Enjoying Retirement
Discussion
okgo said:
This brings me back to my question of has anyone found a decent yardstick tool - i.e. to be on track for x, you should have £y at z age?
As every situation is different you are best off just doing your own on excel.The 2 main questions being what age do you want to retire and how much do you want in retirement.
You can then model it pretty quickly.
IMVHO you *should* have *about* £100k per £100 saved per month over a 35 year period with a medium risk portfolio.
YMMV!!
covmutley said:
gotoPzero said:
£1M pot gets you c.£40k draw down or c.£30k annuity.
To get a £1M pot over say 35 years you are looking at "contributions" of c.£1k/mo assuming 4% returns.
I guess you could just about hit £6k a month as a couple if you went the draw down route and if you both had a £1M pot. Before tax.
So if you both paid £1k a month you might get there.
Id say that is very, cautious. My SIPP has averaged double that (roughly) and that performance also ties in with the long term market returns. To get a £1M pot over say 35 years you are looking at "contributions" of c.£1k/mo assuming 4% returns.
I guess you could just about hit £6k a month as a couple if you went the draw down route and if you both had a £1M pot. Before tax.
So if you both paid £1k a month you might get there.
Also, the 4% drawdown is arguably conservative too. You could drawdown more if the market is performing even averagely and still not be touching the pot. It may be better to plan to drawdown more in early retirement, and ease back as you get older?
I would rather be cautious though. Plus most IFAs say 3-3.5% is more like it. In the US they tend to be closer to 4%.
Obviously you might get lucky and get a really good run of 20-30 years of good returns which might be twice that. But as a base line I would say being a bit more cautious is probably better. Then when you come to draw down - if thats your bag - you can take more risks if you have more than expected. IYSWIM.
Each to their own though.
bennno said:
Sorry yes, final sentence is what i'm planning. We moved west to pay off the mortgage and be near the beach, the suplus bought a couple of holiday lets to give income until we need to access pension. Morgan, Elise, Boxster and a 3L BMW all paid for to play with in retirement.
Surprised to read you are back in an S1 Elise bennno given your last experience! gotoPzero said:
As every situation is different you are best off just doing your own on excel.
The 2 main questions being what age do you want to retire and how much do you want in retirement.
You can then model it pretty quickly.
IMVHO you *should* have *about* £100k per £100 saved per month over a 35 year period with a medium risk portfolio.
YMMV!!
Interesting, I suppose I was wondering how far behind the curve of having a decent pot I am with having circa 50k at 34. I know I'm a way off, but hope it isn't too far off.The 2 main questions being what age do you want to retire and how much do you want in retirement.
You can then model it pretty quickly.
IMVHO you *should* have *about* £100k per £100 saved per month over a 35 year period with a medium risk portfolio.
YMMV!!
okgo said:
This brings me back to my question of has anyone found a decent yardstick tool - i.e. to be on track for x, you should have £y at z age?
I know it's fashionable to slate IFAs in this forum as they are "all just charlatans who are out to get you to pay 5% PA in fees for useless advice that's no better than you can get by reading some forums".As an alternative view, I retired when I was 56, and it was working for a number of years with a great IFA that made this possible.
We set out our aims well in advance, and had a plan with appropriate levels of investment risk that would allow me to go part time, and then retire by age 60. As it happens, the plan worked out rather better, and so when my employer finally took all the remaining enjoyment out of my final job, I quit, and didn't even consider the various incentives they offered to try to get me to stay.
The IFA had a lot of really good planning tools (e.g. Voyant) that helped to look at various options for investments, potential for drawdowns, and even to look at how our same strategy would have worked every year since 1930, to give an idea of how consistent the outcome might be. They also helped with a bunch of inheritance questions for my Mum when my Dad died, without charging.
This is all stuff that in theory you can do yourself to a certain level, but in my case I was quite happy to pay for it (and at the time I was paying much less than 1% PA for all the advice/fees), and I know that I wouldn't have got anywhere near the same result doing it myself, so it was money very well spent.
It all starts though by knowing what you want to achieve... When do you want to retire, do you want to prioritise leaving inheritance for dependents, what will you want to spend money on now and in the future.
okgo said:
gotoPzero said:
As every situation is different you are best off just doing your own on excel.
The 2 main questions being what age do you want to retire and how much do you want in retirement.
You can then model it pretty quickly.
IMVHO you *should* have *about* £100k per £100 saved per month over a 35 year period with a medium risk portfolio.
YMMV!!
Interesting, I suppose I was wondering how far behind the curve of having a decent pot I am with having circa 50k at 34. I know I'm a way off, but hope it isn't too far off.The 2 main questions being what age do you want to retire and how much do you want in retirement.
You can then model it pretty quickly.
IMVHO you *should* have *about* £100k per £100 saved per month over a 35 year period with a medium risk portfolio.
YMMV!!
Your best bet is to think about when you want to retire. Then think about what sort of income you might want / need (2 very different numbers probably!)
Then work back from there how many years you have to save the sums needed.
Remember:
Employer contributions
HMRC contributions
State pension once at SPA.
Delete as appropriate!
I'm planning to retire in the next 5 years, currently 51 and saving/investing more than ever. Don't really have a figure in mind yet, I could probably stop working now, downsize the house and live just fine but it wouldn't be a very exciting lifestyle. So hopefully another 5 years or so of investment will allow me to retire and keep a fancy car, bike and a few holidays per year too 
Useful calculator here to model spending/investment post retirement
https://www.firecalc.com/
compares your withdrawal rate against market history, interesting to play around with the numbers
Useful calculator here to model spending/investment post retirement
https://www.firecalc.com/
compares your withdrawal rate against market history, interesting to play around with the numbers
bogie said:
I'm planning to retire in the next 5 years, currently 51 and saving/investing more than ever. Don't really have a figure in mind yet, I could probably stop working now, downsize the house and live just fine but it wouldn't be a very exciting lifestyle. So hopefully another 5 years or so of investment will allow me to retire and keep a fancy car, bike and a few holidays per year too
Useful calculator here to model spending/investment post retirement
https://www.firecalc.com/
compares your withdrawal rate against market history, interesting to play around with the numbers
Does it have UK historical data (inflation and market returns)?Useful calculator here to model spending/investment post retirement
https://www.firecalc.com/
compares your withdrawal rate against market history, interesting to play around with the numbers
bennno said:
ray von said:
bennno said:
Bonkers PH responses on here, national average wage is 26k and it’s being suggested to enjoy retirement you need at least 2-3x that.
‘To comfortably run 4 cars, I’m budgeting 15k per annum for holidays etc, to pay leases on cars’
You shouldn’t need 50-75k net with the mortgage paid off, after income tax, without costs of working, with no dependents etc?
Planning to retire next year at 50, house and several cars paid, no debt, net income of 20-25k from a couple of holiday rental properties, try to keep pension untouched as long as possible.
Is the last paragraph a quote from the thread or what you are going to do?‘To comfortably run 4 cars, I’m budgeting 15k per annum for holidays etc, to pay leases on cars’
You shouldn’t need 50-75k net with the mortgage paid off, after income tax, without costs of working, with no dependents etc?
Planning to retire next year at 50, house and several cars paid, no debt, net income of 20-25k from a couple of holiday rental properties, try to keep pension untouched as long as possible.
Derek Chevalier said:
bogie said:
I'm planning to retire in the next 5 years, currently 51 and saving/investing more than ever. Don't really have a figure in mind yet, I could probably stop working now, downsize the house and live just fine but it wouldn't be a very exciting lifestyle. So hopefully another 5 years or so of investment will allow me to retire and keep a fancy car, bike and a few holidays per year too
Useful calculator here to model spending/investment post retirement
https://www.firecalc.com/
compares your withdrawal rate against market history, interesting to play around with the numbers
Does it have UK historical data (inflation and market returns)?Useful calculator here to model spending/investment post retirement
https://www.firecalc.com/
compares your withdrawal rate against market history, interesting to play around with the numbers
ray von said:
Which just proves the bonkers figures are relative to where you are sitting so to speak, and where I'm sitting I'd say your figures are bonkers but good luck to you you've obviously done well
Have to agree - I just can't see how a couple can live comfortably including Morgan, Elise, Boxster and a 3L BMW on £20-25k per annum.Our core bills including medical insurance but no mortgage, food, motoring or discretionary spend already add up to £12k+
Halitosis said:
okgo said:
Interesting, I suppose I was wondering how far behind the curve of having a decent pot I am with having circa 50k at 34. I know I'm a way off, but hope it isn't too far off.
I think you're in a far better position that 90% of your age group. I have drummed it into any sub 30 yr old around me that the earlier you start the earlier you might finish (and to balance pension with ISA).
Shnozz said:
You have said what I was thinking.
Having said that, I completed that "how much do you need to live" speadsheet that another poster linked to earlier. I think we live relatively frugally, or certainly living costs (our social lives are expensive but non-essential so could be culled significantly if our income fell). However, even taking into account modest household expenditure, subscriptions, gym memberships etc the sum required PCM was far higher than the estimated figure I had in the back of my head.
Before retiring from my last big job at 55, I calculated what we as a family had actually spent on average each year over the past couple of years and used that as the base figure that I needed to cover with pension/savings for the next 30 years before jumping ship. I then stuck my figures in to ‘fire calc’ to determine the likelihood of success. All rule of thumb but provides a decent indicator as to whether you are on the right track. Having said that, I completed that "how much do you need to live" speadsheet that another poster linked to earlier. I think we live relatively frugally, or certainly living costs (our social lives are expensive but non-essential so could be culled significantly if our income fell). However, even taking into account modest household expenditure, subscriptions, gym memberships etc the sum required PCM was far higher than the estimated figure I had in the back of my head.
https://www.firecalc.com/
halo34 said:
Halitosis said:
okgo said:
Interesting, I suppose I was wondering how far behind the curve of having a decent pot I am with having circa 50k at 34. I know I'm a way off, but hope it isn't too far off.
I think you're in a far better position that 90% of your age group. I have drummed it into any sub 30 yr old around me that the earlier you start the earlier you might finish (and to balance pension with ISA).
Perhaps I might not be as poor as I was expecting. Have always compared myself to my FIL who has a police final salary pension and thought I would have been far worse off.
anonymous said:
[redacted]
This, my Mum is 85 and has an income of around £1200 per month. She still runs her car and manages to enjoy a couple of foreign holidays each year and give generously at Christmas and birthdays. She's probably only spending around £200 per month on day to day living. zj2016 said:
Have always compared myself to my FIL who has a police final salary pension and thought I would have been far worse off.
I'm relatively new to the entire concept of retirement planning (didn't start working in UK until aged 37 and before that lived in places where pensions aren't as much of a concept as your children are expected to look after you when you're old).Didn't make my first pension contribution until into my 40s when I finally cottoned on that employer-matched contributions are a good thing.
Anyway, I literally found out just last year the meaning of defined benefit / final salary pensions and it the concept blows my mind. In my naivete I struggle to believe that such a thing exists. No wonder all those folks were willing to spend their entire careers on low salaries.
Edited by plenty on Friday 21st January 12:19
zj2016 said:
Always thought I would be skint in retirement but feel a bit better having read this thread. Current pot is £100k at 37 and contributing £1000 a month and £750 to S&S isas.
Perhaps I might not be as poor as I was expecting. Have always compared myself to my FIL who has a police final salary pension and thought I would have been far worse off.
You are absolutely crushing it and I doff my cap to you. I didn't even start a pension until my 40s, and was in my 50s when I reached £100k. The usual pattern is to direct most of our earnings to property in our 30s, and only seriously start shovelling into pensions from 50 in an effort to make up for lost time. Perhaps I might not be as poor as I was expecting. Have always compared myself to my FIL who has a police final salary pension and thought I would have been far worse off.
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