A Couple of Questions for the Forum Retiree's ...

Albermarle

I've spent these kind of sums while the kids are growing up, paying mortgage etc but how do you spend that much in retirement?
We don't need luxury lease cars, or jet-set lifestyles, so why would we need all this money?
Am I missing something?

On the forum there are many threads with literally thousands of posts, on a similar theme. 

Although normally the discussion is not around 'jet set' lifestyles, where you are talking about expenditure in the hundreds of thousands a year. It is more about spending £60K pa vs £20K pa.  and the answer to why some spend more than others, is simply that everyone is different,

sgx2000

[Deleted User] said:

sgx2000 said:

Kim1965 said:

I have 8 yrs till full sp, already getting 7.8k in fully indexed db. I have about 290 k in sipps, isa and savings and could probably retire. Mf, kids through uni, and need about 20k ish a year. 
 However i am always waiting for things to improve, onflation to come down, ukraine war to finish, markets to go up etc one more year of ft work perhsps. If i had a 20k db pension now, i would retire. Like many i dont like the uncertain nature of dc provision. 

Hi Kim
Nice to see someone else on the forum that only needs about £20k to live comfortably 
Imagine only being 3 years from SPA  -  the financial instability of s&s, and worse bonds, is really annoying...
Just a little more excess needed....
But, will that always be true... I just need a little more???
 

I'm another one who's expecting to need a modest income in retirement.

As a couple, I'm reasonably sure that we can comfortably get by on £25k per year, topped up with 25% tax free pension withdrawals if needed. This should hopefully keep us tax free or thereabouts.
Our passion is motorhoming and we plan to travel a lot. We've been doing it for years already, so know what the costs are.

In today's money, state pension will bring in 20k per year, which leaves 5k a year to be covered by other pensions (which will easily be covered).

I'm mindful that when one of us is gone, income will drop by 10k and this shortfall will need to be covered (again, this shouldn't be a problem for us).

My dilemma is when to retire (and start depleting various pots at £25k per year until SP kicks in) but more importantly, have I got it wrong?
I frequently read articles suggesting that you need 40, 50k plus to have a 'comfortable' retirement.

I've spent these kind of sums while the kids are growing up, paying mortgage etc but how do you spend that much in retirement?

We don't need luxury lease cars, or jet-set lifestyles, so why would we need all this money?

Am I missing something?

@sgx2000 I'm not looking to take your thread off-track, hopefully just raising some points to help us both?

I agree...  the forum does always seem to be top heavy with the afluent 
But Albermarle has a very valid point.....
Evryone is different
And some are just financially more astute ....

My reason for starting the thread was to get advice from retirees who, having taken the leap, will obviously have a realistic view of both the pluses and the pitfalls

mebu60

1 - Yes. Aged 54. Qualify for state pension next year. No idea where the time has gone!
2 - Not really, waited a little too long to downsize after daughter left home.
3 - Nothing immediately comes to mind. 

The hardest thing for me has been capital spend. Holiday, car, etc comes out of the pot and does not get replenished. But if you can afford to do it then don't hesitate. After working 12+ hour days for far too long I was told by all that I'd soon be bored. Not a bit of it. There's always something to do but no rush. Enjoy! 

sgx2000

mebu60 said:

1 - Yes. Aged 54. Qualify for state pension next year. No idea where the time has gone!
2 - Not really, waited a little too long to downsize after daughter left home.
3 - Nothing immediately comes to mind. 

The hardest thing for me has been capital spend. Holiday, car, etc comes out of the pot and does not get replenished. But if you can afford to do it then don't hesitate. After working 12+ hour days for far too long I was told by all that I'd soon be bored. Not a bit of it. There's always something to do but no rush. Enjoy! 

I think I have everything inc holidays covered.... but only small cash pot £60k 
Hence my hesitance to retire...
Wife is 17 years younger so probably unlikely to retire in the near future .
So £60k would be my half of unforeseen expenses..
Will it be enough? Again hence the hesitance.

Sarahspangles

I think I have everything inc holidays covered.... but only small cash pot £60k 
Hence my hesitance to retire...
Wife is 17 years younger so probably unlikely to retire in the near future .
So £60k would be my half of unforeseen expenses..
Will it be enough? Again hence the hesitance.

1. My other half retired early last Summer at 60 and 3/4, he could have continued to 62. He is still second guessing it on financial grounds as his db pension has capped revaluation and he only got part of the cost of living pay increase factored into his final salary calculation. 

2. and 3. despite this, are both ‘no’.

There are financial factors. We’re finding he’s still able to save/invest. I guess we were in denial about how much his commute and canteen meals were costing! Plus we were eating out a lot because we were too tired to cook.

We had also made assumptions for capital spend, like him needing to replace his high-mileage car, but we now find we don’t need two cars at all, and doing so would only be ‘keeping up with the Jones’s’. Instead he has doubled the number of mountain bikes he owns.

There are also lifestyle factors. He was able to spend significant time with his widowed mum in the last few months of her life. And it’s made dealing with the estates a bit easier - if he was working he’d have had to use annual leave as well as compassionate leave, so the last few months would have been gruelling yet with no prospect of a holiday.

I’m still working, from home, so I now benefit as most days I have a barista and chef on hand. I don’t actually want a house husband, but we’re certainly both less time pressured with him able to keep things ticking over.

We have a smaller age gap than you do, but it doesn’t feel as large as when he was physically tired and stressed from work and commuting. He came in a little while ago from a day out cycling with friends - he’s now fit and tanned and cheerful.

 

OldMusicGuy

sgx2000 said:

SouthCoastBoy said:

If i had a 20k db pension now, i would retire. Like many i dont like the uncertain nature of dc provision. 

I think that is the issue, if people had the certainty of an fully index linked dB pension, many, myself included would retire. I guess the only way to achieve this is via an annuity.

Annuities......
Now there is a minefield....
Better returns of late
But, the prospect of handing over all your hard earned....    buurrrr... shiver down my spine

I just did it and boy does it give me peace of mind. You don't have to hand over all your hard earned, I used part of my DC pot to give me a secure RPI linked income floor because I have no DB pensions. I was very happy with the deal I got, rates have dropped a bit since early this year though.

scobie

sgx2000 said:

scobie said:

sgx2000 said:

Thanks to all for the answers....

I (probably like many others) am 63 and struggling with the decission when to retire...
My pension incomes will cover my current expenses with a couple of hundred spare each month....

But i think the current economy is just totally unpredictable.....

I hear you.  

I’m 59 in August and ponder this all the time. I plan to retire in Thailand where I lived for many years and already have my retirement home by the beach. A couple of other properties - my U.K. house and an apartment in Bangkok would easily generate £2400 a month income - and other savings / pensions amount to £700-750k.  And I’ll get a full state pension in 2031. 

And yet. And yet . . . I just can’t pull the trigger.  I still enjoy my work; I’m almost hoping they tire of me and put me out ti pasture so I don’t have to make the decision myself. 

You fortunately appear to have a very nice steady income....

If my pensions where a little higher..........

Also, I doesn't help that my current income exceeds my expenditure by £1500 a month
So every month adds to my cash pot...

Hopefully, at some point, it will become an easier decision ....

The notion that keeping working increases the pot is a powerful one - and so too is the implied other point: that it decreases the length of time your pot needs to support you. 

But you’re right. The decision will become easier. If it’s not made for me as per my earlier post, I suspect that a milestone like reaching 60 in 15 months time will be a ‘natural’ trigger. 

scobie

sgx2000 said:

Us Paupers will probably be living on nearer £20K..

The most insightful comment I have seen is....
"If you retire at 65, you can expect 10 years of relatively good health, followed by 10 years of declining health"

So if you have more than you need to live comfortably...
Why are you wasting the good years??

I enjoy my work. I have huge amounts of freedom. I travel a bit - always enjoyable. I come and go as I please. I’m off to a golf tournament today and will be at a Halle concert in Manchester tonight - all part of work. 

I say this because right now - at this point in time - I don’t feel I’m wasting the good years.  

sgx2000

scobie said:

sgx2000 said:

Us Paupers will probably be living on nearer £20K..

The most insightful comment I have seen is....
"If you retire at 65, you can expect 10 years of relatively good health, followed by 10 years of declining health"

So if you have more than you need to live comfortably...
Why are you wasting the good years??

I enjoy my work. I have huge amounts of freedom. I travel a bit - always enjoyable. I come and go as I please. I’m off to a golf tournament today and will be at a Halle concert in Manchester tonight - all part of work. 

I say this because right now - at this point in time - I don’t feel I’m wasting the good years.  

I always remember reading a post...
Its said
If you would do the same job for no pay, then you're not really working...
Lol

plumb1_2

scobie said:

sgx2000 said:

Us Paupers will probably be living on nearer £20K..

The most insightful comment I have seen is....
"If you retire at 65, you can expect 10 years of relatively good health, followed by 10 years of declining health"

So if you have more than you need to live comfortably...
Why are you wasting the good years??

I enjoy my work. I have huge amounts of freedom. I travel a bit - always enjoyable. I come and go as I please. I’m off to a golf tournament today and will be at a Halle concert in Manchester tonight - all part of work. 

I say this because right now - at this point in time - I don’t feel I’m wasting the good years.  

Sounds like a perfect day, I like golf and love the Halle.