Can we retire???

[Flippityflops]

I am really bad at money !
I am asking advice about wether it would be sensible to increase my work load or stay as we are.
I am none neurotypical , and whist I am really really good ar some things and have post grad qualifications , I do struggle with what some woukd call ‘ common sense’ !
So

both in 60 s
dh gets full stare pension next year.
he will be taxed as he had a work pension too
his work pension is just short of 2k pa and if he dies , I get half of that for life.
i have a smaller work pension of
£ 500 pm as after dc i worked p t
i will get just short of stare pension as i didnt pay enough contributions and i need to add 3 k to it to get nearly a full pension.
no mortgage
no debt
35k
savings
i see so much about pension pots amns amount s. Needed for retirement but i have no idea how out’s translates as i ts not a pot! But a monthly amount.
Husband is 66 state pension nwxt year .. i get it in 6 years.
Dh thinks we will need to keep working past retirement age ?
( ps we both took work pensions early - due to exhaustion at public facing jobs for many years and do jobs like cleaning now , just pt earning about £800 pm )
thanks

Work pension of £2,000pa - did I understand that correctly?

Your question is unclear in terms of numbers. Is your DH going to get £2k per month or per year as a private pension? You've said pa but then you say yours is lower at £500pm so you've made a mistake somewhere I think.

No sorry per month!🤪

Told you I struggled w numbers ! 😂

Well it does depend on your outgoings. They may reduce as you get older, but probably not until you are well into your 70s.
So if I understand correctly, at current rates your DH will get £1k state pension plus £2k personal pension = £3000 per month

Currently, for next 6 years , you are adding £500 per month.

So can you live comfortably on £3500 per month ? Without struggling, or going without holidays or hobbies?
Will the personal pensions increase with inflation or are they fixed?

Have you checked with Pensionwise as to whether it is work paying the £3k to get full state pension? You do have some savings to possibly do that.

It’s very personal to your circumstances.

So pensions of £2.5k per month. Is that indexed linked? Dh will get state pension of £11.5k shortly?
I'd say he can retire tbh. But does he want to have some part time work? Nothing wrong in that!

I live on less than that. So yes

Depends on your outgoings surely?

PS meant to say - that’s £3500 per month before tax, so gross income of £36k for your DH, and until you get your state pension, £6k puts you below tax threshold.

I'm a bit confused here. Are you currently living on your work pensions of £2.5k between you plus £800 a month from cleaning etc and are able to manage? If that's the case when your DH gets his state pension of nearly 1k per month you'll be better off than currently depending on tax, especially if you both continue to do odd bits of work as you do now. When you get your pension, even though its not quite at the full rate, you'll have that too so be a lot better off. Or am I missing something?

Everyone is missing something- which is that if your DH dies before you (statistically likely) then your income will be drastically reduced as you'll only get half his private pension and none of his state pension. So you need to figure out whether you'll be able to live on that amount rather than the amount you and your DH will have together. The latter sounds like a good healthy amount but the former unfortunately doesn't.

Nifty50something, of course, I'd completely missed that key point.

DH and I live very comfortably on less than you will have coming in.
It depends on your outgoings and how you want to spend your retirement though.

I think what you need to consider is if worse case scenario takes place which is when your husband is no longer around. In this scenario, you will have: 500+1000+partial state pension (just short of 1000 because of your missing years). So, about £2400-2500 a month before tax (£2k after tax). If both of your husband and your pension are index linked (increase with inflation), I think you will be OK with £2k/month. It is much more than required to live on minimum lifestyle (13k per year after tax), but not quite there to live a moderate lifestyle (£32k per year after tax). But if your husband and your pension are not index linked, I would say you may struggle.

I am not sure what you could do as you are already in your 60s, though.

I do think it’s worth considering paying to top up your state pension if you can. State pension increases each year so you typically recover the investment within about 2.5 years. As a pp points out if your DH dies before you that could make a difference.

I don't think you'd have a very nice retirement. You may not be able to afford many nice holidays or hobbies. You need to boost your savings because if your DH died you'd really struggle.

So he has a defined benefit pension of £24k per annum? That’s almost certainly index linked (you should check this- who was his employer?)

And you have £6k per annum.

As a rough guide that’s equivalent to you having between you a pot of around £750k. It’s really really good.

You should definitely top up your state pension.

What is your household income now? Assuming you can draw you pensions now, you’d get between you £42k at the moment (24+ 6+12) rising to £54k when you reach SP age.

This is really good and much higher than a lot of people are looking at. https://www.retirementlivingstandards.org.uk/ This suggests that a couple can have a moderate standard of living on just under £44k and a comfortable standard on just over £60k, but it’s all personal and dependent on your own situation. For example, do you own your home?

if he dies and you’ve reached retirement you will have £30k per annum. Again, not bad at all - a moderate income according to the link.

That's really irrelevant as we have no idea of your outgoings or of theirs.

Are you not happy at work? I would say it is wise to keep adding to the pie.

@LornaSaysYes The RLS figures are after tax, not gross.

This is a good point. It’s still true that a £54k index linked income is very good though. Really easy to underestimate the value of a db pension. I

He will get almost £2k plus state pension - tax and you will add £500 to the pot. Can you live off that monthly? That is the question you need to ask. How much do you need each month to live a comfortable retirement? Surely if he is working plus taking his state and occupational pensions he is paying a lot of tax.

I'm retired , no mortgage but know it's about 800 a month just to have the house in place.

Without knowing what your fixed outgoings are - its impossible for anyone to say whether you can retired or need to keep working

you need to sit down and calculate what your fixed monthly bills amount to?
then sit down and work out what your fixed income is without working? Which id goes is

£166 per month from dh private pension
£500 per month from your private pension
£996 per month state pension for dh
£1662 total without work

so £1397 for dh to pay tax on across the total year at 20% £297 tax payable

If you continued to work and earn less than £546 per month, so 10 hours a week - then you'd maximise your tax free earning between you

giving you £2200 a month between you for 10 hours work per week on average

added to that if your savings are in an isa - then you'll get tax free interest of £122 per month at 4.2% interest - which is easy enough to find

If though this money is not in an isa then you'll need to pay tax on £470 as interest is payable at 20% for every £ above £1000 you earn interest - so put in an isa if not already in one to mitigate tax

Then work out if £2322 per month is enough for both of you to live on for the next 6 years

his work pension is just short of 2k pa and if he dies , I get half of that for life.
i have a smaller work pension of
£ 500 pm as after dc i worked p t

this bit is a struggle to understand - as £2000 per annum is less than £500 per month?