Is £23k really only a modest retirement income for a single homeowner?

[Lumpycat]

I’m at that stage where I’m constantly doing my sums and wondering when I’ll feel secure enough to retire.
I am a single 60 year old.
I’ve seen the standard responses on this based on some massive survey where it’s state pension levels to just survive. Then about £23k to have a moderate lifestyle and about £32k for a decent retirement.
Own own house.
Would have around £80k put aside for big things/kid’s weddings help.
Live in Surrey/outer London.
Drive a hatchback that I buy at about 2 years old and trade in at about 10.
Three adult children. One cat!
Hobbies very cheap. Reading, cooking, gardening, music, walking, local gym.
Not a shopper and don’t do beauty treatments.
I think I would spend about £5k a year on car including replacing it. Then about £2k on a holiday. Then bills and food around £750 a month so that’s about £15k.
House is fairly modern so not thinking it will need anything major for a decade.
I’m not massively sociable. Have close friends that I tend to meet for coffees/pub quiz/walks.
I don’t get why £23k gives only a very modest lifestyle. Seems like it will be plenty.
Current planning would give me £21k if I retired today then state pension on top at 67.
Really interested to hear from anyone who retired already on similar amounts and the reality of living on ‘below modest income’ levels at my age. What am I missing?

Ah, yes, I see the point! I had around 30 years in mine. If OP is aiming to retire at 60 then the full 40 might be a stretch.

I am planning for retirement now - hoping to retire in 15 years at 62 - but I do t want to take a significant drop in lifestyle!

i have a spreadsheet of all my monthly expenses and i am trying to think now these will change. Some are obvious - the mortgage will be paid off, I wont Waste money on a takeaway coffee every morning, or have commuting costs. Will I need to save at the same rate, or will I just consider the savings stage of my life done?

But most of my other costs will be the same or higher! I will have more time on my hands, so will be doing more gardening, more DIY, more traveling, more lunches and dinners out.

As I get older I will need a gardener and a cleaner. Someone to do the DIY (paint rooms etc).

When I was younger I thought retirement meant six months on a cruise ship sipping champagne!

35 years but lost about 8 to part time work for years. Plus I was at a lower grade while DC were young then went full time and moved up quickly. Quite a typical scenario for many women I know.

See I think this is where people need to think about their own attitude to money and spending. Even though I have the spare money now it’s just not on my radar to spend on most of these service things.
Yes I may need help but I have a very large and close family and we tend to help each other out when we can. Another reason to stay in my expensive area. It’s where my people are!
I’m not from money and I think just not used to high spending habits. Treatments and massages. I also don’t care about ‘stuff’ very much. Not to say it’s wrong to spend your money on handbags and jewellery and beauty treatments and high end hotels if that brings you joy. It’s so personal.
I know it’s not enough for the retirement some would want. I am listening to the cautionary tales. But think I’m more like @latetothefisting with my spending habits.

It’s funny what people spend. I’ve just been on the ‘how much was your summer holiday’ thread and someone spend 9.5k on a fortnight in Greece for 4 people (2 adults, 2 teens) - we just did the same length of time in Italy for just under 4k, all in. People’s idea of what is normal spending it very, very different. OP you sounds very similar to me on what you spend - I’m early 50s but have calculated similar budget and think it sounds plenty. More than I have at the moment trying to pay for 2 kids through uni anyway!

I retired last year at 60 and I'm loving it but hated my job towards the end. I live on a similar amount and it's plenty. I go to exercise classes, do long walks, lots of cooking and crafts. Holidays aren't a massive priority as life feels a permanent holiday and I live on the coast. I feel 10 years younger, no stress so I would say 100% go for it.

I wasn't talking about "stuff" or beauty treatments.

I was encouraging you to think about things that might change for you as you get older.

Things like - you put your neck out and you might want to pay for some physio or osteopathy or a treatment like that. Rather than join a very long NHS waiting list. A massage isn't necessarily a luxury if you have hurting muscles. But if that sort of thing isn't important to you, that's cool.

Similarly as you get older, help like a cleaner or a gardener might not be a luxury service - you might be physically incapable of doing it yourself. Maybe your family are willing to do a lot of that sort of thing for you - if so, that's wonderful for you. But I personally think it's risky to assume that.

In general you seem to take a lot for granted about how healthy and capable you will be and how much other people will do for you.

I talked to a retirement adviser a while back and the general advice was you spend most heavily in the early years of retirement , then less as you wind back , and then more again as you need a bit more help around the home .

So the basic advice was “ if you have enough steady income for early retirement then you have enough for the later years “

they didn’t advise saving for care homes and didn’t advise making the assumption that you would need more for personal at home support because of the assumption that you would have gradually been spending a little less anyway

and I was clearly looking at the modest level of pension income

My worry is the state of the NHS and waiting lists. Having some basic form of health insurance (Brenden) given the waiting lists for things like cataract surgery.

I do all my own paintingand decorating - I might not be able to do that in my seventies.

Grocery delivery services aren’t overly expensive - taxis if you aren’t able to drive for a while. And I do think a cleaner will be a help at some point.

Money means independence for longer. I want enough that I don’t have to ask favours to do a weekly shop, that I can get the hall stairs and landing painted if I need it. A newish reliable car. A nice holiday and some city breaks.

As you say OP, we all have different lifestyles and requirements. And we will all age differently and have different needs at different stages.

yes but it’s a question of how much money is needed and if a modest income would actually be enough

if you need painters and cleaners and gardeners and some private health stuff ( just like mother now) you are probably spending a lot less on eating , going out and travelling - at least that’s the case for mother and it’s because she no longer wants to do those things.

and she has also found that having some small savings means that she has had funds for the one off more expensive items like cataracts

Yes I agree but the OP's response to me suggested that she basically thought private health treatments were frivolous and that her family would do her cleaning, gardening etc.. So am not sure she has thought through whether it could be covered by a modest income

I would want to have enough savings to cover…

Things:
any potential repairs needed to the house
replacement of car and major appliances
people to clean, paint, repair stuff, gardening if I could no longer do these things

Quality of life:
travel - with decent hotels and business class if long haul
cultural stuff - theatre, exhibitions etc
having lunch/drinks with friends

Health:
being able to fund essential treatments privately if waiting lists are long; as we ‘run out of life time’ this gets more urgent….
cataracts
hip or knee replacement
investigations (MRI, CT etc)
high quality glasses
plus non-life-threatening ‘niggles’ that the NHS doesn’t consider urgent but which nevertheless impact quality of life, e.g. varicose veins

Thats all I can think of!

The reason I raised these potential costs was OP has said her lifestyle is very modest now. So I don’t think she will have significant savings from stepping down from traveling and eating out as she ages.

She should think through would she be able to fund - say - cataract surgery privately if she was faced with a five year waiting list. Does she want to rely on family for cleaning and gardening and diy, or would she want to be able to buy in some help.

Yes, but she seems very naive about the possibility of ever having any health issues.

The other thing about the family help side is that currently she has three adult children who don't have their own children. If any/all of them have their own children, they will of course still love and want to support the OP, but they will not have lots of time available to help her with daily chores. And likely the OP herself would prefer to spend time with her children/grandchildren, not have them come round to do the hoovering

Watch this video, it will put things a bit more realistically than ridiculous surveys that say you need X £££s to live a comfortable retirement!

@IlovedLadybirdbooks Ha, ha - no. Op has her head in the sand. Her life expectancy is 87. Over one in four adults aged 65 and older fall each year, which can lead to severe injuries like hip fractures or head trauma. Even if the NHS fixes the broken hip it's 6-12 weeks recovery for normal tasks and 6-12 months for full healing. It's about that for most broken bones. It's 2-6 weeks recovering from a cataract op. About 30% of adults over 65 live with a visually impairing cataract but the NHS doesnt generally do them until you are past 70. Studies show roughly 40% to 48% of women around age 70 report bladder leakage, with numbers rising closer to 50% or higher for those aged 75 and older. OP has had 3 children - she's likely to be one of the women coping with this.

What type of ill-health she will suffer from and when is unpredictable but what she can expect is that she will experience some, maybe in her 70s and certainly once past 80. There probably arent any over 80s on mumsnet to warn her/you so she'll have to make do with me - although she could read some of the threads in the elderly parents section. Gransnet might have some better advice.

She isnt planning to spend a lot on holidays and eating out but she does think she might want to support her kids still. Her 3 adult kids are currently healthy but childless. Look at the threads on mumsnet - once they have families they'll be doing their own diy and not wanting to do OP's as well. They are not going to want to be around every week weeding the garden and nor should she expect them to do it. They arent going to want to stay with her for 6 weeks at a stretch after broken bones or operations.

She needs to really think about her expectations and whether they are realistic. You dont want your kids resenting you because you are constantly making excessive demands on them. She might even want to spring for a holiday or two taking the grandkids to, say, disneyland.

Is it being so cheerful that keeps you going, @anyolddinosaur 😂

I agree with others that you have to take what the finance industry says about what you need as a retirement income. They have a vested interest in you keeping savings/pensions tied up. Now private pension pots are subject to IHT, the government also wants you to oversave.

With a paid off home and a nice family, I think OP is well placed to take that leap of faith into retirement.

I appreciate it’s daft to not think I will ever be frail. But I do know I already apparently have a better pension than most so am I really supposed to work to 67 then save it all anyway for my cataracts and hip replacement?
This has gone from wondering about my grocery and travel budget to being blind and sitting alone in my own piss.

Just watched. Thanks. He is painfully slow but agree with the ridiculous figures on what is needed. £500 eating out!

yeah but these things (most of which most people aren't going to need all of!), aren't necessities.

And even if they were, they don't come close to the big spend items most people will have hoped to have paid off by retirement.

A cleaner for 2 hours a week, is, what £40-50. That's not the equivalent of paying £300 a week in childcare in your thirties.

A private physio is, say, £50-80 per session for 6 sessions. So about £400. Not comparable to £1200 a month on a mortgage for thirty years pre retirement.

Nobody is saying you won't have or want to spend any money in retirement. Just that the logic used by many of these financial forecasters suggests people will need significantly MORE money during retirement than they earn during the most expensive times of their lives, despite most people having significantly fewer big outgoings (mortgage, supporting dc, paying off student loans, commuting costs) by then.

This. It's great that you're content but for many people never eating out only 1 holiday a year and an old cat would not make them very happy. You are content to live modestly. I think many others wouldn't be satisfied with that lifestyle. Don't forget you'd still pay some income tax on the £21k.

I have council tax £234
Electricity/gas £260 including car charging
Water £65
Internet/TV package/subscriptions £89
Mobile £10
House insurance £48
Accidental death £6
Boiler service/gas certificate £10
Gym membership £40
Cats £40
Food £800 me, DH and 3 teens
Eating out £350
Holidays £700
Help niece at uni £50
Holiday home tax/water/electricity/upkeep £50
Birthdays 3 DC/2 DGC £50
Xmas Gifts 3dc/2dgc £150
Xmas food/entertainment £100

That's about £4260 before any fun stuff. I found I spent more after I retired early. Whilst working I was always too tired/exhausted to go out much. I joined gym so membership fees. After I took early retirement and especially after DH too took early retirement 4 years after me I find we eat out more gogether, go off for day trips occasionally staying in Premier Inn overnight, go to watch more sport live events, shows etc we never really did as much whilst working as Just too tired and had to get up for work next day. Just a coffee out whilst walking dogs around lake is £3.50 each. We certainly have more energy and are keen to do things whilst we are still able. I think as people get to over 70 they might spend less as not go out quite so much. Then over 80 spend a lot less. I'd be wanting a lot more than £23k from 60 to 67 as that's when people tend to spend more immediately after they retire but still fit enough to do more.

How can you say "without any fun stuff" when you have £700 per month (£8400 per year) budgeted for holidays, £350 per month (£4200 a year) for eating out, you're giving your niece £50 a month for no apparent reason (do your siblings give your children £50 a month in return?), you put £150 a month away just for your children's Christmas presents - £1700 per year - and an additional £50 a month for birthday presents - and your monthly budget includes upkeep of a holiday home as an additional, separate line to your holiday budget!

Your food budget isn't for one retired person but includes feeding three teenagers.

I don't think you're seriously suggesting that this is a retirement budget (it's highly unusual and not relevant to the OP to suggest feeding three teenagers is something people should budget for in retirement) and without sny fun stuff has to be tongue in cheek!

Just watch you haven’t faled into the 68 age bracket for pensiosn, what’s the alternative stay working a few more years? I’m not sure 23k would stretch if bills and food keeps going up!

I would assume that all of those items are "household" rather than one person! Hardly like-for-like with OP. Does @caringcarer's DH not pay for anything?