How much to live on

Organgrinder

Plasticman said:

oceandreamer said:

Thankyou for all your replies.  It does seem that it is sensible to 'get your house in order' before you retire.  I am going to think hard about what is achievable while I am still at work, both in terms of cost and more importantly, time.  I don't really want to retire to a massive to-do list but have to be realistic about what I can manage to do while still working quite long hours.  At least if I have a plan I can take baby steps towards getting it done.  
@Alnat1 you touch on something else which I feel is very important, and that is that money isn't the only (or even probably the most important) consideration. Looking after you future health is absolutely priority number one and has to be a part of any retirement plan.  I am hoping that there will be more time to exercise, cook from scratch, shop etc which will directly improve my health and fitness. 

I'm hoping to retire at 55 so I'm (hopefully) not going to get a new kitchen that'll last for the rest of my days. My current plan is to replace both the kitchen and main bathroom after retirement and then we'll probably have to fund another round at some point unless we decide to move.

Having had our bathrooms and kitchen done when I was about 55, I want to make sure I have sufficient funds available for another refurb. Hence my desire to have a pot of about £100k in addition to my pensions and short term savings.

It sounds a lot of money - but in reality it only takes something like a new roof, windows and so on and that pot isn't as big as it sounds.

Organgrinder

Ordinary_Yet_Unique said:

@Alnat1 what an excellent and inspiring post! Your approach is one that I believe the vast majority of people who are approaching or who have taken retirement take, and manage to live well. Good to see some balance. All the best with your plans. 

Could you perhaps back up this assertion with statistics?

gambleruk

Like many others we had the kitchen and bathroom completely redone, both were the original fittings and had lasted 35 years so bearing in mind that once you are retired you have more time to look after everything (though I can understand some people not wanting to clean and maintain things in retirement) then in our mind the new bathroom and kitchen should last us our lifetimes and like in a previous post once you get into your 80's I honestly do not think upgrading will even cross your mind.

Ordinary_Yet_Unique

Organgrinder said:

Ordinary_Yet_Unique said:

@Alnat1 what an excellent and inspiring post! Your approach is one that I believe the vast majority of people who are approaching or who have taken retirement take, and manage to live well. Good to see some balance. All the best with your plans. 

Could you perhaps back up this assertion with statistics?

If you read what I said carefully I used the words 'I believe'. Beliefs are a personal matter, that I do not need to justify with statistics.

You need to remember that posters on this board are not representative of the retiring or retired population as a whole. There are maybe a hundred or so posters on this thread compared to millions in the country.

I would also venture to say that most people do not necessarily have the means to upgrade the house with new kitchens and bathrooms etc.... before they retire. Such things, while useful, are not an essential requirement before retiring.

I believe for most of the population house improvements are a gradual process over many years when funds or borrowings allow.

Many retirees do not have very big DB pensions or DC pots of hundreds of thousands. Quite a few will continue to rent in retirement too.

They simply retire and get on with things. 

I personally do not know many people who keeps detailed spreadsheets and who spend time chasing deals etc....
I do have a rough budget that estimates certain areas of spending during the year, but it is very flexible.

I am not saying that people should/do not try and balance things, but when you get to a certain age other things like health and remaining positive become more important.

Life is not a question of how much you have or how much you can continue to acquire, it is about, IMHO, how well it has been lived. I would like to think that when I leave this world people will say of me that I did some good and had a positive impact on the people around me.

Like @Alnat1 in my retirement I have simplified things. two current accounts, a savings account for annual expenses and one cash ISA for longer term savings. I have a few thousand in PBs and occasionally have a £50 win which is nice from time to time.

If I should need care in later years the house can be sold and pay for that.

Funeral and burial plot paid for!

As for the question 'How much to live on' I manage very well on £2500 a month after tax. I currently put about £1000 of that a month into savings, both short term and long term.
Useful but not extensive back up in the bank.

Incidentally, I am having a couple of home improvements done this month because I have saved enough to get them done. However, I certainly didn't go rushing around doing things before I fully retired a couple of years ago. I couldn't have afforded to do so.

I am fortunate in having no debt and a paid for house My heart goes out to those who are paying off debt, mortgages or rent in retirement. I have total respect for those on low income who also carry on and live their best lives, whatever the circumstances. In other parts of the forum there are some living on £10000 a year or a little more quite happily. I personally could not do that, but genuinely admire their ability to do so. In fact I find reading about their experiences far more interesting than those with far more resources. They are also an inspiration to others who will be retiring on relatively lower incomes.

Also this thread and other parts of the forum can overlook the fact that many people do not have the means to build up decent retirement incomes during their working lives as the result of low wages, raising  families and/or dealing with the curve balls life often throws at us. Again I admire and respect their determination to carry on.

I think what I am trying to say is that everybody's retirement or planning for retirement is different. I just believe that to assume that everyone plans extensively and does this and that before retiring is simply not the case. Many people retire and do whatever they need to do to make it work.

Finally, any amount of planning or resources pale into insignificance if illness or death prevent you from enjoying the fruits of your labours.

Organgrinder

I know you said "you believe". I just wondered what you base that assertion on. Acquaintances? Family? Or just your own circumstances?

Ordinary_Yet_Unique

Organgrinder said:

I know you said "you believe". I just wondered what you base that assertion on. Acquaintances? Family? Or just your own circumstances?

I believe I have made that clear in the response above.

Kantankrus_Mare

@Ordinary_Yet_Unique.........what a lovely eloquent post!! Although I have 8 years before I will be able to retire at 67, I think my retirement will look a lot like yours.

OH has a semi decent pension but mine is miniscule. We have a rental property which will help when the time comes to sell. 

We are lucky in the respect that our mortgage is paid off and like you have a bit of savings in premium bonds.

We are of the mind that we work to live, not live to work. OH works 4 days a week (nights) and I work 22 hrs a week on a minimum wage job. We manage quite well on our income and think retirement wont be a drop off the cliff income wise.

I have an allotment which takes up a fair bit of my spare time but I love it!! We are also long time members of a local gym which keeps us fit and healthy...(god willing)

My only regret is that I wish I had started saving a little more when I was younger, only as I dont relish the thought of working to 67 but at the moment it keeps me fit and when the time comes.......if I still feel ok I will do a couple of shifts to keep my hand in. My dad is 77 and still working 2 days a week!!

Organgrinder

It's just that "vast majority" seems such a sweeping statement and at odds with what many people on here seem to do.

But of course that's just my interpretation of what people post. Everyone views things differently. I know you've no interest in bank switching etc.

You yourself have stated many times that you feel at odds with people on these boards. And indeed these boards are really only representative of the sort of people who want to "save money". It's a bit like waiting in the wine aisle to ask people if they drink wine.

As you know I'll go after a deal and track my finances closely. But I only go after a deal if it's a good use of my time. 5-10 minutes effort to maybe bag £200 for example. It's a damn sight better hourly rate than I get in education. Though less rewarding from a personal perspective obviously.

I've far too many hobbies and interests to waste time doing surveys for example where the return is, in my opinion, pitiful.

I'm in full agreement that life is for living and I think I certainly squeeze a lot out of the resources I have. My pension forecast is much the same as yours. I'm just a classroom teacher on 0.8 albeit with a small TLR. From that I manage three foreign holidays a year, a new car every 4 years, eating out a couple of times a month. Frequent trips to the cinema. Etc etc.

Everyone is different in how they go about things. Well, that's my opinion anyway. But hopefully we all have the same common aim on this thread. To enjoy our lives as best we can on the resources we have available.

And on that note, it's back to a few jobs and some exam marking. Today is my day off and I best change the bedding and cut the grass.

helensbiggestfan

Good morning all. 

Some interesting discussions as usual.  However...........

"Man makes plans and God laughs". In other words, none of us has a clue what lies ahead.  Life has a nasty habit of throwing curved balls, we can catch them or we can try to deflect them but we can't avoid them.  

I am a classic example. 

 My husband and I were happily jogging along, planning for a well funded retirement dividing time between our apartment in Spain and our house in the U.K.,  Then disaster struck in the form of my husbands terminal illness.  It took 9 years to claim his life during which time we had very little help from the State, we drained our savings and were on the verge of bankruptcy.  These things happen.  And when they do you are left reeling and virtually powerless.  

What do you do.......well when he died I eventually picked myself up and rebuilt my finances.  To a certain extent I'm still rebuilding, not so much for myself, I'm happy with what I've managed to salvage but I do want to leave a legacy for my family.  I've already gifted my sons deposits to get them on the property ladder, now I am trying to build some additional wealth for my grandchildren.  

The oddest thing..........my husband seemed to have a premonition that he would die early.  He always used to say that he wouldn't live to draw his pension. It made me cross but he was proved right.  He was 49 when he was diagnosed and 57 when he died. He knew alright,  and he did everything he could to mitigate the damage that an early death can cause, specifically plenty of life insurance and adding me to his private pension.  His foresight has helped ease my path and I am eternally grateful for his wisdom and care for mine and our sons well being.  His very last words were "look after the boys". I have tried to do that as much for my husbands memory as for my own satisfaction.  My husband and I discussed the subject at length and we both felt it was wise to give the boys a head start rather than making them wait for an inheritance on my death.  

This was back in 2014 so we are now well past any tax issues or any questions about deprivation of assets (should I need a nursing home) 

Oddly enough through my sustained efforts I have actually recouped the money I gave away as deposits so there shouldn't be any issues. 

I don't wish to be all doom and gloom but I do foresee tough times ahead, crashing economies, civil unrest etc.  I shall be 74 on Sunday and I have lived through several deep recessions and times of uncertainty.  History does have a habit of repeating itself and economies do have a tendency to go in boom and bust cycles.  I think there are a lot of parallels with the recessions of the 70s and early 80s, and going even further back 1929. I think our current cost of living crisis is just the beginning and that we have got a long way to go before the tide turns again.  

My advice to everyone, whether young or older, is to do everything you can to protect yourself, shield your assets and stash the cash as much as you can.  Avoid over committing yourselves, taking out unnecessary loans for non essentials.  Now is not the time to be taking on extra debt,  

Oops handy man has just arrived. Wasn't expected today. I don't mind means I can get cracking.  ....😁

Smudgeismydog

Thank you for your sharing your incredibly personal post @helensbiggestfan, it was very touching.

I too was widowed young (at 36 with a 2 and 4 year old), and this has also taught me to live within my means, save for a rainy day and I like yourself, I have a very strong desire to help my kids in my lifetime, (arguably when they need it more). 

In terms of the title of this post, it is very subjective how much we will all need to live on, but it is possible to live a fulfilling retirement on quite modest amounts. I feel that a lot of posters, particularly on the Pensions board, will not be able to spend their assets in their lifetimes. 

My advice would be don’t wait for the potential redundancy, or for your assets to hit a certain figure, you never know what’s around the corner.