How much to live on

SouthCoastBoy

I've been trying to get a gauge on actual spend figures, so my wife and I decided to open a joint account and put all expenses through that, this has been going for 18 months now, last year we contributed £2500 per mth this year £2650 per month, currently we are running at a small surplus. I found the exercise really useful and it gives me some confidence into how much is needed. During this time, out the joint account, we have also funded a trip to Australia, bought new sofas, new radiators for all rooms, and new carpets for lounge, hall, stairs and landing. So I am becoming more confident that we now know what our sustainable monthly figure is  for retirement. I will carry on the experiment for a while yet before I do retire.

Kim1965

SouthCoastBoy said:

I've been trying to get a gauge on actual spend figures, so my wife and I decided to open a joint account and put all expenses through that, this has been going for 18 months now, last year we contributed £2500 per mth this year £2650 per month, currently we are running at a small surplus. I found the exercise really useful and it gives me some confidence into how much is needed. During this time, out the joint account, we have also funded a trip to Australia, bought new sofas, new radiators for all rooms, and new carpets for lounge, hall, stairs and landing. So I am becoming more confident that we now know what our sustainable monthly figure is  for retirement. I will carry on the experiment for a while yet before I do retire.

So providing you have a million in your pot you could withdraw at say 5% to state pension age, ease off withdrawals when state pension kicks in, and leave a pile to your kids?? 
 But i know your a cautious fellow. Lol
 I have a very good idea what i need for a comfortable retirement, 1.9k pm net. But with a 9k indexed pension, full sp in 8 yrs and about £290 k in my pot i dont think im totally free of work yet, although others might disagree. 

SouthCoastBoy

Kim1965 said:

SouthCoastBoy said:

I've been trying to get a gauge on actual spend figures, so my wife and I decided to open a joint account and put all expenses through that, this has been going for 18 months now, last year we contributed £2500 per mth this year £2650 per month, currently we are running at a small surplus. I found the exercise really useful and it gives me some confidence into how much is needed. During this time, out the joint account, we have also funded a trip to Australia, bought new sofas, new radiators for all rooms, and new carpets for lounge, hall, stairs and landing. So I am becoming more confident that we now know what our sustainable monthly figure is  for retirement. I will carry on the experiment for a while yet before I do retire.

So providing you have a million in your pot you could withdraw at say 5% to state pension age, ease off withdrawals when state pension kicks in, and leave a pile to your kids?? 
 But i know your a cautious fellow. Lol
 I have a very good idea what i need for a comfortable retirement, 1.9k pm net. But with a 9k indexed pension, full sp in 8 yrs and about £290 k in my pot i dont think im totally free of work yet, although others might disagree. 

Kim1965 you're right I am cautious , but I'm getting there!

Albermarle

So providing you have a million in your pot you could withdraw at say 5% to state pension age, ease off withdrawals when state pension kicks in, and leave a pile to your kids?? 
 But i know your a cautious fellow. Lol

If I remember correctly from SCB previous comments in various threads, he has a lot more than a Million. 

SCB - The £30K pa seems quite low considering all the extra items, trips to Oz etc. I had the impression one reason that you were holding off retiring was that your family ( excluding you maybe) liked to splash it around a bit, but that seems not to be the case from this figure.

So another good reason to hand your notice in !

MovingForwards

Just checked my projected figured for this year, excluding anything to do with the mortgage, work, savings, and vastly trimmed back my 'beauty salon' things as what I do now wouldn't suit an older me. 
Current joint outgoings are £9129py / £760.76pm for 2 adults and cat; non-smokers, 1 who occasionally drinks and the other doesn't, 1 car. 

Between us we'll have savings, 1 small DB, 2 DBs (current jobs), small DCs and a SIPP. Inheritance still ongoing and yet to be received.

We recently got married after being together several years, therefore no worries about IHT or any quirky pensions not passing over albeit reduced. 

Albermarle

Current joint outgoings are £9129py / £760.76pm for 2 adults and cat; non-smokers, 1 who occasionally drinks and the other doesn't, 1 car. 

That is seriously low, even by the standards of some of the more frugal livers who contribute to these forums and especially following a bout of inflation !

Presumably does not cover one off things like holidays, replacing an old car/boiler, new carpets etc ? Will you have a separate pot for that?

MovingForwards

@Albermarle we don't have holidays as we do day trips, replacing my car will happen in the future but that would come out of the surplus money saved each month for insurances, car repairs etc. 

I've various saving pots eg repairs, upgrades etc, which have lump sums dropped in each pay day. 

All I'd done was stopped out all work, mortgage and saving related items to get my current money figures. When we retire we'll have a decent amount of money, for us, in the bank.

Kim1965

MovingForwards said:

Just checked my projected figured for this year, excluding anything to do with the mortgage, work, savings, and vastly trimmed back my 'beauty salon' things as what I do now wouldn't suit an older me. 
Current joint outgoings are £9129py / £760.76pm for 2 adults and cat; non-smokers, 1 who occasionally drinks and the other doesn't, 1 car. 

Between us we'll have savings, 1 small DB, 2 DBs (current jobs), small DCs and a SIPP. Inheritance still ongoing and yet to be received.

We recently got married after being together several years, therefore no worries about IHT or any quirky pensions not passing over albeit reduced. 

Im still unsure what your actual spends are. 
I could say my outgoings are £880 a month which covers all diect debits (ct, utilities, insurances, internet, streaming, tv, petrol, food/alchol, milkman,). However, if i take off pensiin contributions, my actual spends enfs up around 1.8 to 2k.One off spends (car up grade, house upgrade, white goods etc are not included in the monthly figure.
 Like Albermarle, i sometimes cannot fathom folks stated budgets. 
 Could yiu breakdown that 9.2 k a year so it is more transparent? 

[Deleted User]

Kim1965  MovingForwards has an excellent thread in the How Much Have You Saved Section which tells her fascinating journey towards her financial goals as well as dealing with health issues along the way. A thought provoking read.
Here is the link:
Moving forward and upwards — MoneySavingExpert Forum

Murphybear

Albermarle said:

[Deleted User] said:

Albermarle. I always appreciate your informative and knowledgeable comments.
So would you say that my current planned income from July 2024 of nearly £33000 a year gross for single person will give me a comfortable retirement? I believe it is, but always good to have someone else give me the thumbs up too! 
Fortunately my occupational pension has full index linking as will my state pension (although I realise things can change).

My annuity is very small (about £675) a year and varies by a few pounds a year depending on fund performance as it is a Prudential Income Choice Annuity. To be honest I don't really include it in detailed planning but the £45 a month after tax is useful for miscellaneous spending!

To be honest I have done well out of that small fund. I only ever paid in about £5000 and then stopped. At 55 it was worth about £12000 or so. I took the 25% lump sum and bought an annuity with the remaining £10000 which has paid out about 6.5% to 6.8% yearly since then. So I have already had about £8000 back, so not too bad.
Ten years ago I did not know about MSE, but if I had, I  would probably have added more to the fund and left it a few years. However, it is what it is and hasn't worked out too badly!
Again thanks again for your comments on this thread.

Thanks for the appreciation !
You will know that there are a couple of retirement income surveys around that sometimes get linked in threads. This one in particular ( now updated with recent inflation) 
Home - PLSA - Retirement Living Standards
Some of the detailed spending figures can be argued with, but overall the figures look a good enough guideline. £33K for a single person puts you close to 'comfortable' although that definition will mean different things to different people. Some things to note with these types of figures.
1) The figures are after tax. So probably your net income will be more like £30K ? and slightly less 'comfortable' 
2) It need not all be income as such, but could be income + using up a set amount of savings each year.
3) Sometimes you see posters saying ' We only spend £20K pa ( or even less) but then later it turns out they have a separate pot for one offs like holidays, replacement car etc. Or a separate pot for travel/motoring  expenses.
 These figures include everything, with bigger expenditures, averaged out over many years. So for example if your annual expenditure is £33K but every 5 years you swop your car for a newer one at a cost of £10K, then your real annual expenditure is £35K.

We have £23k between us.  Few housing costs and heating costs very low.  We don’t have overseas holidays and don’t drink or smoke.  We have a very comfortable lifestyle.  We run 2 (old) cars and live in a beautiful part of the country, Dorset.  We shop in Waitrose, our small town hasn’t much choice, it’s Waitrose or Sainsbury’s  and buy things from local markets and local butchers.  

We live in sheltered housing run by a charitable HA and they have properties all over England.  Most have hospitality rooms and they charge £10/15 per night to stay for the room so we’ve had loads of short trips around the country that cost peanuts  

Everyones needs and lifestyles are different