How much do you need to retire?

[Mice!]

2 hours ago, team tractor said:

This morning I’m off to Neville’s ( Walker 570) fruit picking again with the kids . 
 

I need 2000 a month too break even currently. Cheap lifestyle really . 
I think I’d like to work 3 days a week in my 60s/70s tho.

 

My mate died last week at 44 from cancer. He spent the lot as he went . I’m glad he did . 
My uncle died the week before at 87 and only just broke even with what he paid in . 
Honestly I don’t know how to feel on it all.

Say hi to Nev if you see this mate 👍 

I doubt you have spare cash to put into a pension after all the out goings.

I can understand how you feel, 44 is no age and probably quite a shock, I'll be honest 87 seems a great age, a lot older than my folks got to.

[team tractor]

3 hours ago, marsh man said:

You are at a age now TT where you will think about the years ahead but at the moment that will be only that , thoughts , in a few years time you might then look at the trials in life a bit different to how you are looking and feeling about them now as you have got a lot on your plate and you need to carry on doing what you do to maintain your way of life , everyone circumstances are different and most of the posts are from people who are looking forward to retirement but we must also remember that retirement will not suit everyone and sadly once retired from work then to those guys life no longer have any purpose , yes it really do happen . Hope all goes well and please remember me to ( Nev ) , one of the good ole boys on the forum .      MM

Nev was in good spirits but bored . He’s 3 weeks into a new hip . 
I filled 5 rubble sacks full of apples again . They might fall near my high seat 😂😂😂. 

[team tractor]

1 hour ago, Mice! said:

Say hi to Nev if you see this mate 👍 

I doubt you have spare cash to put into a pension after all the out goings.

I can understand how you feel, 44 is no age and probably quite a shock, I'll be honest 87 seems a great age, a lot older than my folks got to.

Had my mortgage statement today 😂. I’ve a while until the spare cash 😂😂😂. 
87 but the last year he’s been a body without him there. Glorious dementia. 

[Smokersmith]

A decent piece of advice I got was to bear in mind that you will probably not need the same spending power in your later years as the first few. I plan on thoroughly enjoying myself in the first years, plenty of travel and shooting etc, but will not plan to do anywhere near as much when I’m 80+.

[JohnfromUK]

20 minutes ago, Smokersmith said:

A decent piece of advice I got was to bear in mind that you will probably not need the same spending power in your later years as the first few. I plan on thoroughly enjoying myself in the first years, plenty of travel and shooting etc, but will not plan to do anywhere near as much when I’m 80+.

Whilst that is reasonable advice, as you age you need to spend more on heating, possibly more on 'help' such as gardening, home maintenance, car maintenance etc., so I think it cuts both ways.

[marsh man]

3 hours ago, Smokersmith said:

A decent piece of advice I got was to bear in mind that you will probably not need the same spending power in your later years as the first few. I plan on thoroughly enjoying myself in the first years, plenty of travel and shooting etc, but will not plan to do anywhere near as much when I’m 80+.

There isn't any guarantee on what age we will reach or how our bodies will be when and if we reach a certain age , so my advise would be enjoy when you and your body can , get the shooting and travel in early and then if you can do any more then treat it as a bonus  

[mel b3]

11 hours ago, team tractor said:

No pension, mortgage will be paid off when I’m 51 so 9 years left . 
I’ve had 1 holiday abroad in 15 years ( this year) 

I did my rotacuff 10 years ago after rolling my van 😂. 
Divorce helped me a lot financially as I’ve met someone who helps with the bills a lot. 
will i retire  I doubt it . I’m self employed. It upsets me I pay the staffs pension contributions but have none of my own 🙈. 
My body hurts but I think sitting down retired or in an office would be a lot worse. 
I pay maintenance to 2 ex’s for 3 kids . It’s life for me . 
This morning I’m off to Neville’s ( Walker 570) fruit picking again with the kids . 
 

I need 2000 a month too break even currently. Cheap lifestyle really . 
I think I’d like to work 3 days a week in my 60s/70s tho.

 

My mate died last week at 44 from cancer. He spent the lot as he went . I’m glad he did . 
My uncle died the week before at 87 and only just broke even with what he paid in . 
Honestly I don’t know how to feel on it all.

I've seen your motorbike.  You don't need to worry about pensions 😄.

[team tractor]

2 hours ago, mel b3 said:

I've seen your motorbike.  You don't need to worry about pensions 😄.

😂😂😂😂. Loving the confidence 😂

[marsh man]

I think to be honest , when anyone get to the normal retirement age or thinking about packing up a bit earlier they should know roughly how much they would need to carry on living the same lifestyle they are already living , as already said it would make a difference if there was one or two living in the household who were getting , or are about to get there state pension .

I have now been living by myself for nearly 11 months and money wise it have made very little difference , we were debt and mortgage free and I can easily live off my pension , I have got some savings so I do treat myself to within reason to whatever I want , both for myself , my dog and my house , I have kept my same car as there is nothing wrong with it , I don't smoke or drink and haven't been on holiday for years although the last 17 years have been one very long holiday , so stop worrying yourself if you have got enough , just get on with it and adjust to what you have got and enjoy life to the full for the time you have got left .   MM 

[Remimax]

On 24/10/2024 at 10:34, RCB56 said:

Years ago people ran out of money once they retired. Now you run out of time.

Wise words sir.people bust a gut working too buy **** they don't need too impress people they don't like

Edited October 27 by Remimax

[oowee]

6 hours ago, marsh man said:

I think to be honest , when anyone get to the normal retirement age or thinking about packing up a bit earlier they should know roughly how much they would need to carry on living the same lifestyle they are already living , as already said it would make a difference if there was one or two living in the household who were getting , or are about to get there state pension .

I have now been living by myself for nearly 11 months and money wise it have made very little difference , we were debt and mortgage free and I can easily live off my pension , I have got some savings so I do treat myself to within reason to whatever I want , both for myself , my dog and my house , I have kept my same car as there is nothing wrong with it , I don't smoke or drink and haven't been on holiday for years although the last 17 years have been one very long holiday , so stop worrying yourself if you have got enough , just get on with it and adjust to what you have got and enjoy life to the full for the time you have got left .   MM 

I would agree with the sentiment. The hard part is if you intend to use capital to finance (in part or in whole) your retirement. If you do then you have to make an assumption about how long you expect to live. Or rather how long you expect the capital to last for. 

[marsh man]

1 hour ago, oowee said:

I would agree with the sentiment. The hard part is if you intend to use capital to finance (in part or in whole) your retirement. If you do then you have to make an assumption about how long you expect to live. Or rather how long you expect the capital to last for. 

When I packed up on the day of my 60th birthday I was looking ahead at the next five years until I qualified for my state pension which was then 65 years old , I worked it out where I could pay my wife and the house money for the next five years by doing next to nothing and a few little earners here and there , when I first finished my boss was kind enough in paying me in full till the end of the financial year which was nearly six months away , he also gave me little digger jobs that I could do in my own time , we were also doing over 30 days Partridge shooting which I helped out on every shoot , if any gun needed help on the day then I stood with them to make sure they were safe and kept them at ease throughout the day , this often resulted in a few fold up notes going into the back pocket , plus I was getting paid to drive the guns around in the first place , maybe I was luckier than most in getting these little earners but at the beginning I was heading into uncharted waters as I didn't know what laid ahead but my freedom from ( work ) was far more important to me and I was prepared to take a chance for whatever laid ahead , now I can look back it was the best days work I done finishing early , there yer go I still use the word work a lot. .  

[Wymondley]

8 hours ago, marsh man said:

stop worrying yourself if you have got enough , just get on with it and adjust to what you have got and enjoy life to the full for the time you have got left .

Which is probably the best advice anyone thinking about retiring could get.

[marsh man]

31 minutes ago, Wymondley said:

Which is probably the best advice anyone thinking about retiring could get.

Sadly some of us are not going to be on this earth as long as we hope to be , no one know when the end will come but we know something for sure it will come , it opened my eyes when me and my wife went Christmas shopping for the day with no problems , had our tea and by the next morning she had passed away in her sleep so after nearly 50 years together it was all over in a matter of hours .

We both retired within about six weeks of each other and had 16 lovely years doing within reason whatever we wanted to do , hundreds of days out , many of them on a bus that didn't cost a penny , she had holidays in Scotland with her friends and I went wherever the day took me , we both had our own money and in the 16 years we were both retired I could never remember ever talking about how much money we needed , while we had some then that was enough , if we could had done it on state pensions with a small private pension then so can others .

Like I said , everyone needs are different , I have heard where someone carry on working 3 or 4 days a week to fund a good holiday each year , where I would get more enjoyment not working 3 or 4 days each week and just go up the coast whenever I wanted to and give what that person think is a good holiday a miss , like I say , each and everyone of us our needs are different , all I can say is just get on with whatever you plan to do , rather than leave it to late and then say you wished you had done it , by then the boat have sailed over the horizon  .  

[team tractor]

3 hours ago, marsh man said:

Sadly some of us are not going to be on this earth as long as we hope to be , no one know when the end will come but we know something for sure it will come , it opened my eyes when me and my wife went Christmas shopping for the day with no problems , had our tea and by the next morning she had passed away in her sleep so after nearly 50 years together it was all over in a matter of hours .

We both retired within about six weeks of each other and had 16 lovely years doing within reason whatever we wanted to do , hundreds of days out , many of them on a bus that didn't cost a penny , she had holidays in Scotland with her friends and I went wherever the day took me , we both had our own money and in the 16 years we were both retired I could never remember ever talking about how much money we needed , while we had some then that was enough , if we could had done it on state pensions with a small private pension then so can others .

Like I said , everyone needs are different , I have heard where someone carry on working 3 or 4 days a week to fund a good holiday each year , where I would get more enjoyment not working 3 or 4 days each week and just go up the coast whenever I wanted to and give what that person think is a good holiday a miss , like I say , each and everyone of us our needs are different , all I can say is just get on with whatever you plan to do , rather than leave it to late and then say you wished you had done it , by then the boat have sailed over the horizon  .  

That’s scary tbh . My sister went to sleep at 19 . 25 years on she’s at peace in her sleep . It’s destroyed my parents . 
next year I’ll be with them in the iow with my partner and I think myself lucky I’m able to do that . 

[marsh man]

10 minutes ago, team tractor said:

That’s scary tbh . My sister went to sleep at 19 . 25 years on she’s at peace in her sleep . It’s destroyed my parents . 
next year I’ll be with them in the iow with my partner and I think myself lucky I’m able to do that . 

Sorry to hear about your sister passing at the very young age of 19 TT , for most people this is around the age that life really begin , my wife was 75 and although I am getting better I still find it hard to believe and there isn't a day pass where she is in my thoughts .   MM

[Cosmicblue]

I'm 67 and retired back in February '23 - not exactly my plan at the time but made redundant 6 months short of my 66th birthday and state pension.

To the original question of 'How much money do you need to retire?' 

We all have different financial commitments however having a clear idea of the monthly expenses is a good start so:

Council tax, Energy (Electricity/gas/oil), Food, provisions for car tax/maintenance etc

You then need to check to see what your individual State Pension payment is going be - you can do that here https://www.gov.uk/check-state-pension 

People have posted in this thread about about stopping work before the State Retirement age do bear in mind that the DWP take into account the amount you have contributed and use it to calculate your pension - paid every 4 weeks, gross with no tax deducted - mine is very slightly less that £1000 a month so not to be sniffed at.

Any other income will need to come from other sources - how much you need will depend on what you need money.

My only regret is not seeking guidance from a professional financial adviser many years earlier - I could have planned for retirement rather than just let it happen and have to figure out the puzzle as was the case for me.   The adviser I eventually selected was able to project my income and likely expenditure out to age 100 using standard industry data models with around age 85 being the start of the taper down to being fairly inactive - provided confidence as to the future. 

Retirement is a personal journey - for me and for a good 6 months it felt like a holiday, got lots of jobs around the house done, still think about work - 'work' is a 50+ year habit one is trying to break. 😀  

 

 

 

Edited October 28 by Cosmicblue

[sitsinhedges]

Financial advisors seem to want you to have as much when you die as when you retire which to me is ridiculous. They use a 4% rule so having a modest £20,000 a year requires a £ half million sized pot.

I think it's more realistic ways of working it, if you don't mind dying, still  at a good age without so much left.

 

[JohnfromUK]

25 minutes ago, sitsinhedges said:

Financial advisors seem to want you to have as much when you die as when you retire which to me is ridiculous. They use a 4% rule so having a modest £20,000 a year requires a £ half million sized pot.

I think it's more realistic ways of working it, if you don't mind dying, still  at a good age without so much left.

 

In my calculator (a simplistic spreadsheet), taking out £20K a year and the 'pot' having a growth rate of 4% needs a pot of just under £300K to last 20 years of 'drawdown' (i.e. fund is exhausted at year 20).

If you want the pot to remain at (or near) it's initial; value, you would need £470K

It's all guesswork;

1. How long will you live?  (None of us know with any accuracy, but to mid to late 80's might be a guess)
2. How much (on average) will the fund grow?  (No one knows, but 3% or 4% are typical figures that are used)
3. The picture changes to 'inflation link' because no one knows what the inflation over the period will be.
4. There may be 'tax rules' changes that alter what happens

Overall, its just a case of making the best guess you can.

Similarly with our expenses.  When I worked my plans out I made various assumptions, but several have been a long way out.  Although I wasn't too far off in 'general inflation' (it has been both above and below the standard figure I used of (I think) 3% ............. certain thins that are amongst my biggest outgoings have been MUCH higher than predicted.  Notably

• Household energy prices, esp gas.
• Insurance, home and motor
• Local tax (which may get a lot worse if the single person's discount is abandoned).

[Charlie1965]

On 23/10/2024 at 20:41, sitsinhedges said:

It's a broad question but I'm wondering how much people have found they need to retire per year. I'm assuming no debt and a reasonable lifestyle. 

It was my intention to quit at 60 in a  year but a rotor cuff tear has stopped me doing my job and it sounds like it'll pretty much write this year off financially before it's sorted. This means a significant loss of extra pension and savings I would have earned. Plus I'm a bit bored cos I can't do much that I want to at the minute.

I'm just wondering if I can stretch my money and give up now.

The standard suggestion from the finance industry for a couple is 

minimum £22,400

moderate £43,100

comfortable £59,000

Here’s my back of the cigarette packet…. aged 60 and contemplating retirement , 7 years until state pension.

7 years x £43,000 = £301,000             Wife gets her pension 3 years before 3 x £11,000 = £33,000

£301,000 - £33,000 = £268,000          Age 67 to 85 we get state pension £11,000 each - £22,000

£43,000 - £22,000 = £21,000              18 years x £21,000 = £378,000

£268,000 + £378,000 = £646,000

So £646,000 in our SIPP’s / ISA’s all invested in high yielding dividend stocks, eg HSBC, Aviva both at 7%        £646,000 x 7% = £45,220 / year and the capital is still left for the kids when we are gone. (I know it will be £67,220 from age 67 with the state pension)

Shoot it down folks, it’s a shooting site after all. ( This is all fictional and I’ll just keep working )

For the younger ones, the percentage of your salary you put in your pension should be half your age when you start contributing. 

 

[islandgun]

On 26/10/2024 at 21:09, mel b3 said:

I've seen your motorbike.  You don't need to worry about pensions 😄.

😄😄

[Miserableolgit]

I'm not going to go into my personal circumstances but reflect back on the experience of my father. He had a decent job, provided for his family, did the right things. The job was managerial involved credit control in a fairly large outfit which included taking legal action against poor corporate payers. The job was demanding and stressful, he brought work home and stayed up late dealing with it. In the end his health suffered and he suffered a nervous breakdown and had to have quite a time off work as a result. They kept his job open, he went back but again found the demands too much and again had to have time off. His doctor told him to give up the job and find something less stressful to coast to retirement. This he did but the road was not an easy road as his income reduced and he was made redundant at least once. Come his 65th birthday - the age of retirement that was. By this time he was on his own with his two dogs living in the family home. 

He collapsed and died suddenly of a heart attack as two weeks after his 65th birthday as we stood in his kitchen chatting about this and that. One minute we were having a laugh and a joke, the next he said "oh dear" took a few steps toward the dining room then he was down and out. Despite my best efforts to do the usual CPR etc until the ambulance arrived he was gone before they got him to hospital.

Poor old ******. Not much of a retirement was it.

We just never know what awaits us.

Edited October 28 by Miserableolgit

[Mungler]

58 minutes ago, Charlie1965 said:

The standard suggestion from the finance industry for a couple is 

minimum £22,400

moderate £43,100

comfortable £59,000

Here’s my back of the cigarette packet…. aged 60 and contemplating retirement , 7 years until state pension.

7 years x £43,000 = £301,000             Wife gets her pension 3 years before 3 x £11,000 = £33,000

£301,000 - £33,000 = £268,000          Age 67 to 85 we get state pension £11,000 each - £22,000

£43,000 - £22,000 = £21,000              18 years x £21,000 = £378,000

£268,000 + £378,000 = £646,000

So £646,000 in our SIPP’s / ISA’s all invested in high yielding dividend stocks, eg HSBC, Aviva both at 7%        £646,000 x 7% = £45,220 / year and the capital is still left for the kids when we are gone. (I know it will be £67,220 from age 67 with the state pension)

Shoot it down folks, it’s a shooting site after all. ( This is all fictional and I’ll just keep working )

For the younger ones, the percentage of your salary you put in your pension should be half your age when you start contributing. 

 

 

My own view is that you should not factor a state pension into your calculations. Indeed, I think it will eventually become means tested.

Yes, we all "pay into the state pension pot" for all our lives, but of course there is no actual pot - it is merely what the next year's tax take can cover / what the next generation is prepared to contribute towards.

We are currently dealing with a lack of productivity on a never seen before scale and measuring anything in the future against what has always happened in the past is dangerous.

Factor in the length by which people are living longer and the daft civil service pensions still being doled out, there will be a breaking point inside of the next 20 years.

I do wish the conservative government had focused on the school curriculum in the last decade and promoted "economics" alongside maths and english - I really think that people would be appalled by government expenditure and at the rate by which they are taxed if they understood a few key facts / data sets better.

https://en.wikipedia.org/wiki/Government_spending_in_the_United_Kingdom

 

 

 

[TIGHTCHOKE]

I think you are correct.

[Bigbob]

A bloke at work reckoned he could live on 8K a year and he packed in and proofed it 

I retired threw ill health at 60 and i had 2 pensions and we should of been well off but with covid we had to be carefull and tighten or belts a little but i cant wait o see the budget this week