How much in savings would you need to give up working at 60 years old?

[AbbyGal]

Assuming you'd paid off your mortgage and had adult, financially self-sufficient children.

I'm thinking £500,000 - even if you don't earn any interest on it, that's £25,000 a year for the next 20 years. If you did live longer, then you could sell your home to pay for care fees etc.

Although I am nearly 60 I don't, sadly, have a spare half a million, but a girl can dream!!

That theoretical £500,000 won't have to fund everything for the entire 20 years, it will only have to fund the difference between your pension income and your expenditure. The best starting point would be to get some information about how much income you'd get from your occupational pension and decide what age you'd like to start taking it. If it's £300 a month you'll need a decent chunk of savings to draw on, if it's £3000 a month you'll probably only need to use your savings for big expenses, if at all.

If you invest the amount you don't expect to need in the next five years in a low cost global stock market tracker rather than keeping it as cash it's likely to increase in value over the time available.

Depends on the lifestyle you wish for and the pensions you have. If you need 30K a year to live comfortably, and you have 30K in occupational and state pension then you need 30K a year saved for between the time you retire and when you get your pensions (plus an extra in emergency funds). 500K wouldn't be far off.

If you plan to downsize then you have extra money from that so need less. If you need 30K to live but get £25K in pensions then you need to factor in the extra £5K a year you'll need later too. Plus as people have said account for some inflation.

If you want to cruise the world in 5 star resorts of course you'd need a lot more!

Do you mean £50k a year annual income in retirement? Depending on exactly what the conditions are, that's worth about £1M+ itself so is comparable with the larger numbers from PP. Apologies if you meant a £50k pot.

My husband and I plan to retire at 60 and we're aiming for at least €800k each in our private pensions plus the Irish state pension if it still exists or isn't heavily means tested by the time we retire. Of course we're a long way off those pension sums....both still in double figures actually but that's the goal anyway.

One way to look at it is to consider the average spend - see the PLSA https://www.retirementlivingstandards.org.uk/

This gives you a range of spends, and split by single or couple. For example a couple household average spend could be:
minimum £19900
moderate £34000
comfortable £54500

The website allows you to see all the underlying detail so you can determine which is closest to your spend / what you want. This can be helpful if you don't know where to start (although of course these figures are just averages).

Another way to consider what you will need is to track your current spending on everything, for 1 / 2 /3 years etc. What items will continue on every year (e.g. food and bills) and are there any items which won't occur in retirement (e.g. travel to work, mortgage ?) This will give you a clearer figure of what you currently spend.

Then once you know your average or approx figure, whether per individual or per couple, you can work out how that relates to your predicted pensions / savings.

Well this thread has depressed the hell out of me.

I think £25 K a year might be a little tight. Or is that plus pension?

are those figures pre-tax?

Quite a stealth boast-y thread Most people will have nowhere near these sums.

Frugally? assuming no mortgage, you'd have 25k per year to live off, tax free (as its living off existing savings) and after 67, 35k per year and triple lock means your SP is inflation proofed atm and no one is suggesting this will go

Or you could take more from your 500k now and then less when SP kicks in.

As for investing it, investments can very easily go down as well as up! and the traditional low risk approach of bonds and gilts have been turned on their head.

Plus no one knows how long they live for but there are very active few 80 year olds, i do some long distance cycling events and at 60, there are maybe 2% of entrants (15 to 20) in the 60 to 64 category, at 65 to 69, there is maybe 1 or 2, at 70 to 74, none.

I don't think people truly realise how little active life they have (as an avg) after 60.... cue posts from marathon running 90yo's

My female relatives are active well into their 80s and have been for several generations.

I think you need to budget to 85 not 80.

I struggle working out the inflation thing.

I know £25k will be worth less 25 years later but I cant really get my head round how much less.

I think a lot of people relying on making their own provision are going to struggle to have a comfortable retirement unless they started investing in their pensions early. It’s quite depressing really.

I'm planning to retire in 3 years at 55. I should have £900 a month in Occupational Pension, plus a lump sum that'll pay for a good few cheap holidays/ boiler repairs etc. Mortgage will be paid off and I reckon I can manage on that.

My partner is 6 years older and has £50k in savings, not much to speak of in occupational pension. He'll be retiring at the same time, so will be 61. It should tide him over until he can take his state pension.

If we need to we can take some temporary work from time to time. I hate my job and can't wait to get out! Time is so much more important than money, my hobbies are all but free and I just want to enjoy them while I am active enough to do so.

There are also those walnut people you see in Turkey, Tunisia etc, who pay for a whole month or two of AI over winter in hotels when it's cheap.

I think wintering abroad would be very cost effective, if you own outright so aren't duplicating housing. The cost of AI in some places is definitely less than supermarket shopping, heating etc, and the warm weather fends off winter bugs.

Same! Wish I'd not clicked on it now.

Go outside of the uk with £500k however, you can find better weather, healthcare, live in luxury with sea views and amenities such as gyms, pools, games rooms, food is cheaper and healthier.

I haven’t done the numbers, but if you put €250,000 into a property in Greece (except a few areas requiring €500,000), you get a golden visa - permanent residence, right to state education (for family members under 21) and healthcare, freedom of movement for you and your family within the EU….with a flat 7% tax rate for retirees on foreign pensions.

We were told on a Greek island this month, it’s possible to rent a 2 bedroom bungalow for £200 - £250 pcm, although that won’t give you permanent residence since Brexit; and dinner in a taverna for €8 a night each.

Yup. I'm destined for one bar on the electric fire and a cupasoup for dinner.

Not stealthy at all, and not boasting.

You don't have to click if you don't want to hear about the existence of people with money.

But as someone without these sums of money who plans to acquire them, this is interesting and useful.

Your comment is neither.

As well as pensionwise I find the Which? website quite useful in determining how much cash you would need to live. The drawdown calculator in particular. The key thing is that income needs will vary according to your lifestyle.

I agree. Pension and retirement discussions are valuable and figuring out how much money you'll need is a key starting point.

I spent far too long with my head in the sand regarding how much preparation and sacrifice are needed for a comfortable retirement. I wish I'd had that wake up call in my 20's instead of in my 30's but now I find discussions around retirement figures really helpful and thought provoking. I'm also a long long way off the kind of figures I'd like to have, as I said in my previous post, but I have goals set and I'm taking steps to achieve them.

I posted above regarding how much we were living on (23k) so between the minimum and the moderate in the eg above. Without savings for holidays etc that would be just getting by but it certainly wouldn’t be starving or unable to pay bills as long as you were mortgage free.
I definitely think being mortgage free is the key, for us it meant an extra 500 quid a month spending power. We also spent money in the last few years of working updating the house so we would have a good few years of no/low spend on property related stuff

I am retiring in just under 3 weeks at age 58 ( health reasons) . I'm aiming to live on around 16-18k a year until my state pension kicks in at age 67. This is doable for me but a fairly no frills existence. I have lump sum/ savings invested which will go a little way to help with rising costs/inflation but obviously won't fully inflation proof things. The small pension and annuity I'm also relying on till age 67 are also index linked which will help.
There's only me, no partner or children. I could think about downsizing my home at some point if needed but not thinking of that in near future.

It depends entirely on your spending habits,financial commitments and your projected pensions income.
Don't forget to factor in the erosion of the value of your savings by inflation.
10k in 2000 could buy far more than 10k now.
Early retirement requires careful planning and excellent financial control.

How can anyone say without knowing the variables. The cost of running and maintaining our cars/home/holidays is about £50k per annum. Our choice - large house and garden.

Our joint occupational and state pensions will be substantial and will more than cover it. However we may still downsize because we like money but don't much like spending it.

I think the value of my public sector pension pot for 2/3 of an occupational pension is about £750,000. I blew my annual allowance a couple of years ago. At 64 expect about £35k and £100k lump sum.