Cloud Cuckoo Land

enthusiasticsaver

I have just read the bare bones of the PLSA retirement living standards report.  We are a  couple on the comfortable income so around £59k per year with no mortgage or debt and a comfortable investment buffer. When we were working we were slightly on higher than that but that was 6 years ago when we both took early retirement. We saved a lot from our income in the last few years of our working life which was how we knew we could afford to retire. 

I would say that there are many categories on there that we underspend so we spend nowhere near £130 a  week on supermarket food.  (Closer to £75-£80 with an occasional bottle of wine and we buy high quality food in a mixture of supermarkets, farm shops and local independent stores.) Roughly the same on eating out as we spend on groceries so £75 a week. 

We don't spend anything like £1500 each on clothes and shoes but we do spend a fair bit on hobbies and travel.  A long haul holiday can cost around £7-£10k for 2 people in a 4 star hotel and even a med holiday will cost around £4k for 2 people in a nice resort or villa with spending money and flights on top. Even holidays in the UK cost a fair bit and we tend to take the family away at least once every 2 years in high season to fit in with grandchildren at school. 

On the subject of replacing linen and towels we probably keep ours for about 5-7 years and then after that they go into the garage for rags or the local animal charity or recycling. 

We run two cars and have a country club subscription to a private gym, pool and exercise/social complex which we use on average 3 or 4 times a week. Those all cost a fair bit.  I think we gift more than the PLSA report suggests too. We could live on a lot less but as we don't have to we probably do live up to our income.  We save a bit every month but that goes to replacing cars, home improvements and long haul holidays. 

Like @[Deleted User] we did not really want to be frugal in retirement and in later life I have my eye on one of those retirement villages I am trying to persuade my 89 year old mum to move into with hairdressers, restaurants etc on site so we need to allow for that.  We have children but we have helped them financially through university and on to the housing ladder and we pay for holidays and meals out  and money to them and grandchildren. They get what is left but we will be looking after ourselves first so not really bothered about leaving a large inheritance. 

Everyone has their own idea what retirement will look like but I do not think the figures are that far off.  I disagree  that it is cloud cuckoo land to assume people can get there I can assure you it is perfectly realistic if you make saving for retirement as much a priority as other household expenditure through their working life preferably starting in their twenties.  Obviously that does assume you have a reasonable income to start with though and few if any gaps for redundancy/sickness. 

A few things which helped us reach our goal was not taking on consumer debt unless at 0% and on the odd occasion where we took out a car loan we paid it off early.  We also rarely paid for brand new cars (usually they were 1 or 2 years old) and did not go for high end luxury ones. We only moved twice in our lifetime so did not keep taking on bigger mortgages and we overpaid ours to finish just as our daughters started University. We still did holidays annually though and we went on meals out but on average 10% of our income went into longer term investments/pensions from about the age of 25. That ramped up to 30 or even 50% in later years (45 onwards) when the children were financially independent and the mortgage was gone. We also had the benefit of DB pensions for at least 30 years which I fully accept our children and grandchildren may not have. 

We encountered a few people along the way who said what was the point of saving for retirement when often people die before they get there.  My own father died at 63 still working (although financially he did not need to) but at the ripe age of 63 myself I would counter that some people die before retirement but many do not and we did not want to take the risk of not allowing for that in the same way we are allowing for costs for later life now as well when we are less mobile and independent. Many said we could afford a bigger house, better car, long haul holidays every year etc etc but we always tried to strike a balance between living in the present and preparing for the future. Now I am very glad we did it through a combination of luck (no ill health or redundancy, good jobs) and financial discipline. 

Albermarle

enthusiasticsaver said:

I have just read the bare bones of the PLSA retirement living standards report.  We are a  couple on the comfortable income so around £59k per year with no mortgage or debt and a comfortable investment buffer. When we were working we were slightly on higher than that but that was 6 years ago when we both took early retirement. We saved a lot from our income in the last few years of our working life which was how we knew we could afford to retire. 

I would say that there are many categories on there that we underspend so we spend nowhere near £130 a  week on supermarket food.  (Closer to £75-£80 with an occasional bottle of wine and we buy high quality food in a mixture of supermarkets, farm shops and local independent stores.) Roughly the same on eating out as we spend on groceries so £75 a week. 

We don't spend anything like £1500 each on clothes and shoes but we do spend a fair bit on hobbies and travel.  A long haul holiday can cost around £7-£10k for 2 people in a 4 star hotel and even a med holiday will cost around £4k for 2 people in a nice resort or villa with spending money and flights on top. Even holidays in the UK cost a fair bit and we tend to take the family away at least once every 2 years in high season to fit in with grandchildren at school. 

On the subject of replacing linen and towels we probably keep ours for about 5-7 years and then after that they go into the garage for rags or the local animal charity or recycling. 

We run two cars and have a country club subscription to a private gym, pool and exercise/social complex which we use on average 3 or 4 times a week. Those all cost a fair bit.  I think we gift more than the PLSA report suggests too. We could live on a lot less but as we don't have to we probably do live up to our income.  We save a bit every month but that goes to replacing cars, home improvements and long haul holidays. 

Like @[Deleted User] we did not really want to be frugal in retirement and in later life I have my eye on one of those retirement villages I am trying to persuade my 89 year old mum to move into with hairdressers, restaurants etc on site so we need to allow for that.  We have children but we have helped them financially through university and on to the housing ladder and we pay for holidays and meals out  and money to them and grandchildren. They get what is left but we will be looking after ourselves first so not really bothered about leaving a large inheritance. 

Everyone has their own idea what retirement will look like but I do not think the figures are that far off.  I disagree  that it is cloud cuckoo land to assume people can get there I can assure you it is perfectly realistic if you make saving for retirement as much a priority as other household expenditure through their working life preferably starting in their twenties.  Obviously that does assume you have a reasonable income to start with though and few if any gaps for redundancy/sickness. 

A few things which helped us reach our goal was not taking on consumer debt unless at 0% and on the odd occasion where we took out a car loan we paid it off early.  We also rarely paid for brand new cars (usually they were 1 or 2 years old) and did not go for high end luxury ones. We only moved twice in our lifetime so did not keep taking on bigger mortgages and we overpaid ours to finish just as our daughters started University. We still did holidays annually though and we went on meals out but on average 10% of our income went into longer term investments/pensions from about the age of 25. That ramped up to 30 or even 50% in later years (45 onwards) when the children were financially independent and the mortgage was gone. We also had the benefit of DB pensions for at least 30 years which I fully accept our children and grandchildren may not have. 

We encountered a few people along the way who said what was the point of saving for retirement when often people die before they get there.  My own father died at 63 still working (although financially he did not need to) but at the ripe age of 63 myself I would counter that some people die before retirement but many do not and we did not want to take the risk of not allowing for that in the same way we are allowing for costs for later life now as well when we are less mobile and independent. Many said we could afford a bigger house, better car, long haul holidays every year etc etc but we always tried to strike a balance between living in the present and preparing for the future. Now I am very glad we did it through a combination of luck (no ill health or redundancy, good jobs) and financial discipline. 

I/we are in a very similar position, and I agree with nearly everything you have said ( unusual in these types of threads  ) 
The only difference is that we have a larger grocery bill ( including quite a lot on alcohol), but do not eat out regularly. Also we are more ( but not totally) reliant on the DC pension I built up, and savings, with only modest DB pensions from the past. ( My OH was unable to work much, due to issues with one of our children ( still ongoing now they are an adult). Plus the state pension of course ( one in payment so far )
Also I have no desire to live in a retirement village, despite that we are surrounded by them, and they regularly send me invites to open days ! Just not my cup of tea and very heavy on the charges, so not very MSE !

enthusiasticsaver

@Albermarle Yes I know the retirement villages are heavy on the charges. I don't really worry about it being MSE (only that it is affordable). It is not a problem for my mum who has a very high pension because my Dad died young and she also now gets a pension from her second husband who died a few years ago.  She already pays high service charges on her apartment in the South East as it is in parkland.

What is it you dislike about the idea of living in one?  I wouldn't want to now as we are independent and in our early 60s but my mum is on her own and finds it lonely sometimes and at almost 90 is starting to find some tasks are more onerous for her.  She is also very sociable and loves bridge etc but has said to me in no uncertain terms I am not to put her in a care home if she starts having falls and cannot live independently anymore. Do you have a plan if you need help in later life? 

Sunnylifeover50plan

probably been said already but one of the first principles of retirement planning is to establish how much you plan/ hope to spend. It's a very individual thing.

zagfles

enthusiasticsaver said:

Everyone has their own idea what retirement will look like but I do not think the figures are that far off.  I disagree  that it is cloud cuckoo land to assume people can get there I can assure you it is perfectly realistic if you make saving for retirement as much a priority as other household expenditure through their working life preferably starting in their twenties.  Obviously that does assume you have a reasonable income to start with though and few if any gaps for redundancy/sickness.

It's not cloud cuckoo land to assume people can get there. Any couple with public sector DB pensions likely would with say a £20k pension each plus £10k state pension each. We likely would if we worked till state pension age (but there's no chance of that!)

It is cloud cuckoo land to tell people they need that sort of amount for a "comfortable" retirement. IMO.

[Deleted User]

enthusiasticsaver said:

Everyone has their own idea what retirement will look like but I do not think the figures are that far off.  I disagree  that it is cloud cuckoo land to assume people can get there I can assure you it is perfectly realistic if you make saving for retirement as much a priority as other household expenditure through their working life preferably starting in their twenties.  Obviously that does assume you have a reasonable income to start with though and few if any gaps for redundancy/sickness.


Although you have to live in the moment  too. Life is not all about retirement planning when you are younger and nor should it be. There is also no guarantee you will make it to your planned retirement age, or how how many years you have left after you reach it! Something of course none of us can provide the answer too!

LHW99

zagfles said:

enthusiasticsaver said:

Everyone has their own idea what retirement will look like but I do not think the figures are that far off.  I disagree  that it is cloud cuckoo land to assume people can get there I can assure you it is perfectly realistic if you make saving for retirement as much a priority as other household expenditure through their working life preferably starting in their twenties.  Obviously that does assume you have a reasonable income to start with though and few if any gaps for redundancy/sickness.

It's not cloud cuckoo land to assume people can get there. Any couple with public sector DB pensions likely would with say a £20k pension each plus £10k state pension each. We likely would if we worked till state pension age (but there's no chance of that!)

It is cloud cuckoo land to tell people they need that sort of amount for a "comfortable" retirement. IMO.

And has been said before (here, ifnot this thread) it does depend on what you have been used to when working. Our household income only ever reached $50k for one year. Mostly it has been between £20k-£30k,

We put 2 children through uni on that and paid off a mortgage (in the end) having had to move 3 or 4 times to follow jobs.

So the fact we have a retirement income around that level isn't a problem for us. If you are used to having a much higher income when working, its almost inevitable you would need a larger retirement income to be able to regard yourself as "confortable".

Tastiger

What I found thoroughly disheartening was last year it was £34k for a couple to meet moderate standards and I thought, "good we can just about do that". To then change it within a year to £43k - an increase of around 26% - puts it so far out of reach as to be demoralising. I have not noticed my outgoings rising by that amount. It makes me not wanting to engage with anything from PLSA. I have tracked my monthly expenditure for some time and know we don't need anything like £43k

zagfles

LHW99 said:

zagfles said:

enthusiasticsaver said:

Everyone has their own idea what retirement will look like but I do not think the figures are that far off.  I disagree  that it is cloud cuckoo land to assume people can get there I can assure you it is perfectly realistic if you make saving for retirement as much a priority as other household expenditure through their working life preferably starting in their twenties.  Obviously that does assume you have a reasonable income to start with though and few if any gaps for redundancy/sickness.

It's not cloud cuckoo land to assume people can get there. Any couple with public sector DB pensions likely would with say a £20k pension each plus £10k state pension each. We likely would if we worked till state pension age (but there's no chance of that!)

It is cloud cuckoo land to tell people they need that sort of amount for a "comfortable" retirement. IMO.

And has been said before (here, ifnot this thread) it does depend on what you have been used to when working. Our household income only ever reached $50k for one year. Mostly it has been between £20k-£30k,

We put 2 children through uni on that and paid off a mortgage (in the end) having had to move 3 or 4 times to follow jobs.

So the fact we have a retirement income around that level isn't a problem for us. If you are used to having a much higher income when working, its almost inevitable you would need a larger retirement income to be able to regard yourself as "confortable".

But the PLSA aren't saying you need a level of income similar to when you were working. Or related to the amount you had while working. That might make some sense. 

They are saying you need specified amounts, and those amounts for most people will far exceed what their income will be, and far exceed what they spent while working after taking off children and mortgage costs.

That's why it's "cloud cuckoo".

westv

zagfles said:

LHW99 said:

zagfles said:

enthusiasticsaver said:

Everyone has their own idea what retirement will look like but I do not think the figures are that far off.  I disagree  that it is cloud cuckoo land to assume people can get there I can assure you it is perfectly realistic if you make saving for retirement as much a priority as other household expenditure through their working life preferably starting in their twenties.  Obviously that does assume you have a reasonable income to start with though and few if any gaps for redundancy/sickness.

It's not cloud cuckoo land to assume people can get there. Any couple with public sector DB pensions likely would with say a £20k pension each plus £10k state pension each. We likely would if we worked till state pension age (but there's no chance of that!)

It is cloud cuckoo land to tell people they need that sort of amount for a "comfortable" retirement. IMO.

And has been said before (here, ifnot this thread) it does depend on what you have been used to when working. Our household income only ever reached $50k for one year. Mostly it has been between £20k-£30k,

We put 2 children through uni on that and paid off a mortgage (in the end) having had to move 3 or 4 times to follow jobs.

So the fact we have a retirement income around that level isn't a problem for us. If you are used to having a much higher income when working, its almost inevitable you would need a larger retirement income to be able to regard yourself as "confortable".

But the PLSA aren't saying you need a level of income similar to when you were working. Or related to the amount you had while working. That might make some sense. 

They are saying you need specified amounts, and those amounts for most people will far exceed what their income will be, and far exceed what they spent while working after taking off children and mortgage costs.

That's why it's "cloud cuckoo".

Not quite, They have detailed exactly what you might need for each level of income and it's exact cost. Anybody can then amend the list as they see fit.