How much to live on

FIREDreamer

TywysogLloegr said:

The Retirement Living Standards website new update shows a big increase. Having recently retired I have found that everything is just more expensive than planned for.

Typical, just a few months before my retirement.

As usual, my timing is impeccable.

Cfisis Mr Picton, Cfisis!

Farway

kimwp said:

TywysogLloegr said:

The Retirement Living Standards website new update shows a big increase. Having recently retired I have found that everything is just more expensive than planned for.

Hi @TywysogLloegr, how did you do your planning? I'm basing it off what I spend now, but there's a big unknown about costs filling in the time that I currently work, any tips or lessons learned greatly appreciated 😊

One lesson I found, having taken voluntary redundancy over twenty years ago, was not to worry too much about things you can't control

I left before any pension was due, and lived off my savings & redundancy pay for about five years. This was from a commercial company BTW, not some arm of government / CS.

I had cleared my mortgage so no housing costs apart from rates, energy etc

I based my choice on what I spent then and on the assumption that my forecast State pension (+SERPs bit) while lower than my take home pay after tax was enough to live on. Assuming I never went on a round world cruise etc.

My assumption proved correct, but my lifestyle may not suit all, I do not covet fancy cars, meals out or clothes for instance, was quite happy with UK based coach holidays & not going abroad

My pension is “only” State no other income and I have enough for my needs with enough should some emergency, like the oft quoted new roof, arise

In the twenty plus years since stopped work, prices have gone up a lot, but I find applying a bit of MSE helps. In my case, my health since Lockdown has also prevented me from being able to do some things I would spend money on before.

Phossy

For me the research base isn't really big enough or representative enough. They have extrapolated a lot from a very small sample size - "135 participants took part in 14 discussion groups between January and May 2023 "

In previous iterations, they stated that their modelling showed 75% of employees would achieve at least the minimum standard, around half would be between minimum and moderate and that 1 in 6 would be between moderate and comfortable.

I'm not sure this report represents 'reality' but  if it does, it points towards the minimum being more the norm.

Albermarle

Phossy said:

For me the research base isn't really big enough or representative enough. They have extrapolated a lot from a very small sample size - "135 participants took part in 14 discussion groups between January and May 2023 "

In previous iterations, they stated that their modelling showed 75% of employees would achieve at least the minimum standard, around half would be between minimum and moderate and that 1 in 6 would be between moderate and comfortable.

I'm not sure this report represents 'reality' but  if it does, it points towards the minimum being more the norm.

I am sure quite a significant % will be below the minimum as they will either not be able to retire, or will retire still with mortgage, credit card debt to pay etc.
I think the lowest socio economic groups are at least partly ignored.
Anyway here are the figures if anyone is interested.

Note the figures are for expenditure, so gross ( pre tax income) needed would be higher.
Note they do include an  annual cost for replacing items every few years, like Kitchens, cars, white goods, house maintenance etc and holiday costs. So they are not talking just about day to day spending.
However as a new item that has not been included before, they include helping out family with money. 

Pension income needed to retire jumps as family costs rise - BBC News

[Deleted User]

I really do believe that publications about retirement living standards should only ever be used as a guide. As has been said so many times in this thread how much you need depends on individual choices and lifestyles. You have to be true to yourselves. It concerns that living standard surveys discourage people from retiring when it would be better for their quality of life to do so.

I firmly believe many retirees are living full and enjoyable retirements on a lot less than stated. I think the average retirement income is about £18500. This means some are on far more and others on far less. Perhaps it would be useful if past contributors updated us on how they are managing and what figures are involved. Likewise new contributors would be warmly welcomed.

One of the initial strengths of this thread was that posters were open about the amounts they had and needed. Probably important not to lose that focus, because real figures are more helpful and reassuring to others.

[Deleted User]

Of course retiring with a mortgage or rent still to pay can be more challenging.

[Deleted User]

I have just read the article on the BBC website. To be honest I find some of the figures unbelievable. To say a single person needs over £43000 a year to be comfortable! Lots of families have to get by on that or less! Crazy.

helensbiggestfan

hi Everyone.  Not posted for a while but in response to Barons request......

My total pension income is just shy of £15k, with a slight rise in SSP due in April.  I live simply but well, I really lack for nothing.  

I sold my house and am currently in rented whilst house hunting.  The "house money" is invested in various easy access accounts, giving me around 5% which just about covers the rent so that £15k is plenty for my needs.   My next home will be mortgage free so again the £15k income will be just fine.  

My biggest expense this last year or so has been dental implants.....about the equivalent of a new roof. 😱😂.   

I think we need to take those retirement surveys which say you need X, Y, or Z with a generous pinch of salt.  They are only averages and who wants to be average 😂.  I too think they might be scaring some wannabe retirees off.  

Tips and advice........

1.   The most important,  Look after your health. Do your best to stay fit, strong and healthy for as long as possible.  Health is wealth, getting sick costs money. The more you can do to remain active and independent the better. Dont skimp on healthy nutritious food and keep moving. You don't need to join a fancy gym, walking is free, small hand weights for strength training won't break the bank.  Swimming, dancing, local exercise classes such as yoga, Pilates etc are usually inexpensive.  

2.    Remember the old adage.......buy cheap, buy twice - clothes, furniture, equipment etc.  invest in quality.  Better to buy high quality preloved than cheap tat.  

3.    Learn a few simple DIY skills.  Invest in a few power tools to help make gardening and diy easier.  

4.     Declutter so you can keep your house clean and tidy yourself and avoid having to employ a cleaner.  

Can't think of anything else offhand.  

I would just re-iterate that you don't need a fortune to live well. Hobbies and travel can be as cheap or as expensive as you make it.  Some hobbies can be turned into a nice little side hustle and make money.  

[Deleted User]

@helensbiggestfan. Thanks so much for your excellent post. Wonderful to hear from you again! 

helensbiggestfan

My pleasure.  

Just waiting for my mechanic.  My ancient but very reliable Ford Fiesta just sailed through it's MOT, with just an advisory to replace all 4 tyres.  He has found me some almost new alloys with plenty of wear in the tyres.  £120. Cheaper than a set of new tyres.  

Just pimping my ride.....😂🤣