pensions

[Potter]

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.

[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.

[Potter]

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

You hedge against it by using the money wisely, but that's been done to death and will only lead to pain on this forum.

[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.

[Yorick]

We get by on about 25k per year.
But we get a about half that from the apartment we have. So not drawing lots from savings.
My state pension kicks in in 3.5 years. And my small private pensions when I want.

[slowsider]

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

You hedge against it by using the money wisely, but that's been done to death and will only lead to pain on this forum.

That's partly cos you come out with the hedging comment after something like 'I don't plan on leaving anything in the bank when I die' . Since it's likely you have joint planning, if you pre-decease Mrs P, she'll need money in the bank.

[Potter]

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

You hedge against it by using the money wisely, but that's been done to death and will only lead to pain on this forum.

That's partly cos you come out with the hedging comment after something like 'I don't plan on leaving anything in the bank when I die' . Since it's likely you have joint planning, if you pre-decease Mrs P, she'll need money in the bank.

Nope, she's taken care of, I actually meant what I said, I don't want the pain on here of explaining any more about inflation or explaining how to mitigate it just to be told I'm wrong or the pack jumping in to turn it into something else.
I was just interested in opinions on how much is enough based on what you want out of the rest of your life.

I think Weeksy has it spot on, decent life balance, £750k in the bank and go steady.

[Mr. Dazzle]

Sort of related...

My parents both volunteer at the local hospital now they're retired. My Dad was telling me the other day that pretty much every shift he gets an old dear telling him "I'm 95 you know!"...of course they all think its remarkable, but as he says it's an every day occurrence now.

26 years after 55 only takes you up to 81

[Count Steer]

Just out of interest I ran through last months bank debits.(For 2) - Food shopping (not food out and about), council tax, energy, petrol, mobile phones, home insurance yadda yadda yadda (not home phone/broadband - s'quarterly, or car taxes, servicing, TV licence etc). £1300. Call it £1500 with the other bits in. ie £18k pa on 'essentials'. The food thing is probably a bit OTT - could shop much cheaper and there's 0 booze in it - but I don't think those sorts of figures are particularly unusual and the energy payment hasn't gone up yet, it was just one tank of fuel, and the council tax isn't on a 12 bed, 30 acre place, just a pretty typical home.

So, 18k after tax, for 'running costs' in SE England. After that it's whatever you want on clothes, hols, toys, home maintenance etc etc. Using the ×28 calculator that's £0.5M just for essentials.

[Mr. Dazzle]

I tell thee what, being alive is a costly endeavour.

[Potter]

We reckon on about £1500 a month on bills and stuff, then some months might be a bit more or a bit less.
So if we've got £500-1000 of disposable income then we should be ok, we used to have that back when we had kids and a mortgage to pay and we had a pretty decent life.

I don't think you'd be suffering on £30k a year for two people who have no debt or rent/mortgage.

[Yorick]

Rental property is the best pension. Guaranteed income every month and the property will appreciate in the long term.

[Couchy]

At age 58 £350k in drawdown could provide £1750 a month till you’re 67 when state pension kicks in, the drawdown would then reduce keeping a similar amount till you’re 80. After that you’d be on state pension only. I’m gonna aim for £400k and I’ll be happy with that but there is the wife’s pension which is a similar amount. We’ll live happily on £3500 or so a month as tbh that isn’t far off what we do now

[Taipan]

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.

When you put it like that shirley you'd be better of with something like a c£3k XT660x for your mbike kicks?

[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.

When you put it like that shirley you'd be better of with something like a c£3k XT660x for your mbike kicks?

Tbh mate I don't think it much matters what's in there, it gets used sometimes and I enjoy the mt07, I wouldn't use an xt660x more or indeed less.

The mt07 going or staying wouldn't free up that much cash as I'd want a low mileage immaculate one.

[Skub]

Rental property is the best pension. Guaranteed income every month and the property will appreciate in the long term.

Rental can be aggro if you get unlucky. BIL rented out a cottage which was fine until a tenant wrecked it,then buggered off. Before he fixed it up a squatter moved in and has cost him years of legal fees to get back to where he started.

[JackyJoll]

Rental property is the best pension. Guaranteed income every month and the property will appreciate in the long term.

Rental can be aggro if you get unlucky. BIL rented out a cottage which was fine until a tenant wrecked it,then buggered off. Before he fixed it up a squatter moved in and has cost him years of legal fees to get back to where he started.

Renting is a business. That makes it more of a job than a pension, in my eyes.