How much to live on

Flugelhorn

GeordieGeorge said:

Baron_Dale said:

So GeordieGeorge what are your plans and numbers then? Lifestyles and choices are very individual and personal things. The posters on this thread in the most part seem happy with their lives and plans based on their financial situations. 

For what it is worth the thought of driving across the Alps or motorcycling across the Sahara would fill me with dread! (which you could actually do fairly cheaply!)

I don’t have a number settled in my mind yet; my wife and I are both in careers that we enjoy, and I think that we can continue for another decade yet.

The problem with plans like this (planning cruises, few trips - Alps sounds nice etc) is that we haven't been able to spend much in the year since full retirement - wish I had quit a few years earlier 

MovingForwards

But some of us don't naturally spend loads, don't go on short / long haul holidays each year, don't have brand new cars and other things. When we see how much we do spend each month, deduct all work / mortgage related costs retiring earlier then becomes an option. 

At some point there's a couple of cruises I would like to do and they start quite local, it's just a case of saving for them. I've not got the stomach for flying anymore and was happy with where I have been over the years. I've so much to see in Scotland and when not working will actually have the time to do so. 

As for the comment about shopping at Aldi, I rarely do and Pontins is my idea of hell.

For me the longer I carry on pushing myself to work, the less chance I have of enjoying myself from whatever age I retire due to health issues. That would be a total waste, hence why I also no longer have a professional career but a role which pays enough for me to save a decent amount each month.

Thank goodness we are all different and have the option of making it work.

jimi_man

GeordieGeorge said:

I’m a bit surprised at those who are aiming to retire very young and then to live what seems to be a very frugal lifestyle.

I’m going to want to drive across the Alps to Monaco in the summers, visit friends in Whistler in the winter, eat out at good restaurants, and motorbike across the Sahara.

The idea of having forty-plus years of adding up the shopping cost at Aldi and looking forward to a weekend in Pontins in the low season once a year would fill me with dread.

I can identify with that to some extent. To me, retirement should be an opportunity to enjoy oneself and not to have to worry (too much) over money concerns. I'm amazed (and impressed) at some of the frugality shown on here - £3600 for all food and bills from one poster is nothing short of unbelievable.

 But I do accept that everyone is different and has different needs and circumstances, which makes the thread interesting. Early retirement is about accepting that you have enough to do what you want to do and if Aldi and Pontins are those things then it's not for me to say it's wrong, (Does Pontins still exist?)

 Whilst I don’t want to drive across the Sahara, we do like holidays – the Far East in particular, as well as sailing and skiing which require budgeting for.

203846930

GeordieGeorge said:

[Deleted User] said:

So GeordieGeorge what are your plans and numbers then? Lifestyles and choices are very individual and personal things. The posters on this thread in the most part seem happy with their lives and plans based on their financial situations. 

For what it is worth the thought of driving across the Alps or motorcycling across the Sahara would fill me with dread! (which you could actually do fairly cheaply!)

 my wife and I are both in careers that we enjoy, and I think that we can continue for another decade yet.

That is the big thing for me, I was in work for 39 years and hated every minute of it no matter which job I was doing and no I did not have a 'career', I had jobs.
Retiring early was an ambition of mine since I was 16.

blue.peter

GeordieGeorge said:

I’m a bit surprised at those who are aiming to retire very young and then to live what seems to be a very frugal lifestyle.

The issue isn't being frugal vs. being (relatively) extravagant. It's being happy vs. being unhappy. Happiness is the important thing. It's perfectly possible for some people to be frugal and happy. Frugality and happiness are absolutely not mutually exclusive. Equally, being wealthy and being miserable are not mutually exclusive.

I retired early, on a substantially reduced income, and don't regret it. I'm not particulatly extravagant (though admittedly not as frugal as some contributors to this thread), but am much happier than I was when working. I'm even still able to save a bit each month. Accepting a considerably reduced income was, for me, a price well worth paying for not having to work again.

blue.peter

duncanthedog said:

That is the big thing for me, I was in work for 39 years and hated every minute of it no matter which job I was doing and no I did not have a 'career', I had jobs.
Retiring early was an ambition of mine since I was 16.

You sound like me, though I didn't consider retirement to be my ambition until I was 18. And I always wanted to retire as early as I could. I also saw my work as a job rather than as a career. Even though I stayed with one company for about 30 years, reached middle management, and only left when I was made redundant, I still saw it as a job and not a career. Promotions were only ever a means to an end (i.e., financing early retirement), not an end in themselves. I eventually retired at 56, following a second redundancy.

Dazza1902

Both myself and oh are 56, one son still at uni for another 2 years. Plan for me to retire 60, wife 62. 
Always thought we needed £2500 pm in retirement even though bills and food ... essential costs at retirement will be £1k pm.
Lockdown has been a good double check for me. Currently our joint take home is about 4k pm, equal split between myself and oh.
For the last year we have saved about £1400 pm into sipps as a minimum.
Monthly mortgage £425 finishes in 5 months, Insurances £80 pm finish in 10 months, Support for our son £200 pm finishes before we retire, our FAMILY mobile phone spend is £130 pm (still pay my daughter's for no good reason !) Union subs to stop , etc
 So take all this off means our monthly spend is around £1800.
Currently have £150 k in sipps,( hope to have £250 k min by 62. Fulll state pensions at 67. At 60 pick up dB pension  of 6k, wife at 62 picks up 8.5 k dB pension and  start drawdown.
All the above tells me we are on course ?

blue.peter

blue.peter said:

The issue isn't being frugal vs. being (relatively) extravagant. It's being happy vs. being unhappy. Happiness is the important thing. It's perfectly possible for some people to be frugal and happy. Frugality and happiness are absolutely not mutually exclusive.

PS: not only are frugality and happiness not mutually exclusive, but frugality in the sense of careful budgeting can, in at least some cases, actually increase happiness. Knowing that money is under control means that it's something that isn't a constant and stressful worry that causes unhappiness. I remember the stress that an overdraft (and the resultant letters from my bank manager) caused me, even though that was over 30 years ago. Budgeting was one factor in getting me out of that situation.

MacMickster

Dazza1902 said:

Both myself and oh are 56, one son still at uni for another 2 years. Plan for me to retire 60, wife 62. 
Always thought we needed £2500 pm in retirement even though bills and food ... essential costs at retirement will be £1k pm.
Lockdown has been a good double check for me. Currently our joint take home is about 4k pm, equal split between myself and oh.
For the last year we have saved about £1400 pm into sipps as a minimum.
Monthly mortgage £425 finishes in 5 months, Insurances £80 pm finish in 10 months, Support for our son £200 pm finishes before we retire, our FAMILY mobile phone spend is £130 pm (still pay my daughter's for no good reason !) Union subs to stop , etc
 So take all this off means our monthly spend is around £1800.
Currently have £150 k in sipps,( hope to have £250 k min by 62. Fulll state pensions at 67. At 60 pick up dB pension  of 6k, wife at 62 picks up 8.5 k dB pension and  start drawdown.
All the above tells me we are on course ?

It seems that you are more than on course. You say that you have been spending £1800 per month over the last year. That may not give the best picture of your spending due to lockdown limiting your chance to spend money on leisure activities. 

That said, from age 67 you, as a couple, will have monthly income from your state and DB pensions of around £2600 after tax, so that would seem to provide you with a more than adequate income. Aiming for £250K in sipps (to add to your DB lump sums and pensions) to cover the 5 years between your actual retirement and state pension age seems excessive, even allowing for a decent amount of savings to cover capital spending in retirement. A bit like belt, braces and hands in your pockets "just in case".

In your position I would allow myself to spend a bit more enjoying life now, and also think about taking the plunge a year or two earlier than your current plan.

[Deleted User]

Dazza1902. I think you are definitely on course. Assuming you take the max tax free sum from your SIPP of say £62000 at 62 and then draw down 3.5% a year, your income at 62 will be about £21000 a year. From age 67 with SP for both of your yearly income will be £40000 a year. Very doable. If you don’t take the tax free sum income at 62 your income will be about £23250 a year. This assumes your SIPP grows as you suggest. You will be fine.