This is money, how much you need in retirement

will-he-payitoff

Just read this and Ive no idea how they come up with the figures

https://www.thisismoney.co.uk/money/pensions/article-9640827/Couples-need-26k-single-people-19k-year-happy-retirement.html

Insurance £2424 per year?

Household goods £1440 per year?

Car £4861 per year?

Bimbly

It's the annual Which? survey:

https://www.which.co.uk/money/pensions-and-retirement/starting-to-plan-your-retirement/how-much-will-you-need-to-retire-atu0z9k0lw3p

Stubod

..assume the car costs include depreciation?

Likewise household goods could also include depreciation / boiler& white goods?

Assume insurance could include car / house / dental / medical / pets?

Neasy

Also, aren't the numbers way off on the State Pension?

drumtochty

Neasy said:

Also, aren't the numbers way off on the State Pension?

Yes, these numbers ar higher than the state pension. What's your point as everyone knows you need more than the state pension to enjoy retirement.

kuratowski

I think Neasy was referring to the way that the thisismoney article quotes the state pension as £8060 per person, which is a bit less than the full new state pension.  Although the which article (on which thisismoney is based) also quotes the average actual state pension for a couple being £16000 (i.e. on average, today's post 2016 retirees do not have sufficient NICs to qualify for the full new state pension), which is close.

bostonerimus

Writing articles like this is a really thankless task because what some one will need for retirement is a very personal figure. Yes they could have done better with the SP figures, but really the numbers are almost meaningless because one person's luxury might be another's penury. So do your own detailed budget and then figure what items will be different in retirement: you might not have a mortgage payment or commuting costs. 

Thrugelmir

Try this instead. 

https://www.retirementlivingstandards.org.uk/

Bravepants

Thrugelmir said:

Try this instead. 

https://www.retirementlivingstandards.org.uk/

Plus 1 for this. I use these figures in my spreadsheet, which I then uplift for an assumed 2% each year (target BoE inflation rate) and then compare those figures against mine and my partner's projected income streams.

I feel the "Which?" articles on this type of stuff are a bit of a mess.

kuratowski

bostonerimus said:

So do your own detailed budget and then figure what items will be different in retirement: you might not have a mortgage payment or commuting costs. 

This is my preferred approach, although it only works if you have a really detailed understanding of your current spending (but that's a good thing in itself).  My retirement budget is based on my current budget plus adjustments.  During the 2020-21 lockdowns, I actually did observe some data to test at least some of those adjustments, e.g. the energy costs of being at home all day   The other data I have observed to test my adjustments is the rate at which my parents have slowed down in their late 70s; and I'm not saying that it will be the same for me, but things like going out in the evenings, travelling more than 100 miles away from home, etc, do not appear to be costs that are likely to persist into very old age.

PennyForThem_2

Which? survey their customers.  Who subscribes to Which but those who are probably better off.  
However for those with DB pensions low inflation is not good news (IMO).  As from experience price increases do not adher to inflation.   
Hence I would advise a hedge against above inflation price increases when you retire......which I am not sure has been taken into consideration.