How much to live on

GeordieGeorge

blue.peter said:

GeordieGeorge said:

While you’re right, there are an awful lot of state employees whose defined benefit pension is equivalent to more than a million pounds in a defined contribution scheme.

Hmm. It depends what you mean by "an awful lot". I've just done some sums.

The best annuity rate currently available* for a 65-year old man in good health, married to a lady 3 years younger, with LPI and a 50% widow's pension, paid monthly in advance is 41.416:1. A £1,000,000 fund is therefore roughly equivalent to a pension of £24,145 pa (or £18,108 pa + a lump sum of £54,326). For someone with 40 years service, that gives a salary at retirement of £36,217.

How many people overall are in schemes that good, with a retirement salary that high *and* that much service? Even if it's a high proportion of state/local government employees (which I doubt), they don't make up a huge proportion of the population. (ONS says that the public sector is currently about 17%.)

*I obtained quotes from Hargreaves Lansdown for this purpose.

Several million people, I’d say. The average nurses salary is about £32,000, and so there are a good number of people (around half...) on more than that.

[Deleted User]

Title of thread 'How much to live on? '      

PennyForThem_2

I am really adverse to existing on a 'minimum'.  I decided to work beyound state pension retirement age (old pension) to maximise the 10% offered interest and to extend a DB pension.  So I am very comfortable -  yet..... 

DB pension increase is likely to be 0.5%.  (Teachers Pension letter received today 0.5% pa - but I also have NHS pension which I expect to be similiar.)  My SIPP earned in excess of 8%. (Not in drawdown yet).  And that is probably low.

I know without a doubt that once you retire your pensions whether defined or contributed 'may' (are likely) not to keep pace with inflation.  My council tax, utilities, broadband/mobile, TV have all 'probably' exceded inflationary increase of 0.5%.

One influencer is that I am in reasonable health and my family is long lived so risk calcs = longlife.  That is why I tried to make absolutely sure I did not have to worry about what I spent each month.

[Deleted User]

PennyForThem_2. Many thanks for your post. Are you able to supply a rough guide to the figures you consider comfortable? Could be useful to other posters on here. Many thanks.

Sunnylifeover50plan

PennyForThem_2 said:

I am really adverse to existing on a 'minimum'.  I decided to work beyound state pension retirement age (old pension) to maximise the 10% offered interest and to extend a DB pension.  So I am very comfortable -  yet..... 

DB pension increase is likely to be 0.5%.  (Teachers Pension letter received today 0.5% pa - but I also have NHS pension which I expect to be similiar.)  My SIPP earned in excess of 8%. (Not in drawdown yet).  And that is probably low.

I know without a doubt that once you retire your pensions whether defined or contributed 'may' (are likely) not to keep pace with inflation.  My council tax, utilities, broadband/mobile, TV have all 'probably' exceded inflationary increase of 0.5%.

One influencer is that I am in reasonable health and my family is long lived so risk calcs = longlife.  That is why I tried to make absolutely sure I did not have to worry about what I spent each month.

The first question when planning retirement is to ask yourself what level of income you need in retirement. It's unusual for people to have a starting position of "I don't want to worry about what I spend each month".

That's partly why this thread is interesting as it provides details on different spend profiles from which, if necessary, people can draw conclusions or plan more effectively. Without an insight into monthly/ annual spend there is little value in posting in this thread.

GeordieGeorge

Sunnylifeover50plan said:

PennyForThem_2 said:

I am really adverse to existing on a 'minimum'.  I decided to work beyound state pension retirement age (old pension) to maximise the 10% offered interest and to extend a DB pension.  So I am very comfortable -  yet..... 

DB pension increase is likely to be 0.5%.  (Teachers Pension letter received today 0.5% pa - but I also have NHS pension which I expect to be similiar.)  My SIPP earned in excess of 8%. (Not in drawdown yet).  And that is probably low.

I know without a doubt that once you retire your pensions whether defined or contributed 'may' (are likely) not to keep pace with inflation.  My council tax, utilities, broadband/mobile, TV have all 'probably' exceded inflationary increase of 0.5%.

One influencer is that I am in reasonable health and my family is long lived so risk calcs = longlife.  That is why I tried to make absolutely sure I did not have to worry about what I spent each month.

The first question when planning retirement is to ask yourself what level of income you need in retirement. It's unusual for people to have a starting position of "I don't want to worry about what I spend each month".

That’s exactly my thinking though, I don’t want to have to add up the cost of my shopping before going to the checkout, have to drive round in a ten year-old Yaris, or view the occasional Chinese takeaway as a luxury.

I want a foolish spots car in the garage, that I have valeted, and that I drive to Paris for lunch on a whim.

I want to be able to fly to see friends in Antibes for a party, and to eat in a Michelin starred restaurant when we have a birthday night out in town.

I’ve no interest in retiring in my forties and then  having forty years of careful budgeting and living frugally.

Time4T_Accounts

We do go (pre-Covid) to Michelin starred restaurants once or twice a year - and we spend no more on eating out each year than do my daughter and her husband, who go out often to ‘chain’ restaurants. We prefer what we perceive to be ‘quality’, as does she, ‘quantity’.  One size doesn’t fit all (thankfully)!

[Deleted User]

Yes GeordieGeorge, but not everyone wants what you want. Not everyone needs a huge amount to have an enjoyable and fulfilling retirement.
So how much are you going to need?
Very few people on here have mentioned retiring in their 40s. You may have no interest in careful budgeting and being frugal but others may have through choice or necessity.
If you do not agree with the sentiments of this thread that’s fine. It is not compulsory to contribute!
For me quality time with people and good health are priorities. 

Sunnylifeover50plan

GeordieGeorge said:

Sunnylifeover50plan said:

PennyForThem_2 said:

I am really adverse to existing on a 'minimum'.  I decided to work beyound state pension retirement age (old pension) to maximise the 10% offered interest and to extend a DB pension.  So I am very comfortable -  yet..... 

DB pension increase is likely to be 0.5%.  (Teachers Pension letter received today 0.5% pa - but I also have NHS pension which I expect to be similiar.)  My SIPP earned in excess of 8%. (Not in drawdown yet).  And that is probably low.

I know without a doubt that once you retire your pensions whether defined or contributed 'may' (are likely) not to keep pace with inflation.  My council tax, utilities, broadband/mobile, TV have all 'probably' exceded inflationary increase of 0.5%.

One influencer is that I am in reasonable health and my family is long lived so risk calcs = longlife.  That is why I tried to make absolutely sure I did not have to worry about what I spent each month.

The first question when planning retirement is to ask yourself what level of income you need in retirement. It's unusual for people to have a starting position of "I don't want to worry about what I spend each month".

That’s exactly my thinking though, I don’t want to have to add up the cost of my shopping before going to the checkout, have to drive round in a ten year-old Yaris, or view the occasional Chinese takeaway as a luxury.

I want a foolish spots car in the garage, that I have valeted, and that I drive to Paris for lunch on a whim.

I want to be able to fly to see friends in Antibes for a party, and to eat in a Michelin starred restaurant when we have a birthday night out in town.

I’ve no interest in retiring in my forties and then  having forty years of careful budgeting and living frugally.

Maybe just share how much you plan to spend when retired?

GeordieGeorge

[Deleted User] said:

Yes GeordieGeorge, but not everyone wants what you want. Not everyone needs a huge amount to have an enjoyable and fulfilling retirement.
So how much are you going to need?
Very few people on here have mentioned retiring in their 40s. You may have no interest in careful budgeting and being frugal but others may have through choice or necessity.
If you do not agree with the sentiments of this thread that’s fine. It is not compulsory to contribute!
For me quality time with people and good health are priorities. 

What a strange post. Everyone’s giving their opinions, why would I not give mine? It’s not compulsory for you to contribute either, and if all you are doing is having a pop at someone for giving their view then maybe you should think twice.