Pensions Planning: The NUMBER
in Pensions, annuities & retirement planning
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Your multiplier is a bit rough and ready (a bit like mine!), but the important thing is that you have something to aim for, and that's half the battle.:T
...and THANKS for your feedback!
Is your estimation method saying that if my NUMBER is £30k, I should have £360k
in pension/savings to fund it in future? (at age 65?)
There is no right or wrong method, its good to hear others ideas
...but I am not sure I understand your method...
For our present, retired lifestyle ie comfortable with a couple of holidays and waitrose food then 24K works well
More pension expected next year so the number will rise to 50k, followed by another addition of 7K a couple of years ahead
much more than enough so good holidays ahead and no scrimping at all for the rest of our lives. Having said that, tax will reduce that somewhat. It was all about saving and investing for retirement. Not at all bad considering we came from the poorest area in a big town. Made possible by hard work and frugality, like home baking and camping holidays of course but definitely worth it
Really surprised to see you shop in Waitrose after being frugal for so long? Don't think I could ever be rich enough to do all my shopping in there or M&S. I go to Waitrose as a treat sometimes to use their salad bar, colleague comes with me & fills her basket every time, much to my horror . Still, my mortgages should be paid off in 7 years, she is on IO with no savings scheme to pay off capital....
Well done on what you've achieved. It would be interesting to know people's backgrounds & how you're faring compared to your parents. I have a better job than my father did but because he was in a very generous works pension he had a fairly comfortable retirement. Whereas I had a lot of time off when I had children so I have a lot of catching up to do :rolleyes:
I never shopped at waitrose until this year. Background, very poor ie money not love or aspirations. 7 children, me oldest. 11 plus all of us. Parents did without and we all went to uni or college. Beautifully cared for children, clever parents who didn`t have any chances. We have all done well but only because our parents gave us the springboard
Being frugal in my immediate family wasn`t about doing without, on the contrary. We ate all hm and had hm clothes, chickens, home grown veg. Two foreign camping hols in 30 years and lots of camping in the uk. Our children are doing even better than us as the aspirations went down the family. The best thing is that we are all very happy as we appreciate all we have earned. No civil service pensions by the way just sheer savings and the hard route but with an eye to `getting old`
I agree with you that being frugal doesn't mean going without, it's all about getting more for less. So, I will happily fly Ryanair & Sleazyjet & book a small car to give me more hols for my money, whereas friends 'wouldn't lower themselves' (their words!) and have less hols as a result (or the same, but bung them on the credit card :eek:).
Yes...a great achievement...and not just financially...well Done!
Knowing (estimating) one's NUMBER....or range of NUMBER's (Basic...comfortable....Luxury) allows us to know
what we can realistically expect in retirement (or semi retirement).
Personally I prefer to aim lower for expectations, but then work hard to do better and reap the rewards.
More difficult if you do not calculate your NUMBER in the first place!
Whether the state pension can survive is of course another question. I can see successive governments of whatever colour making the SRP means tested, and even robbing the personal funds we are trying to build up for our own provision. Don't think it can't happen because it has.
But what is so important about this thread is that it brings into stark reality the sheer amount of money we will need to maintain any semblance of a similar standard of living in retirement to that which we enjoy during our working lives. And the only opportunity we have to improve this is while we are working. In spite of the faint hope of a premium bond win, or discovering a long lost cousin in Australia who owns a gold mine but has no other relatives! So thank you again for starting it.
I would feel vunerable with only £360k to fund £30k income.
If you start with £360k, add 4% growth pa, but deduct £30k pa (not increasing).... the money runs out at age 80.
I know we will probably not make 80, but this raises another aspect of the NUMBER: How much safety buffer should we build in for care costs in later life?
The way the government is going, stripping out our pensions value and means testing everything... I do start to wonder if we should PLAN to run out at age 80....then go and BEG for our daily bread...or go to the clinic in Switzerland!:cool:
Forgive the newbie question, and the belated reference to a long-forgotten post (it was #19), but what is this "lifetime spreadsheet" of which you speak? Is it something you worked out for yourself, or is there a template somewhere that I could crib?