Nest Egg

Running_man

Hi

A little background

Both retired wife 71 me 66

Worked hard and long all our lives

We have got enough money coming in to cover bills ,food etc

While we both here

Now the dilemma

We saved enough to have a small nest egg.This pays for holidays,emergencies etc

But how much would people advise keeping back for just in case or when there is only one of us

And I know it feels like how longs a piece of string

But does anyone have any kind of plan or are in same position

Keep_pedalling

No right answer here it will be different for everyone. In our case it is enough to pay for a live in carer for at least 3 years each but that is probably at the extream end of the scale.

Do you own your own house?

p00hsticks

You need to work out what reduction in both income and expenditure the survivor would experience when one of you died;

e.g. you'll lose one lot of state pension

do either of you have DB occupational pensions, and if so, is there a spouses pension ? Often this is onyl one third to one half of the regualr amount.

what savings will there be ? e.g. Do you currently each run a car so one coudl be got rid of ? There would be a 25% single person reduction in council tax …

Chances are you'll suffer a far greater drop in income than you would in expenditure, and so savings might be needed to cover the shortfall

Organgrinder

I often wonder about this. Much like I wonder about leaving money to children.

All I would recommend is you look at the income either of you would be left with and see if that is sufficient and then work from there.

You might want to list all income streams and all bills/expenditure taking into account reductions for being one person as opposed to being a couple as already mentioned.

As an example.

Predicted figures for me and Mrs O come SPA retirement.

As couple monthly figures are

Income (net) £4k

Outgoings £3k (averaged over whole year inc holidays etc).

Should I pass first.

Income (net) £2.2k

Outgoings £1.8k

Should Mrs 0 pass first

Income (net) £2.8k

Outgoings £1.8k

In both cases our savings figure remains unchanged. It just shows how much earnings disparity continues into retirement.

MarzipanCrumble

This is something that really troubles me - not personally, but in reading the various forums that impact on survivor income. The below is assumptions - but provides food for thought…

I think that usually women have a longer survival. So husband (main income provider usually) dies first. How is the widow provideded for? Is it enough? Are they just beyond means tested benefits? Does the widow know who to go for advice? How to appy for benefits?

Does the widow know how finances work? How to use comparison sites? When to change utilities etc provider? The fact that companies charge premium prices if you are out of contract and how to resolve this?

Brie

https://forums.moneysavingexpert.com/discussion/comment/82111335#Comment_82111335

When working as a debt adviser I was surprised by the number of intelligent and elderly women who needed our assistance as they had little idea of their household financial situation prior to the deaths of their husband. One was surprised to find at 90 that there was a mortgage on their home which she didn't have the income to service. Another was just bewildered at the concept of having to pay bills.

In a job in pensions admin decades back I was surprised at the number of men that would come in to discuss their imminent pension and weren't willing to make provision for their wives. A standard line was "it will be ok, I'm very healthy so won't be dying any day soon!" My reply was "well either of us could walk outside and be hit by a bus!" Credit to those who at least paused to think about their pension just a little bit more.

I'm so glad that things have changed some what.

middlewife

I was rather amused when in a meeting with hubby and our financial adviser to discuss taking an income from his SIPP; FA looked at hubby and asked how much he'd need - cue look of total confusion on his face ….. So I replied " do you want the poverty budget, the middle budget or the luxury cruise budget?" It's long been the case that OH works out how much we have left once bills have been paid, and I then spend it! He replied that I must have a fair idea as I hadn't given him a rounded figure and had also prepared budgets for different scenarios - sadly, we don't have enough for the luxury cruise level income, but have enough to continue our present standard of living.

To answer OP - you need to do a proper budget first to see if you really have enough income to meet your current needs, for the next 30 years, allowing for inflation. Be realistic and factor in everything. Also bear in mind that things will need replacing from time to time, big ticket items will need funding like replacement windows, roofing, bathrooms, kitchen, cars and furniture. As you age, things tend to even out because although you may have to pay for help with cleaning, shopping, gardening, decorating, you will spend less on travel, hobbies and holidays. Also consider if you want to leave anything financially by gifting before you die, if you want to save anything towards care home fees, private medical treatment. You could decide never to spend anything, or blow the lot gradually, only you can answer that……..

Running_man

Thank you for replies

We own our own house

No debt

Run one car which will be12 years old in January

Still runs well but is a heavy diesel only does 38 to gallon

So again another dilemma Do we replace it with something more economical.

Had it over 8 years

Then we have to factor in purchase price offset by more economical

It would probably be our last car as we keep them a long time

Did all house before retirement but know there will be ongoing costs

So hmmm alot to think about