How much to live on

GeordieGeorge

Sunnylifeover50plan said:

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?

But I don’t know yet. I’m in the good years of my career, like a great many people I have a choice to make, playing off continuing to work and accumulating money against the risk that I don’t have as many healthy years left as I’d hope

The aim is perhaps £100,000 per year, if I’m happy and able to work to sixty, but I’ve no idea if I’ll get there.

If I stopped work today, in my 40s, we’d have perhaps £40,000.

[Deleted User]

GeordieGeorge said:

[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.

I think Baron_Dale's point is that this thread has been a refreshing change to those posted over on the Pensions board.   The pensions board is very good and I have learned a lot from it, and changed my approach to retirement planning in the last couple of years from information gained. However the posters on there do tend to be very high earners and so the numbers quoted are extremely high compared to average folk and so many people can be scared off of the prospects of retirement as they will have no hope of achieving those numbers.   

Reading some of the examples on this particular thread brings things into perspective in terms of what you actually need to pay for the cost of living and also understanding what is really important in life (granted people have different views in that respect but we don't all need lots of expensive travel or restaurants to be happy).

Personally I downshifted from a well paid job in I.T 4 years ago to do something completely different with a 40% cut in salary.  I realised what was important to me and it wasnt all about maximising income or status.  Best decision I ever made as I work 4 days a week and do an active job rather than being sat at a desk all day.  

I still have 10 years minimum until I retire (will be 60 then) and could happily live off of £1300 a month (in reality it could be double that depending in investment performance and wife's pensions but I know I would be able to live off less and still be happy).  I am actually quite looking forward to the "pottering about" phase of life

Amateurretiree

Yes there are definitely many different ways of enjoying your retirement, we all have our different priorities in life thankfully! 

We live very comfortably on 30 000 a year, we treat our family, buy whatever we want within reason, and have a USA holiday out of that.
This past year we have been able to save 1000 a month out of that as haven’t had our holiday.
It helps that our monthly bills are only £550 and we spend £300 a month on groceries( neither of us smoke or drink regularly)

We have found so much happiness in just taking our 3 yr old granddaughter out for country walks and picnics, we did before the pandemic but this has made us focus more on what is really important to us.( But we knew all along really!)

We babysit 3 or 4 days a week, but know this will come to an end next year when she starts school, so the other three days a week we are out walking, gardening etc. DH can potter on all day in his workshop if he has a project.

I wouldn’t say we are intentionally frugal or count the pennies,we have never lived a particularly extravagant lifestyle apart from our regular USA holidays, but we have a nice paid for house and enough money to be comfortable. 

I think the secret is knowing how much money you need to live the lifestyle YOU want.

I retired at 55 and DH at 60. We count ourselves extremely fortunate.

[Deleted User]

I would like to emphasise that in no way was I suggesting that anybody in particular should not contribute to this thread. That would be wrong. I simply said that contributions were not compulsory! 

Tabby_cat

Here's my Two-pennies worth. I retired in December 2018 aged 52 and three quarters (very Adrian Mole, I know). Since then my spending has broken down as follows:

2019 
22k Total spend
11k Essentials
5k Holidays
6k Holiday early 2020 (3 weeks in Thailand)

2020
15k Total spend
11k Essentials
£2880 into pension (forgot to do it in 2019)
1.5k Spending money on  Thailand holiday and 1 night away, eating at a Michelin stared place.

I have a large pension pot and could spend more if I wanted to, but I have no reason too. I'm happy. I spend on what I want, whenever I want, without having to think about it. That, for me is priceless. On reflection, I probably could have retired earlier, but, I had a project at work that I really wanted to finish (I'd been involved from day one, worked on two phases and wanted to finish the third). I realised the other day, my pension pot is growing faster than I can spend it and think I should spend more, but as I don't believe in wasting money, I struggle with that one. It's a nice "problem" to have.

blue.peter

Tabby_cat said:

I realised the other day, my pension pot is growing faster than I can spend it and think I should spend more, but as I don't believe in wasting money, I struggle with that one. It's a nice "problem" to have.

If you don't need to spend it, then don't. As my mother said when my father died and she accepted that she'd need to go into a care home "well, I suppose this is the rainy day that our savings are for". Your rainy day might come. If it does, you'll be glad that you have the money to pay for it.

Dazza1902

I think most people want a comparative lifestyle in retirement as they had at work.Geordie George must earn a few Bob and wants it to continue into retirement, understandable.
 I find this thread very comforting, after bringing up a family, paying off a mortgage etc etc I am likely to have more disposable income  in retirement than I have had in most of my working life. 
Reading from one of the recent posts that 30k retirement income with £550 monthly bills and £300 groceries (exactly my numbers) allows a "comfortable" life is music to my ears.

Dazza1902

Amateurretiree said:

Yes there are definitely many different ways of enjoying your retirement, we all have our different priorities in life thankfully! 

We live very comfortably on 30 000 a year, we treat our family, buy whatever we want within reason, and have a USA holiday out of that.
This past year we have been able to save 1000 a month out of that as haven’t had our holiday.
It helps that our monthly bills are only £550 and we spend £300 a month on groceries( neither of us smoke or drink regularly)

We have found so much happiness in just taking our 3 yr old granddaughter out for country walks and picnics, we did before the pandemic but this has made us focus more on what is really important to us.( But we knew all along really!)

We babysit 3 or 4 days a week, but know this will come to an end next year when she starts school, so the other three days a week we are out walking, gardening etc. DH can potter on all day in his workshop if he has a project.

I wouldn’t say we are intentionally frugal or count the pennies,we have never lived a particularly extravagant lifestyle apart from our regular USA holidays, but we have a nice paid for house and enough money to be comfortable. 

I think the secret is knowing how much money you need to live the lifestyle YOU want.

I retired at 55 and DH at 60. We count ourselves extremely fortunate.

Is any portion of that 30 k taxed out if interest ?

Amateurretiree

Dazza1902 said:

Amateurretiree said:

Yes there are definitely many different ways of enjoying your retirement, we all have our different priorities in life thankfully! 

We live very comfortably on 30 000 a year, we treat our family, buy whatever we want within reason, and have a USA holiday out of that.
This past year we have been able to save 1000 a month out of that as haven’t had our holiday.
It helps that our monthly bills are only £550 and we spend £300 a month on groceries( neither of us smoke or drink regularly)

We have found so much happiness in just taking our 3 yr old granddaughter out for country walks and picnics, we did before the pandemic but this has made us focus more on what is really important to us.( But we knew all along really!)

We babysit 3 or 4 days a week, but know this will come to an end next year when she starts school, so the other three days a week we are out walking, gardening etc. DH can potter on all day in his workshop if he has a project.

I wouldn’t say we are intentionally frugal or count the pennies,we have never lived a particularly extravagant lifestyle apart from our regular USA holidays, but we have a nice paid for house and enough money to be comfortable. 

I think the secret is knowing how much money you need to live the lifestyle YOU want.

I retired at 55 and DH at 60. We count ourselves extremely fortunate.

Is any portion of that 30 k taxed out if interest ?

Yes my DB of 14 k and DHs SIPP of 20k so we pay a smallish amount of tax.

p00

I live quite comfortably on around £14k a year. I do live alone with my 2 dogs and I own my home.
My income is a lot less than when I had a partner and worked (until age 66) but I actually feel better off as I choose what to spend money on. I can still have a holiday (or 2 depending how much I want to spend) if I want one, I run a fairly new car. I have hobbies.
Life is all about choices. We choose what is important and spend accordingly, so what I want to spend or save is different to someone else.

p00 x