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 ?

A useful set of additions to this thread which I started in early 2021.

I can't find any more up to date article than the original Which link with a proposal of how much people need per year. I have found a fairly recent quote from Martin Lewis who says "The money saving expert continued: “A decent retirement is about two thirds of your salary."

Everyone's different, I retired and we live on about 45k net a year, thats with no mortgage, car loans etc. Our largest expenses are holidays approx 10k a year , which sounds like a lot but are only 4 modest holidays. We don't spend much on clothes, eating out etc, it's amazing how things, like, energy, food, house maintenance etc add up.

I have been forced into retirement a couple of years before I get my state pension and I can manage on £15 including running a modest car. (No mortgage or rent).

I will be retiring this year. DH works 2 days a week on a project he is passionate about and will continue for at least another year. Without his work we will have about £50k gross pa. Compared with what you read here and on Gransnet it sounds ample but when you factor in house repairs and improvements, cars, decent holidays etc. it comes out at about adequate for us. I am not going to end up like my mother dressing from Edinburgh Woollen Mill and Cotton Traders so I'll need money for that hairdressing etc.
I'm thinking of a part time job myself too, then I can have that money for self indulgence.
We are fortunate in that DH had his career in the public sector, so his pension is inflation linked, and we have no mortgage but over the years as the mortgage was paid off and the children became independent we have got rather used to living high on the hog and I really don't want that to end just yet.

took early retirement last year. pension is 21k pa managing fine on that

We are aged 57 and 59 and retired. We live on 28000 per annum but don't have foreign holidays and run old cars. We do have 3 ponies which I suppose are the equivalent to the cost of holidays.

What would you do if your pension pot was low at 55 if you wanted to retire at 65?

Would you downsize now, clear small mortgage invest the large equity for 10 years? Can you put it in a pension plan or is that a poor strategy?

Would this be like the FIRE thing in your 50/60s rather than 20/30s?

Very interesting thread.

For those already retired or close to retirment age, what would your advice be to those in their 30s? Anything you which you had done sooner, hadn't done or very greateful you had done?

Don't downsize until you retire. Property will do far better than the bank.in 10 years your property will make at least 10 to 20k a year doing nothing.

That's hilarious, I get my shirts from EWM, they are great.

Is it not worth downsizing now and putting the equity into a pension or other investment rather than savings which gives a revenue stream in 10 years time? Or are you saying pension can’t out perform pension in the next 10 years?

What do you do with cash from down size at 65? Is that where those equity release things have you over a barrel?

I recently worked this out in a spreadsheet, based on current prices, and worked out as a couple we needed 25k (no mortage or rent needed though). That included holidays and everything - even down to haircuts. I also factored in the cost of replacing 2 cars every 8 years, replacement white goods and household repairs.
I think 25k is a pretty good estimate for a couple, but obviously the cost of living could be more when you retire.

Dh has just retired, I’m still working as I’m 14 years younger. His pension is very good, approximately £25 grand a year until state pension age. I earn £40 grand.

We have paid off our mortgage but from September will have 2 dses to support through university so it won’t be cheap. I will be thinking about reducing my workload when both dses are finished with university.

I suppose I do worry as we don’t have masses left over now, although we do save and won’t save as much for the next few years.

I think in some respects life can get more expensive when you retire with all that free time🤷‍♀️

Retired last year with a lump sum and pension of 21k per annum. My outgoings aren't high. was never one for beauty treatments/clothes shopping etc and I,m doing fine. been abroad, have had multiple trips to UK cities. can still go out for lunch, coffees, etc. Go to the lakes/peak district Wales nearly every weekend. Food bills have gone down because I m not grabbing lunches at work or takeaways because I was too tired to cook or prepare lunch. I have the time now to batch cook/shop around/walk more. Time for hobbies.
I thought I might miss working and was prepared to do bank shifts to top up my pension but I, ve neither needed to nor wanted to.

I'm about five years away from when I hope to retire, at 62. The thing I really wish I'd done in my 30s is regular savings into a stocks and shares ISA, even a little bit a month.

The thing I did that I'm so thankful for is join my company's (final salary) pension scheme - I seriously thought of leaving it a year or two (Which I suspect would have meant not getting round to it for ages).

This is a really helpful and interesting thread. I started doing spreadsheets several years ago - still don't understand how we spend so much money! Just about retiring and planning several trips. We are using drawdown from our SSAS to finance us for the first 3-4 years until both DH and I get our state pension, but plan to enjoy the money we have earned in the first 10 years of our retirement (fingers crossed), as who knows what will happen in our later years.

I learned from my Mum - who had a very healthy company pension - that you just don't need a lot of money in your later years, unless you need care. Having said that, she loved to be able to treat us from time to time.

@Rapunzel91

I retired last year at 60. I’m loving every minute! Don’t miss work at all and trying to enjoy every moment (and succeeding!).

With hindsight I wish I maybe saved a bit more / paid more into pensions. However I did make sure my mortgage was paid off a few years ago so that helped increase the pot (as well as just taking jobs that paid a lot in the last 6 years!).

It is true you need less money in retirement and you can get great deals. I’ve just come back from 2 months in Spain (accommodation was €550 a month including all bills - food fantastic and lots of fun was had!).

Regarding downsizing, it’s a personal choice and depends on your circumstances. We retired at 57 from a remote region, sold and moved to a community with better health services and amenities. The smaller home is cheaper to heat and maintain. We stayed within the same price range. Pleased we did.

We're 10 years away from retirement, all in we'll have 45 grand p.a., along with the state pension a few years later, a good lump sum which we plan to buy a small cottage with, drop to one car only and mortgage will be finished, We'll be leaving the adult kids living in our current home, with them paying nominal rent, or rent it out if the kids don't want to. The youngest will be 24 so hopefully finished college. Fingers crossed no major disasters for us between now and then.

I’m retired…my budget spending is £23k …that includes quite a lot on entertainment and hobbies, running a car, a holiday, and eating out/ takeaway once per week and the odd “ destination coffee” with friends. It also includes quite significant sums for house maintenance and contingency for repairs
I live on my own so that includes all bills etc.
I know I could cutback and live reasonably on around £19k…less than that I’d be a bit anxious about unexpected bills and I’d have to reduce my hobby spends which in turn would reduce the amount of socialising I do - as I am on my own that’d worry me a bit.

We've been early retired about nine years now (husband at 57, me 61) and took our workplace pensions early (my husband has one, and I have two from different occupations). My state pension has now kicked in and my husband will get his shortly). We find having a basket of income, savings and investments works for us. Our income once state pension fully kicks in will be roughly £38k which is comfortable for us as we have a simple lifestyle. We moved to a more modern property just before the pandemic and the reason for this was to have a smaller garden but mainly to be nearer to our daughter. We did manage to release a bit of equity, which will be given to our family when they decide they're ready to move to a slightly bigger house. This has been held off for now until they see which way the property market goes as it feels unstable at the moment.

Our biggest outgoing is the council tax (Band E house), we've gone down to one car and once our grandson goes to school and we no longer look after him our petrol bill will decease massively as we can use bus passes to get into our nearest City. I took a risk recently and fixed our energy costs - EE at 24% over the present price cap, fixed for two years. Obviously not sure how that will work out, but it gives us certainty - looked at the MSE website for advice on that. For things to improve our house (recently had an old gas fire replaced) and projected other stuff including new sliding doors we contribute equally from our savings. We go out to breakfast a couple of times a month and have days out. I lunch with a friend about once a month. I love clothes and have an extensive wardrobe, sporadically added to from mainly T L Maxx. Not interested in foreign travel at the moment - too much hassle. I love my garden but grow loads of stuff from seed and propagate from existing plants and shrubs too.

The thing that gives me peace of mind financially is knowing that even though it's not huge - this income is regular - and we both have good savings as back-up. We contribute the same amount each to bills, but have completely separate finances apart from that.

I have just retired early. I have savings and personal pensions which give me £1200 a month. Dh retiring end of the year on £1000 a month. At 60 the pensions will be replaced by work pension which is similar amount. We also have a separate account just for holidays £80k, other savings in premium bonds for emergencies, new vehicle etc £60k. Both of us will get roughly full state pensions. We have a rental property without a mortgage which we bought when we downsized to sell if we need to. Bills/food are £7k per annum which leaves enough for 3/4 holidays abroad plus our normal leisure pursuits.

Congratulations Bearsan on the early retirement !

Your bills and food sound very low and economical on £7k per year - or did I misunderstand you, does that relate only to utility bills (gas / electricity / council tax) ?

Thanks BookWorm45
No that's pretty much everything.
We have a log burner though and get some logs free.
Monthly - Council tax/gas electric/WiFi/house insurance/water/tv licence = £320.
Same amount again for food.

@Rapunzel91
Reading this thread we are looking at a higher level of income in retirement. My only regret is that I didn’t take a career break when DS was little. At that stage state retirement age for women was 60 and DH persuaded me to go straight back following maternity leave so I would have full contributions at 60. I’ve now been working for 42 years (not including part-time work at school) and have another seven years to wait for my state pension. So my advice would be to be aware of which pensions could change / be taken away from you.