How much money for a confortable retirement?

[Mindfulness99]

I will be 52 this year, DH is 8 years older; I am hoping to retire with him in 5 years time.

How much do we ned for a comfortable retirement; assuming no debts. DC19 will only be 19 so may still need help; however they are not sure they want to go to university.

Perhaps I should continue to work part time but would like some flexibility to travel. We are both from overseas/different continents each.

Does anyone else read posts like this and think there’s no way on earth I will have anything like that money sitting there by retirement?

Nope, and two people definitely live for less than a single parent. 😏

OTOH, I don’t have to spend my retirement living with a wanker…

Fair point! Definitely being wanker-free is a bonus. I was just wondering whether you were comparing your current income-for-one against the values being mentioned as pension-for-two.

That's completely insane. They don't actually give a detailed analysis of every penny of that spending that I can see. Me and OH will be fine on state pension each, i.e. around £25k. That's what we're living on now, 7 years before retirement. Mortgage paid off, no taxis, a couple of oldish cars which we'd reduce down to one. Two or three modest holidays each year (I note the website says "all inclusive" - just why? - we're happy self catering or bed & breakfast). House has been fully gone through over the past 20 years, so we won't need a new roof, new boiler, new windows etc - all done, so just repairs/maintenance and decorating which we can do most of ourselves. Pension firms are notorious for over-stating the costs needed in retirement as they are biased and have a vested interest to get people to invest more in pensions. Why would a couple in retirement expect to have an income similar to working couple (similar to average household income) during working years when they'd have far higher costs such as mortgage, children, etc?

We don't even earn £50k now so a pension of that amount is ridiculous for many people.

If you go over to Money Saving Experts pension forums there are people surviving on as little as £10k (single) and others on hundreds of thousands. I follow a teacher on YouTube who's living off a £9k pension.

Im retiring from teaching this year and my pension will be £18k. I have no mortgage or debts. I've got some savings and income from rent. I'll also get a small lump sum. I'll be nearly 57 when I retire. I plan on getting a part time job for a few years and then supplement my pension with my SIPP until my state pension kicks in. There's no way I can carry on teaching. Having cancer in 2021 has totally changed how I think.

Ive been tracking my spending for 2 years so I know what my bottom line is.

@BG2015 - that’s one of you. Do it’s not unreasonable to think x2 is £36k (18x2)

The question is also not what you could manage on. But what would be comfortable
We could manage on far less, but £50k would comfortably allow us to help out ds, and future grandchildren, house maintenance etc. if we only had £24k (12 each) we would struggle to pay for a £80k new roof ( what we have just been quoted!).
Hence why I said we will probably never fully retire and dip into part time over the years as pensioners

Every case is different
eg the PP with a roof problem - if you have emergency savings that will cover stuff you don’t need your pension to be enough for that

for your hobbies - are they free / cheap or is it posh dinners out ?

the best way is to sit down and make a spreadsheet - current outgoings ; how you anticipate them to change.

allow for inflation unless your pensions are linked

Only reduce things if it’s a certainty because it’s amazing how habits don’t die - you might think you will spend less on office wear but you still need clothes and are used to buying nice

that lets you calculate your personal / family need

don’t foget you likely get state pension at some point - that can be a buffer for when you get older need more help around the home ( decorating) and can’t drive ( taxis fares )

We have a joint income of around £50k No mortgage and no debts. We have more than enough for our needs without scrimping and also help our adult kids at times.

Our income is way less than 50k and we have a great lifestyle and no need to scrimp … see it’s dependent on lifestyle choices

WTF? 50k 60k a year?
Me and DH have never earned anyway near that in the whole of our working lives (and that’s between us). He’s currently on 42k a year and I don’t work. We manage perfectly well.
Once the mortgage is paid off next year our state pensions and a small savings pot will be more than enough.
Our bills without mortgage are currently £500 a month. What on earth do we need to be buying that requires us to have an income of £60k 😮

Our pension income at 63 & 61 is £32k pa. Mortgage is paid off. DC has finally moved out (although we have been helping him with moving related costs).
On a day to day basis our income is more than enough to cover expenses including meals out, running 2 cars and a holiday abroad. We do have to dip into savings for large bills and purchases though. However, DH is only drawing on one of his pensions atm - the other (pot of around £280k) has remained untouched. We will both get full state pensions at 67 though so we're not bothered when we do dip into savings as we'll definitely have surplus income once state pensions kick in.

Thank you.

We live in London and need to allow for transcontinental trips to visit families in two different continents.

Sorry what your roof is £80k that’s only 10k less than my house cost. That was seven years but still.

@LongLiveTheLego - yup. That was the cheapest of three ( it is detached so fairly big but still)

Like op asked for, comfortable is different from doable. If op needs to visit family overseas like we do annually, that’s a fair chunk each year just on basic flight, accommodation etc to go home.
If you have uni age children like others mentioned and plan on supporting, that’s another fair amount ( some people are saying it’s £12k just for uni accommodation!). If you own a house that needs or will need repairs over time, money again. If you retire at 65, one of you could realistically live another 30 years, so most houses need new things in that time, most cars need repair or replacement

I'm 63 and retired at 57, DH 60 and recently retired. I get Teachers Pension of approximately £9k pa, plus an annuity because I changed another smaller private SIPP I had paid into over to annuity to last just until my state pension kicks in at 67. Annuity is a little under £400 pcm. DH gets £26k per annum Civil Service pension and will get another small public service one whenever he wants to take it but if before 67 it gets accuarily reduced. He could get £2800 pa now but iro £5.2k if he leaves it until he is 67. We also have a passive income from our btl portfolio of iro £48k pa. Mortgage repaid. We can afford to go on holiday when we like, we gift £2k per DC per annum which is most we can ATM. We also help my niece at uni because her parents can't afford to and from September will be helping former foster DC to go to university. Actually we save a lot each month and I've put £10k into a SIPP to lower my tax bill. I think I could manage a comfortable life style on £50k per year after tax.

I've lived in 5 houses and never needed a new roof.

Surely there’s no answer?
everyone is different.

You have an extremely good set up. You’ll be bringing in circa 90k per annum plus state pension. So yes of course you’re comfortable.

My point was even though we get more, we could be comfortable on £50k per annum between us because we give away some and save some ATM.

Yes, but most people do factor in the state pension as well. So it’s more like £750k - £1m, plus whatever you need to fill the gap to state pension age.

It really all depends on what you want to do in retirement and what your basic outgoing will be, plus the nice to do.

If you want to be living a ‘high life’ with lots of travelling, going out to more expensive places say regular theatre trips, eating out in restaurants etc, that is going to cost more than if you don’t travel/infrequent travel, go to the cinema during the day, eat out infrequently. Run two cars, one car or no car? Gym membership/sports clubs or walking? Into higher end fashion or wear clothes until they wear out, or something in between? Giving birthday/Christmas/adhoc gifts to offspring and grandchildren is very different if you have one child and one grandchild than three children and multiple grandchildren. Need help around the house or garden in the future, costs will be different for a flat to a large house, or a postage stamp garden versus an acre. And so it goes on. Spending patterns will also change through retirement. You are likely to spend more in the early years, before spending dropping off, but that may then increase again due to support or care needs.

Map out what you need for the lifestyle you would like. Some suggest to live within that income and see how it feels. If there is a gap between income and outgoings you then need to plan out what you can do about it. It is far easier to secure additional income by continuing to work in your current role, than it is from trying to secure part time employment elsewhere. I would caution against leaving a job with the view to picking up part time work further down the line, its not as easy to do as it is to say.

Most of the figures you see suggesting how much income you need in retirement are complied by the financial sector who have a vested interest in you having more money. I have found that the figures need to be taken with a pinch of salt and you need to dig down to see how they are complied. A lot of the figures are more than someone is earning when working full time.

We have found that what we need is far less than the retirement figures suggested.

Understanding your pension(s) and options is vital. The same applies to savings/investments.

The Which website had a guide on retirement income from 'basic' to all bells and whistles. I found it to be very accurate.

Surely, you start with what your income is prior to retirement, i.e. wages, as a starting point. You won't need more than that if you've been living on a certain amount for years/decades (unless you plan major changes).

As others have said, the figures are prepared usually by pensions firms, so they have a vested interest in trying to pursuade people to save/invest more.

Some costs will reduce, some will increase when you retire. You won't have commuting costs to work, you'll probably have paid off your mortgage (lots retire when they pay off their mortgage as it's usually the biggest cost). No more work clothes to buy, snacks/drinks/lunches during the working day. But, you'll probably spend more on hobbies/entertainment, etc. It's all personal to you!

Spending may well be higher in the first years of retirement as you do things you've not had time for, i.e. travelling, home improvements, etc., or buying "One offs" like a new car, caravan, moving home, camper van, "Once in a lifetime" holiday etc. But you're not going to be doing those every year - they're one offs.

OH and I are currently living on £25k per year (net) between us. We're 7 years away from retirement. No mortgage, no expensive hobbies, "normal" holidays rather than exotic long haul ones. It's a perfectly good standard of living. We have lots of savings but never use them, so we have a good backup for when we need to buy a new car, home improvements etc - don't need to use income for that kind of thing.

We're more than comfortable to plan to live on just 2 x state pension which is about the same £25k that we live on now. We literally "couldn't" spend the kind of income that some of these reports suggest - it'd mostly just go into our savings, certainly not "needed".

People really need to do their own sums and make decisions based on their own needs rather than being fooled by biased reports.

NB the figures on that website are your income after all taxes.