How much do you think you’ll need to save up to retire on?
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I think what is often overlooked is that the lower an earner you are the higher percentage of that income you need in retirement. I knew that when I retired if anything I would need a higher income. This is because I had very small work related expenses (walk to work, no smart clothes required except by choice etc). If I had only 60% of my pre-retirement income (we'd been on short time since the crash) then my car would have had to go, not an option I was prepared to accept!
I think a lot of people on lower income come & read these threads & wonder if they are living in the same world & go away again, which is a great pity as the info is usually excellent & could be scaled down to suit oneself.0 -
We're a couple aged 43 and 42. Mortgage free in a house we could realistically downsize from at some in the future.
Ideally we want to have the choice to retire at age 55. We were aiming for a net annual household income of £30k but I am considering increasing this to £35k per annum for added comfort. We currently spend between £30-35k as a family of four now.
I am fortunate to have a DB scheme that will pay £12.5k from 60. This figure is in today's money and is already 'in the bag'. I'm still paying in, so it continues to grow, but I may move employers in the future so I incorproate my accrued benefits when working out our existing pension savings only. Both on track for full SP and hubby has a company DC, that we will draw down from to zero. We also receive around £2.5k in guaranteed passive income until age 62.
In simple terms we have already achieved the £30k from age 60, as long as hubby carries on contributing to his DC at the current rate. We have a savings gap between 55-60 and obviously any increase in the £30k target creates a further gap to address. I also want a lump sum saved too but not sure how much. My DB will give me a £20k lump sum and we could release £150k from downsizing. But we have a further 12 years of saving to address all these gaps. Our next steps are for me to pay into a DC so I can take advantage of my annual allowance pre 60 and for us to start saving into ISA's.
Just a couple of years ago I had an idea to retire at 55 but no actual plan to achieve this. I now have a solid and realistic plan in place, thanks mainly to this forum and its members.0 -
I think what is often overlooked is that the lower an earner you are the higher percentage of that income you need in retirement. I knew that when I retired if anything I would need a higher income. This is because I had very small work related expenses (walk to work, no smart clothes required except by choice etc). If I had only 60% of my pre-retirement income (we'd been on short time since the crash) then my car would have had to go, not an option I was prepared to accept!
I think a lot of people on lower income come & read these threads & wonder if they are living in the same world & go away again, which is a great pity as the info is usually excellent & could be scaled down to suit oneself.
I think that's a really good point bad memory. People with little chance of getting these big numbers must feel a little disheartened.
I'm aware that having a pension pot of 400kish and investments cash of a minimum of 250k is well out of the reach of many, never mind when people quote 6 figures!0 -
While working we spent about 24k per year, but when you are working 5 days a week with maybe 6 weeks hols per year you don’t really get much chance to spend it. In retirement we planned to increase our expenditure to nearer 35k..0
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I think what is often overlooked is that the lower an earner you are the higher percentage of that income you need in retirement. I knew that when I retired if anything I would need a higher income. This is because I had very small work related expenses (walk to work, no smart clothes required except by choice etc). If I had only 60% of my pre-retirement income (we'd been on short time since the crash) then my car would have had to go, not an option I was prepared to accept!
I think a lot of people on lower income come & read these threads & wonder if they are living in the same world & go away again, which is a great pity as the info is usually excellent & could be scaled down to suit oneself.
I agree badmemory. When I first started on this forum I was amazed at some of the figures banded about but I took the attitude of good on you, now what can I do for us in our situation and ask questions about our circumstances. Then we came to our plan which we are following- the we being very much a "royal we" as Mrs CRV turns cold at the whole thing, she would rather know the bottom line of how much and when!
I would say to people that are just starting the journey don't worry about what anyone else is doing/ has got, you're here for you. Or at least that was the way I approached it.CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!0 -
I agree that some of the numbers talked about in both the pensions and savings boards could seem completely daunting and unrealistic for the average person.
However, when I've asked questions the same (rich) posters have been incredibly helpful and have even resisted temptation to mock paupers like me
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This is more than I can say for my work colleagues who emailed me 101 gruel recipes when I moaned about a large vet bill.
So - if you are poor like me - still post and you'll get lots of help. 0 -
For those wondering about the larger numbers sometimes quoted...starting early is just so important...I opened a private personal pension over 30 years ago and made relatively modest contributions to it for a few years...then changed employer and entered a DB. Scheme....and didn't pay a lot of attention to the private pension...
Yet 30 years later it has become a pretty substantial 6 figure sum..which frankly still surprises me.
30 years of compounding (helped by ok markets) really is a wonder to behold.
So for those at the other end of the journey.....the larger numbers need not be fantasy land if you can start young enough (I think I was about 22) even with modest contributions. I wish this was better and more widely understood - it would make a huge difference to so many people.0 -
In addition to starting early - contributing enough is also very important. I do wonder how people think they are going to get 30+ years of happy retirement while only contributing single digit or low double digit percentages. Maybe they overestimate the benefits of compounding by not discounting fees and inflation?
In some ways auto-enrollment is set at such low percentages that it is harmful in giving people the idea that it might be sufficient. If it is only enough to keep them off means tested benefits what's the point?
Alex0 -
I think that's a really good point bad memory. People with little chance of getting these big numbers must feel a little disheartened.
I'm aware that having a pension pot of 400kish and investments cash of a minimum of 250k is well out of the reach of many, never mind when people quote 6 figures!
Agree that not everyone can get into 7 figures but people are living longer, so if you can’t then perhaps a 30 year retirement and retiring at 55 is not possible. Early retirement isn’t a right unfortunately. Like a lot of things it’s a luxury for those who can afford it.
It’s a downside of longevity in a way.0 -
In addition to starting early - contributing enough is also very important. I do wonder how people think they are going to get 30+ years of happy retirement while only contributing single digit or low double digit percentages. Maybe they overestimate the benefits of compounding by not discounting fees and inflation?
In some ways auto-enrollment is set at such low percentages that it is harmful in giving people the idea that it might be sufficient. If it is only enough to keep them off means tested benefits what's the point?
Alex
I think that is the whole point!CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!0
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