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  • FIRST POST
    • Gatser
    • By Gatser 14th Dec 09, 12:44 PM
    • 593Posts
    • 221Thanks
    Gatser
    Pensions Planning: The NUMBER
    • #1
    • 14th Dec 09, 12:44 PM
    Pensions Planning: The NUMBER 14th Dec 09 at 12:44 PM
    The NUMBER is how much income you need to "live comfortably"
    So What's your number?
    Very important for pensions planning, to know what you are aiming for.

    My Number? (for a couple)
    I calculated: 22,000
    based on
    Food 5,000
    Car/transport 5,000
    Bills/Utilities 4,500
    Holidays/Leisure 4,500
    Clothing/Cash/Xmas/Other 2,000
    Repairs/replacements 1,000
Page 67
    • MallyGirl
    • By MallyGirl 24th Jan 19, 7:26 PM
    • 3,826 Posts
    • 9,248 Thanks
    MallyGirl
    I just started my own - but have been tracking my bank account in excel for 20 odd years.
    • DairyQueen
    • By DairyQueen 24th Jan 19, 11:14 PM
    • 796 Posts
    • 1,466 Thanks
    DairyQueen
    Having read up on this post today, do you all create your own spreadsheets? Or is there a link to a basic one that I could start with?
    Many thanks - new to all this!
    Originally posted by Coppice10
    I create my own but MS provide some reasonable templates for starters:
    https://templates.office.com/en-us/Budgets

    Changing $ to is cosmetic.
    • enthusiasticsaver
    • By enthusiasticsaver 24th Jan 19, 11:43 PM
    • 8,765 Posts
    • 20,362 Thanks
    enthusiasticsaver
    I have a spreadsheet for recording expenditure. We have found since retiring our disposable income is much higher. No NI or pension deductions. No work clothes or commuting costs and lower tax due to lower gross income. The main reason is though we don't save any more beyond budgeting for annual costs like holidays and Christmas.

    However our entertainment budget is higher. We pay more on gas and electric as home more in the daytime than when working. Our holiday budget is higher as we go on more breaks than when working. We also now tend to treat ourselves to first class train tickets rather than basic and we don't skimp on theatre tickets so no more cheapest ones.

    We decided we needed a minimum of 2500 per month net. We actually get around 2900 once we include income from our income portfolio. We run two cars though and have an expensive leisure club membership although we have reduced it by moving to off peak hours.

    We could manage on a lot less if we just covered essentials and budgeted entertainment and holidays and got rid of one of our cars.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • shinytop
    • By shinytop 25th Jan 19, 3:25 PM
    • 387 Posts
    • 442 Thanks
    shinytop
    Gosh, all these spreadsheets! I have no idea what I spend on what and don't really want to know. I take more of a top-down approach. Rather than work out a 'number' and save up for it, I decided roughly when I wanted to retire, saved as much as I reasonably could and we will make do with what we have when I do. Fortunately what I have looks to be about enough; if not I'll have to do without some things. If I have too much money I'll simply buy more/more expensive things. I thought that's what everyone did?
    • TBC15
    • By TBC15 25th Jan 19, 4:18 PM
    • 801 Posts
    • 474 Thanks
    TBC15
    Unfortunately that may leave you open to the query “are you working love”. If anything requires a spot of planning, retirement does.
    • DairyQueen
    • By DairyQueen 25th Jan 19, 7:55 PM
    • 796 Posts
    • 1,466 Thanks
    DairyQueen
    Gosh, all these spreadsheets! I have no idea what I spend on what and don't really want to know. I take more of a top-down approach. Rather than work out a 'number' and save up for it, I decided roughly when I wanted to retire, saved as much as I reasonably could and we will make do with what we have when I do. Fortunately what I have looks to be about enough; if not I'll have to do without some things. If I have too much money I'll simply buy more/more expensive things. I thought that's what everyone did?
    Originally posted by shinytop
    If you have no idea how much you spend then how do you keep within your income. No offence but sounds like a recipe for debt to me.
    • LHW99
    • By LHW99 25th Jan 19, 8:47 PM
    • 2,020 Posts
    • 1,865 Thanks
    LHW99
    If you have no idea how much you spend then how do you keep within your income. No offence but sounds like a recipe for debt to me.
    Well during our working life, I kep an eye on whether the C/A balance was positive at the end of the month. If it wasn't I moved a bit in from savings, if it was I moved it back.
    Apart from ensuring all required insurances were in place, and basic bills were met on time, if we couldn't afford something like a holiday, we didn't have one.
    I do have a spreadsheet now (since the middle of last year) just to check that what I think was the case really is (it is!) and to ensure I know to what degree I will need to use SIPP income in future when we finally do fully retire (12 months or so..... or more ......)
  • jamesd
    If you have no idea how much you spend then how do you keep within your income. No offence but sounds like a recipe for debt to me.
    Originally posted by DairyQueen
    The "saved as much as I reasonably could" part may be the clue. Consider my decade plus with a savings ratio above 60%. I didn't and don't use a budget or very closely track spending because I don't need to. Of course I've been broadly non-extravagant and do pay attention to substantial exceptions to my base spending.

    If finances were tighter or I was inclined to engage in shopping as a pleasurable activity or buy and change cars or computers frequently the approach I use just wouldn't work and spending budgeting beyond core needs would be required.
    • DairyQueen
    • By DairyQueen 26th Jan 19, 6:31 AM
    • 796 Posts
    • 1,466 Thanks
    DairyQueen
    The "saved as much as I reasonably could" part may be the clue. Consider my decade plus with a savings ratio above 60%. I didn't and don't use a budget or very closely track spending because I don't need to. Of course I've been broadly non-extravagant and do pay attention to substantial exceptions to my base spending.

    If finances were tighter or I was inclined to engage in shopping as a pleasurable activity or buy and change cars or computers frequently the approach I use just wouldn't work and spending budgeting beyond core needs would be required.
    Originally posted by jamesd
    That sounds very like how my OH ran his finances before I met him. It worked fine for him because his salary was paid net of generous pension contributions, and his income was sufficiently high that he always had a surplus. However, he had no incentive to seek out value on things like insurance, and his management of the surplus was grim.

    I don't track expenses monthly but create a budget at the beginning of each year. Non-discretionary expenses from the previous year are my starting point. Then I broadly analyse non-discretionaries to reach the total. I allow 1/2% of property value for maintenance. Once inflation is added I have my income requirement for the year.

    This allows me to make year-on-year comparisons.

    One-off, high-value spends (cars, white goods, holidays) are funded from savings.

    This method should fit within our retirement income strategy. We will use UFPLS to make a single withdrawal to fund any deficit between guaranteed, regular income and the expenses forecast for the coming year.
    • AnotherJoe
    • By AnotherJoe 26th Jan 19, 6:42 AM
    • 14,946 Posts
    • 17,981 Thanks
    AnotherJoe
    If you have no idea how much you spend then how do you keep within your income. No offence but sounds like a recipe for debt to me.
    Originally posted by DairyQueen
    There's a difference between knowing how much you spend, and how much you spend on what.
    The OP said the former, not the latter. I operate the same way, I know what I'm spending per month because my bank balance stays roughly constant, but i couldn't tell you what i spend as a % in all the different categories such as food, motoring, entertainment, holidays etc etc. If I find my bank balance seems to be decreasing I'd reign back overall spending, maybe decide i wont go on that 3k holiday I've been fancying for a while, etc.

    I could decide what the allocation is between (say) "entertainment", holidays, car etc at the start of the year and then have budgets and move thinsg between them, but I find i dont need to, and such allocations are arbitrary anyway. It might be useful for people who overspend to do this, or to do it to analyse why you are overspending, but if you "naturally" live within your means then you get a feel for whats reasonable.

    Then there's also the situation which I'm now in that to a certain extent, and so are many here, I should be spending beyond my means, because I have no particular wish to snuff it with a million in the bank, forgoing (say) holidays in the Seychelles and Hawaii, or suffering flying economy instead of business to meet an arbitrary budget. Of course, you could argue that as long as your budget includes that burn down then fair enough as you dont want to exhaust that million when there's still (say) 20 years to go. Not of course you know how long that period is.
    Last edited by AnotherJoe; 26-01-2019 at 6:51 AM.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • bugslet
    • By bugslet 26th Jan 19, 7:28 AM
    • 6,629 Posts
    • 31,452 Thanks
    bugslet
    I've never had a budget as such. I know as long as I don't spend more than 150.00 per week on food incl dog food, toiletries, going out, discretionary stuff then I'm ok. Being old school, I draw that in cash once a week.

    As for spreadsheets, wouldn't know how to do one. I know my pension will be circa 400 k by the end of the year. I know that minimum I will have 250k in the bank, but more likely to be 400+k. It all broadly brings it to what I live on now, 25k pa. I've future proofed the house over the last few years, mortgage has <20k to pay off.

    I'm definitely of the jump and it will happen mindset.

    PS that translates to my business as well. I'm rubbish at maths and would probably would fail the financial side of the CPC to run a haulage business, but someone told me a long time ago, fuel + wages should be 50% of your costs and it worked. Definitely a folllower of the KISS orinciple
    • shinytop
    • By shinytop 26th Jan 19, 7:36 AM
    • 387 Posts
    • 442 Thanks
    shinytop
    If you have no idea how much you spend then how do you keep within your income. No offence but sounds like a recipe for debt to me.
    I was being a bit flippant and like others I do know how much I spend, just not on exactly what. I'm in the fortunate position of not having to watch every penny so if I've spent more that the average in a period then it doesn't matter. It doesn't make any difference to me whether I've spent more on food, clothes or whatever and knowing won't change the decisions I make. I do understand that others want to/have to know this; it's just not for me. I have spreadsheets but they work out how much I'm going to have and how little tax I can get away with paying rather than what I'm going to spend it on.
    Last edited by shinytop; 26-01-2019 at 7:39 AM.
    • Doglegger
    • By Doglegger 26th Jan 19, 8:01 AM
    • 44 Posts
    • 59 Thanks
    Doglegger
    If you have no idea how much you spend then how do you keep within your income. No offence but sounds like a recipe for debt to me.
    Originally posted by DairyQueen
    I'm with Shinytop on this one. Not everyone has the inclination to track everything they spend and categorise it on a spreadsheet. Fair play to those that want to but I spend enough of my working life on excel without wanting to do so willingly outwith that.
    We know what currently comes in at the start of month. We know what's there at the end of it (if any). We know what we will get from our pensions and at what stages. We know what bills we will bin and what new ones we will take on. We know what things we would like to do in retirement and roughly how much they cost. We know how much of a buffer we would need to help us sleep at night. These are all big lumps of numbers and not micro-managed pieces of data.
    Back of a fag packet economics maybe but I'm pretty sure it's not going to lead to a road to debt. We have no clue what surprises both good and bad are round the corner for any of us so fussing over a spreadsheet for years prior to retirement is more than likely going to give the same results as a rough bit of simple but sensible arithmetic.
    • westv
    • By westv 26th Jan 19, 9:34 AM
    • 4,835 Posts
    • 2,420 Thanks
    westv
    I'm also one for dealing in "gross" numbers rather than drilling down into fine detail.
    • Terron
    • By Terron 26th Jan 19, 12:19 PM
    • 483 Posts
    • 486 Thanks
    Terron
    If you have no idea how much you spend then how do you keep within your income. No offence but sounds like a recipe for debt to me.
    Originally posted by DairyQueen

    It sounds like the best way to do things to me. It is possible to achieve the same results as someone who makes detailled budgets with much less effort.


    Of course you can restrict your spending by budgetting and keep it under your income so that you accumulate wealth. But if you develop the habit of only spending what you have available and allocate money for savings first you get the same result for virtually no effort.


    In my first year at university there was no ATM in town. I would withdraw 20 in cash at the start of the week, Some weekend s I would run low but I could not get any more out so I would just make do with what I had. In my second uear an ATM had been installed byt I kept the same habot (except that bank holiday mondays were less of a problem)..



    I had a simple budget of how much I could afford to spend a week beyond costs like my rent and course books. Taking out cash once a week and then just spending that forced me to stick to it. I did a similar budget when I started working, but I didn't redo it when my pay increased. I did increse the ammount I withdrew but only when I was finding myself short and was sure I could afford it.



    Since I was spending less than I earned money accumulated. Some I spent to treat myself such as a nuce (but cheap) holiday. Some went on cars, but nothing flashy. I started paying into pensions. Then I spent all my savings on a deposit for a flat. and the mortgage started taking a chunk.I moved a couple more times, each time wiping out my none pension savings. Then I settled dow for 18 years and my savings started to really build up.



    Xurrently the only budgetting I do is to check my main bank account towards the end of each month to make sure there is enough to cover my creadit card bills. Uf not I transfer some in. Also I use an old account to put money aside to pay my tax.
    • TBC15
    • By TBC15 26th Jan 19, 3:29 PM
    • 801 Posts
    • 474 Thanks
    TBC15
    I've never had a budget as such. I know as long as I don't spend more than 150.00 per week on food incl dog food, toiletries, going out, discretionary stuff then I'm ok. Being old school, I draw that in cash once a week.

    As for spreadsheets, wouldn't know how to do one. I know my pension will be circa 400 k by the end of the year. I know that minimum I will have 250k in the bank, but more likely to be 400+k. It all broadly brings it to what I live on now, 25k pa. I've future proofed the house over the last few years, mortgage has <20k to pay off.

    I'm definitely of the jump and it will happen mindset.

    PS that translates to my business as well. I'm rubbish at maths and would probably would fail the financial side of the CPC to run a haulage business, but someone told me a long time ago, fuel + wages should be 50% of your costs and it worked. Definitely a folllower of the KISS orinciple
    Originally posted by bugslet
    I take it you do own a dog
    • bugslet
    • By bugslet 26th Jan 19, 8:37 PM
    • 6,629 Posts
    • 31,452 Thanks
    bugslet
    I take it you do own a dog
    Originally posted by TBC15
    Nope, just hoarding in readyness for Brexit/zombie apocalypse/when the dementia n kicks in.
    • akh43
    • By akh43 28th Jan 19, 9:24 PM
    • 1,264 Posts
    • 3,189 Thanks
    akh43
    I am planning to take early retirement at 60 on 8 March this year so less than 6 weeks left to work.

    I will be getting my DB works pension, which going off last year's forecast will give me approx 1,070 a month (12,840 a year) after taking the maximum lump sum of approx 85k (this includes approx 48k AVC's I started in 2014). This will increase slightly due to pay increase this month.

    I don't bother with spreadsheets, but due to paying approx 1k a month in AVC's for past few years my take home pay has between 850-950 a month and I have not struggled, in fact I have saved quite a bit during that time, so I am sure I will be fine with my monthly pension amount.

    It is only me, no mortgage or debt and have very small monthly outgoings as regularly reassess these and have approx 90k in savings.

    I have started a list of things I want to do on retirement, with work on the house at the top of the list and some holidays, but I am confident I will manage fine moneywise.
    • michaels
    • By michaels 28th Jan 19, 10:00 PM
    • 22,575 Posts
    • 103,769 Thanks
    michaels
    The "saved as much as I reasonably could" part may be the clue. Consider my decade plus with a savings ratio above 60%. I didn't and don't use a budget or very closely track spending because I don't need to. Of course I've been broadly non-extravagant and do pay attention to substantial exceptions to my base spending.

    If finances were tighter or I was inclined to engage in shopping as a pleasurable activity or buy and change cars or computers frequently the approach I use just wouldn't work and spending budgeting beyond core needs would be required.
    Originally posted by jamesd
    60%- pah, I put 450% of my pre tax income into pensions and only work 3.5 days a week.
    Cool heads and compromise
    • Scrounger
    • By Scrounger 29th Jan 19, 5:57 AM
    • 761 Posts
    • 368 Thanks
    Scrounger
    I put 450% of my pre tax income into pensions...
    Originally posted by michaels
    Please explain (I thought the max allowed was 100%) ?

    Scrounger
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