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.

That sounds incredible 10% ish after tax!

You should also look at any impact of IHT on estate if partner passes- and he should do the same if you pass.

I think a sabbatical could be a great option to get in a 'trip of a lifetime' and then go back to work? Or if you can, target places you want to visit then each year take say 3 weeks of your leave at a time and see that place for a bit longer? t But you'd need to look at the impact of that on everything else too.

2 diffeeent Qs.

1. Can you afford to retire? Yes. And certainly if you have a decent savings pot behind you for but ticket items which will occur (replace car etc) then looks fine.
2. Do you want to stop working? You have to decide that.

You are living on barely more than the basic state pension.
How do you manage on £300 a week?

Your food bill must be close to £100, then there is council tax, gas/ electric, water rates, house insurance, car insurance, house repairs, and we've not even got to clothes, holidays, gifts for family, and unforeseen costs.

My simple answer to your original question is, better than most people who are working

Assuming that just over £3k joint income is net, with house and car paid off, no other debt, that's a very nice lifestyle you could have.
The problem is that around 60% of that is your husband's pension. I think your pension will be reduced if you take it now. Can you take it at 60 which is only 3 years away? Would that give you a better income from your own pension than going now? Do the calculations, but also think about whether you are ready to stop working.
Might a halfway house be to take 3 months off (partly unpaid probably) to go on that cruise this year or next?
Perhaps think about going part-time at work?

If he dies first, which is how FA work as men die sooner statistically his share automatically goes to his wife unless he's made a will saying otherwise.
There is no IHT payable when one spouse dies and the other inherits.

I don’t think it’s about surviving! It is about having a comfortable existence and enjoying retirement. It is sad that others are in a less fortunate position but not OPs problem.

As a couple retired for 3 years with a similar net income I can tell you it is plenty. DH and I have lots of holidays and are generous parents too. Social life is cheap, we have a great local sports centre that is £35 a month and there are lots of U3A groups for £12 a year. We don’t worry too much about care homes, you are unlikely to need one statistically but we have a good rainy day nest egg. We find we can save from our income so the concern about having to go private if the NHS fails us would only be serious if we had a B lot go wrong at once.
The years go quickly when you are enjoying yourself and we both wish we had retired a few years earlier, and B perhaps downsized to pay for the extra years.
Can I suggest you have a look at Gransnet to see how people manage at different income levels? The perspective on there is very down to earth and friendly.

Yes! Why do people spout off so knowledgeably about inheritance tax when the tiniest bit of googling will put them in possession of the facts? Surviving spouses don't pay it.

You see it as well when people are convinced that when their parents die, their inheritance will be all eaten up by tax.

Do you have savings? How much is taken out of your account for bills and payments every month?

It very much sounds like you are not ready to retire but your job is very tiring so I take your husbands point about not being able to enjoy life together. But the money you would have to live on wouldn’t allow extravagance every day! Could you apply for less physically demanding positions and do it part time?

Don't be ridiculous it's a significant amount of money wherever you live. They have no mortgage so even if they still have £1500 in bills, that's over £2k a month to spends - there's only so many lunches and pilates classes you can go to a month! And I'm guessing if their pensions are this much they will have fairly significant savings to pay for bigger items plus life assurance.

DH took early retirement 18 months ago and I work part-time - our joint income is £2400 - which is exactly what we spend doing what we want and when (have some savings, DH had a lump sum and when we're getting old age pension we'll have far more than we need coming in).

Obviously depends on your lifestyle/circumstances. We only run one car, don't like the heating on too high and our grocery shop doesn't tend to be as much as many. We have fairly inexpensive hobbies other than his gym and my exercise classes 3x weekly (which amount to £100pm). We still have plenty of treats. DH went to Spain in the summer, I'm going to Scotland next week. Together we went to a log cabin in February, have done two camping trips this year and are off to Ireland in the autumn. Ended up in a pub yesterday afternoon. We're out walking on Sunday - coffee and cake will be our first stop off, our second will be Sunday lunch. We live in a converted four bed bungalow so a reasonable size to run.

As others have said, it is really going to depend on what your outgoings are/are likely to be. Also factor in costly items:
Are you dependent on two cars and can you afford to replace it/them?
What will you do if one of you can no longer drive? Budget for taxis?
How close are supermarkets/hospitals/drs etc.
How sound is your house? Do you have a 10 year maintenance plan (repainting/boiler/roof etc)?

Do you have scope to downsize if you had to and/or is the house suitable for less mobile residents?

What does “I want to travel” look like for your DH and is the sort of holiday that appeals?

By virtue of switching jobs/going freelance/banking holiday when child-free DH and I have had several “3-5 week” holidays (road trips and multi-destination stays, often popping in to see some family). For me, after about two or 3 weeks, I actually begin to miss my home comforts/routine.

What do you think you would do once you both stopped working?

It looks doable, but the big question is whether you both want to.

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

With no mortgage or rent and no expensive drug habit? Pretty comfortable I'd have said. That's me pre tax and pre £900 mortgage.

We have an age gap. My husband has retired and I am still working. We have approached financial provision in retirement separately. Mostly because I was always the far higher earner, so he had to provide for him and me for me, so that I have enough to support me alone on the realistic assumption that he will die before me (he also had health issues).

Much as I am keen to be in the financial position to retire and I am working towards that, I don't have enough to take early retirement yet and be confident of sustaining me (and so us) in retirement. I am conscious that I will need to buy in help when I am elderly whereas now my husband does everything practical and we don't have that cost.

I am saying this because you have to ensure your single financial future as well as your joint one.

You could consider moving into seasonal work to allow you to travel more now or ask for a sabbatical at work to take an extended trip. In my case I want to blitz it now, save and then retire properly rather than take a big step down in role to be part time.

Oh my God, how will you survive on that.

I think your DH has a point about spending retirement together.
But I do get it's scary!
It sounds like a very reasonable retirement income to sustain 2 people with no mortgage/rent or dependents to me, especially with a buffer of savings.

How much of a drop in income will it be?
You need to work out outgoings versus income but on face of it it sounds fine.
If you think it's tight could you reduce your hours or find a part time job?

Without knowing your full expentiture and I haven’t read all the posts and any updates from yourself but I would say that you could easily have a great retirement on £3k per month. We are retired and are very fortunate to have good pensions between us.

I haven’t RTFT but we are retired and have no mortgage, run two cars, and can live comfortably with on an income of about £4000 pm. We do have a savings pot which we use for big holidays, new cars, major renovations. But we can afford UK breaks and European holidays from our normal income.

We mix and match - we do shop for ‘bits’ at Waitrose but do basics at Aldi; we don’t do takeaways but if we go out for dinner we look for good, quality food. We use the local leisure centre on PAYG rather than expensive gym membership as we’re away a lot. I am an avid Vinted/ charity shopper for clothes (high end brands) but if we’re going away we look for 4star hotels. We love an Airbnb because we can take our own teabags and muesli but do long haul holidays at least once a year.

The beauty of retirement is that you have time to make conscious decisions and track your spending whereas when we were working, it was grab and go.

As for giving up work, we both do sports, volunteer work, travel, babysitting for grandkids, seeing friends. There are times that I get a bit bored - but they are much fewer than the times I was bored rigid sitting through meetings or training or client calls at work.

We're on a similar income ( 2 occupational pensions and 1 old age pension), no mortgage, adult kids, some savings. It's absolutely fine, we feel we have plenty and will feel quite comfortable when the second old age pension kicks in.
I retired very early 10 years ago from a stressful job because of a particular set of family circumstances and haven't regretted it for a minute.

@Sunnyside4 we also ended up in a pub yesterday afternoon after a walk along the river. We now have the time to talk from the serious stuff to the ridiculous stuff. We had 28 years where we barely saw each other especially when DH worked overseas often.

Unless people really are bewildered then an IFA for a straightforward retirement is not needed if you have the capacity to number crunch yourself and understand real interest rates and inflation.

We sat down and did our entire outgoings the year before DH retired accounting for inflation. So 2 years ago our outgoings were 28k. I was already retired and had a couple of years of U3a and volunteering while I waited for him. I still volunteer, he does a bit of consultancy. We do live in a very cheap part of the country. You can still get a pint for £3 in some pubs local to me.

@LovelyLuluu I wasnt clear - that's the amount of savings I consider we need to have to supplement our pensions to provide decent care. We've passed on money to an adult child, we holiday when we are fit enough - but we dont touch that amount of savings. I accept it may not be enough if we live longer though.
We are both of the view that you dont accept medical treatment when your quality of life is poor and have declarations to support that.

One of the things that reassured me about retiring early was seeing how little my parents managed to live on. It was similar to the OP figure and made up of two occupational pensions (one a lot bigger than the other) plus two state retirement pensions, and they managed to run two cars, do a sport that had costs associated with it, go on holiday to a resort hotel for a fortnight twice a year, replace domestic appliances and pay for redecorating without thinking about it, hand out around £4000 a year to their grandchildren, the church and various charities, and still made a point of putting some money into savings every month like they always had.

Neither of them ever showed the slightest sign of being bored.

What about going part time? You'll free up time and can still have some income? He's being a bit selfish, if he passes you'll be buggered, would you get a pay out? His pension? Like serin says is he wanting to go off traveling... You've 3 options, stay full time, go part time, or retire, retirement isn't permanent you can go back to work, with no rent or mortgage your income is going to be good, but again it depends on your outgoings etc, I would expect cutbacks. If you're living around that now then you'll be ok, if not then you're not going to make it, check out your outgoings goings for the next few months. See where you can make cutbacks. And see what husbands plan is, if he's wanting to do travelling etc you may need an income... He can't just expect you to retire 10 years early with out being properly prepared, even if you agree on 5 years. A lot of retired ppl go bk to work because they get bored or the pension doesn't stretch, it's not that uncommon these days, do what's best for you