pensions

[Cousin Jack]

God loves you.

But he created hell just in case you don't love him back.

I think I preferred the ancient greek gods. At least they were upfront about their capriciousness.

I prefer the Norse ones myself. The idea of Valhalla rather appeals, although having to keep a sword oin your hand when you kark it is difficult today.

[McSatan]

Not long ago the Weald was a place you tried to avoid as it was pretty lawless.

Yeah, it was renowned for being like the Wild West

When I say 'not long ago' I mean relatively.
eg...
'The gang's exploits were legendary and some say they virtually ruled the south east for a period. In 1744 it is recorded that three large cutters laden with contraband sailed into Pevensey. The goods were loaded onto 500 waiting packhorses to be carried inland for distribution. Their ability to put such a huge transport convoy in place, and brazenness in running their illegal trade so openly, says much about the extent of their power and influence.In many ways, the time was right for such an enterprise. Britain was about to become the powerhouse of the industrial revolution in the early 18th century, but in the countryside, all was not well. The population was rising but jobs were scarce and the land enclosures had put many smaller farmers out of business altogether. Faced with many mouths to feed, some people turned to smuggling as an alternative career.'

I live in Pevensey. And own some remote woods further inland. It's *definitely* not lawless now

[irie]

Just curious, imagine you were to retire at fifty years old, what is the sum of money you think you'd need in the bank to get you through retirement?
Imagine you had no pension and you arrived at fifty with a sum of money to invest, buy an annuity or draw down - what's that number?

Depends completely what standard of living you wish to maintain, for how long, how that sum of money was invested as you regularly deplete it, the level of risk you are prepared to take, and so on.. Only you can do the numbers.

[weeksy]

Just curious, imagine you were to retire at fifty years old, what is the sum of money you think you'd need in the bank to get you through retirement?
Imagine you had no pension and you arrived at fifty with a sum of money to invest, buy an annuity or draw down - what's that number?

£750k. Assuming my mortgage is paid off by that day.

But it depends if/when you'd get any inheritance etc too

[weeksy]

But that depends how much you care about the pension aspect doesn't it. I expect I get people giving some of my posts a 2nd look when I buy £5000 worth of bicycles for my lad then take him racing.

But my logic is that I'd rather spend this now while he's young, full of life, excitement and fun. Living the dream. Happily, it overlaps my dreams too so it's a double win.

But if we were not racing I'd have put thousands more in my pension in last few years, but you know what, I simply don't care. Lol. Being out with my lad on the side of mountains beats any small pension increase when I hit 60. Or even if that meant 61 instead, I'll take that thank you

[Count Steer]

Just curious, imagine you were to retire at fifty years old, what is the sum of money you think you'd need in the bank to get you through retirement?
Imagine you had no pension and you arrived at fifty with a sum of money to invest, buy an annuity or draw down - what's that number?

Depends completely what standard of living you wish to maintain, for how long, how that sum of money was invested as you regularly deplete it, the level of risk you are prepared to take, and so on.. Only you can do the numbers.

First thing a finance/pension adviser will ask is (having established if they're talking about 1 or 2 people) is about expected lifestyle. At 50 I'd say £1.5M - 2M (+ state pension/s expected when due and no liabilities). Tax needs to be factored in too. As you say though, it depends...

[Mr. Dazzle]

At 50 I'll have a mortgage still as it currently stands, plus probably some school/uni fees to help Baby D with

I'm gonna say.....2 million

[weeksy]

Same, I always thought that life should be lived whilst you're young enough to enjoy it, and as a consequence I don't want much in retirement.

Retirement will be different to normal every day life i expect.. I don't really do massive holidays.. It's not really my thing. I think if I do go down that route i'd do something like a 4 month rental of a place in Spain/Canaries over winter instead of a holiday... spend the winter away and come back in March or so for spring/summer. But in many ways i'm not an excessive person in terms of lifestyle etc, i don't want a particularly nice car, or a superbike, or a super watch for that matter.. i just like the simple things, a pub lunch, sitting outside a pub garden with a beer watching the world go by and cycling back home ... I'll take that all day thank you

I was discussing this with a mate the other day in terms of hitting 55 and taking some of the pension out for a 'really nice car'... The best i could come up with .... a Honda CRV I mean really.. i can buy anything i want and the best thing i can come up with is a Honda CRV... Jeeez.

Although i must admit, i did see the Toyota Hilux and thought that'd make an ace vehicle for MTB duties..

Simple boy, simple needs

[slowsider]

You'll want to factor in medical expenses and house maintenance as well as your pub lunches

[Mr. Dazzle]

I wouldn't describe a £5000 mountain bike (or 3 or 4 of them, how many ya got weeksy?) as a simple need.

[weeksy]

I wouldn't describe a £5000 mountain bike (or 3 or 4 of them, how many ya got weeksy?) as a simple need.

How many bikes and how much... Errrm depends on RRP or what we paid.

Currently we've got
Trek Fuel ex9.8 (paid £3200, RRP £6000)
GT Fury (bought used for £1800, RRP £4000)
Specialized Status (bought used for £1800, RRP £3000)
Liv Embolden E+ (bought new for £2500)
Raleigh Cadent (bought new for £400)

But don't forget, by the time i retire i won't be buying the lad bikes... i also won't want one every 18 months or less as i'll just be riding simple gentle stuff mostly.

[Count Steer]

So my number is £850k, give or take, that's 26x £30k a year, with £100k in reserve in premium bonds just in case.
Obviously with car, house, bikes, etc and no liabilities.

Does the 26× factor in tax or does it mean £30k less tax? You have to plan to replace cars too and whether you save for them out of the 30k or draw down from reserves and/or pay PCP.

I know people living on state pensions and some on £galore - more is good, but not essential. The £galore people aren't necessarily happier (some are miserable gits) but coping with 10% inflation is easier for them.

The other thing to consider is, if you draw down a fair bit and live to a ripe old age it'll be a bit if the stash is seriously depleted (especially if you need to pay for care). Ideally though you plan it so your last cheque bounces.

[Mr. Dazzle]

In 26 years times 30k is gonna be worth a lot less than it is today too.

[Dodgy69]

It's realistically 55 for most atm, then possibly a full state pension 11/12 years later, maybe. I can live on much less than 30k, also atm. The big factors are your chosen lifestyle and how long your gonna live.

500k possibly.

[weeksy]

Personally I think that's insane, but we're all different, last year I flew a Spitfire at a cost of £6k an hour.

We cycle every weekend, we race several of them. Every holiday is cycling based (E.g Morzine), every adventure is cycling based... the world revolves around cycling.

If anything is insane, it's having a £6000 MT-07 in the garage lol. Sunny weekend, long weekend, yet the odds are, it won't move.

[irie]

In 26 years times 30k is gonna be worth a lot less than it is today too.

Indeed.

The BoE inflation calculator shows that goods and services costing £30k in 1995 would now cost £61k with inflation averaged at 2.8% a year.

[Mr. Dazzle]

I'm sure it's not beyond the wit of man to adjust your draw down based on an assumed rate of inflation.

[weeksy]

whether they'd stopped to think how much they'd need to do that.

I'd imagine not in the majority. Most people now will have a pension. But that's just 'what it is'. I know what mine is worth today, but i don't know what it'll be worth when i retire... I'll worry about it when i get to that age... I don't see myself doubling the contributions as i have bills and a mortgage, i don't see myself lowering them either as they are what they are... So i'll just go with it.

If that means i can do more or indeed less when i retire, so be it... i'll cut my cloth to what i have as they say.

[irie]

I'm sure it's not beyond the wit of man to adjust your draw down based on an assumed rate of inflation.

To which must also be factored in a percent rate of increase in face value of the capital remaining to be drawn down.

[Count Steer]

Does the 26× factor in tax or does it mean £30k less tax? You have to plan to replace cars too and whether you save for them out of the 30k or draw down from reserves and/or pay PCP.

I suppose you get to decide that, you could put it all on red, invest it in an S&P500 tracker or buy an annuity - or anything in between.

I was really just interested in what other people think is a sensible sum to live on per month and whether they'd stopped to think how much they'd need to do that. I just used fifty as a target age, but fifty-five would have been better really.

I don't plan on leaving anything in the bank when I die, the kids are provided for, so ideally I run out of money the day before.

Years ago I was in a similar situation, working v hard, v stressed but on the cusp of living it large/planning to get off the treadmill. On a walking holiday in the French Basque country met a bunch of retired 'self-made men' - pretty vile characters - but one did say 'you need £1M to retire'. I thought that was just gobbing off but, with hindsight, it wasn't that far off the mark (they had nothing like final salary pensions) - if you want the transition to be not too stark. Some find it hard if it's all 'do you remember when we....' and you know you can't do any of that ever again. You can plan to taper your lifestyle so it's not like throwing a switch. Spend more in the first few years - from a 'get to eg 55 or state pension age' pot.

Everyone is (happily) different. I know 2 blokes, retired, relatively minted, huge (new) houses, bored as bored can be - golf, big holidays etc...but really, they'd much rather be at work again. It's like work was what they are/were - without it they are somehow 'diminished'. Others have taken to it like a duck to water, skint but got an allotment, volunteer for a couple of things or got a part-time pocket money job etc. Happy as Larry.

Hope you work it all out.