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 ?

And here we are, having spent nigh on thirty years apart Monday to Thursdays, didn't mind the UK so much.

Switzerland and other places were a drag,(even weekly Laderach chocolate from the airport did not ameliorate the situation) to ending up with a very respectable final salary and state pension combined, plugged it into the Salary Calculator the other day , and went oh look yay a bit extra that will be nice, up to now we have been saving like mad. Then we both looked at energy surplus and we looked at each other and said, oh wait, that is energy crisis......

I know. know, know we are lucky to be buffeted by it, but we really should at our stage of life be buffeted enough by the little left at the end of the moment to want to go off and spend in farm shops and harbourside coffee houses,,,thus putting back into the right pockets, not the pockets of energy suppliers.......

I'm 58 and could pay off my mortgage with savings and downsize a little. Currently work full time but would like to give this up and find a part time job until I get my state pension. Current private pension of around £200k but not planning on touching that at the moment and not sure what to do with it. Those of you who have found part time jobs in your late 50s/60s - how easy was it?

For me, very easy. I’m an experienced teacher, and now work 2 days a week as a PPA cover teacher. Lots of my ex colleagues ask me if I can do a day or two in their schools!
I have several friends in their early 60s who also have part time jobs - in shops, cafes, NHS, Civil service. Plus a couple who do agency work.

Just bumping this thread up in view of the massive rise in cost of living and cost of energy...

I will be on my own soon (DH terminally ill) and will reach state pension age early next year. I've worked out my annual income after tax will be approx £16,050. That will be made up of the full new state pension of £10,600 plus 50% of H's work pension and a tiny work pension of my own.

I live in the south east and council tax alone will be more than £2000 pa (after the 25% single person's reduction but not including any impending increase strongly hinted at in the news). We own our house outright and have no debt. My small car is around 10 years old but is reliable (fingers crossed) and in good condition.

I won't be flush but think I'll be OK. I might look for a job in any case - I haven't worked for a long while as I've been caring for my DH so any job will probably be low paid like garden centre, shop or cafe.

When I started this thread, in Jan 2021, the Which suggestions were "couples enjoying a comfortable retirement" spend around £25,000 a year. For singles, around £19k a year.

I've just looked at Which and they have updated their suggestions now (as of Oct 22) for a comfortable retirement, so that income targets for couples are now £28,000 and for singles, £19k. Obviously that won't take into account the very recent budget changes which I assume would mean the numbers need to go up again.
www.which.co.uk/money/pensions-and-retirement/starting-to-plan-your-retirement/how-much-will-you-need-to-retire-atu0z9k0lw3p

I am in my 30's but I'm aiming for around £20k a year as an individual. I don't know whether or not to include state pension in this figure, as a lot can change between now and then.

Some folk seem to think that the state pension is unlikely to be around in another 30 years and that it will be means tested. The other side of the arguemrnt is that means testing everyone is very expensive in itself, and that means testing actually discourages people from saving into their own pensions.

This is making me feel like I spend way too much.

I've recently been living (temporarily) on fixed income (but soon to go back to work)

No mortgage but standing orders are still £1400 (bills, charity donations, essential insurance, gym, private health - I have joint issues so need the physio)

Food (so expensive!) about £600 a month for 3 of us

Then all the rest.

Going out / lunch or dinner out occasionally £400 (£100 a week - quite a lot? )

Travel /fuel £100 or so
Other stuff - haircuts, toiletries, presents, gardening supplies, bird food at least another £100-200

So in total £2700 minimum a month, excluding holidays, repairs to,the house, car maintenance, new glasses, dentist etc.

So that's net £32,400 a year, (more gross).

I'm used to a much bigger income (not a stealth boast) and it's quite a shock at a) how quickly the money goes and b) how much we spend on non essentials.

I'm of the view that retirement should be about relaxation and finally having the time to do what you've always wanted. Sadly, that doesn't seem in reach if most. it's going to be a bit tight to have the comfortable lifestyle my parents did after retirement.

and before anyone starts throwing rocks at me, I've lived on (and below) the breadline in my life and know how bloody awful it is. That's one of the reasons I intend to enjoy my dotage as much as I can and don't live more frugally than I need to (a very privileged position I know).

That's a very long way to say that for me and DH 25k is realistic (once our kids are no longer dependents) but would mean cutting out some fun stuff, not going on holiday and not spending on new clothes etc unless we really had to. Living is expensive. ^^

I can see that’s enough to live on, and the fact you have far more time makes life cheaper.

But I wouldn’t want to live on it if I could avoid it.

Exactly.

I think the Which article is based on an old fashioned idea of a quiet retirement, that’s not what a lot of us want.

I retired a bit earlier, having learned from a retirement seminar that I wouldn't lose as much income as I thought by doing so. I was also pleasantly surprised by how much less my outgoings were, car fuel, lunches, etc.

My best financial move was to join the local government pension scheme and also pay extra AVCs early in my career, even though initially it was difficult until I built up my salary, especially when also paying the mortgage.

I would say that I have around 2/3 of my working income, which now includes some state pension. We paid off the mortgage and have no debts. DH has a small pension and the state pension.
We both have some paid work as well, I am a Registrar, working sessionally, and he does some pest control. This is his beer money and my tea-and-charity -shops-afternoons money.

We bought a small piece of land, which we are gradually turning into a garden and orchard. After laying out for hedging, fencing and trees, we now get everything else from Freecycle: bricks for raised beds, slabs for inside the poly tunnel, water butts, garden furniture, etc, so hopefully we will only need to buy seeds. We get tons of free horse poo from our friends with a livery.

I have enough clothes to open a shop last me, same with books, DVDs, etc.
Our biggest expenses are council tax and oil, although we supplement the heating with our wood burner.
Our biggest extravagance is having two vehicles, but there is no way on earth we could manage with one.

@Luredbyapomegranate

A recent conversation with my financial advisor did give some hope though. He said that expenditure drops rapidly in your late 70s /80s (unless you have to pay for care) so your 'needs' tend to be far less.

That said if I'm fit and well I'd like to be popping out for lunch and coffee with friends or my kids and not worrying about it, and able to holiday annually to somewhere warm. So I'm not sure how realistic that will be for our generation who seem to be ageing more slowly than our parents.

@TheVillageShop I'm sorry to hear about your DH.

Oh mine says the same - I think it’s to make us feel better about the horrific amounts of money we have to put away.

But I think it’s based on a totally outdated idea of retirement. I think it’s reasonable to hope to be sprightly to your early 80s - and popping out for lunch etc beyond that - and if you aren’t, you probably need an expensive knees replacement or whatever

DH and I were sort of forced into retirement by Covid, having spent time worrying about whether our pension pot would last. I've done several things which have helped me come to terms with how the money will stretch out, starting with recording everything we spent over the past three years. So interesting to look at the different categories - how do we spend so much on gifts?!!!

I also have a spreadsheet showing income and expenditure until I'm 85 - so over 20 years away! Travel is a big thing for us, and we want to do it whilst we're still relatively fit and able, but it is a big cost. We too have been told that come 80 we are unlikely to have the energy to travel as much as now, so our costs will reduce.

It's all a bit geeky, but I actually enjoying updating and re-evaluating our financial situation, as I feel it gives me some control over the situation.

I am currently in the middle of a brush with breast cancer, which fortunately is being dealt with. But that certainly put things into perspective - I'm not going to be saving every penny that I can, we need to enjoy the time we have!

Just hope that yesterday's budget doesn't damage our plans too much.

The Which article is based on retiring at SPA, I think. Younger people (40s and under) will be used to that as the age you retire. But anyone closer to 60 now will, I think, still think of 60ish as pension age and not early retirement. So if you can match the Which figures at 60, you're doing well, pension-wise.

The useful thing about the Which article and this similar research www.retirementlivingstandards.org.uk (not updates for recent COL rises though) is that they have different levels for different lifestyles. So if you want the luxurious version with long haul holidays and private health insurance they have that as well as the essentials and comfortable amounts. Luxury is 45k for Which and just under £50k for the other (spending not gross income) so I do think they cater for the now so quiet retirement too.

I am decades off retiring but it's helpful to have some kind of benchmark for working out where to aim.

This keeps popping up on TIO, so I thought I would update.

When the dust settled, we have ended up with £49,000 before tax in pension icmome, £40k in PB's, £270,000 invested with Royal London, sadly the investment figure has jumped as my DM died eight weeks after a dreadful fall that left her with five facial fractures.😰

Just for levity, DS 21 is still eating us out of house and home. 😂

According to my pension provider's current estimates, a moderate/ basic lifestyle will require £23k pa as a single person and a ccomfortable lifestyle with some meals out/ holidays would require £39k pa for a single person. This is assuming no mortgage/ rent payments.

My pension arrangements are just fine. I'm just not sire what I would do with myself. Am 62. Still rocking full time.work.

@RosesAndHellebores

I used to say that, but ill health made me slow down and once you do life is just grand.

I think it's important to work out the level you need for your own personal finances.

I have heard people at work quote those published figures that others have linked to as a means that they can't afford to retire yet.

But you have to think differently to how you will live in retirement. For us we will be able to shop more frequently and locally when retired which will save money as we tend to shop for convenience and have little time to cook.

We like our holidays and they are eye watering expensive because we are stuck for times we can go and tend to want luxury to make up for us both working long full time hours. When we retire I know we will be able to go on more holidays for a lot less because of the flexibility and not compensating for having to work.

Maintenance of the house will be less as we can do a lot ourselves but when working we can't as time poor. And when I physically can't then I suspect I will be old enough not to care if my kitchen/bathroom/decor is flaking and aged.

I looked at our current spending and used that as a list then adjusted figures for retirement.

Are these figures before or after tax?

I think Which and the other I linked to are both expenditure rather than income so post tax

This is my Ad-Hoc reckoning regards retirement expenditure in today's money (retirement some years away yet). Basically what we spend now (Me, wife, 2 Kids). How does that compare with anyone else?

Essential
Gas and Elec £3,000
Food £4,000
Council Tax £2,448
Health Insurance £2,400
Fuel £2,400
Car maintenenance £720
Clothes £600
SKY Phone £300
Hair £300
Water £480
Home Ins. £363
Life Insurance £360
Car Camilla £360
LV Car -me £360
TV £264
Dentist £180
Shoes £300
Sub-Total £18,835

Luxuries
Lottery £120
Window Cleaner £120
Booze £600
Activities (Cinema, Comedy etc) £2,400
Holidaysx2 £7,000
Netflix Amazon Disney £360
SKY Digital £1,242
Gifts £500
Takeaway/Eating Out £2,400

Total
£33,577