Retirement

[Town End Farmer Giles]

I agree with what a couple of others have said, it is a scare story to keep you investing into pensions longer.

I earn a decent wage, my wife is ok but often earns below national average (she is freelance so it changes a lot).

If we added up what we earn now, take off things like the higher tax I pay, take away pension contributions, take away what we are putting into savings, the £2-3k I spend on commuting, and the big one, mortgage payments, I bet that is not anywhere close to the moderate level.

But when I look at our lives, we don't have cash to spread about and do need to think about the bigger purchases. We are not skint either. Things like the old car needing replacing in a hurry were annoying but achievable without a worry. I would say that is a moderate life.

And all this is with two teenagers at home, needing clothing and feeding. If my son left home, the electricity bill alone would drop significantly!

I'm aiming for £40-£45k income for the two of us in retirement, but occasionally I wonder if that is too much and will have me working for longer than I need.

Don't know your circumstances, tastes etc but that's more than my budget.

Broadly speaking £500 a month on bills (council tax, utilities etc) 500 groceries, 500 a month pocket money i.e. clothes,nights out (for me, missus rarely bothers), 500 a month towards holidays. Some months more, some less. Around 400 this month so far on trainers and couple of pairs of shorts but might spend nowt next couple of months. Or more if I see something i like...

Appreciate I'm council tax band A so that's only 145 a month, some on here will no doubt pay a lot more. Odd one offs like season ticket, car service, insurance on top but £25k seems ok here. With the buffer of being able to dip into lump sum/past savings for more when needed.

Will spend more on holidays when missus retires but that 2-3 years away mebbes, and we'll have the bonus then of more flexibility .

 

[Will e]

If my daughter left home the hot water bill would decrease by the gdp of a small country

Aye, same here , two 30 something daughters and the wife, I remember phoning the water company quite a while ago (we're on a water meter) about the bill, the woman said are you sure you haven't got a leak, aye, I've got three of them. So you can imagine the other utility bills.

 

[big bill]

Don't know your circumstances, tastes etc but that's more than my budget.

Broadly speaking £500 a month on bills (council tax, utilities etc) 500 groceries, 500 a month pocket money i.e. clothes,nights out (for me, missus rarely bothers), 500 a month towards holidays. Some months more, some less. Around 400 this month so far on trainers and couple of pairs of shorts but might spend nowt next couple of months. Or more if I see something i like...

Appreciate I'm council tax band A so that's only 145 a month, some on here will no doubt pay a lot more. Odd one offs like season ticket, car service, insurance on top but £25k seems ok here. With the buffer of being able to dip into lump sum/past savings for more when needed.

Will spend more on holidays when missus retires but that 2-3 years away mebbes, and we'll have the bonus then of more flexibility .

So is it fair to say you are spending about 2k a month ( including putting away £500 a month towards a holiday) my biggest concern is if I retired, I would be spending more during the day doing things I would like to do then when I’m at work where I take my own sandwich’s for dinner and basically don’t spend anything during the week.

 

[DaveH]

Don't know your circumstances, tastes etc but that's more than my budget.

Broadly speaking £500 a month on bills (council tax, utilities etc) 500 groceries, 500 a month pocket money i.e. clothes,nights out (for me, missus rarely bothers), 500 a month towards holidays. Some months more, some less. Around 400 this month so far on trainers and couple of pairs of shorts but might spend nowt next couple of months. Or more if I see something i like...

Appreciate I'm council tax band A so that's only 145 a month, some on here will no doubt pay a lot more. Odd one offs like season ticket, car service, insurance on top but £25k seems ok here. With the buffer of being able to dip into lump sum/past savings for more when needed.

Will spend more on holidays when missus retires but that 2-3 years away mebbes, and we'll have the bonus then of more flexibility .

I have not sat and worked it out to that level yet.

I've mainly took the approach of looking at what we take home and then taking off all the things I will not be spending on any more.

I'm still 9 years out so I have the rough figure in mind. I can have an annual pension quote, so I'm likely to do that at 56 and then work out what that really means. If I'm right, that will confirm that going at 58 is the right time. But if I find the value is decent and my estimate for what I need is low, then I might end up going sooner.

So is it fair to say you are spending about 2k a month ( including putting away £500 a month towards a holiday) my biggest concern is if I retired, I would be spending more during the day doing things I would like to do then when I’m at work where I take my own sandwich’s for dinner and basically don’t spend anything during the week.

Spending more is at the back of my mind too.

I'm likely to want to go away walking, so I'm likely to spend more on short breaks.

I want to do woodworking projects, so I'm going to be spending more on wood. Some of that will be guitar building and the cost of parts for those mount up, along with more expensive wood than your standard B&Q (bent) pine.

I also like astrophotography and that is not cheap.

At the minute work acts as a dampener for those hobbies, because I struggle to find the time. And that stops me spending.

 

[Town End Farmer Giles]

So is it fair to say you are spending about 2k a month ( including putting away £500 a month towards a holiday) my biggest concern is if I retired, I would be spending more during the day doing things I would like to do then when I’m at work where I take my own sandwich’s for dinner and basically don’t spend anything during the week.

Its only been 3 months, so it's a bit hard to tell, but that's my rough estimate for going forward. It'll be a year or so before I know how accurate this turns out to be as there will be big peaks and troughs in spending month to month.

More pub lunches and coffees, but missus still working so there are days when I spend nothing. The bills and groceries are largely fixed, it's my miscellaneous spends that are the big variable, depends on nights out, gigs, clothing etc.

 

[Darlo1973]

I have not sat and worked it out to that level yet.

I've mainly took the approach of looking at what we take home and then taking off all the things I will not be spending on any more.

I'm still 9 years out so I have the rough figure in mind. I can have an annual pension quote, so I'm likely to do that at 56 and then work out what that really means. If I'm right, that will confirm that going at 58 is the right time. But if I find the value is decent and my estimate for what I need is low, then I might end up going sooner.

Spending more is at the back of my mind too.

I'm likely to want to go away walking, so I'm likely to spend more on short breaks.

I want to do woodworking projects, so I'm going to be spending more on wood. Some of that will be guitar building and the cost of parts for those mount up, along with more expensive wood than your standard B&Q (bent) pine.

I also like astrophotography and that is not cheap.

At the minute work acts as a dampener for those hobbies, because I struggle to find the time. And that stops me spending.

I need to develop some hobbies which don't involve day drinking.

 

[Swindon On Tour]

If my daughter left home the hot water bill would decrease by the gdp of a small country

Often when I come home I can see our house brightening up the village with the amount of lights left on. Usually a direct correlation with the eldest being home.

 

[Marcosplace]

My brother retired as a teacher at 55 and after 24 hrs they re-hired him. Dinnar the ins and outs but I’ve heard other teachers doing this malarkey for tax and lump sums. He had to take the pension for one day for some reason.

Yeah. It's possible. You actually have to wait 30 days after taking your pension to return

 

[Swindon On Tour]

Its only been 3 months, so it's a bit hard to tell, but that's my rough estimate for going forward. It'll be a year or so before I know how accurate this turns out to be as there will be big peaks and troughs in spending month to month.

More pub lunches and coffees, but missus still working so there are days when I spend nothing. The bills and groceries are largely fixed, it's my miscellaneous spends that are the big variable, depends on nights out, gigs, clothing etc.

Unexpected bills for repairs etc are the challenges. Always have to have funds available to cover these.
Don’t get me started on filling our heating oil tank

I need to develop some hobbies which don't involve day drinking.

I would take you fishing if you were closer.
Mind you I do like to have a beer in the rucksack.

 

[Sam Handwich]

My first job in management had a couple of blokes who were working towards early retirement (DB scheme) with little to no interest in moving up the ladder or any 5/10 year plans and no interest in even the corporate merry-go-round of annual performance reviews.

Think you've just described everyone over 50

 

[Town End Farmer Giles]

Unexpected bills for repairs etc are the challenges. Always have to have funds available to cover these.
Don’t get me started on filling our heating oil tank

Be a few years,if at all, before that is much of a worry as got savings and lump sum.

The challenge at the minute is not going daft on things I quite want,but don't really need. Apart from trainers, they're a necessity.

 

[You can call me Al]

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The only thing making it misleading for me is it assumes I die at 93.
I’ve ran two retirement dates through it today, the one I had in mind which worked out and then tried it again one year earlier and it still worked out. I’m thinking I best get some expert advice based on spending and withdrawal strategy.

 

[Ned Land]

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The only thing making it misleading for me is it assumes I die at 93.
I’ve ran two retirement dates through it today, the one I had in mind which worked out and then tried it again one year earlier and it still worked out. I’m thinking I best get some expert advice based on spending and withdrawal strategy.

Try asking copilot/chatgpt before paying anyone.

 

[The Great Soprendo]

I'm aiming for £40-£45k income for the two of us in retirement, but occasionally I wonder if that is too much and will have me working for longer than I need.

The way I'm trying to think about it is in three phases (assuming no early grave):

1. early retirement, before state pension - this is likely the most expensive section. All funded from private pension.
2. from SP age to maybe 80 - still wanting to do stuff etc - split between SP and private
3. 80 onwards - no need for much at all - can probably reduce what you actually need for this period

Assuming SP continues to increase it's a big chunk of that 40-45K in phase 2 if you are both getting a full one.

Probably suggests many of us don't really need as much as we think in a private pension.

 

[You can call me Al]

Try asking copilot/chatgpt before paying anyone.

I get 2 sessions work pay for and I’ve been trying chatgpt. I’m not laying my own cash out when with a bit of effort you can work most of it out yourself. The withdrawal strategy is the thing that I get stuck on, everything I look at says spend your cash but I want to have 2-3 years available if the market crashes.

Just run it again and it reckons I can go in 10 months!

 

[stapler]

Then there is the £1,073k that I would hit about 18 months later. Me and the wife are about the last generation of well off pensioners, just hope we live healthy long enough to enjoy it.

I thought the lifetime limit was abolished with effect from April 2024. It now only applies to limit the tax free lump sum (i.e. 25% of that number) or the tax free element if a person dies before drawing their pension. This second bit may have been booted with the inclusion of pensions within a taxable estate. I haven't checked.

 

[Ned Land]

I get 2 sessions work pay for and I’ve been trying chatgpt. I’m not laying my own cash out when with a bit of effort you can work most of it out yourself. The withdrawal strategy is the thing that I get stuck on, everything I look at says spend your cash but I want to have 2-3 years available if the market crashes.

Just run it again and it reckons I can go in 10 months!

James Shack has some good videos, basically keep 2-3 years of spending in cash to ride out any market downturn early in retirement.

I have endless scenarios on spreadsheets etc. but I doubt that any plan will be perfect.

 

[Darlo1973]

The way I'm trying to think about it is in three phases (assuming no early grave):

1. early retirement, before state pension - this is likely the most expensive section. All funded from private pension.
2. from SP age to maybe 80 - still wanting to do stuff etc - split between SP and private
3. 80 onwards - no need for much at all - can probably reduce what you actually need for this period

Assuming SP continues to increase it's a big chunk of that 40-45K in phase 2 if you are both getting a full one.

Probably suggests many of us don't really need as much as we think in a private pension.

Of course there is always the possiblity of

4. 80/85 onwards - Care costs become significant unless a future government finally makes it free/affordable

 

[stapler]

Three quarters of people arent on track for moderate retirement

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However when you consider average salary & wages, then deduct NI, other retirement related savings, mortgage, childcare (expenses you wont have in retirement) then why do you need anywhere near that for what they consider moderate. People on average arent on track for that because they dont earn enough. Its just ridiculous their numbers.

I mean, this is obvious bollocks from people whose job it is to get people investing more in pensions.

The "comfortable" figures are greater than the equivalent working medians. Out of the working money comes the pension contributions and the mortgage. In retirement, the former will have stopped for anyone drawing that kind of money. The latter will have stopped for most people. Then there are all the expenses associated with work or being to tired to do much else.

It's like the £300K to raise a child stories pumped out on slow news days. Yeah, but when you dig down, £250K is for private schools. It's unrepresentative cobblers.

People need to focus on their expenses. The lower your expenses, the more you can save,  and the longer what you save will last.

£40/£60K to be "comfortable" probably means consistently spaffing money up the wall chasing "lifestyle".

 

[You can call me Al]

I thought the lifetime limit was abolished with effect from April 2024. It now only applies to limit the tax free lump sum (i.e. 25% of that number) or the tax free element if a person dies before drawing their pension. This second bit may have been booted with the inclusion of pensions within a taxable estate. I haven't checked.

I won’t get there so haven’t looked into it but if you do it is something like 55% tax. I could be miles out though on this reply it is just what I was told but not arsed in looking into it.

James Shack has some good videos, basically keep 2-3 years of spending in cash to ride out any market downturn early in retirement.

I have endless scenarios on spreadsheets etc. but I doubt that any plan will be perfect.

James Shack is a great watch.