Pensions Planning: The NUMBER

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  • Marine_life
    Marine_life Posts: 1,059 Forumite
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    PipPip wrote: »
    At the time I thought my wife and I needed £50k pa and I would retire at 60. My outlook has changed a little since then. I am now targeting retirement at 55, in 7 years time and have lowered my target income somewhat. I now feel that £35-£40k will be sufficient based on current spending.

    For us this depends very much how much is in the discretionary spending bucket.

    Our normal living expenses come to around £25-30k per annum but I reckon we could easily double that with travel and other "non-essential" expenses which is why the "number" is such a personal thing.
    Money won't buy you happiness....but I have never been in a situation where more money made things worse!
  • westv
    westv Posts: 6,091 Forumite
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    That's the real unknown. How much will spending change once free time is unlimited?
  • Triumph13
    Triumph13 Posts: 1,734 Forumite
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    westv wrote: »
    That's the real unknown. How much will spending change once free time is unlimited?
    That's a key financial question, but for early retirement the key 'happiness' question is more how much spending ability are you willing to forgo to get that extra free time?
  • jerrysimon
    jerrysimon Posts: 343 Forumite
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    18 months and counting, retired at 56. For me its more important to look at monthly income than the annual figure, given my annual figure is less than half my leaving salary but with no NI, Pension and little tax my monthly figure is nearer 2/3rds of what I was getting before I left. Also helps that we have paid off the mortgage.

    Voluntary work and two new grandchildren keeps the happiness factor high :)
  • westv
    westv Posts: 6,091 Forumite
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    I'm not sure I see any difference between annual and monthly - one is just 12 times the other.


    My current figures indicate a pension income of 44% of my current salary end of this year or 50% in 2 years.
    However, after deduction of expenses getting to London for work each week, the net figure is 93% end of the year or 102% in 2 years.
    How much longer my wife wishes to work, when/if she will go part time and how she will take her CS pensions are also important aspects.
  • RuleTheWorld
    RuleTheWorld Posts: 145 Forumite
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    pension planning the number?

    hopefully its the same as todays earnings

    ie earnings less mortgage less NI less pension contributions
  • jerrysimon
    jerrysimon Posts: 343 Forumite
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    westv wrote: »
    I'm not sure I see any difference between annual and monthly - one is just 12 times the other.


    Fair point, but I think many compare annual salary to retirement annual salary and forget that deductions like NI and Pension payements no longer apply which for me was over £700/month.
  • Triumph13
    Triumph13 Posts: 1,734 Forumite
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    westv wrote: »
    I'm not sure I see any difference between annual and monthly - one is just 12 times the other.

    I can see Jerry's point. I bet if you asked a random group of people their annual salary then most of them would tell you the gross as that's the number on their contract. If you asked their monthly salary they'd tend to tell you the net as that's what goes into their bank account.
  • SmashedAvacado
    SmashedAvacado Posts: 1,262 Forumite
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    monthly current income
    less any saving
    less any mortgage and debt (assume debt fully repaid)
    less commuting costs (train, car park, suits, etc)
    add additional leisure costs (more golf balls and shoes)

    I think if you try to work it out on what you spend, then the problem is that larger items such as holidays, building works, cars, insurances get less accurate.
  • ams25
    ams25 Posts: 260 Forumite
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    2 years "retired" - our actual spend is about 10% higher than when working...but about 50% of gross earnings. That's due to no NI, little tax, no pension contributions, no savings, no mortgage payments. You need to work these out...it might surprise.
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