Do you think 2k a month is enough to live off for the next 40yrs?

[Rheese]

If you don't need to pay a mortgage but you have all the expenses of running a house/repairs etc, plus car. Could you live comfortably off 2k a month for the rest of your life? Today 2k is a lot but in 20 or 30yrs time it might be peanuts. I am not entitled to the state pension so this will be all I have. I know I could live frugally off this but I don't want to be frugal for forever more, I'd like to be comfortable.

Op you need to look at the value of money, in thirty years time it will be the equivalent of one thousand a month if it’s not index linked.

That is my current income and I pay a mortgage out of it and have a dependent child. So yes.

Where is the money coming from? I think in 40 years time it will seem very little given the current rise in the cost of living.

OP can you do any sort of part time job. That will build up your entitlement to a state pension.

Yes, easily. I would probably live off 1k a month for now and put £500 in to an easily accessible savings account and £500 in a long term savings account incase I needed to top up my income in the future.
1k a month, £300 bills, £200 food, £500 fun money.

Have you got time to get something from state pension. I think you need a minimum of ten years to get a pension but it won't be the full one. You can buy back years which might be a sensible investment. Don't know how old you are but I think the state pension age is 66 at the moment but it does keep going up.

With ten years contributions you'd get about £50 a week at the moment but that will increase so could be a useful cushion.

None of us know what will happen with inflation over the next 40 years but I think it is a risk if your £2k a month isn't index linked.

No. Goods costing £2000 today would have only been £1000 in 1991 and that's during a period of really low inflation rates. Inflation is currently c. 7% and rising.

It's actually terrifying for people on fixed incomes.

Not likely in 20 years time no, it will be worth a lot less with inflation and interest rates won’t keep up. How old are you, do you have time to build up more savings or pay into a private pension? Can you work part time when you retire?

Yes we as a family of 5 live off 2500 a month which includes having a mortgage to pay. Some months are tighter than others but it’s possible

There is research with retired people on spending habits which suggests that this would be enough (assuming it after tax) for a 'moderate' standard of living www.retirementlivingstandards.org.uk for a single person and you can see what they mean by that in detail on that link.
Of course whether it's enough for you depends on what your spending habits and commitments are. E.g. are you running a huge, drafty listed building or a small, new, well-insulated flat.
Then as PP say it depends on whether it will keep pace with inflation in the future. If it is a pension then ideally it will be index linked but many are not or have a cap on inflation. Plus your personal inflation may be very different from the index.

2000 right now, no problem.
2000 in 2040? Might be getting tight
2000 in 2060, likely to be struggle.

You need to increase the amount by annual inflation each year to maintain the current standard of living.

In 10 years at 5% inflation it would be nearer in equivalence to say 15k ?

In todays system you would end up on benefits which isn't much to live on

in what world are all your bills totted up only £300 when one bill such as electric can cost that

Yeah £300 I wish! My car plus bills (without food or petrol) is £1k a month! (Council tax, phone, water, elec, insurances, Sky etc)

Where is the money coming from? If it's savings then surely it will increase with inflation. If it's coming from a work pension then that will increase too, surely?

The point is the eroding impact of inflation.

OP given how inflation is increasing at present I do t think it will be enough in ten or twenty years

Savings interest rates have been lower than inflation for ages

How much do you have as a lump sum? Where is it invested/what is the expected return? And what is the drawdown rate?

I think you would be best speaking to a financial advisor. But just cash sat doing nothing in 30+ years, depending on inflation I doubt it would be a livable amount.

My bills are only about £300pm.

I know, but OP won't have housing costs. I live on it now paying housing costs, childcare and everything a child needs so it will probably work out similar.

Well it depends

• is that just for you? You & partner?
• how big is the house? What are the running costs? Have you taken into account current energy price increases?
• what kind of car are you running? Have you factored in replacing it when it becomes uneconomical?
• how much money do you want for fun stuff? To go out/do things?

Fine now and if you can / invest save the money you have for later and make the same rate as inflation or more should be fine for later. At the moment that is not really possible but historically it normally is. Also if you put the money in a pension the government adds some tax back (if not working you can add £2800 a year I think and it gets made up to £3600) and it might be worth making voluntary contributions for the state pension if working is not an option or you prefer not to work. Though what the state pension will be worth in future who knows.

With no child benefit or other benefits, though?

It's more than I'm paid so yes.

No OP, £2000 doesn’t get you very far now, let alone in 10 years.

Can you take a lodger/domestic jobs?