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 gave up when they raided pensions back in the 90s and started buying derelict properties and renovating them as rentals. Now both retired in our early 60s we've sold a couple and we have around £30k a year from investments and live quite frugally. We've never been big spenders, we don't take foreign holidays etc although we do like to eat out and we just spend less. With no mortgage and just two of us at home it's amazingly cheaper than having kids, teenagers or young adults.

I am retired and have a good standard of living. I have no mortgage and have approx 55,000 pre tax. I don't have a mortgage. I holiday twice a year long haul and in the UK and Europe at least twice a year. I worked in many countries where others might not due to financial incentives.

These threads really make me laugh. I take home £3k now, I have to pay my mortgage (£500) and support my DC, I am also spending c. £700 a month on retraining. I have a comfortable lifestyle and am still able to save a bit. I expect to have £1700 or so a month in retirement and feel that that will be more than ample.

(None of my friends and family have much money, and none will have MN-style pensions. I do think that matters as I am not comparing myself to those who have more.)

We are aiming for a real terms income of about £90k between the two of us, made up of a combination of DC pensions, a small amount of DB pension, ISAs and other savings. The plan is to retire before state pension age- if all goes to plan and if we're still eligible for state pension by the time they become payable, we'll then give some money to our kids and keep our income the same.

All of this is based on pretty standard assumptions about returns and inflation which could of course be completely wrong.

I’m five years off retiring, busy topping up my SIPP, buying ISAs and PBs, partly from income and partly from money left by my DF. Mortgage is paid off, which changed my situation and mindset completely. In today’s money I will need £36k to live comfortably, based on what I currently spend less the costs of working. I ignore ‘advice’ from the pension industry, which just wants you to stash cash to boost their profits, so a massive conflict of interest.

Not so many holidays as were in 70's and 80's by then
My mum is mid 70s and my dad is 80. They are both still very active. They can easily walk 10km a day. They travel a lot, go away 6 weeks in the winter.

I guess it all comes down to your health and what you enjoy in life. I would expect £2,000 a month to enjoy mine, my OH about the same. Anything over would be great.

We'll have around £24k between us and around £10k in savings, possibly for a nearly new car when needed. Mortgage free and don't have to give a lot towards GC, probably around £700 a year if that's all I can afford, we'll have enough as long as I stay mobile. It's when you need taxis to get around and really feel the cold etc. Along with pensions, health should be a priority. At the moment there is loads of free stuff to do were we live. I'd be happy to make my retirement about volunteering, the odd class and visiting were I can get to on my bus pass, if skint. On £24k we can do a holiday every year still and we'll probably do a tinsel and turkey weekend, but others would shudder at that.

You definitely don't need 2/3 rds your current income if you are above 30k.
You can make surprisingly good savings not being in work that you should factor in.
No commute costs and often can bin a car if you are 2 car household or even both as you have time for public transport
All leisure at off peak prices including flights etc for holidays
Time to shop around for all your services To get all the discounts and incentives
Flexibility to shop when there are deals to be had and respond quickly to take advantage Of vouchers etc
Research and find all sorts of events at discounts or subsidised prices
Time to cook and avoid impulse purchases, lunches at work, coffees, work collections, work clothes, etc
More relaxed and more time so less likely to impulse spend for quick gratification and repair and fix things yourself instead of paying for it
No peak travel. Find travel bargains on trains to cities etc because you can go when it's off peak

There's more, but that's the idea. We reckon you can easily halve what you live on by not being in work and have the same standard of living.

The big one is housing. If you are mortgage free then you have great options. But if your rent or mortgage is going to be part of your pension it is different.

Well this is a scary thread for me 🙈
We take home 2000 a month. We have £25 a week left after all out goings....

Once the kids are at school (another 4 years) we will have an extra £1000 a month but we need that to live a bit after having nothing for years, house repairs need doing and our car is on its last legs...

We are 38 so I don't see how we can possibly save enough to live on.

Scary.

But it's relative.
If you're on a smaller income, you will manage on less than that in retirement. Everyone needs to work out their own figures.
But, even if it's a tiny amount, start paying into a workplace pension as early as you can . It's tax-effective, the employer contributes and the effects of compound interest make a massive difference if you have had many years paying in.
And don't rely on a man! That's general life advice, not just about pensions.

@saltinesandcoffeecups

• ”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)

Your spouse can claim SS on their record or on your record without it affecting your SS claim. Depending on your age upon claiming, spousal benefits can range from 32.5 percent to 50 percent of your husband’s or wife’s primary insurance amount — the retirement benefit to which he or she is entitled at full retirement age, or FRA. Your spouse below refers to you, as it is written to your DH:

You are eligible for SS spousal benefits if:

• Your spouse is already collecting retirement benefits.
• You have been married for at least a year.
• You are at least 62 years old (unless you are caring for a child who is under 16 or disabled, in which case the age rule does not apply).

You can collect benefits on a spouse’s work record regardless of whether you also worked. If you are eligible for both your own retirement benefit and a spousal benefit, Social Security will pay you the higher of the two amounts.

If your DH becomes a widower (sorry), he can still claim.
The chief criteria to qualify for survivor benefits are:

• You were married to the deceased for at least nine months (unless the death is accidental or occurs in the line of military duty, in which case there is no minimum time period).
• You are at least age 60, unless you are disabled (then it’s 50) or caring for a child of the deceased who is under 16 or disabled (in which case there's no age minimum).

https://www.aarp.org/retirement/social-security/questions-answers/spouse-social-security.html

We’ll have 60k a year which should be plenty. I want to have enough for holidays, trips & meals out. I don’t just want to ‘survive.’

Upthread PP said they or their DHs couldn't access Civil Service Pension until SPA. This isn't strictly the case. Can claim it earlier but will be reduced. Something like 4 to 5 percent per year below SPA. It is worth doing the sums because sometimes a smaller amount of money paid for longer is more beneficial than waiting. I am not a financial advisor etc

Many are asking about the calculators and how they come up with estimated amounts for retirement. These amounts are usually adjusted for future estimated inflation.

If the cost of food, goods & services keeps going up an average of 5% a year, then in 20 years what you can buy now for £1 you will need £4.32 to buy it in 2054. In other words, your £1 today is only worth 20p in 2054. There are many future inflation calculators out there where you can tweak the figures.

So if you are 20 years from retirement, and you think 🤔 hey I can live off £2k a month if I were to retire today mortgage free, you would need to plan to have £8k a month to match that same living standard.

Keep in mind, the state pension does go up every year with a cost of living increase. This is why the triple lock is MORE important for the younger generations than it is for current OAPs. If the triple lock on state pension is broken, then the fate of Millenials and Gen Z will be abject poverty because the buying power of the state pension will erode year on year. The state pension is already not generous it has to keep pace with inflation or today’s young workers and students will be left with pennies on the £ to survive.

Surely everyone has to do their own calculations? Based on what they currently spend and what they would no longer need to spend, or be willing to give up, once they are retired. These "what do you need for a comfortable retirement" figures as a general statement are just nonsense.

I would say that I was pleasantly surprised when I worked out how much less I would need given that I would no longer be paying into a pension and NI. Plus obviously average tax goes down with income. That plus not paying for mortgage, kids (hopefully!), cost of commuting, means you need nowhere near the same net income as when you are younger.

@ZebraPensAreLife Before paying off the mortgate. I was putting in the minimum required to get my employer to put in the maxiumum they would.
I was putting in 5% and they were putting in 7%.

We were over-paying the mortgage and now that's done I'm putting 50% of my salary into my pension. It's made very little difference to my take home salary but is having a dramatic impact on my pension.

I've been doing that for 4 years and am hoping to retire in another 4 if we can keep this level of investment up. The increase in the threshold of maximum annual contribution into a pension has also been very helpful.

I hope all you current tax-payers are aware of this - I find the figures banded around by those in the 'good retirement' position rather distasteful.

ALL taxpayers are responsible for covering the unaffordable life-style of some retirees.

Taxpayers are on the hook for a colossal £2.6 trillion to pay for existing inflation-proofed pensions for public sector workers now and over decades to come.28 Aug 2022

@ruby1957

The only reason I stay in the nhs is the pension. I can get paid twice as much outside of it. My health is adversely affected by the work that I do. Therefore I intend to retire in peace, having served the tax payer.

@ruby1957

You should mention that public service employees pay into their pensions by salary sacrifice. It works similar to NIC, what they pay in pays for current retirees.

The average public service pension was decreased from 24% of final salary to only 14% of career average earnings (CARE) in 2007- a career of 40yrs is needed to get this full amount. The majority of public service pensions are less than the state pension in £ amounts. This will continue to be the case due to the above reductions, as those workers start to retire in 2047 and onwards.

£2.6 trillion to cover decades of pension income for millions of employees is fairly cheap.

It’s not an “unaffordable” lifestyle

It is something that I need to clarify, I was aware of this rule and he probably has enough quarters in to qualify on his own for a minimal amount (or on mine if it’s allowed) For the bulk of his prime earning years his pension disqualifies him from contributions to SS.

We’re going to have to sit down with someone from both the pension and SS who can tell us the rules on all of this.

I’m not exactly going to add this to our planning and treat it as an unexpected benefit if we get an additional amount.

It makes me laugh how the nhs is considered a big pension. If you work 35 years full time, the maximum pension is half your final salary (in the 95 scheme). Given your final salary is 35-45k (in the main) then a pension of around 20k isn't massive for all those years service.

Given the vast majority work part time at some point the 50% is hard to achieve. I know one nurse who will retire with the maximum pension. She's childless.

@Houseplanter
And it is much much lower for those hired from 2007 onwards under the career average earnings calculation, with 40yr minimum.

@saltinesandcoffeecups
The citizen services at the US Embassy can advise you and your DH. You have to apply through them for SS anyway when the time comes.

Sadly yes it is.

I think I might be wrong, it might be 40 years for max pension. Whatever, low pay means low pension.

It all stinks.