How much to live on

Nebulous2

Sea_Shell said:

And I thought we were low, having spent £61k over the last 4 years. 😉

This includes ~£10k in home improvement/maintenance.

I don't keep accurate records of expenditure, but I do keep a monthly record of resources and where my money is secreted. I retired just over two years ago and took a part-time job, currently working one day a week.

I've always regarded us as fairly frugal - but that is clearly inaccurate, looking at the rest of this thread. It may be more accurate to say we manage to squeeze a lot out of what we have. 

We've spent slightly more than you, in two years rather than four.

That has included; three foreign holidays, running two fairly new vehicles, one of them leased, maintaining a large caravan, around £7k on a new kitchen, which isn't finished yet, and multiple short stays on caravan sites and two in hotels. We have a big Antipodean trip planned early next year, and the flights and some of the costs while there have already been paid.  

Albermarle

I've always regarded us as fairly frugal - but that is clearly inaccurate, looking at the rest of this thread. 

The issue is that what one person means by frugal, is different to what another person might think. Same as what is meant by a 'comfortable retirement' which will mean completely different things to different people.

Also there is a lot of room in-between frugal and comfortable. For example I would describe myself as cautious with money, ( but not completely risk averse) but becoming more relaxed about spending it as I get older. My OH is a bit more relaxed about spending but not to a silly degree.

We take many steps to save money, and do not waste it. 

However as we have sufficient money, we do not deny ourselves of what many would think of as the normal pleasures of retirement.

Two retired adults + two semi dependent offspring. Budget was £40K pa but with inflation is now £45Kpa. That covers pretty much everything but we bought a new(ish) car just as I retired a couple of years ago, which isn't included.

We could probably afford to spend more ( although after the last 18 months not so  sure about that anymore !) but choose not to/no need to.

Since retiring, expenditure has increased, partly because there is more time to spend it, partly due to inflation/energy prices and partly due to the fact that I have to pay for things now that previously the company paid for ( like a car).

Plasticman

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.

Similarly, we've actually been living off our predicted retirement income for 2 years now "plus adjustments". Adjustments include things like the mortgage as that will be paid off when we retire. 

I have a forecast that allows a 4% increase in our income each year when we retire. Despite the current rate of inflation, we're managing quite comfortably and haven't had to dip in to our savings for anything. We're still spending on some luxuries and managing to save a bit from that income too. We couldn't cope with inflation being much above 4% in the long term though so that will shape future plans. 

MovingForwards

I did post up a breakdown but for some reason it didn't appear. 

These figures are annual and as I said before, all I've done is stripped out mortgage, work, savings etc to provide our potential retirement outgoings based on today's money:

Gas & Electric £1200 

Council tax & water £1465 

Food £2400 

Phones & internet £540 

Fuel £300
Car insurance, repairs, MOT, home ins £1300

Gifts £200
Salon £500

Cat £1200 

Bank fee £24 

Fuel will be low due as most people we currently visit are already long retired, same with the gift budget. Surplus money from the insurance pot goes towards the next used car. We'll have more than one moggy when retired and so I've increased that budget.

I'll be doing the kitchen, bathroom and rewiring before retiring and will have a pot of money for anything else required while retired.

As it stands now I've pots of money for repairs and replacing items when they're broken.

Nebulous2

Albermarle said:

I've always regarded us as fairly frugal - but that is clearly inaccurate, looking at the rest of this thread. 

The issue is that what one person means by frugal, is different to what another person might think. Same as what is meant by a 'comfortable retirement' which will mean completely different things to different people.

Also there is a lot of room in-between frugal and comfortable. For example I would describe myself as cautious with money, ( but not completely risk averse) but becoming more relaxed about spending it as I get older. My OH is a bit more relaxed about spending but not to a silly degree.

We take many steps to save money, and do not waste it. 

However as we have sufficient money, we do not deny ourselves of what many would think of as the normal pleasures of retirement.

Two retired adults + two semi dependent offspring. Budget was £40K pa but with inflation is now £45Kpa. That covers pretty much everything but we bought a new(ish) car just as I retired a couple of years ago, which isn't included.

We could probably afford to spend more ( although after the last 18 months not so  sure about that anymore !) but choose not to/no need to.

Since retiring, expenditure has increased, partly because there is more time to spend it, partly due to inflation/energy prices and partly due to the fact that I have to pay for things now that previously the company paid for ( like a car).

Are those net figures Albermarle? 

Your description of your behaviour matches how I see us.

We also bought a decent caravan, practically new towing vehicle, and put in a new boiler prior to me retiring, with the intention of getting some of the heavy lifting out of the way. That was very fortunate, as prices for caravans and vehicles shot up during the pandemic, so both of these would have sold for more than we paid for them, until fairly recently. 

Albermarle

Nebulous2 said:

Albermarle said:

I've always regarded us as fairly frugal - but that is clearly inaccurate, looking at the rest of this thread. 

The issue is that what one person means by frugal, is different to what another person might think. Same as what is meant by a 'comfortable retirement' which will mean completely different things to different people.

Also there is a lot of room in-between frugal and comfortable. For example I would describe myself as cautious with money, ( but not completely risk averse) but becoming more relaxed about spending it as I get older. My OH is a bit more relaxed about spending but not to a silly degree.

We take many steps to save money, and do not waste it. 

However as we have sufficient money, we do not deny ourselves of what many would think of as the normal pleasures of retirement.

Two retired adults + two semi dependent offspring. Budget was £40K pa but with inflation is now £45Kpa. That covers pretty much everything but we bought a new(ish) car just as I retired a couple of years ago, which isn't included.

We could probably afford to spend more ( although after the last 18 months not so  sure about that anymore !) but choose not to/no need to.

Since retiring, expenditure has increased, partly because there is more time to spend it, partly due to inflation/energy prices and partly due to the fact that I have to pay for things now that previously the company paid for ( like a car).

Are those net figures Albermarle? 

Your description of your behaviour matches how I see us.

We also bought a decent caravan, practically new towing vehicle, and put in a new boiler prior to me retiring, with the intention of getting some of the heavy lifting out of the way. That was very fortunate, as prices for caravans and vehicles shot up during the pandemic, so both of these would have sold for more than we paid for them, until fairly recently. 

Yes net figures, but the gross income is not that much more as paying very little tax so far.
Apart from general inflation, main area where I underestimated expenditure was holiday costs. Not because we are away so much, but just the rising costs of hotels, airbnb's, flights etc just seem to mount up over 12 months. We are restricted on when/how long we can go away due to family reasons, so tend not to scrimp too much when we can get away.
I was also very fortunate in my new vehicle purchase timing. I agreed to buy a Demo vehicle 3 months in advance of needing it. Just before the new car shortage started. When I picked it up in July 2021, it was already worth more than I paid for it, and despite being a non trendy petrol estate it only dropped below the purchase price about 9 months ago and it had 12K miles on the clock. Crazy!

[Deleted User]

I have decided to open my own thread in this part of the forum. I have described my reasons for doing so in the new thread.
I have no intention of leaving this thread and will continue to comment and contribute here and look forward to hearing updates from regulars as well as those formulating their over 50s plans!
Here is the link to my thread,
The Senior Wonder Years! — MoneySavingExpert Forum

Organgrinder

One of the not so wonderful things about retirement planning for me has been that awful realisation that as a couple our income at 67 is boosted by £21k pa to a level which if we both stayed until the bitter end would mean a joint income that leaves us significantly better off than we are now. It's a shame you can't take a reduced state pension by retiring early. It seems crazy to me that as we approach (early) retirement we see income potentially drop massively only for it then to be boosted at 67.

For me I'd happily take £6500 at 60 instead of £10600 at 67. Maybe some insurer will start offering something where you give up your rights to your state pension at 67 and they provide you with an income!!!

Nebulous2

Organgrinder said:

One of the not so wonderful things about retirement planning for me has been that awful realisation that as a couple our income at 67 is boosted by £21k pa to a level which if we both stayed until the bitter end would mean a joint income that leaves us significantly better off than we are now. It's a shame you can't take a reduced state pension by retiring early. It seems crazy to me that as we approach (early) retirement we see income potentially drop massively only for it then to be boosted at 67.

For me I'd happily take £6500 at 60 instead of £10600 at 67. Maybe some insurer will start offering something where you give up your rights to your state pension at 67 and they provide you with an income!!!

Some other countries (USA?) do offer that - the opportunity to retire earlier for a reduced state pension. 

Funding that gap between early retirement and SPA is the challenge that many people face. The government doesn't want to help, in fact they've been trying to encourage early retirees back into the workforce. 

I have a DB pension, and was willing to take the actuarial reduction for stopping early. If I had gone to state pension age I would likely have had more in my DB pension and State Pension than I would have been earning at the time. 

While a DB pension is a luxury that many people don't have, its a double whammy. You lose out in the actuarial reduction, but you also lose out by having less years and less pension than you would have later. That's one of the reasons why - one more year - becomes so attractive. At the same time that physical clock is ticking and those could be extremely valuable years if your health later takes a turn for the worse. 

I'm not a huge planner, but worked out that we had enough. It's important to focus on that, rather than the 'what ifs' and the 'one more year.' Make a plan, commit to it and run with it.

As it happens, I decided I wasn't ready to retire and took a part-time job. We are now finding ourselves ahead of where we were when I retired two years ago, and instead of drawing down on our capital we have actually added to it. That's a common pattern. Research shows that many retirees spend less than they expect, and many of them add to their resources, rather than deplete them. 

Organgrinder

I totally agree. I see little benefit to retire at 67 with pensions of £70k between us when it possibly means we're too old to enjoy it. I'd rather go at 60/61 with savings of say £120k to drawn down on and pensions of about £30k with then an uplift to £50k at SPA.

And to be honest, we don't need this amount either.