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 reckon you can cut a lot of that out when you're retired.

Alan, the Money Saving Expert forum boards are also very good at discussions on spending / saving etc depending on what you want.

As for your total in retirement - I wasn't sure if you are looking for ways to spend less than the items listed, or whether you are looking to check if you have enough in your retirement pot to be able to afford all the items listed.

As BG said above, my view is that you could choose to spend less on several items in retirement. However everyone has their own preferences.

@Alan1999 that's a good exercise.I probably spend approximately the same on essentials but I don't have a car or health insurance, I stay with friends for holidays, I am happy with Freeview. I do have treats!

I do save every month. I noticed that you didn't include savings, though.

I retired almost 5 years ago at 54, and DH almost 4 years ago at 56. We live on 28,0000 a year.

@Mollyplop999 what sort of a retirement do you have? We’re looking at similar ages in a couple of years from now but worried we won’t be able to afford the life we’d like

I did a quick review earlier and just for: utilities; council tax; insurances (car, house, health); sky, broadband, mobiles; food, etc and I'm sure I may have missed stuff, our starting point is £25,000. Then I remembered, gardening; maintenance; replacing the cars; hair; opticians, dentists, chiropody; holidays; clothes; theatre; eating out; Christmas and birthday presents; etc.

We could of course downsize to save utilities, council tax, maintenance, gardening, etc., but that will cost us at least £60k once estate agents, stamp duty, moving costs have been paid and I question if the upheaval would be worth it.

OxanaVorontsov ourway of life wouldn't suit everyone. We live in a 1920s 2 up 2 down semi, so we're in band A council tax. We have old cars and don't go abroad. However we have 3 ponies which cost us £350 a month to keep, so I suppose that's a couple of foreign holidays a year. We've had to make some sacrifices , I buy most of my clothes on Vinted. Having said all that I wouldn't change any of it. I used to feel ill when I'd had any annual leave and was due to go back. I love my life now.

Honestly it's such a 'how long is a piece of string?' question as there are SO many factors to take into account. One thing for sure is that we won't have anywhere near as much disposable income as our parents born around 100 years ago with similar pension savings that were set to pay out far more along with a lower cost of living. I found some good articles here Which retirement guides

DH and I retired ( 5 and 7 years early ) about 18months ago, and live on under the quoted minimum for a comfortable retirement.
We are managing fine at the moment but we have no rent / mortgage / car payments / loans etc , which makes it doable . We have hobbies , modest holidays and pay our bills comfortably , but certainly wont be crusing the Caribbean on this income .
It all depends on your priorities, we could survive on less, but wouldnt want to by choice.

We were confident we would be fine with both our pensions - two full state and DH's work pension was going to bring in approx £30,000 pa after tax. That felt enough for a good quality of life.

I'm not quite retirement age and my DH is terminally ill, so when my state pension kicks in later this year I will have only that and half DH's pension, which will be about £16,000 pa after tax.

All those years we prepared for our retirement, we hadn't factored in me being on my own right from the start of mine.

@balconylife I'm sorry.

That is really tough on you @balconylife - and a worry for your DH. Not having a crystal ball makes all of our plans guesswork. I was diagnosed with breast cancer in the Autumn (treatable), but one of my first thoughts was how I'd spent ages planning how we could stretch our finances for a long retirement, to wondering if I'd have the opportunity to enjoy my retirement.

@balconylife so sorry to hear this.

When people talk about early retirement do they mean any time before state pension age?

We've lived and are living a nice life right now, have been on lots of amazing trip of a lifetime holidays with DCs, eaten out, theatre, etc etc. Our jobs are well paid but not stressful or long hours.

I'd be quite happy to carry on working for at least 10 years. Perhaps take a sabbatical for a year to travel and then back to work part time.

We'll have a pension income when we do retire of around 55k gross which will be plenty. Apart from some traveling I don't know what we'd spend our money on in retirement after bills etc.

If you buy a private dental plan, you know exactly what the cost is . Mine is £35 a month and covers 2 checkups a year and all additional appointments, hygeinist, fillings, root canal, xrays . I've never paid any additional fees and can get appointments at times to suit me with my own dentist. Its far better care than I was paying for at previous NHS dentist.
Teeth is my total annual medical cost as we happily use exclusively NHS for medical care.

   Its only when you retire from employment that you realise how much it cost to go to work;   the price of commuting,  work milage and  wear and tear on  car,  work clothes,  food,  phone use,  and all the little services you pay someone else to do  because you haven't got time (making sandwich for lunch, walking dog).

We live on £49,000 pension and we have £30 k in a rainy day fund and £250k on deposit. No credit card debt, no mortgage.

We still have a YP at home and support them to the tune of £200 a month.

We can heat the house, eat well, have as much wine and beer as we wish, we have a cleaner, an ironer and a gardener. Life is good.

Thank God.

@FinallyFluid do you find you use all of your income? (Is it net/gross?)

I think we'll have a similar income in retirement. I estimate that the basics, bills, insurance, council tax, etc would come to £15,000pa for 2 people in a small house/flat. Would you say that's about right? I'm finding it really hard to work out how much we need just to cover the basics as we have a big house at the moment and 2 teens.

@Amboseli

Hard to tell because due to lock down and working from home, DH went to 66 to match up with the state pension, OMG you would think that he was the first person ever to have two revenue streams, and ever since we have yet to have a "normal month" despite calling them the morning after he hit 66 in August they insisted that we hadn't told them and changed the tax code yet again🙄 and we opted to pay sum due to keep the income steady, all good. Then yesterday they told us that they owe us two grand. We know, we disagreed you flexed your muscles and guess what we were right.

Ds had his apprenticeship reviewed today and he has now been put on a 50% payrise back dated, so that is & 200 month extra.

That was the long answer, the short answer is we generally have about £1k left, worse case scenario £500.

That is net, when I hit state pension age obviously will improve.

Re Ds it means that we no longer have to support him. Well in theory. 😂

Do you think you'll spend it all?

I think we could live very comfortably on about £36k net. We're not into new cars and clothes and don't drink much. After basics we'll spend on holidays and eating out, maybe gym membership. Any leftover will go to DCs.

I'll probably find a flexible part time job, I can't imagine a week with no structure and I like the social side of work.

@Amboseli

When HMRC stop messing us about I will let you know. First time in our lives, we have been actively looking forward to a new tax year. 😂

I’m working on the basis on needing £36k net ideally and that £30k net for the 2 of us will be okay. So looking for £2.5-3k net per month.

At the same time, will want at least £100k available to draw on over time, for a couple of replacement cars (would expect to buy 3 year old cars and run them for close to 10 years) and a new kitchen and bathroom at some point, plus replacement if white goods possibly 3 times and other general maintenance.

For us, we want to stop work at 60. We can see that by the time we are 67/8 our pension income will all be fully on-stream with 2 full state pensions plus 2 defined benefit pensions, different elements of which will gradually become available between 60 and 67 - would give us about £50k per year net.

Thats more than we’d need, so what we are looking to do is take some of the defined benefit pensions early….means there is an actuarial reduction, so we will never then hit £50k per year net, but instead, can probably have about £40k net from around 60 ish. It’s worth it for us. Time is more important than having more money later.

As others have said upthread, health is unpredictable. Having your partner with you is something you can’t guarantee into the distant future. We are more able to enjoy doing stuff in 60s than late 70s and 80s. It brings home to me again that stopping sooner if you can manage it is better and having time with enough, but being not quite so well off, is far better than constantly trying to boost that income and possibly not having the time, or people or health to enjoy it.

No-one wants to live in penury in old age. However, I honestly think, that life long savers who are naturally frugal, rarely look back in their 80s or 90s and say they wish they’d worked an extra 5 years so they had a bit more cash later. It’s almost always the other way, with people saying they should have stopped sooner. It’s fear that stops people doing it. But if you crunch the numbers carefully, you can have confidence in your calculations and can stop when you think you can and don’t need to keep doing an extra year ‘just in case’.

Wise words @WombatChocolate.

We should stop but DH is a workaholic and I don't think ever will. I'm nearly 63 and feel increasingly the same sort of WTF fear I felt nearly 30 years ago when I was about to go on mat leave.

Thanks Wombat, useful - I agree with you about time is more important than potentially more money later on.