Retirement planning dilemma

Albermarle

I already have a DB pension that should be worth about £14K from 55 or £24K from 65 in real terms, plus full SP.  Also, reading above the comment that lots of people think £36K is plenty for a couple, my wife already receives nearly that amount in her NHS MHO pension (already retired) just on her own - maybe I can just retire and she can look after me .  Joking aside

For some £36K would not be enough to have a very comfortable retirement, with nice holidays, nice cars, helping out family etc.
The usually quoted figure for this is around £45K net , or with current inflation maybe £50K.
Looks like that will be a breeze for you though  ! To be honest with all that DB income and later SP, I would not be spending too much brain energy on investment planning. Some yes, but not too much.

 but also contemplating downsize.

Not the easiest strategy to implement by all accounts. You may start off with the best of intentions, but human nature means when you start to look for your new home, you will start to up the ante. The classic one is 'somewhere nice by the seaside' - smaller but a more expensive area, so the amount of equity released is a lot less than originally intended.
Of course there could be some practical reasons to downsize before you get much older, but as a way of releasing money it is not a guaranteed solution for everybody.

zagfles

Albermarle said:

For some £36K would not be enough to have a very comfortable retirement, with nice holidays, nice cars, helping out family etc.
The usually quoted figure for this is around £45K net , or with current inflation maybe £50K.
Looks like that will be a breeze for you though  ! To be honest with all that DB income and later SP, I would not be spending too much brain energy on investment planning. Some yes, but not too much.

Usually quoted by who? Not generally MSE'ers! Perhaps organisations with an agenda? Or ones who think a cleaner and gardener are essential to be "comfortable" and that you need to pay £75 for a haircut, £50 per head to eat out, £30 a month each for mobiles, £500 a year on shoes etc

Interesting discussion here https://forums.moneysavingexpert.com/discussion/6282632/actual-spending-in-retirement-against-expectations/p7

coyrls

GazzaBloom said:

coyrls said:

GazzaBloom said:

coyrls said:

A pension wrapper is not a generally a great place to hold cash.  You say you can save £10 to £15K a year.  Why don't you build up your required cash outside your pension?

For what reasons is cash inside a pension wrapper not such a good idea? 

Usually, you have no access to retail savings rates.  Outside a pension you can hold cash in fixed term savings at much higher interest rates than are typically available in a pension wrapper.  There are more specialist SIPPs that have some access to fixed term rates but they generally charge higher fees.

a few percent better savings rates don't outweigh the 40% tax benefits from salary sacrifice vs after tax cash savings on the way in for me. Plus I would only be paying up to 20% tax on the way out later in life.

I am not suggesting you reduce your pension contributions to build up cash outside a pension, my suggestion was to use the 10 to 15K a year you say that you can save outside your pension to build up your cash and to invest your pension contributions.

Albermarle

zagfles said:

Albermarle said:

For some £36K would not be enough to have a very comfortable retirement, with nice holidays, nice cars, helping out family etc.
The usually quoted figure for this is around £45K net , or with current inflation maybe £50K.
Looks like that will be a breeze for you though  ! To be honest with all that DB income and later SP, I would not be spending too much brain energy on investment planning. Some yes, but not too much.

Usually quoted by who? Not generally MSE'ers! Perhaps organisations with an agenda? Or ones who think a cleaner and gardener are essential to be "comfortable" and that you need to pay £75 for a haircut, £50 per head to eat out, £30 a month each for mobiles, £500 a year on shoes etc

Interesting discussion here https://forums.moneysavingexpert.com/discussion/6282632/actual-spending-in-retirement-against-expectations/p7

Home - PLSA - Retirement Living Standards

Plus add 15% for inflation since it was last updated. Which has similar figures.
The spend on clothes and shoes seems high, but the food spending seems low, so it evens out.

I do not think anyone has an agenda, just a different view on what 'comfortable' or 'luxury' means.

Also as you know some posters say they only spend so much, but when you dig deeper they also have a separate fund for house repairs/improvements, child's wedding/uni costs etc. For me the £45/£50K would include absolutely everything with an estimated annually spread cost for one off expenditures ( including an estimate for costs still yet unknown as far as possible) 

zagfles

Albermarle said:

zagfles said:

Albermarle said:

For some £36K would not be enough to have a very comfortable retirement, with nice holidays, nice cars, helping out family etc.
The usually quoted figure for this is around £45K net , or with current inflation maybe £50K.
Looks like that will be a breeze for you though  ! To be honest with all that DB income and later SP, I would not be spending too much brain energy on investment planning. Some yes, but not too much.

Usually quoted by who? Not generally MSE'ers! Perhaps organisations with an agenda? Or ones who think a cleaner and gardener are essential to be "comfortable" and that you need to pay £75 for a haircut, £50 per head to eat out, £30 a month each for mobiles, £500 a year on shoes etc

Interesting discussion here https://forums.moneysavingexpert.com/discussion/6282632/actual-spending-in-retirement-against-expectations/p7

Home - PLSA - Retirement Living Standards

Plus add 15% for inflation since it was last updated. Which has similar figures.
The spend on clothes and shoes seems high, but the food spending seems low, so it evens out.

I do not think anyone has an agenda, just a different view on what 'comfortable' or 'luxury' means.

Also as you know some posters say they only spend so much, but when you dig deeper they also have a separate fund for house repairs/improvements, child's wedding/uni costs etc. For me the £45/£50K would include absolutely everything with an estimated annually spread cost for one off expenditures ( including an estimate for costs still yet unknown as far as possible) 

That's the one that thinks you need the stuff I listed above to be "comfortable"

The Which one is far more realistic, £28k for a couple to be comfortable (April 2022)

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

We spend about £35k a year (ex mortgage, which will be gone when fully retired) as a couple with a lot of support for the kids still, that's including around 6 holidays a year, mostly foreign, and eating out quite a lot. I itemised it in the other thread. May end up a bit more this year with inflation, but then support for the kids will drop off as they're both out of uni and in good jobs.

£30-35k in today's terms is more than enough for us, with plenty of slack to cut back on if a major expense came up, in the pandemic year we only spent about £21k, inc the kids (partially), and even that included loads of non essentials eg new greenhouse, furniture, takeaways etc. Of course others (eg Sea Shell) put me to shame!

Anyway, it was discussed quite in depth in the other thread, I guess the main difference now is energy costs have sky rocketted, which will distribute inflation unevenly.