Enough in my pensions?

Dazed_and_C0nfused

What_time_is_it said:

Audaxer said:

What_time_is_it said:

Thanks @MX5huggy.
That's similar to what we were trying to work out. If we both retire at 60, and assume that we don't take out of our DB pensions and state pension until 70, then we will need to have around £250k in the pot (in today's money) to get us through those 10 years on £2k a month. 
Am I calculating this right? Or missing something?

£2k per month spend seems quite low for a couple currently earning £70k. I only say that as we are a retired couple averaging more in the range of £2.5k per month (around the same as when we were working), and I don't consider us big spenders.

A £250k pot of cash would cover a fixed £2k per month over 10 years without much allowance for inflation. However I assume you plan to keep most of it invested, whereby I think it would be quite difficult to ensure it is a risk/volatility level to ensure you could safely drawdown £24k per year plus inflation over 10 years.

I am surprised that you say that you plan on not taking DB or SPs until you are 70. I was assuming you were planning to take DB pensions at 60 and SP at 67/68. That way I would have thought you could keep your DC pots invested, just to top your DB pensions from 60, and still having a fair amount in the DC pots when you are able to claim your SPs?

Thanks for the comments again @audaxer. 
I'm really not much of an expert and it does sound it may well be better to plan to take our DB pensions at the point of retirement. I'd used 70 as a guess at what the state pension might be in 25 years time, but we would certainly both take our state pension as soon as it is available.

The next change (if there is a change) to the State Pension age is currently under review and the outcome is to be announced by May 2023 so worth keeping an out for that we part of your planning.

arnoldy

It is worth checking what the cap/inflation linking of the "final salary" pensions is. Apart from public sector most private "final salary" pensions will be capped at a composite rate of about 3%. So this year all those deferred or in payment private sector (basically all of them as they are closed for accrual usually) will be 7% worse off in real terms. This is a massive factor to consider. Hopefully things will get better, but if inflation stays high it will decimate most private sector DBs - guaranteed. At least with your DCs you have a chance of maintaining inflation adjusted value.

Brie

Check the normal retirement dates on the DBs.  Both my OH & I are in the same one but were in it at different times.  My NRD was at 60 and his at 65.  (fyi - not a sex defined age just a change to the whole scheme.)

And consider if you do want to take lump sums.  I did because mine cleared almost all of our mortgage which makes life less complicated but there may be reasons not to take one.

older_and_no_wiser

When working out how long pension pots will last in retirement, you should also factor in that (usually), your money will continue to be invested in retirement so should be growing forever - unless you transfer it into an annuity. Maybe use a retirement planner tool online. These will allow you to input your numbers and give different scenarios of what your pot is worth based on average growth over the years.  They will tell you how long your money will last in different conditions.