Retired - how much money do you live on per year ?

[BookWorm45]

Still working but thinking about retirement once DH hits 60.

I found this article in Which
www.which.co.uk/money/pensions-and-retirement/starting-to-plan-your-retirement/how-much-will-you-need-to-retire-atu0z9k0lw3p
and it suggests that households "couples enjoying a comfortable retirement" spend around £25,000 a year. For singles, around £19k a year.

Is anyone currently retired and able to comment on this ? Do these figures seem realistic to you ?

I'm single and retired and live comfortably on less than that. Like most pensioners, I no longer have a mortgage which makes a big difference. I no longer have to pay fares to work or pay NI on my income. I do have savings which I use for big items.
If you pay rent, still have a mortgage and have no savings then you would need a higher income.

Thanks @Fairystory that is encouraging to hear that you can be comfortable on less than that !

I'm not retired but I am thinking about my own at 60 in c12 years time, and I worked out outgoings would be c£500 per month for utilities, council tax, insurances etc, assuming the mortgage is paid off or we have downsized. I reckon I'd need another say £800 per month for food and treats. Inflation will make those figures a bit higher by the time I retire. So I think drawdown of c£18-20k pa from my pension pot would cover it, plus I might still work a little part time job...then at 67 state pension would kick in which will be around £9k so from that point onwards I will reduce the drawdown.

DH is quite a bit younger than me so he will be working after I've retired, but he has very very little pension provision (not earned much, changed jobs lot, now s/e) so when he retires we will mostly be reliant on my pension income. I'm hoping we will be ok.

My 70 year old DM lives on £1k per month perfectly comfortably. She's single, lives in a modest 3 bed semi which was paid for in full years ago, has a caravan and 5 UK holidays in that in a normal year, eats out maybe once a month.

£25k, more than £2k per month? In fact that which article says you need £40k yo enjoy luxury holidays. Who is that which article catering to? Looks to me like the working £100k+ brigade!

The part which I think is impossible to know until it happens.... how much money is required to pay for medical / dental stuff, e.g. major dental work, can't be done on NHS. As we get older, teeth, eyes and hearing all seem to need money thrown at them.

£18 to £20k a year sounds about right for a couple with no mortgage or rent. But your pension fund would have to be pretty big to cover it. At least half a million pension fund?

I’m single and retired, and yes that sounds about right. Living the way we are at the moment with no holidays or leisure outings takes much less.

But how often do you go shopping on that kind of money? And where do you shop? Where do you holiday? Where do you eat out? I think those aspects will have a huge impact on how much you need. 'Comfortable' can vary significantly from person to person.

in reality I expect that I and DH will end up doing a "blended" approach when the time comes -

1. some money from pension pot drawdown
2. some money from State pension (not a lot !)
3. some money from a part time job.... if that is possible.

In retirement I can't imagine we'll be eating out more than once a month, and I don't think we'd be going on holiday more than once a year. Hmm does that all sound too bleak ?

My thinking is that once retired I'll have a lot of free time so I'll want to go shopping, eat out, go on holiday, etc, much more than I do now. So that will mean I'll need much more spending money.

My thinking is that the gap we need to worry about is the bit between when we want to retire and when state pension kicks in - because its the bit we will want to make the most of by travelling etc while hopefully relatively healthy. Then state pension will boost our income and we will probably gradually have less expenses. So will put any. windfalls over the next few years towards this 'gap'.

It depends on the kind of retirement you want. I really don’t want to just exist in retirement, I want lots of holidays, short breaks, meals out, theatre visits etc.

You can always downsize your home and move closer to a town centre, this saved my mum loads as she did not have to heat a large family home, maintain a big garden, and eventually when she could no longer drive, she was close to a bus route and amenities.

@blue25

It depends on the kind of retirement you want. I really don’t want to just exist in retirement, I want lots of holidays, short breaks, meals out, theatre visits etc.

That's my thinking too. I will probably also go to get my hair done weekly. An my nails done fortnightly. Eating/going out with friends, etc. New car, gardener, cleaner, ironing service, etc. I do believe that besides having no mortgage, retirement requires more money than non-retirement.

I assume about £30k a year would be enough taking into account reduction in NI and commuting expenses.

As others have said, it depends on the sort of retirement you want. If you don't already, start keeping an exact track of where your money goes. DH and I have used YNAB (You Need a Budget) since 2014 so we could work out (and can still) see exactly how much we spend and on what.
We can pay for all the essentials from one pension and fun stuff like holidays from the other.
Plus, we still intend to carry on working part time for a while so that means more money available for discretionary spending like helping the DC.
About £30K a year is ample for basics for a couple, we are aiming for about £46k net of tax to enjoy a comfortable retirement.

I'm thinking of retiring and have been looking at this. I keep a spreadsheet of monthly outgoings. I reckon to just live it costs us about £8k. That's heating, food, broadband etc.this is once the mortgage has been paid. No luxuries. So if we wanted holidays, clothes, meals out, weekends away etc you need to add that on. I shop in Aldi and cook from scratch, we have very few takeaways but do enjoy foreign travel which currently costs a fortune in school holidays.

We will downsize and then invest some of the equity. Also you begin to spend less as you get older I imagine. You will spend more for the first 10-15 years of retirement if in good health.

Everyone's 'number' will be different.

I’m a retired teacher but now work part time. DH works 4 days a week. We have no mortgage now, and live well on around £35k pa. Our outgoings are quite high (I think) in that we both have lease cars costing £500 pm, our TV package is about £150 as DH is sports mad. We do, however, save at least £500 a month.
I calculated that by the time FH retires, I’ll defining longer be working, but will also have my State pension. he has no private pension. By then we’ll have an income of £26k pa, but outgoings may well be lower than now.

‘Definitely no longer’

@blue25

It depends on the kind of retirement you want. I really don’t want to just exist in retirement, I want lots of holidays, short breaks, meals out, theatre visits etc.

So did I. I retired last Christmas. Covid put paid to those plans!!

I imagine being retired might be like being on ML in some ways. I didn't have many meals out but lots of coffee shops were visited! Retired I would also want to add on holidays and other hobbies. Don't know what will happen with dc regarding where they live as adults and any grandchildren, I would definitely want some money to help them when they needed it too (am 50 just now)

DPs have an annual income of £30K. Mortgage free. Live quite comfortably but DM only has £12K of that as her husband keeps the rest as he regards it as his

Took early retirement from teaching 2 years ago....had enough.....small pension so i have 2 lovely lodgers....both long term foreign students...i have around 1200 a month after expenses left, no mortgage....may go back part time in future if possible....

i like travel but am able to do the mid week flights so a lot cheaper, dont mind staying with friends abroad in spain, also we stay in hostels but get a private room so mix with younger people etc....really good fun...met some great people doing same as us....sim age....55 etc...I do however have another house which i have inherited half share so we will sell that when able and i may buy something small and let it out but can downsize my own home as have 4 beds and dont need it but like the house and area so happy to stay for a long while yet and do plenty of trips...!

I just about bring home £19k net now and I'm far from careful with my money. I think the amount quoted is way too much