How much to live on

Humdinger1

True @[Deleted User]; I find it helpful to have a structure to kick off.  Then, as you so rightly say, it's down to individual decisions.   

jwil

They are of course meant to be a guide rather than an absolute, but are very useful for comparing your own figures to what they suggest.  I don't currently spend anything near what they suggest for some of the categories even in the basic retirement figure - this means I can spend more in other categories or add luxuries without needing much more in savings.  They are a very useful starting point to understand what 'may' be needed.

BooJewels

I'd echo what others have said, you're much better working out your own numbers.  I think that I started off my future planning budgeting figures using the headings for a Statement of Affairs calculation - that just acted as an aide memoire for headings to consider and what to disregard.  There are things on the list that you might not think to include, so I found that useful to at least look at the list.

Plus, I've also found that over time, your situation changes and you can find your priorities change.  My circumstances have changed several times in the last 2 or 3 years and I've had to re-work my numbers and start afresh several times - thankfully, with good interest returns on savings at the moment, that's been in a good direction.

My situation is probably different from most people at my age in that I have capital, but little income, so this time last year, I was curious as to how much I was actually diminishing the capital by as I went along, as whilst I was spending money and every transaction and balance was recorded, I realised I have no idea how much it was different from a year earlier, as calculated totals in a spreadsheet are fluid and perpetually changing. 

So on the same date each month, I record my overall balance in a separate list, along with the change from the previous month, so that I can see changes over time.  I just hit the 1 year anniversary of doing that and the number is quite a bit smaller than my projection.  So that's been a really worthwhile exercise to me, which I'll continue, alongside the annual equivalent which I have in a 6 year plan - although most of that is speculative in respect of interest rates and inflation, which I think I've been quite pessimistic with.  At present I'm about £5k up on the projection for the year, so that gives a little buffer for the longer term, if you start out ahead.

Organgrinder

I totally agree.

I was shocked when I first started researching early retirement and phased retirement options.

I looked at some of the figures and even a moderate lifestyle in retirement required a net income not far removed from where we were last year and thdt included a mortgage.

So look at your current spend etc. Add in things you'll spend more on. Remove things you'll spend less on.

Look at the crucial gap between when you want to retire and actual retirement as well. Can you fund that period from investments/savings/pensions?

One example for how our spend may change is our holidays. Usually take three a year plus short breaks but working in education means we pay a significant premium each year. Once retired our holiday costs will likely either decrease or stay the same but with more time spent abroad.

Similarly I used to change my car every three to four years. I've recently moved to a 0.8 part time role in a nearer establishment. My mileage has halved. My initial assumption on changing my car has changed as a result, along with wondering if we even need to run 2 cars. 

Whatever you do in your planning, try to keep it up to date. My thinking has evolved greatly even in 8 months. You learn so much about what your needs and wants really are.

Albermarle

Tastiger said:

These PLSA figures always make me feel uncomfortable as the moderate couple is more after tax than I made when earning. I think the best bet is to do your own figures as we all spend differently. Here are the figures from Which? magazine that are a little different 
https://www.which.co.uk/money/pensions-and-retirement/planning-your-retirement/how-much-will-you-need-to-retire-aNmlv7V7sVe9

I know the PLSA figures have always been higher than the Which figures, but PLSA have significantly increased to take account of around 15% inflation since they were last published, but I am not sure the Which ones have to the same extent.
Also a comment about Semantics. Which refers to a luxury lifestyle/retirement, but I think if you asked most people what a luxury lifestyle would look like they would have visions of Ferraris, three homes, big yacht.  etc . That would cost more like £44K a month, than a year,

[Deleted User]

The impact of inflation will also depend on your lifestyle choices and priorities. In may case my expenditure certainly hasn't increased by 15% and I am still buying the same amounts of everything. I know I am fortunate to have a fully indexed DB pension but I am actually saving a bit more than previously.

BooJewels

Albermarle said:

Tastiger said:

These PLSA figures always make me feel uncomfortable as the moderate couple is more after tax than I made when earning. I think the best bet is to do your own figures as we all spend differently. Here are the figures from Which? magazine that are a little different 
https://www.which.co.uk/money/pensions-and-retirement/planning-your-retirement/how-much-will-you-need-to-retire-aNmlv7V7sVe9

I know the PLSA figures have always been higher than the Which figures, but PLSA have significantly increased to take account of around 15% inflation since they were last published, but I am not sure the Which ones have to the same extent.
Also a comment about Semantics. Which refers to a luxury lifestyle/retirement, but I think if you asked most people what a luxury lifestyle would look like they would have visions of Ferraris, three homes, big yacht.  etc . That would cost more like £44K a month, than a year,

I lived in the red for most of my adult married life - at least after my son arrived and I gave up a good job to be a Mum, just doing some freelance work.  There have been periods of significant hardship when my husband lost his job or was off work ill - it was always a big deal if we got to the end of the month and all of the bills were paid.  I can recall very clearly a day food shopping where I had 7 pounds and some change to do until payday and had to try and maximise on what I bought to keep us all fed - having done an audit of my cupboards and freezer before leaving home.  I made a note to remember how that felt, as I knew it wouldn't be forever, but wanted to keep that feeling with me, to keep my perspective in future.

So now, for me, luxury is going to the supermarket and going "ooh, those pork loin steaks look nice, I shall enjoy those" or buying an expensive branded tin of chopped tomatoes because I like the texture in a Bolognese better than the cheap ones and buying more expensive loo roll.  I still like a bargain and I certainly don't buy expensive or branded for the sake of it - many supermarket own label items are better than the branded stuff.  I now shop to suit my tastes, not budgetary considerations - and that to me, really is a luxury.

QrizB

BooJewels said:
So now, for me, luxury is ... buying more expensive loo roll.

Agreed, mid-market loo roll is an underappreciated luxury!
The high end stuff though, impregnated with aloe extract and almond oil and unicorn milk, that's just weird.

Albermarle

BooJewels said:

Albermarle said:

Tastiger said:

These PLSA figures always make me feel uncomfortable as the moderate couple is more after tax than I made when earning. I think the best bet is to do your own figures as we all spend differently. Here are the figures from Which? magazine that are a little different 
https://www.which.co.uk/money/pensions-and-retirement/planning-your-retirement/how-much-will-you-need-to-retire-aNmlv7V7sVe9

I know the PLSA figures have always been higher than the Which figures, but PLSA have significantly increased to take account of around 15% inflation since they were last published, but I am not sure the Which ones have to the same extent.
Also a comment about Semantics. Which refers to a luxury lifestyle/retirement, but I think if you asked most people what a luxury lifestyle would look like they would have visions of Ferraris, three homes, big yacht.  etc . That would cost more like £44K a month, than a year,

I lived in the red for most of my adult married life - at least after my son arrived and I gave up a good job to be a Mum, just doing some freelance work.  There have been periods of significant hardship when my husband lost his job or was off work ill - it was always a big deal if we got to the end of the month and all of the bills were paid.  I can recall very clearly a day food shopping where I had 7 pounds and some change to do until payday and had to try and maximise on what I bought to keep us all fed - having done an audit of my cupboards and freezer before leaving home.  I made a note to remember how that felt, as I knew it wouldn't be forever, but wanted to keep that feeling with me, to keep my perspective in future.

So now, for me, luxury is going to the supermarket and going "ooh, those pork loin steaks look nice, I shall enjoy those" or buying an expensive branded tin of chopped tomatoes because I like the texture in a Bolognese better than the cheap ones and buying more expensive loo roll.  I still like a bargain and I certainly don't buy expensive or branded for the sake of it - many supermarket own label items are better than the branded stuff.  I now shop to suit my tastes, not budgetary considerations - and that to me, really is a luxury.

I fully understand that small things can feel like a luxury, when you have previously been unable to buy them. However I  still maintain the general concept of a luxury lifestyle by the majority of the public, would be something a lot more extravagant than buying nice loo roll 

Tastiger

Other than going on nicer holidays - like several here I had the silly prices as a teacher and having to go in school holidays- I don't think we really plan on changing what we buy that much.