What would a retirement on £3,145 a month look like?

[serin]

DH has retired. He is 10 years older than me and wants me to retire as well. His reckoning is that if I work another 10 years he will be 77! Just 3 years off 80 and it won't give him long to have the freedom to travel much as a couple etc.
If I retired tomrw our joint income would be £3145 per month. If I took my small private pension it would be £3800 in total.
Does that sound like a reasonable amount to live on or am I deluded?

We own the house outright and do have some savings. Our DC have flown the nest.
I grew up in absolute poverty and even whilst our children were small there were times we were really struggling. I think this has affected my attitude to money and I'm terrified of not having a steady income and returning to egg on toast every night.

Does £3800 seem ok as a long term situation? My friends are of a similar age, some retired and some not, money is never discussed so I have nothing to compare with.

Does it have to be all or nothing? I would go part time and also buy extra leave (if that's an option) and then reassess in a couple of years.

Is your mortgage paid off? If yes, then £3k pm is easily doable if you live modestly.

I'm confused, how are you able to calculate what you'd earn per month from a private pension fund if you don't know how long you'll live? Wouldn't the number vary massively if you died at 100 vs 80???

Only you can work this out. But beware being rich and not able to spend it on living well because you left it too late.

I do bitterly resent that there is no social care insurance available where we could invest when working Incase we need residential care when we aren't.

Op, apologies if this has been said, I have read your posts but not all,the responses.

Your DH is being very selfish here. At 67, he has had those extra 10 years working , with the NI credits and other benefits that accrue. If you retired now, would you have enough NI credits for full state pension when it kicks in?

Is your DH happy with the drop in income should he die before you, or you before him? If he is content to leave you in poverty to achieve his travel goals, why is that ok?

If you want to, compromise - you will review your retirement age at 60, or in 5 years time. But make no promises. Your financial security matters too.

Does he actually have a solid plan for travel that your work is preventing? I only ask this as I hear the ‘travel’ thing a lot from my in-laws and they have just done one big trip and none of the others have ever materialised. You could still travel with taking a big block of leave or looking at unpaid leave/a career break.

If you don’t really want to leave, I’d explore whether there is actually a solid plan for what ‘travel’ looks like.

OP I completely understand your worries around “will this be enough?” It’s not so much the actual monthly number, it’s the fact that you’ll be switching from the accumulation phase of life to de-cumulation. In other words, when you retire you’ve got to get your head round the fact that you aren’t building up your savings any more, you’re actually spending them. It’s a bigger mind shift than people realise and takes time to adjust to. It’s all very well others saying, ‘oh that’s more than we earn and we’ve got a mortgage etc’ Once you retire, there’s no more monthly salary cheque to build up your savings if you have a huge bill come in like replacing a car, or a new roof). What you’ve got - that’s it.

OP, my concern for you would be if your husband were to die in the next ten years and before you get your state pension. I think that would leave you facing a big drop
in living standards. No one willingly wants that for their retirement. And from my experience those early years of retirement you spend more compared with the preceding years when you are still working (if you have the means). There’s more time for travel, hobbies, holidays etc.

Id go PT if I were you as a happy medium.

Well, do a spreadsheet of what you spend now against your income.
It's that simple.

We did it and found that to live on a basic income, we could do it on £25K pa (net.) No frills and living fairly frugally.

Our pensions exceed this which is fine, but you need to do that maths.
You also need to consider your savings, longer term provision for care homes or care costs.
And outgoings for cars, house repairs, new boiler etc and emergencies.

There's plenty online about what is a 'decent' pension and what is the bare minimum.

For a 'comfortable' lifestyle the figure quoted is around £42K pa.

The other thing to consider is what if he dies?Sooner than expected. A colleague of mine recently retired early, and he was dead within two years. Tragically he developed a very serious cancer.

You're only in your 50s, that's young. I d keep one hand in work and go part time.If you can.

If you normally save £800 a month surely you have fairly substantial savings as well.

Many people have suggested reducing hours to part time work as opposed to retiring. Please explain how that actually works if you want to travel, even if your'e only working a day a week?

The pension is calculated according to the 'pot' that is there when you retire.
The pension provider guarantees that annual amount (can also be linked to inflation) for the rest of your life.

So if you retire with a pension of £30K pa that's what you will get whether you live to 68 or 88.

Just like the state pension- it's the same amount per year if you have enough contributions, whether you take it for 2 years or 30 years.

Wow, never knew this! Thanks! What do you reckon would be a decent sized pot for someone retiring today? 👀

@serin Does the £3145 include the full state pension?
If it does, that's a reasonable income of £37K pa which is in line with the median salary in the UK.

Considering you have no mortgage or dependents at home, it's do-able.

You need to work out how much MORE your pension would be if you carry on working. As for a pension forecast based on if your retire at 60, 62, 65 etc.

Also do you know how much you would have if he died before you ? Do you get 50% of his pension?

Another point. How have you not had discussions before about future life plans etc?
We're 54 and 48 and already discussing respective retirements, which, if you are of differing ages, in particular you do need to do.

What discussion have you had before? Also what was he planning to do being 10 years older than you if you carried on working another 10 years...just hang about waiting for you???

There are plenty of online resources and articles in the press that will answer this question for you.

Plenty online about this- have a google :)

This is only if you buy an annuity. Depending on inflation rates these can be good value or not. Most people do 'draw down' where they just take money out of the pot as they need it.

Well, I don't trust Google to be your average person. First article says a million 😂

OP it is worth consulting an IFA to do a proper cash flow analysis for you both. This can also take into account the cost of full time care should either of you need it in the future.
We did this and found our pension pots & value of our home would ensure we could live comfortably until we are 99 which was reassuring.

We have calculated we would have approx £3,000 per month in retirement ..sounds good on paper but we spend that amount currently with having two adult children still living at home (the food bill is horrendous) and the money just goes despite us being really frugal (hardly ever eat out or go anywhere!)

our retirement is five years away..if we get there 😅

in your shoes I think I would continue to work, maybe have some unpaid leave for travelling…?

Work for another year, max out your pension contribution and saving, you’ll be a year closer to your state pension age and have a bit more money put away. Yes then I’d retire. Enjoy it.

Why aren't your adult children supporting themselves and buying their own food and paying you rent?

Unless they are university students, in which case they should still be working in holidays.Why are you supporting them.

Are adult dc going to be living you when you’re retired? Adult dc should be contributing to bills and food shop spend.

This is very good advice. My estimated final salary pension from a previous employer has increased by 30% by delaying retirement for just 3 years.