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 retired early- get £1200 a month pension. I also returned to work 2 days a week and earn £1200 from that. That's the reason I retired early- get pension, work only 2 days but get same amount as when I worked 4 days a week.
It's worth it 😬

Interesting comment from someone upthread about going on holiday mid week etc. I think holidays in retirement could be so much cheaper than now - as I would avoid all the peak times of schools off etc.

This is a "piece of string" question really but the replies so far have been very interesting.

DH and I are planning our immensity early retirement - he finishes at Easter, me in July.

We currently live in job-related accommodation (though we own a house, currently let) with council tax, water, phone and broadband paid.

My very rough calculation was to take what we currently bring home, add the cost of the above, plus a few hundred more to allow for plenty of gallivanting, days out etc, to arrive at a figure we would need to be available each month. That is 3K per month, but I’m full aware we could live on a lot less if we needed to. That is also roughly what our DB pensions plus state pensions will add up to once they are all in payment.

We both have a personal pension pot as well, so the plan is to put those into drawdown when we stop work, then as each DB pension kicks in (different ages), reduce the drawdown to keep our total income about the same. Our financial adviser says the pots will last, and we have other savings as well.

@PuzzledObserver when you say early retirement...how early?

@Quarks69 I'm 57. DH 61.

I'm 51 but still have a dc at primary, will need to add on enough time for the dc to be "grown" before can take retirement. If not for that would love to stop work (or, work in my current job) sooner.
Reading the thread I'm coming to see we need financial advice

@CookieDoughKid

£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?

This. Most people don’t really understand quite how much you need that pot to be in order to just be “comfortable “. Half a million is about right fr a 20k pension

How many are on track for a half million pot?

This. Most people don’t really understand quite how much you need that pot to be in order to just be “comfortable “. Half a million is about right fr a 20k pension

How many are on track for a half million pot?

This is very true but I suppose 'it depends' is the answer to whether you need half a million to draw £20k/pa

If you're using drawdown and don't mind the pot being depleted you could do it on less.

At 7% growth and increasing the £20k drawdown by 2% each year for inflation, a £300k pot would last 30 years.

Due to a sudden change of circumstances I'm looking at retirement income of c. £25k for me alone, where we were looking at £45k as a couple. Maybe it's not as bad as I feared! I'm struggling to see how the adventurous active retirement I thought I was almost ready for is possible on £25k though.

Depends what you want to do! My bills will be about £7k a year. What do you think yours will be? That's the first thing to look at, yearly expenditure. If you don't have a mortgage or rent to pay that's a big chunk gone.

They reckon you need a lot less than you think. If you live to 67 and have paid NI you'll get a further £9k

It really depends on what you expect from retirement, I expect to live on the state pension alone...as my parents did before me in their retirement.
I'm a coupe of years off getting my state pension but currently semi-retired in a small part-time post which pays so little I don't even pay tax, and which is roughly equivalent to my predicted state pension entitlement. And yes, I do pay rent.

We have only ever really planned one pension, it is a final salary and kicks in in August , DH will work for another year to wait for his state.

So then we will have a full year of salary and also the final salary pension income hitting the bank. HMRC will be thrilled.

The final salary is £36k a year, plus state which is knocking on £9k

We will also have a saving pot type pension which will have about £150k in it after tax.

I have two small pensions totalling £40,000, one is £2,500 and the another annoyingly is over the threshold where I have to take indemnified insurance advice, I am in the process of cashing these in, to place in the beer and skittles account.

Added to which if my DM doesn't need to go into a home there is a pot of about £450 - to £500 k to go three ways.

If DH dies in the first year of retirement I get the full final salary for five years, after that it is two thirds for life.

I am eight years younger so we have a while for mine to kick in but when it does it will give us another 9k.

We sacrificed a lot to get here, I hope we live long enough to see it.

@BarryWhiteIsMyBrother

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.

So you're expecting to be bringing in more when retired than when you're working?

We will have the monthly income we have now, bar the £1k we currently save, but then we will have guaranteed savings pot of £150k so no real need to save, we also currently have about £21k in PB's and the year we are on double bubble, we can stash that extra in PB's so I guess it will be what it will be with the guts of £200k behind us (regardless of possible inheritance)

Our FA said the first ten years are when you tend to spend large on holidays and trips and then you tend to rein it in.

This is really interesting- I calculate that we’d need £35k per annum based on current costs as a couple to have a comfortable life.
DH will have virtually zero private pension, but I have public sector final/average salary pension which will be something like £25-30k depending on how many years I end up doing (40 years is the max, already got 20). Then we should both have full state pension on top.
I’ve got a BTL to cash in too.

So retirement is pretty much sorted as long as I do another 9 more years in my sector but ironically we really struggle with cash right now (older parents with nursery costs plus a needy equine). We have nothing left after bills right now and have to scratch around for money for clothes etc. But it’s reassuring to know there’s light at the end of the tunnel!
The earliest I could retire though will be 62 when DD out of uni (assuming she goes). I’d need a part time income though to get us through to pension age at 67.

I took a lump sum and was able to pay the mortgage off not leaving me much to live on pm.
I have no regrets. I retired early at 58
Recently.
It's hand to mouth after the bills but I'm happier.
About 11k pa.

Oh and when the teen heading into to twenties moves out, we will save a fortune on food.

I shall pay my mortgage off with my lump sum.

I can downsize and sell for £240k and buy something for half that in my area. This should hopefully give me a £100k buffer for holidays etc

Pension will be about £15k when I retire at 58 plus £9k state pension when I get to 67!

I'm a teacher and will have worked 30 years when I retire.

My DP has no pension until he gets to 67 but will continue working part time.

Also waiting for 18 year old to leave which could be a while

For anyone in their 50's with late primary/secondary aged children i.e 12s and 13s age group, when would be the earliest you would retire?

I always hoped to keep working until mine were finished college. However, nowadays some of them stay in fulltime college until they are 27 or as long as you keep paying for them. I will be 62 when my youngest is 22, and I would hope to retire then, when the primary degree is done. Otherwise, I would be 67 and still working. Does anyone have thoughts on this?

I'm thinking I'll start to wind down from about 62/3 when DH reaches state pension age, and then stop working altogether at 67. My youngest will be 21/22 then.

I've only really started thinking about it recently though - I always assumed I'd work till I was 70 but now I don't think I'm going to be quite as broke as I expected. If nothing else I should have a full state pension plus a DB pension of £3000+ a year from an old job, plus I'll have been saving for 25-30 years by then into a private pension + ISA (won't have lots but I hope enough).

I'm a bit part time already although I think I'll work more after youngest goes to secondary school so I can save more ahead of stopping altogether and then just more and more time off until it eventually just merges together and I'm retired. I'm self-employed so should be able to manage the workflow to an extent.

I do believe that besides having no mortgage, retirement requires more money than non-retirement

I’m retired. As l got older l lost interest in clothes, hair, nails etc. I wonder if it was the menopause? I was really interested before that. I hardly spend anything now, no posh work wardrobe to buy.

We live comfortably on about £28k p.a. - husband doesn't receive his state pension for another couple of years. Being mortgage free definitely helps, but also our lifestyle is different to when we were working as we've been able to cut out all those workplace expenses including now only having to run one economical car. I find I can still save as well, if I want to. Our biggest fixed expense is our council tax.

@BookWorm45

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 ?

I don’t eat out monthly now and never go on holiday abroad so doesn’t sound bleak to me at all.

My mum died recently but she had 13 a year. No mortgage but ran a car. I guess she lived simply but she could certainly afford what food she wanted, she was happy dog walking, seeing friends, gardening. She could afford to buy clothes she needed. She rarely ate out through choice but would have a couple of weeks away in the U.K. each year.

DH 66 retired the year before Covid and I chose to resign from my job last September due to changes and Covid. I have just turned 64. I have savings, shares and inheritance and DH has some savings.

We are living on DH pension which he says is £12,000 a lot less than I expected him to have, I thought that would be about what I get. We have no mortgage on our house but I have two years left on a house DS2 and I bought together and DS 3 now lives in. DS3 pays a nominal rent as he didn’t want lodgers in. I am still waiting for my pension to be sorted out.

I shop wisely and put bargain steak and salmon in the freezer. We shop fairly locally 5 miles away and supermarket shop once a month. Since lockdown 1 I have been trying out new recipes so have enjoyed those rather than going out. I went to Scotland to see my sister’s one who has been very ill my main reason for going and chose Airbnb. It was fantastic -clean, walking distance from sisters and small town high street. DS2 was going up on business and so a free ride up though I treated him to a lovely meal on the way up and before he left. I would definitely consider Airbnb for future holidays. There are a lot of beautiful places in the UK to visit but I hope to venture further afield when it is safer to do so.

In the meantime we have been getting things sorted in the house and a green house for the garden. I have been reading a lot more using the charity shops.
We are doing ok. We did have an insurance package which we paid into when in our 20’s which should have paid out £55,000 at 60 but didn’t!