would be sub £10k so I feel comfortable with potential future unknowns.

Kim1965

Lummoxley said:

Kim1965 said:

But do you have a lump sum for one offs? Afford Ing a new boiler/roof/replacement car out of £20k annual budget could be a challenge..

I initially plan to a drawdown a £40k SIPP over the next 2-3 years, if I need additional funds during that time it will come from there. After that I will access a DB which has a £35k lump sum which will cover any one-offs ongoing.

I don't drive so the biggest potential expense is a new roof which on my small terrace would be sub £10k so I feel comfortable with potential future unknowns.

Sounds a very reasonable plan. Enjoy

[Deleted User]

Lummoxley said:

Kim1965 said:

But do you have a lump sum for one offs? Afford Ing a new boiler/roof/replacement car out of £20k annual budget could be a challenge..

I initially plan to a drawdown a £40k SIPP over the next 2-3 years, if I need additional funds during that time it will come from there. After that I will access a DB which has a £35k lump sum which will cover any one-offs ongoing.

I don't drive so the biggest potential expense is a new roof which on my small terrace would be sub £10k so I feel comfortable with potential future unknowns.

Hello. Just curious to know if that £40000 In the SIPP is the total amount or a portion of it. How much will your DB pension be annually? Just trying to see how your figures add up over the next 10 plus years. 

Best wishes.

trevjl

Why does everyone seem to think they are going to need a new roof ? my house is 52 years old as it the rest of the estate, nobody has had a new roof, well apart from the one that burnt down !!

I've been up and in the loft, there is nothing wrong with it. It will certainly see me out.

Kim1965

If you are reliant on dc funds for income in retirement, most people think it prudent to have contingency funds for one offs. Could be anything, roof, electric, car, kitchen, etc

[Deleted User]

Kim1965 said:

If you are reliant on dc funds for income in retirement, most people think it prudent to have contingency funds for one offs. Could be anything, roof, electric, car, kitchen, etc

I don't think this only applies to those with DC pensions. People on small DB pensions need also to be mindful. DB pensions do give some financial security but come in all shapes and sizes.

Lummoxley

[Deleted User] said:

Hello. Just curious to know if that £40000 In the SIPP is the total amount or a portion of it. How much will your DB pension be annually? Just trying to see how your figures add up over the next 10 plus years. 

Best wishes.

It's the total, I intend to drain it before accessing my LGPS DB @ 59/60, I won't need to start accessing the SIPP until next April and will do so as tax efficiently as possible.

LGPS is roughly £14.5-15.5k dependent on when taken, I also have a small Post Office DB of just over £1k payable @ 60.

My DB's should cover my spending, with the LGPS lump sum/AVC covering any surprises.

I'm saying to people I'm taking a break, and who knows, I may want to dabble in some paid work at some point. The important thing is having the choice of what and when if indeed ever.