Enough to retire?

[longingtoretire]

I'm longing to retire. Is a pension pot of £350,000 and £300,000 in savings/investments enough if I live frugally?

I'm happy to top up my income with a few hours stacking shelves or something similar but desperately need to quit the rat race.

That research is very helpful for giving people a starting point for thinking about what they'll need. It's especially helpful for people a long way from retirement who aren't sure what their needs/wants will be in the future. But we have no idea what the OP's situation is. We don't even know whether she is single or planning with a partner.

It'd be a very good idea for her to speak to a financial planner as any plan for decades to come is going to have to take account of tax (the numbers in that research are spending not income) and (especially) inflation. Just taking the total and dividing by life expectancy is too simplistic. She should also take advice on whether to buy an annuity and the balance between different kinds of investment or saving.

The rule of 25 says you need to save 25 times your annual expenses to retire. To get this number, first multiply your monthly expenses by 12, and then you'll have your annual expenses. You then multiply that annual expense by 25 to get your FIRE number, or the amount you'll need to retire.

It all depends on your annual expenses.

Mia85
yes, of course I would expect the op to take advice, ( with that amount they will have too)
just showing it’s something to seriously consider, as they will have far more retirement pot than the rest of us, if it’s not possible for them to retire, what hope the rest of us

Most annuities have not been worth taking out in recent years, maybe with interest rises they might be, but you might have to live to a hundred to get all your pot back

But you have absolutely no idea about… family, dependents, spending habits, hope for retirement. So much.

so to say she could “easily” is…. Daft

@Mia85 Thank you. I'm single with no plans for an extravagant lifestyle or expensive holidays. I have no mortgage, credit card debt or any other debt. I've been in full time employment since my twenties . My pension pot took a dip thanks to Liz truss (like everyone else) but hopefully it will pick up soon.

Thank you everyone

Do you keep track of your spending OP? If you have a really good understanding of what you spend now and how that might change (e.g. no commuting but taking up a hobby) that'll be incredibly helpful in building an accurate plan and working out your strategy.

It's a good amount so it sounds as if you will be in a good position.

Flipflipmania
perhaps we are at different end of society, I would say she has easily enough funds to retire on and have a better retirement than most of us, of course I wouldn’t expect the OP to chuck her good in tomorrow because of somebody said they could on social media, I’m 58 and I would be retired if I had what the OP has.enjoy your retirement as soon as you can, who knows what life has in store for you, my, as we fought healthy mum had her first stroke at 68, life was never the same for her again, not matter how much or little money she had.

good should be job

perhaps we are at different end of society, I would say she has easily enough funds to retire on and have a better retirement than most of us,

It doesn’t matter what the “average” is or whether enough for your type of retirement given your situation

my point was - I find it careless to say that the op could “easily” retire when all you know is her pension pot and she’s a mortgage free home owner. Beyond that’s nothing more

knew not know

Most people do not need an IFA , many of which are complete charlatans sadly .

The good ones are few and far between .

Second recommendations for Meaningful Money Handbook & podcast .

They also have a very helpful fb group .

IFA is last resort

Flipflipmania
careless would be acting on the say so of someone on social media and not taking financial advice. But I still stand by, the OP could easily retire.

A pension pot of £350k should give you not far off £20k/year before tax (I think). That's a good start.

You shouldn't bank on living off interest from your savings - rates are high at the moment, but they won't stay high forever (and inflation always erodes the value of savings).

(proviso- but check what your pension forecast is with your pension provider).

Easily.

Yes, if you're careful and nothing goes wrong like a roof blowing off (happened to my parents).

Life's too short. If retiring and living frugally will make you happier, go for it. I'd rather that than put up with a miserable existence just to pay for extras like a holiday or two.

well now we know more detail - it would appear that way

based on the op - careless

You don’t need an IFA but they might be helpful.

What an IFA would need to know to answer this question is what are your expenditure needs? If you can work that out (including absolutely everything, day to day expenses, holidays, gifts, home maintenance and improvements etc.) you can answer the question yourself with a spreadsheet. Say you had annual expenses of £30k pa, you could earn £15k pa for the next 5 years and draw 15kpa down from savings, then when your SP kicks in you would need£10k less pa, either a draw from your savings / pension or reduced earnings. What an IFA might do could be to help you determine the pattern of drawing, whether it will ‘see you out’ and whether the investments are invested appropriately for your planned withdrawal pattern.

That seems to be a sweeping generalisation of a profession.

I've found an IFA to be quite useful, but your mileage may vary.

Do an estimate online what you can expect from pension, I’m 62 and retired and have a couple of pensions that I’ve just started taking, I took the 25% tax free and for every £100,000 you should get £350 per month. I have savings in one year bonds that make over 5% in interest, so for £300,000 you can make £15,000 per year, you would pay some tax on this.

You haven't mentioned the value of your property?

I’m 63 with no mortgage. We live on my pension, my DHs small income and my part time income. Total income of approx £3500 net per month. That’s £42k per year. We save about £10k per year out of that and have 3 new cars.
At that rate your £300k would last just over 10 years. That’s without interest. And without your £350k pension pot and your state pension.

Average life expectancy might be 82 but if you've already lived to 62 then it's going to be more. I'm late 50s and mine is 93.

This is because everyone who has already died isn't taken into account (obviously).

It's right though that spending tends to drop off a lot after mid 70s unless care is required.