How much to live on

Albermarle

Superdude0499 said:

Kim1965 said:

Out of interest what is your current pension/investment position to fund this expenditure? 

8 years to go (hopefully).

Mrs Dude has approx 15k DB kicking off at 60.

Me currently 360k DC, 30k annual contribution.
22k ISA, 12k annual contribution.

Fingers crossed 

If you do not intend to draw any money from the DC/ISA until after age 57, you maybe be better off just ploughing the full £42K into the pension due to the tax relief. If your earned income is high enough to get the tax relief on all of it.
Unless maybe the ISA is a cash one and you are trying to build up a separate cash savings pot.

Kim1965

Superdude0499 said:

Kim1965 said:

Out of interest what is your current pension/investment position to fund this expenditure? 

8 years to go (hopefully).

Mrs Dude has approx 15k DB kicking off at 60.

Me currently 360k DC, 30k annual contribution.
22k ISA, 12k annual contribution.

Fingers crossed 

At 67 two full state pensions and the db  gets you to your income. Hopefully the db is fully indexed with 50% spousal benefit. I would have thought that with only 7 yrs to bridge and 700+k you will be fine! 

[Deleted User]

Supedude0499
You must be on a very high salary if able to put a total of 42000 a year into pension and ISA. For most people that is greater than an annual salary.

DT2001

Daffodil1234 said:

@Superdude0499 thanks for sharing your figures, setting out in the frugal through to desired columns is a good way to look at it.

I compared your categories to ones that I track / plan for and wondered if you might want to allow for -

Extra spending on health (eyes, hearing, physio, prescriptions, general health items) as you get older

Any particular hobby / interest which takes some money each month / year ?

Any memberships such as gym, pool, or annual membership of something else ?

Any allowance for ongoing technology upgrades / maintenance / software licenses ?

I appreciate the items above might not be relevant to you but hope it's useful to mention.

At 60 eye tests, hearing aids and prescriptions are free however you might want private insurance or a pot for self funding. So you could have different levels for each category. If you have private insurance you need to make a provision for increased premiums as you age.

7k for two holidays could be reduced on the decent category. The majority of our income will come from SIPPs and ISAs so we’re going to flex our holiday ‘fund’ depending on the performance of the pots.

Superdude0499

Albermarle said:

Superdude0499 said:

Kim1965 said:

Out of interest what is your current pension/investment position to fund this expenditure? 

8 years to go (hopefully).

Mrs Dude has approx 15k DB kicking off at 60.

Me currently 360k DC, 30k annual contribution.
22k ISA, 12k annual contribution.

Fingers crossed 

If you do not intend to draw any money from the DC/ISA until after age 57, you maybe be better off just ploughing the full £42K into the pension due to the tax relief. If your earned income is high enough to get the tax relief on all of it.
Unless maybe the ISA is a cash one and you are trying to build up a separate cash savings pot.

Thanks. Yes, probably makes sense to sacrifice the money into DC and add the saving (c£400/month by my reckoning) into ISA.

louby40

My teaching job is getting me down so much recently. Nothing has really changed, just my mindset. I've been teaching 28 years and the love of the job has gone.

Constantly thinking about retiring and then getting a part time job doing something else entirely.

I'm 55 in February and looking at 57 or 58. Mortgage will be paid off by 2027 when I'm 58. Plan on downsizing and releasing £50-60k equity which will then bridge the gap until I'm 67 and the state pension kicks in. There are houses here in my area that are suitable and close enough to family and friends so that makes is feasible. It's just finding the right property. 

My teachers pension is currently giving me a figure of £16k if I go at 57, plus I have another small government pension. I've been keeping track of finances and reckon we spend about £1100 a month on bills etc.  

If I dip into my equity pot and top my monthly amount up to £20k a year, plus get a part time job I think I could easily manage on that. 

I live with my partner but I own my house and his finances are separate to mine. He does give me money for food etc which amounts to an extra £525 a month. 

It's just deciding to make that jump. Anyone else manage on £20k a year? 

[Deleted User]

If you are living as a couple does that £20000 include the income of your partner too?
Have you considered going part-time as a teacher or a phased retirement?

barnstar2077

louby40 said:

My teaching job is getting me down so much recently. Nothing has really changed, just my mindset. I've been teaching 28 years and the love of the job has gone.

Constantly thinking about retiring and then getting a part time job doing something else entirely.

I'm 55 in February and looking at 57 or 58. Mortgage will be paid off by 2027 when I'm 58. Plan on downsizing and releasing £50-60k equity which will then bridge the gap until I'm 67 and the state pension kicks in. There are houses here in my area that are suitable and close enough to family and friends so that makes is feasible. It's just finding the right property. 

My teachers pension is currently giving me a figure of £16k if I go at 57, plus I have another small government pension. I've been keeping track of finances and reckon we spend about £1100 a month on bills etc.  

If I dip into my equity pot and top my monthly amount up to £20k a year, plus get a part time job I think I could easily manage on that. 

I live with my partner but I own my house and his finances are separate to mine. He does give me money for food etc which amounts to an extra £525 a month. 

It's just deciding to make that jump. Anyone else manage on £20k a year? 

A lot of people live on that as a household income.  Having the mortgage paid off (or having the monthly amount as peanuts) helps immensely.

Do you really want to sell your home though?  Unless my home was no longer suitable I would try and keep it (A major hassle to sell/move, plus there is no guarantee of making the kind of gains that you want.)

Even if you split from your partner in the future, your bills will be covered entirely just from your pensions (and I'm sure you could reduce them a bit at a later date, and they would naturally go down if you lived on your own for a while anyway) so the real question is how much spending money do you need?  And do you value your time and freedom over money?

If you took your pensions at 58 (instead of 57) when the mortgage was paid off and retired then, that would give your finances a bit of a boost.

You don't mention any other savings?  You would need a lump sum to take care of one off expensive costs going forward, like a new boiler etc.  Or is that where you thought the house sale would help out?

If you have the option of a larger lump sum or a bigger monthly stipend from your pensions, you really want to go with the larger monthly amount as that is going to help you more ten or twenty years down the line, in my opinion.

Kim1965

louby40 said:

My teaching job is getting me down so much recently. Nothing has really changed, just my mindset. I've been teaching 28 years and the love of the job has gone.

Constantly thinking about retiring and then getting a part time job doing something else entirely.

I'm 55 in February and looking at 57 or 58. Mortgage will be paid off by 2027 when I'm 58. Plan on downsizing and releasing £50-60k equity which will then bridge the gap until I'm 67 and the state pension kicks in. There are houses here in my area that are suitable and close enough to family and friends so that makes is feasible. It's just finding the right property. 

My teachers pension is currently giving me a figure of £16k if I go at 57, plus I have another small government pension. I've been keeping track of finances and reckon we spend about £1100 a month on bills etc.  

If I dip into my equity pot and top my monthly amount up to £20k a year, plus get a part time job I think I could easily manage on that. 

I live with my partner but I own my house and his finances are separate to mine. He does give me money for food etc which amounts to an extra £525 a month. 

It's just deciding to make that jump. Anyone else manage on £20k a year? 

Such a difficult position to be in. I assume that your not confident about retirement until your mortgage free?
 The last thing anyone wants to do is swap working misery for a life of financial misery. The one more year syndrome. 

[Deleted User]

Of course many people lead enjoyable and comfortable retirements on £20000 or less. As has been said many times it can depend on your preferred lifestyle and spending priorities.