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 50, dp is 56. We are moving away from London and buying a house to live in and two flats to rent out for our income plus a part time on line business. No mortgage. Kids all grown up. Can't bloody wait since working from 16!

We have a long while to go but if our circumstances remain the same and don't improve our pensions will deliver £70k. Once state pensions kick in later on it will be £88k. That plus what capital we have built up

When I was working, my disposable income was about £500 a month. It was bloody tough. Now that I'm retired and haven't got a mortgage, I'm much better off.

DH has retired and is now disabled. I wfh but retire in December. After my retirement we will have a disposable income of about £38,000. Given that we don't travel (DH can't), neither of us drinks or smokes, and we are vegan by conviction, we will be comfortable.

I have planned very carefully for this, and hope everything works out the way it should. I want to stop work and be able to focus on DH.

I'm single, still working and approaching retirement with no mortgage. I really can't see how I could live "comfortably" on £19k

Sure I'd be OK, but where's the money to replace the car, keep the house looking good, holidays and eating out?

I retired 3 years ago. Pension income just about £2k after tax. I live alone. I would say it’s more than plenty. I don’t have any debts ( eg car owned outright, house paid off). Currently I’m still not going out much in evenings as I feel a bit conspicuous own my own, but I go out for a simple lunch or coffee once per week, and do a lot of daytime activities that costs bits and bobs. I’ve not taken a holiday though. Not that interested
I’m currently saving £200-500 pr month - not deliberately, just not spending it. But I have big building work needed so conscious that every £ saved helps towards that and not using all my life savings up
I think that’s the other thing to consider. It something having capital…but you also do need a saving pot if possible to budget for things like car replacements, big ticket breakdowns or repairs etc.
My best advice is to work outs budget based on your historic spends cutting out all unnecessary frivolous stuff and expenses you won’t have then like mortgage . Figure out what you need based on what you currently spend on in todays money. Add inflation for years between now and when you retire and that’ll help you target what you need

I think so much depends on both your expectations of what you think it "normal" to spend - be that on holidays, meals, beauty treatments, nights out, or whatever your 'luxury' is, and also your housing.
Even if you have paid off your mortgage, if it is 20 or 30 years since your kitchen or roof or garden fence or boiler or carpets or whatever have been replaced, then you are likely to be looking at spending more over the next 10 years than if you have had all those jobs done recently.
Same with your car.
Our 'weekly' or 'monthly' costs can be thrown considerably if you have to pay our for a new roof for example.

If I take mortgage payments, childcare costs and work related costs out of my current monthly bills, and add a little on for higher medical and dental costs I think my essential outgoings would be about £1k a month.

I would like to have £30/40k a year between the two of us, but we could do it on less quite easily.

I have 11k a year. No mortgage but the house is in a terrible state and I am trying desperately to save for repairs. Realistically it's not going to happen. It's a tiny cottage so no downsizing for me unless I buy a kennel. If it wasn't for the leaks and damp I would be happy.

I'm approaching it from a slightly different angle. Spending now to get house, garden, vehicles, in best possible condition so that when we both qualify for state pension in a year we shouldn't have too many demands on our savings at that point. And house could go on the market quickly. Mortgage has been paid off for a few years.

Otherwise living more frugally atm to get a feel for just how much we spend unnecessarily. It seems that £3k monthly gives us what we consider reasonable, and driving it below that might become a bit miserable. DH and I each have one luxury which we would hate to give up, but could if necessary. That would probably give an average of £2k monthly.

Recently we've had to spend hundreds on glasses and teeth. Plus by choice going privtely for biopsies, etc, just so we know what we're dealing with.

Away to do some sums now.....

We are only in our late 30s but will need almost nothing to live on when we retire. We currently NEED to earn £9k each a year, so £18k, for all of our outgoings.
With the mortgage paid off, a downsize into something much smaller and with a little garden, and getting rid of one car, we'll probably NEED about £12k a year between the two of us.
I never want to stop working, so aim to top that up with a couple of shifts a week doing something, and my husband will do the same.

For the first time in most of our lives inflation is going to be a big thing for at least the next few years. That's quite a worry when you think you've got a comfortable retirement lined up.

I think that you could live quite well on 2k a month.
The big factor though are two variables you don't know.

1. Inflation.
2. What age you'll die.

It has been obvious in the past few weeks that circumstances out of our control can greatly affect living costs and investment returns.
I would also wonder about savings for replacement/repair of large household items such as appliances and cars etc.
Personally I'd like to be in a position where I could enjoy retirement rather than just exist in retirement. With that in mind I think you need to be comfortable at the start as the value and buying power of your pension income is certainly going to taper off with inflation unless you've invested broadly and dynamically or have index linked payments.

Lots of interesting points I hadn’t thought about…

-Boiler, carpets needing replacing
-rampant inflation
-£ for glasses & teeth, other health

Useful thread thank you

We are planning to retire early, in the next 4-5 years both aged 56/57, on 2 public sector final salary pensions. We will be able to clear out mortgage using lump sums and currently live comfortably on about £3000 a month (with the rest of our income going on the luxuries like cars and holidays at peak time) so with lower outgoings should be able to have a good retirement. We could work part time or keep going a bit longer to build up a bigger pot if necessary.

I remember my dad replacing all the white goods the year before he retired, and also all of the furniture that was looking tired.

I took note and have been doing the same thing so that hopefully it will all last a fair while. I'm also saving so that we have funds put by. The house isn't in great condition but it's old, sturdy with very thick walls. I worry about the roof but if it needs work we'll have to deal with it at the time. Carpets aren't great but we have dogs so there's no point replacing them.

3k a month will be comfortable for us. No mortgage, but will want plenty of holidays & short breaks. We both have hobbies which aren’t cheap. I have a LGPS which will provide a good chunk of that 3k fortunately.

It’s the utilities shooting up, food costs and large non frivolous expenses like new boiler/ flooring/ kitchen etc which will require savings over time.
If you only have £9K a year, even mortgage free, it will be a struggle when you have large house maintenance bill or the electric triples in price

Basic utilities of water, oil, electric, council cost us around £500 -£6K a year

If you spend £50 a week on food =£2600 a year. £100 a week = £5200. I doubt food is every going to get cheaper so your probably looking at £4-5k min per person per year in future

I have state pension only (basic plus a bit of earnings related) & DH has state (ditto) plus one small employment one, and two private ones. Our combined annual income now is just over £25k and it has been enough that we can afford to lease a new car (£250pm) & haven’t had to scrimp generally, but I think that will change with looming fuel and food increases.

Foreign hols have been off the table anyway because of Covid, and I now have a medical condition which means travel insurance quotes are in 4 figures if I’m not turned down flat, so they will remain out of reach. Luckily we are happy with UK hols!

So I think the Which figures sound fair, but I imagine achieving them will require much bigger pension contributions in the future.

Are any of you in London, please?

I've just spotted that this article is from last year, so I imagine those figures will no longer apply.
With all the current price rises and those expected later in the year it seems unrealistic.
Interestingly I'm currently surviving on around £12k a year and am not pension age yet.

My mum lives on £ 1200 a month ( state plus small private pension) she has around 50k savings and her own bungalow.....she lives very well on this....rarely dips into her savings.....except for long haul holidays.....home renovations etc
I am looking to retirement next year....I will be 58 .....likely have £1800 a month in 2 pensions....plus savings and lump sum.....lucky That my main pension will be NHS one.

This is an old thread .,, coming back on to say that private health costs - teeth, spectacles, hip - are costing more than I had expected. Rainy day fund very necessary.

@DetailMouse

I'm single, still working and approaching retirement with no mortgage. I really can't see how I could live "comfortably" on £19k

Sure I'd be OK, but where's the money to replace the car, keep the house looking good, holidays and eating out?

i have spent the last 3 years doing all this.....new kitchen, bathroom, garden landscaped, new fences, car upgrade, new flooring, decorated right thru house, new radiators, new soffits and facia, all outside wall repainted, new back door.....so when I retire ( hopefully next year) lump sum can just be added tosavings ( although obviously there will be other house stuff needed to be done along the line).... I will have a couple of K a year more than you but I think it’s more than enough to live well....I live in the NW

DH and I sat down this morning and estimate our utilities and council tax for 22/23 will not be far short of £10k. Add in the gardener and cleaner and that's another £8k pa. Food and wine without stinting is probably about £7k, add in cars and insurance, even if we keep them for 10 years and that's probably another £5k. Household maintenance is probably another £8-£10k per annum. Allow £2.5k for unexpecteds specs, dentist, chiropody, physio, etc. £6k for holidays, theatre, etc. DH's golf subs - perhaps better not to say.

That's about £50k per annum net of tax. Fortunately we are very well pensioned between us. We are presently 60 and 61. I plan to retire at 64 because that is when I will have enough years to claim the full state pension at 68 (contracted out LGPS for 8 years grr) DH is a workaholic and will go on into his 70s I suspect. However, we will not be happy spending that with just the two of us rattling around the house and it will make absolute sense to downsize when I retire and have time to take on a project.

DH will draw down the max possible from one of his funds as an IHT tool. Any savings will be for the DC. Hopefully when I retire grandchildren may be on the way.