How much to live on

[Deleted User]

Yes 'comfortable' is difficult to define as we are all different in our needs and lifestyle. For example I do not need to budget for alcohol or many subscriptions. My hobbies are generally not expensive. 

BooJewels

I've been considering this matter too and have been doing some year on year projections towards the time when I get my SP.   My situation is perhaps different from most others,  as I don't have any pension provision other than from the Government, but I do have some capital savings.  My original plan, after my husband died, was to ensure my SP was fully paid up and live off savings until that kicked in, using savings to supplement it once it did.

I'm currently quite a bit ahead of my projections, largely due to another inheritance and interest rates being higher than when I started doing sums. So I'm confident that I can make it work long term - even factoring in inflation, decreasing interest rates and diminishing capital.

I feel that my standard of living is comfortable - I'm warm, dry and well fed and holidays and leisure are factored in - I don't drink much or smoke and own my own home.  I  think I can do this for around £18k or so.  I don't drive at the moment, but would like to change that, if I can find an instructor to take me on.  But that's factored in the long term plans too as a plan B - a big sum will be insurance for the early years - even at my age, it's stupendous.

One thing I do need to factor in is paying tradesmen to do tasks for me that I wish I could do for myself.  I'm happy to have a go at many things and am comfortable with power tools and can wire a plug, but anything that requires a ladder is off limits.  My main limitation is lack of height/reach and strength.  I changed a tap washer recently - easy enough and took 2 or 3 minutes, but then 40 minutes and a couple of grazed knuckles trying to switch the blasted hot water back on.

So everyone's circumstances are slightly different and require different funding levels.

[Deleted User]

Thanks blue.peter for your comment.
I believe my projected retirement income will be more than adequate for my needs and will also enable me to save some.
I take Albermarles's point about people having pots in addition to their pension income. However, these pots have usually been saved for the intention of being used in retirement so saying you can live on say £20000 a year plus top ups from your saved pots for some extras seems fine to me.

blue.peter

[Deleted User] said:

I believe my projected retirement income will be more than adequate for my needs and will also enable me to save some.

This was discussed some while back, a good many pages up this thread. If you haven't already done it (and it sounds as if you probably have), a long hard look at your bank statements is beneficial in this context. There's no need to look at them in great detail, you just need a good feel for how much you actually spend in a year. If your spending fluctuates a lot from year to year, you'll need to look at several years. Mine doesn't, so a couple of years was enough for me.

[Deleted User]

Thanks blue.peter. I already have a detailed budget plan. Have checked previous expenditure and all is fine. As you can tell from my previous posts in this thread I am well organised and realistic as far as finances are concerned.
I was just interested in Albermarle's opinion.
It is very subjective as many couples and single people have a pleasant and enjoyable retirement on less than is suggested that they need to be 'comfortable'.

LateStarter

Hello all, and thanks for what I consider the best thread on this site. For tracking spend, I've got a slightly different approach, as I find time to be a constraint. I have a spreadsheet where I track incoming funds annually - salary (post tax), interest from savings, etc. On another tab I track my savings and SIPP contributions.

So annually, I calculate expenditure as Income-Sipp Contributions-Savings increase.  Surprisingly last year my spend went from 21.2 K to 21.9k, which meant my "personal" inflation rate wasn't too bad.

Albermarle

BooJewels said:

I've been considering this matter too and have been doing some year on year projections towards the time when I get my SP.   My situation is perhaps different from most others,  as I don't have any pension provision other than from the Government, but I do have some capital savings.  My original plan, after my husband died, was to ensure my SP was fully paid up and live off savings until that kicked in, using savings to supplement it once it did.

I'm currently quite a bit ahead of my projections, largely due to another inheritance and interest rates being higher than when I started doing sums. So I'm confident that I can make it work long term - even factoring in inflation, decreasing interest rates and diminishing capital.

I feel that my standard of living is comfortable - I'm warm, dry and well fed and holidays and leisure are factored in - I don't drink much or smoke and own my own home.  I  think I can do this for around £18k or so.  I don't drive at the moment, but would like to change that, if I can find an instructor to take me on.  But that's factored in the long term plans too as a plan B - a big sum will be insurance for the early years - even at my age, it's stupendous.

One thing I do need to factor in is paying tradesmen to do tasks for me that I wish I could do for myself.  I'm happy to have a go at many things and am comfortable with power tools and can wire a plug, but anything that requires a ladder is off limits.  My main limitation is lack of height/reach and strength.  I changed a tap washer recently - easy enough and took 2 or 3 minutes, but then 40 minutes and a couple of grazed knuckles trying to switch the blasted hot water back on.

So everyone's circumstances are slightly different and require different funding levels.

In my post I said that £25K pa for a couple seemed to be the minimum for a 'decent' retirement, and that for a single person you could reduce that by approx one third= £16.5K, so very close to your £18K, Although if you take on motoring costs, that will go up !
I don't want to get too 'financial' as the Pensions Board is more suitable for that.
However with possibly another 30 years + to fund, you should probably be looking at having some of your savings invested, rather than being 100% cash ( if I have understood properly) . Although you might be wary of risk, in fact having a mixture of long term  investments and shorter/medium term cash savings, is actually less risky than just having 100% cash being eaten away with inflation over a couple of decades.

BooJewels

Thanks @Albermarle - I'm no more interested in investing than any of the previous times you've suggested it to me.  I just don't want to do it and for reasons I don't feel I have to justify here.  I've come to an arrangement that I'm comfortable with.  I've discussed it with what is left of my family and they're in full agreement with my choices and the reasoning behind them. 

I've worked a number of worst case/doomsday scenarios and I'll still be okay.  If I'm not, then 80% or more of the population will be far worse off and we'll be in social meltdown.

Albermarle

BooJewels said:

Thanks @Albermarle - I'm no more interested in investing than any of the previous times you've suggested it to me.  I just don't want to do it and for reasons I don't feel I have to justify here.  I've come to an arrangement that I'm comfortable with.  I've discussed it with what is left of my family and they're in full agreement with my choices and the reasoning behind them. 

I've worked a number of worst case/doomsday scenarios and I'll still be okay.  If I'm not, then 80% or more of the population will be far worse off and we'll be in social meltdown.

Sorry for repeating myself 

Kim1965

I can understand why many are wary of investing.
I am fortunate to have some db pension (9k). I have always paid into an investment style pension  throughout 25 years of self employment. In the last 5 years i have ploughed in as much as possible, kids have finished uni, mortgage has finished etc.
 It has not been easy to keep faith in equities, there has been massive ups snd downs and disastrous political home goals decimating bond values. This year is a loser too. 
 I very much hope that in the long term ive backed the right horses and returns broadly reflect historical values.