Retirement - Actual vs Expectation

Pat38493

By the way I'm not sure if anyone asked on this thread - when you say you have 2 full state pensions have you double checked this for sure on the gov.uk web site?  There are sometimes posters here who believe they have a full state pension but upon checking they find out that they actually need to top it up.  

Sea_Shell

Thanks for the mentions chaps! 😉

As long as your budget/pot allows for large one off spends, and is realistic, then you can do the sums.   

We based our initial "enough" on 3%.   We "needed" £15k pa, so £500k pot was our target.   However, that would 🤞 avoid depleted capital.   We could manage on a lot less, if capital was depleted.

We've just had a very spendy month😱...and I'll need to do some creative cashflow when the cc bill lands😁

pensionpawn

We're 1.5 retired (wife fully, me 50%) and we'll still have a mortgage well into retirement. My wife is drawing approximately the PA +25% and I'll be drawing the PA, giving us ~ £29k pa tax free. We don't have pots anything like the size of some on this forum however we plan to erode ours down to practically £0 by 85. Many will insist on huge pot values to permit that level of withdrawal however I'm not interested in preserving the pot value for offspring. Two out of our three have already bought their houses and the third is doing well with her savings. They'll have the house (at least half of it) in good time. So enjoy your pension pots and don't feel pressurised to keep on grinding away and accidentally become the richest person in the graveyard. Others have raised an important point about planning for the loss of one SP in retirement. We have addressed that by bumping up our reducing term life assurance (for the mortgage) in order to cover loss of SP to 75 in addition to paying off the mortgage. Enjoy the moment asap as tomorrow isn't promised...

gorgeousme

Sea_Shell said:

Thanks for the mentions chaps! 😉

As long as your budget/pot allows for large one off spends, and is realistic, then you can do the sums.   

We based our initial "enough" on 3%.   We "needed" £15k pa, so £500k pot was our target.   However, that would 🤞 avoid depleted capital.   We could manage on a lot less, if capital was depleted.

We've just had a very spendy month😱...and I'll need to do some creative cashflow when the cc bill lands😁

I am impressed that you only need £15k pa. Can I ask where do you live? I live in the South and council tax alone is just over £300pm

gorgeousme

Pat38493 said:

By the way I'm not sure if anyone asked on this thread - when you say you have 2 full state pensions have you double checked this for sure on the gov.uk web site?  There are sometimes posters here who believe they have a full state pension but upon checking they find out that they actually need to top it up.  

Yes all checked thank you

gorgeousme

pensionpawn said:

We're 1.5 retired (wife fully, me 50%) and we'll still have a mortgage well into retirement. My wife is drawing approximately the PA +25% and I'll be drawing the PA, giving us ~ £29k pa tax free. We don't have pots anything like the size of some on this forum however we plan to erode ours down to practically £0 by 85. Many will insist on huge pot values to permit that level of withdrawal however I'm not interested in preserving the pot value for offspring. Two out of our three have already bought their houses and the third is doing well with her savings. They'll have the house (at least half of it) in good time. So enjoy your pension pots and don't feel pressurised to keep on grinding away and accidentally become the richest person in the graveyard. Others have raised an important point about planning for the loss of one SP in retirement. We have addressed that by bumping up our reducing term life assurance (for the mortgage) in order to cover loss of SP to 75 in addition to paying off the mortgage. Enjoy the moment asap as tomorrow isn't promised...

Wise words indeed. We also want to use up all our money and just leave the house for the kids

Sea_Shell

gorgeousme said:

Sea_Shell said:

Thanks for the mentions chaps! 😉

As long as your budget/pot allows for large one off spends, and is realistic, then you can do the sums.   

We based our initial "enough" on 3%.   We "needed" £15k pa, so £500k pot was our target.   However, that would 🤞 avoid depleted capital.   We could manage on a lot less, if capital was depleted.

We've just had a very spendy month😱...and I'll need to do some creative cashflow when the cc bill lands😁

I am impressed that you only need £15k pa. Can I ask where do you live? I live in the South and council tax alone is just over £300pm

That was our starting figure, 5 years ago.   When we decided we had "enough".

We now have it forecast to be about £17,500*.    East Midlands.

Our council tax is £220pm


* We don't have a budget as such.   But I do track our spending and that is what I think we'll probably spend this year.   But I won't re-hash my whole thread here...you'll have to read it for more info 

chubsta

When I started thinking about retiring in earnest (I was very unhappy at work so wanted to retire as soon as possible) I made a plan which basically involved the following:
Pay off all debt - mortgage, car loan etc - I didn't want to service any debt on my pension and I was stunned at how many of my colleagues were saying they would have to work until their mid-60s because they still had a mortgage.
Create a spreadsheet of income/expenditure showing in detail every last penny spent each month, including saving for holidays and stuff so there are no 'nasty surprises'.
Work out how much my pension will actually be, take home, each month (I have a DB pension so that bit was reasonably easy.

Once I had all this set up I lived on what my pension would be each month for 3 years - this allowed me to see if my spending expectations were correct, but also had the massive bonus of allowing me to save the difference between my wages and pension amount each month, this became a pretty large lump sum.

Although I have only just retired I am confident that I will have enough money for one simple reason - in the last 3 years I have never needed more money than I will be getting each month, in fact I am still able to save, although im not sure what for as all my needs are covered.

And then, as a poster has stated above, the whole thing is only an interim measure anyway as at 67 I will get the full SP and combining this with my pension I will have a greater income each month than I ever had when I was working for 40 years, so if I have survived on less this long I am sure I will be ok!

TLDR - until you have a through and detailed breakdown of spending over a longish period of time you will never know if your pension will be enough, I feel you need to trial living off a pension-wage for an extended period to put your mind at rest, if it works, great, if it doesn't well at least you know where changes need to be made.

MallyGirl

I think that last paragraph is key. I am not yet retired as OH insists on seeing daughter through university but I have started tracking expenditure in much more detail. We are very lucky with our salaries but live on substantially less as we each Sal sac £50k into pensions. This is a good guide to what we actually need.

Eldi_Dos

@gorgeousme
                      With the workplace being what it is being able to find work for just a couple of days or hours that suit what you want to do are available.

One of the chaps I pick the click and collect up from, late fifties, changed to present job and only doe's morning shifts so he can get on golf course mid week afternoons and very happy he is with the new arrangement.

You have done well to get where you are, work does not need to be all or nothing you can tailor it to suit your needs.