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  • FIRST POST
    • Gatser
    • By Gatser 14th Dec 09, 1:44 PM
    • 578Posts
    • 213Thanks
    Gatser
    Pensions Planning: The NUMBER
    • #1
    • 14th Dec 09, 1:44 PM
    Pensions Planning: The NUMBER 14th Dec 09 at 1:44 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 57
    • swindiff
    • By swindiff 9th Nov 17, 1:37 PM
    • 313 Posts
    • 131 Thanks
    swindiff
    Would you be in a position to draw on the DC portion of the pension and defer the DB part until 60. Might be worth doing the sums to see how that would work out.
    Last edited by swindiff; 09-11-2017 at 1:42 PM.
    • bluenose1
    • By bluenose1 9th Nov 17, 7:08 PM
    • 1,979 Posts
    • 3,193 Thanks
    bluenose1
    Would you be in a position to draw on the DC portion of the pension and defer the DB part until 60. Might be worth doing the sums to see how that would work out.
    Originally posted by swindiff
    Yes, I would be able to do that. Thanks it is definitely worth me considering.
    I have spent ages calculating the optimal level of additional DC but haven’t really thought yet about deferring DB to 60.
    Doesn’t help that the investment builder doesn’t have a Salary Sacrifice calculator so doesn’t reflect the true difference to salaries.
    Money SPENDING Expert

    • Stubod
    • By Stubod 9th Jan 18, 1:44 PM
    • 486 Posts
    • 339 Thanks
    Stubod
    ..sorry but I thought it was time for a re-boot of this rather good thread.

    It has now been 12 months since we "pulled the plug" on work. I had originally planned to spend around £30k in retirement, (compared to around £24k we spent while we were working). However despite our best intentions we only managed to spend £22k last year...so in theory we can carry £8k forward to spend this year!! , although I fear old "savings" habits may die hard....I just hope I don't as we have some cash to burn.
    • atush
    • By atush 9th Jan 18, 2:33 PM
    • 16,821 Posts
    • 10,497 Thanks
    atush
    At least you can buy a new car for cash with all that savings when you need one lol.

    I will have ZERO problem spending more than 22K lol.
    • MallyGirl
    • By MallyGirl 9th Jan 18, 2:53 PM
    • 2,740 Posts
    • 7,746 Thanks
    MallyGirl
    me neither! My projected fixed and variable costs come to more than that (10 years from retirement) and I will certainly be spending on travel/entertainment/hobbies on top.
    • TBC15
    • By TBC15 9th Jan 18, 3:46 PM
    • 495 Posts
    • 251 Thanks
    TBC15
    ..sorry but I thought it was time for a re-boot of this rather good thread.

    It has now been 12 months since we "pulled the plug" on work. I had originally planned to spend around £30k in retirement, (compared to around £24k we spent while we were working). However despite our best intentions we only managed to spend £22k last year...so in theory we can carry £8k forward to spend this year!! , although I fear old "savings" habits may die hard....I just hope I don't as we have some cash to burn.
    Originally posted by Stubod
    How much/years do you keep in the war chest for when investments go south? Starting to make my plans.
    • enthusiasticsaver
    • By enthusiasticsaver 9th Jan 18, 3:50 PM
    • 6,612 Posts
    • 13,910 Thanks
    enthusiasticsaver
    We are aiming for £30k this year as first year with us both retired. No plans for big holidays this year but some home projects which could be expensive so they may have to come from what I call the capital expenditure account rather than income.
    Debt free and mortgage free and early retiree. Living the dream

    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
    • Stubod
    • By Stubod 9th Jan 18, 4:58 PM
    • 486 Posts
    • 339 Thanks
    Stubod
    How much/years do you keep in the war chest for when investments go south? Starting to make my plans.
    Originally posted by TBC15
    Approx half our funds are in "savings", (mainly nsi PBS and Index linked..and yes probably way too much but I am VERY cautious), and we have a further £100k available for when/if the shares go South for a holiday of their own...
    • westv
    • By westv 9th Jan 18, 5:14 PM
    • 4,546 Posts
    • 2,138 Thanks
    westv
    Can someone remind me, is the withdrawal percentage (4%, 3.5%. 2% or whatever) based on the total portfolio including cash?
    • Linton
    • By Linton 9th Jan 18, 5:20 PM
    • 9,395 Posts
    • 9,529 Thanks
    Linton
    Can someone remind me, is the withdrawal percentage (4%, 3.5%. 2% or whatever) based on the total portfolio including cash?
    Originally posted by westv
    in my view....
    Total investment portfolio but not emergency cash or buffer cash both of which are available for short term use. So only include cash if you actually hold it and regard it as part of your investments eg as a replacement for bonds which could be transferred to equity or bonds whenever you wanted.
    • kev2009
    • By kev2009 9th Jan 18, 5:26 PM
    • 227 Posts
    • 307 Thanks
    kev2009
    Just came across this thread, interesting ready - what seems to be the consensus on what is required for a simply person to liveon whilst in retirement? I seem couples have menioned 22k, some 30k but didn't see any for a single person or perhaps i missed them when skimming through the thread?

    Would it be about half what couples need?

    I'm a fair way off retirement but currently single and been looking at my pension recently and wondering if it will be sufficient and if i could retire before 68

    Thanks

    Kev
    • crv1963
    • By crv1963 9th Jan 18, 5:49 PM
    • 303 Posts
    • 711 Thanks
    crv1963
    Just came across this thread, interesting ready - what seems to be the consensus on what is required for a simply person to liveon whilst in retirement? I seem couples have menioned 22k, some 30k but didn't see any for a single person or perhaps i missed them when skimming through the thread?

    Would it be about half what couples need?

    I'm a fair way off retirement but currently single and been looking at my pension recently and wondering if it will be sufficient and if i could retire before 68

    Thanks
    Originally posted by kev2009
    Kev
    Originally posted by kev2009


    I think the general rule is look at your current spending and what you think you'll spend when retired. For instance housing costs- rented vs mortgaged and will that be paid off by retirement? Some bills wont go down, utilities, council tax, TV licence etc. What will go up? Petrol costs, entertainment?


    We put all our current costs down, subtracted work related costs- travel to work, coffees, professional expenses, we rounded up costs like utilities- may need heating on daytime a bit, maybe use a bit more electricity, added a bit more for entertainment/ days out. Figured for us hobby money and came to our figure.


    How frugal you want to go, how do you balance having a life now against a retired life? What do you want to do in the next phase? For me it wasn't a pipe and slippers nor 6 cruises a year.


    Our figure is roughly 12k to comfortably house, heat and feed then 12k (2 of us) dogs, hobbies, holidays, car(s) and general repairs with a 10k savings for new roof/ emergency repairs.


    Be generous to yourself but not over the top is my advice!


    Oh and don't forget to factor in your SP. We aim to go at 60 (me) and 57 (wife) but taking DB pension at 55 and then changing direction/ work and saving as much as possible to bridge the gap between retiring and SP starting.
    Last edited by crv1963; 09-01-2018 at 5:57 PM.
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
    • MallyGirl
    • By MallyGirl 9th Jan 18, 5:50 PM
    • 2,740 Posts
    • 7,746 Thanks
    MallyGirl
    I would expect a single person to be more than half a couple.

    Council tax single person discount is only 25% not 50%, lighting/heating a room costs the same if one or 2 people in it, cooking for one tends to be more than half of cooking for 2 (fuel), couples may share a car in retirement, etc.
    • kev2009
    • By kev2009 9th Jan 18, 6:26 PM
    • 227 Posts
    • 307 Thanks
    kev2009
    Thanks, Yeah i suspect the house and bills would be the same regardless of how many people were in it pretty much although maybe a little less on electricity unless 1 person has several things running in different rooms etc. I don't have a final salary pension as most of these are rare and due to my age a lot had stopped prior to getting a job. Therefore I suspect pension wont be as favourable but I am contributing. At the moment i beleive my pension is estimated to be approx 8k a year, although as I have over 20 years to go, i'm trying not to read too much into the prediction as its a long time and no one knows how markets will be in terms of pension growth and also what growth my salary may have etc. If i change some setting on the pension calculator and I say i want no tax free allowance, no guaranteed period, 0% to anyone else and a 3% increase a year I believe it would get to around 15-16k a year and then the state pension on top of approx 8k which i'm currently in line to get subject to me contributing another 10 years worth of contributions which fingers cross wont be a problem. I think nearer the time say 55 i might seek advise but jsut trying to get a idea for now to see if i'm on the right plan. In theory i will have no mortgage and own the property outright as that is due to be paid off when i retire, but i'm also trying to make over payments to hopefully have it paid of soon, hopefully by the tie i'm 60 fingers crossed.

    Kev
    • crv1963
    • By crv1963 9th Jan 18, 7:22 PM
    • 303 Posts
    • 711 Thanks
    crv1963
    Thanks, At the moment i beleive my pension is estimated to be approx 8k a year, although as I have over 20 years to go, i'm trying not to read too much into the prediction as its a long time and no one knows how markets will be in terms of pension growth and also what growth my salary may have etc.

    Kev
    Originally posted by kev2009

    Just keep plugging away, we've only over the last year or so seriously looked at it all. I read up as much as I could, played around a bit (no a lot) with our figures and looked how we can save a bit more- looked at best places to save.
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
    • DairyQueen
    • By DairyQueen 9th Jan 18, 9:19 PM
    • 294 Posts
    • 459 Thanks
    DairyQueen
    but didn't see any for a single person or perhaps i missed them when skimming through the thread?Kev
    Originally posted by kev2009
    You are right to be cautious. No offence to the fellow forum contributors but it seems that the vast majority are in couples. This is a very big advantage when you plan retirement. At the very least both partners have some SP income. Most have enough to ensure the max (or close to) SP. In addition, there are all kinds of tax benefits available to married couples that are denied to single people.

    I am actually one of a couple but circumstances dictate that OH and I run separate properties (individually owned) and live apart during the week. This means that I know pretty much the difference between singledom and coupledom.

    My biggest additional cost when OH is here is the grocery bill (food). The extra cost in water is marginal. My Council tax is only 25% below the payment due for a couple. I have calculated that, other than food costs, two can live (basic expenses) pretty much at the same cost as one. However those two will have much more income in retirement than people whom are single.

    Of course discretionary spending will be nigh on double the cost of a single person (clothes, hairdresser, travel, hobbies, etc.) but that spending si discretionary not mandatory.

    My parents (currently in their late 70s/80s) spend barely more than I do. - similar value properties and in the same area but OH is only here at weekends. Their spending is at around the 18k p.a.mark. Mine is around 17.5k. Our (other) property - main home of OH - costs more. He spends approx 20k on basic living costs despite being with me most weekends.

    I think that the government has missed something significant with the nSP. Most people will qualify for it in decades to come. Double it and It is sufficient for a couple to cover a basic standard of living for both. The same is not true for people on their own - and that includes widow/ers.

    The argument for individual pension income has never been stronger. Each member of a couple needs to have sufficient retirement income to survive independently of their OH/spouse.
    • Terron
    • By Terron 9th Jan 18, 9:33 PM
    • 238 Posts
    • 209 Thanks
    Terron
    Just came across this thread, interesting ready - what seems to be the consensus on what is required for a simply person to liveon whilst in retirement? I seem couples have menioned 22k, some 30k but didn't see any for a single person or perhaps i missed them when skimming through the thread?
    Originally posted by kev2009
    I am sure I posted my numbers sometime in the last year or so. I am a single person who is pretty much retired already at 58. They were 18k to live a frugal but not unpleasant life, 25k for a moderately comfortable life including some holidays.

    As it is it looks like I will have 45k pa from BTLs and pensions so I am looking at trying to make myself live in more luxusry, In the short term I will be paying for tripping on boxing day, - nearly £400 for new glasses and over £1500 to get my teeth repaired
    • justme111
    • By justme111 9th Jan 18, 11:09 PM
    • 3,002 Posts
    • 2,900 Thanks
    justme111
    why sad icon for paying for having your teeth repaired? it is great that you are enhancing your life by it and have money to do it. You should be excited about it
    • DairyQueen
    • By DairyQueen 9th Jan 18, 11:11 PM
    • 294 Posts
    • 459 Thanks
    DairyQueen
    and over £1500 to get my teeth repaired
    Originally posted by Terron
    Believe me, it could be a lot worse. My teeth have cost me almost £16000 since 2012. It's this kind of expense that should be factored into retirement plans but s rarely considered. I have also been involved in a costly planning dispute that hit me from nowhere at the end of 2016. I won't even mention how much that has cost (ouch!)
    • BOBS
    • By BOBS 10th Jan 18, 9:58 AM
    • 2,791 Posts
    • 2,127 Thanks
    BOBS
    Ive tried to do a rough budget of what money we will need to keep us going based on our current lifestyle and it doesnt look too bad ..... which makes me think I have missed something major !!

    Monthly Outgoings
    Mortgage ................ £0
    TV Licence .................. £12
    House & Contents Ins... £15
    Car Insurance ..............£25
    Car Tax ...................... £25
    Car MOT/Upkeep ..........£40
    Electric ..................... £50
    Phone & BB .............. £40
    Rates ....................... £80
    Mobiles .................... £30
    Groceries, toiletries etc £260
    Christmas / Birthdays £80
    Oil for heating ............ £80
    Petrol ..................... £85
    Money for daily exp..... £500

    Total exp per month = £1322
    Total exp per year = £15864
    SP £155 x 2 x 52 = £16120

    Have a bit of leeway here, then add on hopefully a decent amount of ISA savings (hopefully £150k) for repairs, emergencies, car upgrades etc., then group together the various pensions we have between us and all in all doesnt look too bad.
    We plan to hopefully not work right up to age 68 and will have a pot put aside to save a few years worth of spending before SP kicks in.
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