If you are retired and have a good life, can I ask how much pension you draw?

[User5512]

I tried some calculators and they all gave me vastly different numbers.

I’d like to know (roughly) how much money does a couple need to have a good life in retirement.

If you are retired, would you be kind enough to give me a rough idea of your lifestyle and how much pension you get?

thanks :)

We live comfortably on just over £40k per annum between us. We managed on a lot less previous to getting our state pensions, as we both retired early - husband 57, me 61. We supplemented our income from savings as and when necessary. So glad we did go early though, as we've had a decade of good health, but now odd things are beginning to creep in.

We moved house about five years ago to be nearer our daughter, and as it was a cheaper area managed to release a good amount of equity to boost our savings. So no mortgage, one old-ish car which is not used that much. We use bus passes a lot to get around and the library/Borrowbox for e-books as well as physical books. I would say our biggest expense from income is probably the council tax. Improvements and maintenance on the house always come from our savings. My last spend on the house was a new fitted wardrobe for my dressing room. The next planned spend will be for replacement double glazed sliding doors to the back garden.

I spend freely on clothes, my garden and often treat my daughter and grandchild. My husband is very into scientific texts and other books which he buys regularly. Our finances and savings are separate, which has always worked for us. We eat out regularly and can easily afford the odd holiday, although these days we find air travel a hassle.

This question terrifies me! I appreciate the real life information. But as someone getting close to retirement my current answer is I’ll need more than I planned. In reality I believe people are like carp… they’ll spend what they have.

We’re planning the following (God willing)

• A base of $60K us/ ~£45K per year (DH Pension)
• Working for awhile until US SS kicks in for me (DH may get a small sum but he’s not eligible to contribute because of his pension rules)
• ~$3K/mo /£2.3K per mo SS (your equivalent of NI, I think)
• + private retirement accounts (currently around ~$700k US
• + savings ($300K US)

The wild cards at the moment are
-housing -we are going to relocate to a more expensive area
-We both plan on working at a much lower pay than we are at the moment until traditional retirement age … so maybe 5-10 more years give or take
The plan is to work and adjust to a lower income while we still have options and to not touch the savings or retirement accounts until we are not working.

We need to account for full end of life care as we’ll not have help. So ~$500K of that is already earmarked.

So yeah the numbers may look rosy on the surface but there’s a lot of living and care that needs to be accounted for with no income supporting it.

Reading this thread as a millennial like 👀

^^

Right?!

My pension is sorted... Now I just need to work for 30 years

🫡

If it helps… I’m Gen X…

I had no concept of being able to save or prepare when I was starting out (or even after I got going). It’s possible, maybe not easy, available at every stage in life, or to the same level as others to prepare for retirement… but it’s possible.

If I’m honest 15 years ago I was a financial train wreck. I’m still not perfect. But I did learn and and prioritize as I was able to.

My parents definitely have a good life and I think are living off my dad’s pension which is definitely 6 figures a year. But basically you need to work out your monthly expenses and how much extra you want for travel etc right?

We are aiming for 50k each so 100k in total excluding state pension (which I do deliberately as it'll probably be means tested or delayed by age)

Obv assumptions will be that kids don't need much support and that the mortgage is paid off as those will be the major costs but they will be in their early 20s when we look to slow down.

I have just done a rough & ready calculation for us (couple, mid 50s) per month:

900 - all DD/SO excl mortgage & life insurance
1000 - food including takeaways & eating out
1000 - God knows what (hobbies, holidays etc)
-----
2900 - pension/month after tax required for current standard of living

We are pretty much there with state pension and a DB scheme. Next challenge is to work out how DH can retire a little bit earlier as his job is very physical.

We're 59 and 60 and draw 2,100 a month from a private and local govt pension. We paid yhe mortgage off before taking early retirement. My husband does odd jobs (grass cutting) for pocket money. Our cars are old and we have 3 ponies to keep. Were quite comfortable but couldn't afford expensive holidays and clothes. But we're happy with our lifestyle.

I estimate that if I can stay in teaching until 60 I will have around 20000 per year in teacher's pension, plus a small lump sum (around £50000) plus state pension at whatever age that kicks in. It will probably just about get me to 2/3 of my current salary but nowhere near the "moderate" income section in the earlier link.

I'm not worried though, as an ex tutor if I'm healthy I can do babysitting, tutoring, exam invigilator work and theatre chaperone so lots of casual work available to give my income a boost. Then when I'm not fit to do that my life will presumable shrink and become cheaper anyway 🤷🏽‍♀️

Currently we are putting £50k a year into pensions so obviously that will stop, house is paid off already and we are stuffing money into savings too. Drawing down £40k a year should produce the same lifestyle then once his state pension kicks in I will quit working, I'm younger

I have the civil service alpha pension and the way things stand currently, I'd get around £18k p.a. if I retired at 55, £30k at 60 and £55k at 65. So it depends on how much longer I can bring myself to work, however the recent news article stating that state pension age could go up to 71 for people born after 1970 like myself really throws a spanner in the works. The alpha pension is linked to state pension age but I don't yet understand how the potential change in s.p.a would affect my numbers.

We had a joint income of c£120,000 pa when we retired 6 years ago. Now we have an income of about £50,000 pa after tax from state pensions, private pension and drawdown. I suppose that would be about £80,000 if taxable so yes 2/3ish.

No mortgage, two cars. It’s plenty. We’re not big spenders; we can do 2/3 European holidays from this and UK trips but if we want a big £10,000 trip we have to take that from savings (about £150,000).

Our pension fund has grown since we retired and 6 years in we have more than we started with.

I think you need a variety of sources of income (state,private, fund) to be safe and a house paid off helps. We could live OK on about £30,000 but our current income allows us to do whatever we want. We think our needs will be less in ten years time when we will be in our 80s so we’re taking more now - no point in hoarding it.

Right, but what’s your answer to OP’s question?

I was born in the 80s but my pension is a huge priority for me. I’ve worked since I was 15 and will work until I’m 67 at least. So I’ll be working for 52 years.

I don’t have a defined benefit scheme so I need to contribute as much as I can whilst I’m relatively young. And yes, I do hope to go on holidays when I’m retired.

Am I one of the people you want to see drown?

I am 55.
I will have in todays money a guaranteed pension of £16k (from a couple of old final salary pensions) plus we will have the new state pension. So if we both live to 67, we well get about £40k in today's money. More than enough. At the moment I have £50k in pension funds and DH about £60k. We are saving £1500 a month now into pensions as we don't have a mortgage. Plan on doing that til 60 and then reassess.

The key thing is having a plan to have a paid off mortgage by the time you retire or at least have your lump sum pay off the balance. If you are stuck paying rent for your old age you are going to need way more!

Planning to retire soon-ish so obviously considering this too.

The only way to make an individualised assessment is to go through all your income and expenditure for the last 12 months, then work out a monthly average.

It's a pain to do this, but you only need to do it once!

I found that it only took a couple of evenings with my bank account/credit card account open and a pen and paper - I sorted everything into categories - food, transport, etc.

You also need to consider what will change, e.g. are you planning to travel more, buy fewer clothes, etc.? Martin Lewis has a good expenditure calculator on his website.

So, exceptional expenses aside, I know pretty much exactly what I need to live on in retirement. Don't forget to factor in interest rates/rising prices!

For me, the current 'recommendations' are quite high, but they might be realistic for someone who is used to a foreign holiday every year, buying take-aways, etc.

So, message is - do your own projection, based your own information, not what someone else thinks you might be doing.

I am now fully retired and have a monthly income of £2000 (state and work). No mortgage or other debt. My outgoings are £700 pm excluding food. I use my weekly state pension of £200 pw as spending money - food, petrol, social stuff - most weeks it is more than enough for me. I have savings of £40k. I eat out regularly, had 3 holidays abroad last year. I’m very comfortable - better than when I was working - but I did get a 6 figure lump sum so was able to clear the mortgage. The only increase in my expenditure is fuel - I’m home a lot more now but the £500 from the government helped.

I am early 60s, DH and I still do some PT work.

We live very well - these are gross figures:

My DB pension is around £46K, side hustle another £1.2K.
DH brings in about £9K pa, hasn't started taking his pension yet.

We still have some lump sum savings from my pension and selling a BTL property and dig into that for house maintenance which is more expensive than we thought - more wear and tear as we're home more and the cost of everything has at least doubled.
Last year, we spent £12k on holidays, about £7k on home improvements, including a new boiler to cut our heating bills.
In just under 2 years, DH will have a final salary pension of about £13k and then we'll have our full state pensions at 67. DH has a small DC pension too.
We do financially help out our DC, especially DC2 who is single. And we'd like them to inherit from us - we are both from WC backgrounds and didn't inherit the huge houses etc that some of our friends have. (I'd rather still have parents in our lives).

We're very fortunate - we did both work FT in stressful jobs. I took very little time off for maternity leave and overpaid my occupational pension. We also overpaid the mortgage and it's now paid off.

I've been doing a lot of planning on this as we're about to enter 10 years of paying school fees so need to plan ahead. DH and I are reasonably high earners but in our case the 2/3 rule doesn't work as we put a hefty amount into pensions/savings/mortgage and soon, school fees. We actually live a fairly frugal life day to day.
£55k between us would give more than enough I'd say taking into account all the stuff above which we wouldn't be paying out.
You will need to plan it in stages though. If you're not getting your state pension until 68 (71?) and want to retire before then, where is the gap coming from. Private pensions can't be accessed until 57 etc etc.

I'm a freelancer so I'm on my own there, it's only my contributions in a private pension, plus state (who knows if that will exist in 30 years). I have to be a freelancer to avoid the extremely high cost of childcare these days, combined with no support network. My husband has a pension and pays into it but can only afford 3% which the employer gives 1.5% I think. A bit tricky to add more when all your earnings literally go on bills. Any small amounts we have left over need to be set aside for unexpected costs.

I fear for the generation coming up behind me who can't afford to buy a house. I wonder what happens when you're paying high rents in retirement.

To be honest, I was more eyeballing the amounts on here. £3k a month pension lol. That's our entire monthly combined income as two working age people at the peak of our careers, and over 2/3 of that goes on essential bills. We have no holidays, no savings, don't go out etc. So it'll be interesting seeing what happens to retirement in the next 50 years. I imagine people will continue working into their 70s and beyond, as long as ageism and ill health don't get in the way. I can't imagine having the amounts on here without a mortgage to pay!

I agree that there will be a big difference but I'm in my 40s so about 20 years away from retiring and put 40% of my salary into my pension which I'm hoping will give me a nice retirement. A lot of my friends with similar salaries have their heads in the sand about the amount they need to save. So the younger generation do need to get smarter about this as well.

Or they simply can’t afford to put 40% of their salaries into their pension.

I don’t know anyone who can afford to make that sort of contribution - we’ve all got too high rent / mortgage / essential bills.

MN really is like another world sometimes

@PollyPeep The OP asked what people's pensions are if they're retired and live a good life.

People have answered. I don't think that's boasting.

I do think younger people have a much tougher time, high mortgages, student loans, COL. It's why part of our income goes to our adult kids.