This is money, how much you need in retirement

Madrick

will-he-payitoff said:

Well this seems to have gone off topic since I posted it. I currently live comfortably on £13000 net per year.

Yep another one here would love to see the breakdown and see if there are any areas we can trim in our own expenditure 👍

Are you including car tax, insurance, service and Mot in your figures

Buildings & contents insurance, 
Travel insurance, council tax etc

Also its dependent on....
what part of the country you live in and the size type of your accommodation . From a 4 bedroom detached house to a 1 bed flat.

Where you do your main food shopping, Lidl & Aldi or Waitrose & M&S. 

But £13k per year is really good 👏

I'm doing my own numbers in the lead up to my own retirement,
Just me and my son in a 3 bed mortgage free house. 
I'm looking at £18k per annum to be comfortable, as we spend £1300 to £1500 each month at the moment. 

NannaH

We live in a cheap part of the country.
Our absolute minimum monthly spends in retirement (at today’s prices) would be £1000 for bills -  (£400)/food (£400) + days out etc. 

£480 for 2 x SIPP contributions (to age 75) to get the £1500 uplift - we would withdraw the uplift and leave the rest in cash until age 67. 

So £18k just for basic living,  then holidays,  house related expenses and changing cars - so say another £8k a year = £26k.

DH plans on retiring in 6-7 years.
He gets a RAF pension in 4 years at 60 so that will go into his Sipp for the 2-3 years he is still working. 

So we will have approx. 4 years to fund the gap to SPA,  it will be a mixture of savings and drawdown to the tune of £20k a year , he will drawdown approx £7000 to use up his personal allowance ( inc. married allowance).  I’ll drawdown about £3k so we’ll need to use around £10k of savings a year.
At SPA we will have £26k plus whatever we draw down. 

The only fly in the ointment will be if DH dies first, I only get half his RaF pension.
He would have £20k a year (inc. drawdown).
I would only have £16kish without significantly increasing drawdown. 

Dazza1902

Think the which report reckons regular foreign holidays, eating out and two cars comes in at £47 k Pa and classed as luxurious. Sounds too good to be true.

NannaH

We currently spend (well did pre covid)  £30k  for two adults. 
That includes a mortgage of £340 a month, car finance of £300 and expensive holidays of £5-£7k a year plus a few weekends away, we run 2 cars, that will drop down to 1 when he retires. 

I’d say that counts as more than comfortable. 

Dazza1902

Eating out twice a week at cheap places 2 mains 2 non alcoholic drinks, going to be £30, twice weekly £60. 
For a year 3k, two cheap foreign holidays 1.5 k ?leaves 8.5k, council tax, gas , water, 2 X insurance etc. How?? please enlighten me.
Unless eating out means the Maccies saver menu.

hugheskevi

NannaH said:

DH plans on retiring in 6-7 years.

He gets a RAF pension in 4 years at 60 so that will go into his Sipp for the 2-3 years he is still working. 

So we will have approx. 4 years to fund the gap to SPA,  it will be a mixture of savings and drawdown to the tune of £20k a year , he will drawdown approx £7000 to use up his personal allowance ( inc. married allowance).  I’ll drawdown about £3k so we’ll need to use around £10k of savings a year.
At SPA we will have £26k plus whatever we draw down. 

The only fly in the ointment will be if DH dies first, I only get half his RaF pension.

Your husband can "allocate" some of his RAF pension at retirement to enhance the survivor benefits - details at this link.

zagfles

Dazza1902 said:

Eating out twice a week at cheap places 2 mains 2 non alcoholic drinks, going to be £30, twice weekly £60. 
For a year 3k, two cheap foreign holidays 1.5 k ?leaves 8.5k, council tax, gas , water, 2 X insurance etc. How?? please enlighten me.
Unless eating out means the Maccies saver menu.

There's an excellent "takeaway with tables" type place near us - kebabs and curries, lassis to drink etc, last time I took a few friends there and the bill came to £22 for 5 of us! Under £5 each. One of them said it was better than a Michelin star restaurant he recently went to

Foreign holidays can be very cheap - last year we went to Greece on a last minute cheap package for £150 each, so £300 for accomodation and flights, we spent about another £600 on eating, drinking, car hire, trips etc but if like some people we'd just sat round the pool all day we'd have probably only needed another £200 or so, eating and drinking were cheap, so could have done it for £500 total. Or if you look out for bargains on RyanAir or EasyJet to cheap destinations like Eastern Europe, accomodation for £20 a night or so, could do a week for under £500.

So on that basis - under £2k for 2 foreign holidays and eating out twice a week is doable, leaving £11k for everything else. Personally I'd struggle more with car costs - but I guess if you can service them yourself it'll save a lot.

Silvertabby

hugheskevi said:

NannaH said:

DH plans on retiring in 6-7 years.

He gets a RAF pension in 4 years at 60 so that will go into his Sipp for the 2-3 years he is still working. 

So we will have approx. 4 years to fund the gap to SPA,  it will be a mixture of savings and drawdown to the tune of £20k a year , he will drawdown approx £7000 to use up his personal allowance ( inc. married allowance).  I’ll drawdown about £3k so we’ll need to use around £10k of savings a year.
At SPA we will have £26k plus whatever we draw down. 

The only fly in the ointment will be if DH dies first, I only get half his RaF pension.

Your husband can "allocate" some of his RAF pension at retirement to enhance the survivor benefits - details at this link.

With a deferred payment age of 60, OP's husband will have been in AFPS75.

NannaH

Yes AFPS75. 

I did have a quick scout around online but couldn’t see anything about extra survivor’s pension allocation.   Presumably it would have been somewhat of a gamble anyway if he were to survive me.   

Silvertabby

NannaH said:

Yes AFPS75. 

I did have a quick scout around online but couldn’t see anything about extra survivor’s pension allocation.   Presumably it would have been somewhat of a gamble anyway if he were to survive me.   

APFS05 and APFS15 may be more flexible than AFPS75, but they have deferred payment ages of 65 and SPA so it's swings and roundabouts.

In the case of APFS75, widow's benefits are 30% for pre 1973 service (unless the member paid extra to top it up to 50%) and 50% for post 1973 service. 

Don't forget that he will  have to contact pensions - 3 months before he hits 60 - as they won't contact him.  He will also get a tax free lump sum of 3 times the annual pension.