How much money do you need for retirement/pension?
Discussion
Was watching a live FT FB feed on the above and they suggested a Million pounds would only give you a pension of £25k a year, that appears to be a staggering amount.
If you haven't got any grave robbers then there has to be a case for doing the maths on your own date of expiry and frittering the money away?
If you haven't got any grave robbers then there has to be a case for doing the maths on your own date of expiry and frittering the money away?
I suppose it wildly varies as per what age you plan to retire and what you plan to get up to in retirement. Outgoings could vary massively.
Do you own your own home, is it expensive to maintain, do you plan to go round the world cruises, anyone to support wife etc, kids away out your pockets, expensive hobbies etc
I'm sure some could and do afford to live on the state pension but they won't be doing much more than surviving.
I think the correct answer is as much as you can afford!?
Do you own your own home, is it expensive to maintain, do you plan to go round the world cruises, anyone to support wife etc, kids away out your pockets, expensive hobbies etc
I'm sure some could and do afford to live on the state pension but they won't be doing much more than surviving.
I think the correct answer is as much as you can afford!?
I've been doing a lot of work on this recently.....£30k on £1mil is a 3% return so doesn't sound ridiculous in current environment.
Before you can answer the question "how much" you need to look at how much you actually spend. For most people (and certainly me that's a bigger number than you think/admit to yourself.
As an example....every day I get to work I've spent £20 on parking, train and a coffee by 8am. Not allowing for driving to the station i.e. petrol and in theory cost of using the car (depreciation and maintenance).
That's £5k a year.
It adds up sodding quickly!
Before you can answer the question "how much" you need to look at how much you actually spend. For most people (and certainly me that's a bigger number than you think/admit to yourself.
As an example....every day I get to work I've spent £20 on parking, train and a coffee by 8am. Not allowing for driving to the station i.e. petrol and in theory cost of using the car (depreciation and maintenance).
That's £5k a year.
It adds up sodding quickly!
Cheib said:
I've been doing a lot of work on this recently.....£30k on £1mil is a 3% return so doesn't sound ridiculous in current environment.
Before you can answer the question "how much" you need to look at how much you actually spend. For most people (and certainly me that's a bigger number than you think/admit to yourself.
As an example....every day I get to work I've spent £20 on parking, train and a coffee by 8am. Not allowing for driving to the station i.e. petrol and in theory cost of using the car (depreciation and maintenance).
That's £5k a year.
It adds up sodding quickly!
Yes I am in the same boat (although hoping not to commute when I retire Before you can answer the question "how much" you need to look at how much you actually spend. For most people (and certainly me that's a bigger number than you think/admit to yourself.
As an example....every day I get to work I've spent £20 on parking, train and a coffee by 8am. Not allowing for driving to the station i.e. petrol and in theory cost of using the car (depreciation and maintenance).
That's £5k a year.
It adds up sodding quickly!
), I recently got an AMex card as I have been told that categorises your spending on the statement each month, so it may point to where I am being lavish!!But is that 3% before tax and then you have the issue with inflation and over the course of ten + years that figure losing it's value?
Mark300zx said:
Cheib said:
I've been doing a lot of work on this recently.....£30k on £1mil is a 3% return so doesn't sound ridiculous in current environment.
Before you can answer the question "how much" you need to look at how much you actually spend. For most people (and certainly me that's a bigger number than you think/admit to yourself.
As an example....every day I get to work I've spent £20 on parking, train and a coffee by 8am. Not allowing for driving to the station i.e. petrol and in theory cost of using the car (depreciation and maintenance).
That's £5k a year.
It adds up sodding quickly!
Yes I am in the same boat (although hoping not to commute when I retire Before you can answer the question "how much" you need to look at how much you actually spend. For most people (and certainly me that's a bigger number than you think/admit to yourself.
As an example....every day I get to work I've spent £20 on parking, train and a coffee by 8am. Not allowing for driving to the station i.e. petrol and in theory cost of using the car (depreciation and maintenance).
That's £5k a year.
It adds up sodding quickly!
), I recently got an AMex card as I have been told that categorises your spending on the statement each month, so it may point to where I am being lavish!!Back to the OP's question. The theory used to be 4% was the drawdown rate that was sustainable but now it's a bit lower because of interest rates. Article about it here.
https://www.ftadviser.com/retirement-income/2017/0...
I've just bought this book to help me understand things a bit more...I've spent 30 years working in finance. It's a really, really complicated subject and I would say beyond most people to model themselves because of the tax implications of various ways you can hold your saving and, of course, the assumption you make about growh of your investments and costs. Oh and in the case of your investments haircutting for unforseen events like the GFC. Lots to think about.
https://www.amazon.co.uk/Beyond-4-Rule-retirement-...
CubanPete said:
I recently had my pension statement through.
They annuity cost for £1,000 p.a. was....
£45,000!
I would have to live to 110 even with no income for that to be better value than draw down. Are they actually expecting anyone to by annuities any more?
That's the kind of mutliple that some people are getting offered to cash out of DB schemes. But yes...very valid. They annuity cost for £1,000 p.a. was....
£45,000!
I would have to live to 110 even with no income for that to be better value than draw down. Are they actually expecting anyone to by annuities any more?
Cheib said:
I've been doing a lot of work on this recently.....£30k on £1mil is a 3% return so doesn't sound ridiculous in current environment.
Before you can answer the question "how much" you need to look at how much you actually spend. For most people (and certainly me that's a bigger number than you think/admit to yourself.
As an example....every day I get to work I've spent £20 on parking, train and a coffee by 8am. Not allowing for driving to the station i.e. petrol and in theory cost of using the car (depreciation and maintenance).
That's £5k a year.
It adds up sodding quickly!
A strange choice of expense for retirement planning! Before you can answer the question "how much" you need to look at how much you actually spend. For most people (and certainly me that's a bigger number than you think/admit to yourself.
As an example....every day I get to work I've spent £20 on parking, train and a coffee by 8am. Not allowing for driving to the station i.e. petrol and in theory cost of using the car (depreciation and maintenance).
That's £5k a year.
It adds up sodding quickly!
Cheib said:
I've just bought this book to help me understand things a bit more...I've spent 30 years working in finance. It's a really, really complicated subject and I would say beyond most people to model themselves because of the tax implications of various ways you can hold your saving and, of course, the assumption you make about growh of your investments and costs. Oh and in the case of your investments haircutting for unforseen events like the GFC. Lots to think about.
https://www.amazon.co.uk/Beyond-4-Rule-retirement-...
I don't think ive ever seen a better reviewed book on Amazon! 98% 5 stars. Either its all the authors mates or there is something genuinely interesting in here. I will buy it and find out! Thanks for the tiphttps://www.amazon.co.uk/Beyond-4-Rule-retirement-...
I've been looking at this too - and contributed on a previous thread.
I think the only answer in modern times if you're normal sort of income is to save up the 400k or whatever is appropriate and then basically use the capital down to zero.
Don't be worrying about leaving it to kids etc - as the % are too low to live off if you want to retain capital.
I think the only answer in modern times if you're normal sort of income is to save up the 400k or whatever is appropriate and then basically use the capital down to zero.
Don't be worrying about leaving it to kids etc - as the % are too low to live off if you want to retain capital.
williaa68 said:
Cheib said:
I've just bought this book to help me understand things a bit more...I've spent 30 years working in finance. It's a really, really complicated subject and I would say beyond most people to model themselves because of the tax implications of various ways you can hold your saving and, of course, the assumption you make about growh of your investments and costs. Oh and in the case of your investments haircutting for unforseen events like the GFC. Lots to think about.
https://www.amazon.co.uk/Beyond-4-Rule-retirement-...
I don't think ive ever seen a better reviewed book on Amazon! 98% 5 stars. Either its all the authors mates or there is something genuinely interesting in here. I will buy it and find out! Thanks for the tiphttps://www.amazon.co.uk/Beyond-4-Rule-retirement-...
https://blog.timelineapp.co/blog?category=New%20Fe...
Edible Roadkill said:
I think I'll plan to retire at 60, with the view to blow the lot in the 1st 15yrs (quality golden years) then live on bread and water for the remainder.
f
kit only live once might as well go out as I arrived (with nothing) having enjoyed myself in between. 
that is the plan! :-)f
kit only live once might as well go out as I arrived (with nothing) having enjoyed myself in between. The Selfish Gene said:
Edible Roadkill said:
I think I'll plan to retire at 60, with the view to blow the lot in the 1st 15yrs (quality golden years) then live on bread and water for the remainder.
fkit only live once might as well go out as I arrived (with nothing) having enjoyed myself in between.
that is the plan! :-)f
kit only live once might as well go out as I arrived (with nothing) having enjoyed myself in between. CubanPete said:
I recently had my pension statement through.
They annuity cost for £1,000 p.a. was....
£45,000!
I would have to live to 110 even with no income for that to be better value than draw down. Are they actually expecting anyone to by annuities any more?
1. Are you sure that wasn’t an inflation-linked annuity?They annuity cost for £1,000 p.a. was....
£45,000!
I would have to live to 110 even with no income for that to be better value than draw down. Are they actually expecting anyone to by annuities any more?
2. Many companies don’t want to write longevity business so quote a poor choice, knowing that the policyholder has the option of taking the money and being an annuity elsewhere.
Edible Roadkill said:
I think I'll plan to retire at 60, with the view to blow the lot in the 1st 15yrs (quality golden years) then live on bread and water for the remainder.
fkit only live once might as well go out as I arrived (with nothing) having enjoyed myself in between.
Why not. At 75/80 your not going to be travelling the world maybe not even driving if they still give free bus passes all your going to need is food and water let the state take car of you after 80 you can live very frugally at that age. f
kit only live once might as well go out as I arrived (with nothing) having enjoyed myself in between. I don’t intend to be working full time much past 55.
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