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Original poster

how much do you think you will need to retire on?

130 replies

SingSam · 02/01/2018 16:14

I am spending the last few days before going back to work looking at how much I think I will need when I retire.

I have read all the advice about how much you are likely to need (a lot say 2/3 of current income which for me is not going to happen), some say work out what your bills are likely to be and go from there...

I am in London so I assume for now I will stay where I am and potentially be mortgage free (v small property). There is the potential to sell up and buy somewhere cheaper but I don't want to consider that option yet (without doing some more research).

I just make a spreadsheet of what my bills are likely to be - excluding food, excluding mortgage - and I was quite surprised by how high they are. This would be assuming I stay in London. I am also sure some bills might go up (like electricity) as I'm in the house all day but then I assume my travel costs would go down (not commuting to work, getting a bus pass eventually!).

has anyone else done this sort of exercise and thought what sort of monthly amount they are likely to need when they retire?

OP posts:
dontcallmethatyoucunt · 03/01/2018 15:04

The exercise you've done OP is exactly what we do with clients.

The current thinking on pension size is 50% salary,minus state pension. Personally a lot of people are in for a massive shock.

Ifailed · 03/01/2018 17:29

£5000 a year to live on all in?! Is that possible?

I though the same, the poster stated she owns her own house etc, but what about maintenance? a new roof will cost £1000s, as would a boiler etc. I'm sure she can live on £30 a week for all food, laundry & cleaning stuff along with £20 a week for luxuries now, but when you are older and maybe can't manage how would you pay for help?

SellFridges · 03/01/2018 17:40

I believe we need to stop thinking about retirement in the traditional sense. I can foresee a time where I work part time to supplement whatever pension I can draw.

Someone up thread mentioned we need to re think pensioners being in their sixties and I agree.

NameChanger22 · 03/01/2018 18:22

A new boiler every 15 years can be saved for at £2 a week. New boilers cost £1,500 where I live.

I don't intend to ever retire fully. I hope to always have a small part-time job or some self-employment. Even when I'm 80 I think I would get very bored with only TV for company.

Squeegle · 03/01/2018 19:38

Sellfrisges, that is all very well; but there aren’t exactly a lot of part time jobs that would allow us to do that, and employers really don’t favour older workers. I’d like to see that change but it is very slow progress. I am one of the oldest at my work and I am 52!

Newrules · 03/01/2018 20:18

I agree there. Employment opportunities for the over 50s are pathetic. In my profession you are ancient at 50 and the first to be made redundant during restructures.

SellFridges · 04/01/2018 16:09

I wasn’t saying that those opportunities are available now, more that I think we will see a shift over the next 20 years or so. I would also anticipate taking a role in an entirely different field. I have 30 years to work to state pension age and cannot foresee staying in my current field even though I enjoy it!

Ellisandra · 04/01/2018 17:04

To those who are single, it's not a bad thing to be planning for that!
I was single and recently acquired a fiancé - it will be great to share retirement costs, but if/when he dies, I'll get nothing - second marriage, all assets to our separate children. So I see any shared costs in the meantime as a bonus. I'd hate to plan for a joint retirement then have the rug pulled from under me.

dontcallmethatyoucunt · 04/01/2018 18:05

You could insure each other. ...

problembottom · 04/01/2018 18:12

I worry about this for a close friend of mine. She is single and in her mid-30s with no pension at all. She owns her house outright thanks to an inheritance and earns a decent salary but she has a degenerative illness which could strike at any moment. She won't listen tho!

DP and I invest heavily into our pensions but they will be nowhere near as good as our parents. DP's teacher dad retired in his 50s and is comfortable, my high earner dad retired in his 60s and lives extremely well.

It's a different world nowadays...

Oblomov18 · 04/01/2018 18:21

Seriously, who has a pension pot of 1 million?
I only work part time.
What sort of salary do you need to be on to get a pension pot of 1million? Over £100k? For how many years?

How many people do you know who earn that much, and have done for most of their working life? How many years, and have put most of it into their pension? None?

dontcallmethatyoucunt · 04/01/2018 18:52

I know quite a few people.... but I'm a pensions adviser. Outside in the real world, very few now DB Schemes have closed.

Doilooklikeatourist · 04/01/2018 19:07

We’re self employed , and have never been able to afford any money into a pension scheme
All our money is in the business
We keep doing sums ( well I do , anyway )
I reckon we need £10,000a year to live on , and £10,000 a year to travel while we’re still fit enough
We plan to sell up and downsize , both late 50s now , one DC working , one still at uni
I get my state pension in 9 years time

Anyone know how to check if the NI contributions are up to date ?
I don’t want it to be January 2027 and some one say ... oh , sorry nompension for you love 😮

dontcallmethatyoucunt · 04/01/2018 19:38

You can check online, you will have a government gateway code for your tax return, you use that.

dahliaaa · 04/01/2018 23:44

@problembottom I met up with my old boss a few weeks ago.
I now do the same job he used to do.
He was very open about the fact that he was one of the last in the company to benefit from the good pensions and we worked out that (with similar length of service/ contributions and seniority of post) IF things don't deteriorate further I will retire with a third of the pension he received (and that with me retiring at five years older than he was.)
He bought dinner !

AnnabelleLecter · 05/01/2018 00:06

Our pensions will give us about £25k+ per year in five years for early retirement. We will have savings and could downsize and release up to £100k. Mortgage will be paid off and we have a small holiday cottage which is cheap to run where we will spend a lot of our retirement. Savings only need to last until state pension kicks in.

pameladoove · 05/01/2018 00:14

I think I'll need a pension pot of 400,000 and then will get state pension on top from 67.

Should give me an income of around £20k, I reckon.

Monthly bills will be about £800 so anything left will be for holidays, going out.

notapizzaeater · 05/01/2018 00:24

We've just been moving all out pensions into SIPPS, we both have approx 200k each and intend working for another 13 years (and are still paying into company pensions) I'm stressing about how much we would have when we retire. Has anyone found a calculator that can work out rough values in the 13 years.

dontcallmethatyoucunt · 05/01/2018 06:27

Aviva has a pretty good calculator.

Namethecat · 05/01/2018 06:38

£1500 a year for food. That works out at just over £28 a week. Seems very low to me. My husband spreadsheet s all our outgoings and we spent £6000 on food, and don't live a lavish lifestyle by any means. Obviously the op was counting just herself but still seemed low.

HippoPotOMoose · 05/01/2018 08:25

Doubt I'll ever retire, hopefully I can avoid ill health and just keep plodding on.

AnakinCyberwalker · 05/01/2018 10:05

A couple of useful calculators from the monevator website (which I recommend with no affiliation):

This one helps calculates pension income required to maintain a post-retirement income assuming no mortgage or rent or childcare costs:

www.standardlife.co.uk/c1/guides-and-calculators/retirement-how-much-may-i-need.page?utm_source=portal&utm_medium=redirect&utm_campaign=1/site/uk/pensions/getting-started/income

This one will calculate how much pension pot you need to give X income you decide you need per month in retirement:

www2.trustnet.com/Tools/PensionCalculator/PensionCal.aspx?Type=2

BixieThoms · 05/01/2018 10:16

Me and DP are planning on early retirement with an income of about £15,000- £16,000.

We won't have a mortgage or commuting costs to pay so we just need money for "essentials" (about £5,000) and food (let's say £4,000). The rest of our income will be spent on treats, holidays, days out etc. For us, £6,000-£7,000 will be absolutely ample for this.

My mum retired last year with an income of £12,000 which is more than enough (she only spends about 2/3 of her income).

Don't forget that it is also possible to earn bits and pieces of money during retirement too. A former colleague retired and now earns about £4,000 a year from secret shopping, matched betting, selling on ebay, dog-sitting.

dontcallmethatyoucunt · 05/01/2018 10:21

Anakin it assumes an annuity is bought, which frankly is out of date. It's a guide, but not a great one.

NameChanger22 · 05/01/2018 10:44

I currently spend £45 a week on food for 2 people and 2 pets. That includes all toiletries and household product. I keep a spreadsheet of everything I spend. I think £28 is about what I would spend for just myself. I am very good at budgeting and cutting corners, I have to be. It is possible to spend less than this on food, lots of people do.