How much to live on

[Deleted User] · 17 July 2023 at 8:39AM

Kim1965 you seem to be implying that the budgets of some posters are unreliable or not possible. We all have different lifestyles and needs. If you look across different sections of the MSE Forum you will come across many posters who manage to live worthwhile and happy lives on what might be considered a very low income, either through necessity or choice.

[Deleted User] · 17 July 2023 at 8:43AM

Following up on other comments made about income and savings pots. Personally I believe either it is perfectly credible for people to say that they can live on say £18000 a year in retirement but use savings for things like holidays and special treats. Those savings have been built up for use in retirement. Without them the person/couple could still live on their income but would just forgo the extras.

Albermarle · 17 July 2023 at 9:24AM

[Deleted User] said:

Following up on other comments made about income and savings pots. Personally I believe either it is perfectly credible for people to say that they can live on say £18000 a year in retirement but use savings for things like holidays and special treats. Those savings have been built up for use in retirement. Without them the person/couple could still live on their income but would just forgo the extras.

Yes that's fine, but £18 K + pots for holidays, car replacement etc goes back to my earlier post that around £25K pa all in, is what most couples would need to have at least some kind of reasonable retirement . It is a good a guideline as any, although there will always be exceptions.

DT2001 · 17 July 2023 at 9:29AM

[Deleted User] said:

Following up on other comments made about income and savings pots. Personally I believe either it is perfectly credible for people to say that they can live on say £18000 a year in retirement but use savings for things like holidays and special treats. Those savings have been built up for use in retirement. Without them the person/couple could still live on their income but would just forgo the extras.

My mother lived off about £8k p.a. for a couple of years before needing help. She had an inheritance in the late 90’s of £50k and used that to upgrade her car and then the occasional longer holiday. There was still £20k+ in that (2019) to help fund her nursing care.

I do not think Kim1965 is doubting the budget however wants to see that he/we are comparing like for like.
I have 4 adult children at home (2 at Uni, 1 saving for a property and 1 at school) so it is interesting to look at other couples retirement budgets to see if my guesses for a couple are realistic. At the moment I exceed £9k on just food (use Tesco, Aldi annd Lidl’s - only 1 drinker) and fuel (larger older property with stone walls which leak heat! but offset to some degree by 4kw solar panels (FIT in excess of £2k p.a.) and diverter to heat water tank.
So with others detailed budgets we can see how downsizing part way into retirement could trim expenditure.

DT2001 · 17 July 2023 at 9:42AM

Kim1965 said:

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.

My OH has done a similar thing, adding a lot to her pension in the last few years. Psychologically when values are down I like to think that 20% of the reduction is the government’s. In addition she will be able to withdraw some tax free (before SPA) and the rest at effectively 15% marginal rate.
The odds are that a sensible withdrawal rate will perform better after a market correction. So less likely to suffer SORR.

Kim1965 · 17 July 2023 at 9:45AM

Dt2001 is spot on. Just seeking clarity in peoples figures. People often post a figure with breakdiwns thst do mot include insurance, tv, holidays, white good replacement etc Some go the whole hog and factor in care home expenses.

DT2001 · 17 July 2023 at 9:51AM

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.

Close. Are you in the OMY club? As even working p/t you will continue to save and have one less gap year to fund.

Kim1965 · 17 July 2023 at 9:54AM

I am still adjusting to having kids who have only just finished uni, they are earning and should be self sufficient. Kids can blow any budget out of the water!