How much pension income do you need comfortably?

[Wholetthekidsout]

I know, how long is a string of thread. But based on where you plan to live (e.g. downsize from London) and what you'd do in retirement (e.g. holidays, part time work)? If you work now, when do you plan to stop?

I went through all the bills and worked out which I would still have in retirement and which I wouldn't. Then I added a contingency for house repairs and living. That gave me an amount in today's value that we would need to live on.

I suspect we won't have expensive holidays as we have them now when we have a good income and more importantly our health.

I found this the other day www.standardlife.co.uk/c1/guides-and-calculators/retirement-how-much-may-i-need.page

I found those tools far too crude to be accurate.

You are better off looking at your bills you have now and working out what would be the same/more/less in retirement. For example we would save around £500 per month as some of our bills are specifically because we both work FT so have to outsource work.

You need to factor in some extras such as keeping a car and house maintenance if you own your own home. Be realistic as well about what you want to do in retirement. Lots of people wait until retirement and want to travel.

Then look at your pension forecasts. Are they matching your expected bills.

We had a shortfall so we went to an IFA and started investments which hopefully will plug that shortfall by the time we retire.

I never plan to fully retire
I just expect to work for less and less months of the year
until I drop
as many of my former bosses and colleagues do, by choice

@TalkinPaece that's mine and DP's plan too. Better hope neither of us get dementia...

Travel is important to me but I'm not a big spender. I'd like to reduce my hours before 60. I aim to travel more when I am younger because I don't know what will happen health wise. I have an 'I could get by on that' figure, and an 'that would be great figure'. Paying a pension that would achieve the latter at the moment but who knows, maybe will land between the two.

Dusty
Carrying on working and going to the gym reduce your chances of dementia
and both DH and I enjoy the work we do
so its a win win

I have former bosses who are very well off but work for one or two months a year because it keeps their brains in good shape.

At the moment we are on track to bring in about 75% of what we have now though we are still relatively young in our careers so I hope to increase this. I want to be mortgage free by 55, save that money to have 6 figure savings, downsize to increase that, and be able to work part time from 60. I don't know when I want to retire, not young, the thought of retirement makes me feel sick...it's like you're waiting for death....I hope to stay working but appreciate you have to make way in some respects, and I may have a more rational and realistic expectation by my 60s lol, and probably fed up of work!

feduuup
DH and I are mid 50s
when we paid off the mortgage we started pumping that monthly money into savings
so we live on about 2/3 of what we earn
it works for us.

@TalkinPaece that's what we are hoping to do :)

@Wholetthekidsout I will answer because I remember how I used to google that exact same question.

We (married couple) will have a retirement income of approximately 2,250 per month to live off.

At the moment we're in our early - mid sixties, retired early and spending the equity from downsizing as we renovate our final home. So our capital is diminishing rapidly.

The figure 2,250 per month is what we will have when we are both over 66 and in receipt of pensions in approx 4 years time. If that isn't enough we will consider equity release. We've poured enough cash and bloody sweat into this renovation I won't worry too much if we have to take some out later for a decent quality of life.

We own our own home circa 500k in a nice village in commuting distance of London.

If you are in UK, you can check your state pension amount, date it will be paid & check if you have paid the 35 years needed for further pension on www.gov.uk under the pension and National Insurance section

From this information, you can then work out if you need to save extra in a private pension, personal savings or other methods of savings