Could you live on your pension?
Discussion
LeadFarmer said:
HoHoHo said:
I like my job so no issue there.
I genuinely envy people who enjoy or love their job. I hate mine, I've hated nearly every day of it for the last 21 years, but the money and security is ok, and I can retire in 4yrs when I'm age 50, which is much earlier than most people. Would I do the same again if I could relive my life - I really don't know. But I will be encouraging my young son to go into a job that he will enjoy, and not just chase the money, as you are a long time at work.
t still smells the same regardless of if you employed or an employer.Pension will be 75% of 40/60th of income, I'd estimate at about £1,600 per month + a nice nest egg of a draw down of just over £100,000 to fritter away at the age on 62 …. in 10 years time 
I'll be mortgage free in 5 years and based on current spend should be fine, Of course the state pension of £600 comes in at 67 as well,
I do feel for those who havn't thought to provide for themselves
I estimate council tax £150, Electric & gas £100, Water & media £100, Other household bills £100, Car charges £100 so about £550 as just bills before food and living that should never reach £1000 so I feel I'll be ok later,
Of course I'll need to prevent picky roofers from having my nest egg
edited … roofers ….. Blame the senility 
I'll be mortgage free in 5 years and based on current spend should be fine, Of course the state pension of £600 comes in at 67 as well,
I do feel for those who havn't thought to provide for themselves
I estimate council tax £150, Electric & gas £100, Water & media £100, Other household bills £100, Car charges £100 so about £550 as just bills before food and living that should never reach £1000 so I feel I'll be ok later,
Of course I'll need to prevent picky roofers from having my nest egg
Edited by T6 vanman on Tuesday 18th September 21:43
edited …
roofers ….. Blame the senility Edited by T6 vanman on Wednesday 19th September 06:56
T6 vanman said:
Pension will be 75% of 40/60th of income, I'd estimate at about £1,600 per month + a nice nest egg of a draw down of just over £100,000 to fritter away at the age on 62 …. in 10 years time
I'll be mortgage free in 5 years and based on current spend should be fine, Of course the state pension of £600 comes in at 67 as well,
I do feel for those who havn't thought to provide for themselves
I suspect (and know) there are many with very little pension provision well into their 50s. I have one colleague who is needing to work at 69 years old now and another contractor who retired last year aged 79 (although I suspect he is quite well off and just enjoyed working!)I'll be mortgage free in 5 years and based on current spend should be fine, Of course the state pension of £600 comes in at 67 as well,
I do feel for those who havn't thought to provide for themselves
I am concerned at age 44 and I have a fair chunk in my pension pot. I am looking at being mortgage free in four years and kids flown the nest in 12 years time (despite probably needing financial support for a few years after that....). It is incredibly difficult to predict how financially settled I will be in 23 years and how much in real terms I will have. At present trying to live on my retirement 'wage' would be impossible. Investment growth, inflation, ill health, job security, earning potential etc are very big unknowns.
Mike
tighnamara said:
HoHoHo said:
So at say 40 how much should you have in your pension pot?
And at 50?
Massively open question, that would depend on what age you want to retire and how much you want to live on each year.And at 50?
If you do the maths, even from a young age in order to have a good standard of living to include say a nice holiday, no worries about bills, perhaps new/recent mid-range car every 5-8 years, membership of a Golf Club or gym or whatever, a meal out now and again and sufficient so you don't freeze to death in the winter and the figure you need to save given current returns is eye-watering.
For example if you have a £1m pension pot this would provide an approximate gross income of £40,000 per year and whilst that great don't forget you are then subject to tax and so it goes on.
And a pot of £1m..............that's a lot of money!
HoHoHo said:
Sorry, I was thinking for around 60 or so
If you do the maths, even from a young age in order to have a good standard of living to include say a nice holiday, no worries about bills, perhaps new/recent mid-range car every 5-8 years, membership of a Golf Club or gym or whatever, a meal out now and again and sufficient so you don't freeze to death in the winter and the figure you need to save given current returns is eye-watering.
For example if you have a £1m pension pot this would provide an approximate gross income of £40,000 per year and whilst that great don't forget you are then subject to tax and so it goes on.
And a pot of £1m..............that's a lot of money!
That is assuming you do not dip into the capital to bolster the returns from interest. If you do the maths, even from a young age in order to have a good standard of living to include say a nice holiday, no worries about bills, perhaps new/recent mid-range car every 5-8 years, membership of a Golf Club or gym or whatever, a meal out now and again and sufficient so you don't freeze to death in the winter and the figure you need to save given current returns is eye-watering.
For example if you have a £1m pension pot this would provide an approximate gross income of £40,000 per year and whilst that great don't forget you are then subject to tax and so it goes on.
And a pot of £1m..............that's a lot of money!
The Mrs has already retired early, nice pension, healthy lump sum, final salary scheme etc which pays the same level of pension for the rest of her life. This is the totally secure foundation of our retirement plan. We will also, of course, have two state pensions coming into the family coffers.
I, after listening to Mrs Thatcher, made my own more flexible arrangements with the result that using drawdown from when I retire, in 4 or 5 years, we will have more disposable income when both of us are retired than we have now, right up until I am 85 whereupon my cash pot is planned to run out.
We then revert to the same income level we enjoy now.
My reasoning is that when retired and active you need more money than when you are working as the travel, long holiday and hobby opportunities all of which cost money, expand to fill what would have been working hours, all of which previously earned you money.
If I reach 85 I would have had a great retirement and all my travelling would be done, if I don't the Mrs will have lump sum to indulge herself with. The "cocktails and pool boys scenario" I call it.
Whatever happens, when we shuffle off into the sunset, our daughter get the house, as hopefully all the cash will have been frittered away on making the most of our retirement.
Cheers,
Tony
LeadFarmer said:
T6 vanman said:
I do feel for those who havn't thought to provide for themselves
Imagine having to live off the state pension alone Im not sure as a home owner I could manage?I feel sorry for people that do jobs they hate so much they can’t wait to retire.
Tony427 said:
HoHoHo said:
Sorry, I was thinking for around 60 or so
If you do the maths, even from a young age in order to have a good standard of living to include say a nice holiday, no worries about bills, perhaps new/recent mid-range car every 5-8 years, membership of a Golf Club or gym or whatever, a meal out now and again and sufficient so you don't freeze to death in the winter and the figure you need to save given current returns is eye-watering.
For example if you have a £1m pension pot this would provide an approximate gross income of £40,000 per year and whilst that great don't forget you are then subject to tax and so it goes on.
And a pot of £1m..............that's a lot of money!
That is assuming you do not dip into the capital to bolster the returns from interest. If you do the maths, even from a young age in order to have a good standard of living to include say a nice holiday, no worries about bills, perhaps new/recent mid-range car every 5-8 years, membership of a Golf Club or gym or whatever, a meal out now and again and sufficient so you don't freeze to death in the winter and the figure you need to save given current returns is eye-watering.
For example if you have a £1m pension pot this would provide an approximate gross income of £40,000 per year and whilst that great don't forget you are then subject to tax and so it goes on.
And a pot of £1m..............that's a lot of money!
The Mrs has already retired early, nice pension, healthy lump sum, final salary scheme etc which pays the same level of pension for the rest of her life. This is the totally secure foundation of our retirement plan. We will also, of course, have two state pensions coming into the family coffers.
I, after listening to Mrs Thatcher, made my own more flexible arrangements with the result that using drawdown from when I retire, in 4 or 5 years, we will have more disposable income when both of us are retired than we have now, right up until I am 85 whereupon my cash pot is planned to run out.
We then revert to the same income level we enjoy now.
My reasoning is that when retired and active you need more money than when you are working as the travel, long holiday and hobby opportunities all of which cost money, expand to fill what would have been working hours, all of which previously earned you money.
If I reach 85 I would have had a great retirement and all my travelling would be done, if I don't the Mrs will have lump sum to indulge herself with. The "cocktails and pool boys scenario" I call it.
Whatever happens, when we shuffle off into the sunset, our daughter get the house, as hopefully all the cash will have been frittered away on making the most of our retirement.
Cheers,
Tony
Personally I took the decision any government have f-all interest in looking after me and my wife once we get old and we took the opportunity to purchase commercial property. We run our business out of two units and we get paid a heathy rent by our company and the third and fourth are rented on long term leases so more income there. We're based in the SE and the value of the property isn't too shabby either so not only do we have an income but an asset that is (hopefully) increasing in value.
I really don't understand why more business owners don't buy their own premises, it's a total no-brainer and should you have a personal commercial mortgage you also get 100% tax relief
Currently I have no plans to retire, I'm really fortunate to do pretty much what I like when I like and I still get paid for it
However you make a valid point that some don't appreciate retirement costs more money than working, that is unless you want to sit at home all day watching TV or something similar.... HoHoHo said:
Sorry, I was thinking for around 60 or so
If you do the maths, even from a young age in order to have a good standard of living to include say a nice holiday, no worries about bills, perhaps new/recent mid-range car every 5-8 years, membership of a Golf Club or gym or whatever, a meal out now and again and sufficient so you don't freeze to death in the winter and the figure you need to save given current returns is eye-watering.
For example if you have a £1m pension pot this would provide an approximate gross income of £40,000 per year and whilst that great don't forget you are then subject to tax and so it goes on.
And a pot of £1m..............that's a lot of money!
Its a difficult one, was hoping to retire or wind down at 55, looking like somewhere between 55 & 60 at the moment to ensure we can keep a decent but not extravagant lifestyle.If you do the maths, even from a young age in order to have a good standard of living to include say a nice holiday, no worries about bills, perhaps new/recent mid-range car every 5-8 years, membership of a Golf Club or gym or whatever, a meal out now and again and sufficient so you don't freeze to death in the winter and the figure you need to save given current returns is eye-watering.
For example if you have a £1m pension pot this would provide an approximate gross income of £40,000 per year and whilst that great don't forget you are then subject to tax and so it goes on.
And a pot of £1m..............that's a lot of money!
House is eating up the cash and will continue for another couple of years, wont get the money back but it is a forever house being completed for retirement.
Things could change in the next few years, so who knows really, we don't have kids so the plan will be to leave as little as possible at the "dying" end.
T6 vanman said:
I do feel for those who havn't thought to provide for themselves
Those of us who deferred the gratification for later lived on less than we could have, gambling that we’d live long enough to have the benefit later.
I've seen my parents struggle as they never paid in to Pensions until later in life. For that reason I pay heavily in to mine which fortunately is matched +2% by my employer.
When I log on to our pension forecast tool it shows both a target and projected value.
Target being what they think you could/should live on and projected is what they project I will get based on current salary and contributions.
Luckily for me my net wage increases when I retire according to their tool.
When I log on to our pension forecast tool it shows both a target and projected value.
Target being what they think you could/should live on and projected is what they project I will get based on current salary and contributions.
Luckily for me my net wage increases when I retire according to their tool.
tighnamara said:
HoHoHo said:
So at say 40 how much should you have in your pension pot?
And at 50?
Massively open question, that would depend on what age you want to retire and how much you want to live on each year.And at 50?
Mortgage paid off
Kids left home
The answer is really the reverse i.e. "What are your outgoings" and then say assume you live to 90 and inflate those outgoings at say 4% and find out how much you need and use a conservative growth rate in your assets.
I've just spend six months doing all this and the real thought needs to go into your outgoings, being honest with it and thinking about future events that may need capital. For most people the outgoings number is bigger than they think it is because they tend not to include one off expenditure every few years...whether that is on house maintenance, replacing a car or buying a fancy new TV.
Cheib said:
Decent amount of our children's generation will struggle to buy their first homes without help from their parents. That's something else that lurks for a lot of us.
Nope, don't think so. Banks need to lend and once this housing bubble gets popped by the powers that be, houses will become affordable again. Banks didn't rule the world by having nobody to lend to. Pension
Safe to say I could not live on my pension. Based on my own current projections I will be some way short of the money I want to be bringing in through retirement, never mind the prospect of sacking off work earlier than state pension age.
All my own doing/fault. Finish Uni, straight in to contracting for 5 years. Never earned enough salary to start paying off my student loan naturally, buying a flat and going motor racing seemed a far more desirable use of my monthly monies. Next job, took a dose of permiecillin and took a take-home pay cut and suddenly had no option but to pay my student loan back, pension contributions I believe I set at 1% with employer matching it, really just to get me the free life cover than was bundled along with it and continued to spunk my earnings on racing. Stayed there for 5 years and for the last 6 months started to take my pension more seriously paying real attention to what it was invested in.
Year and a half in to my 3rd job, I’m taking it much more seriously. 4% is the maximum my employer matches so that’s been going in from the start and I’ve just upped it to 8% personal contribution. In the process of selling my flat and much as firing the equity in to an M4 is extremely temping, I think it’ll be getting spread across a S&S ISA and various other investments.
At 34, my total pot was 1/6 of my annual gross salary, now at 36 it is up to 1/3 of my annual gross salary via bigger contributions and growth in funds. I console myself in knowing I’m not starting from zero, because 18% of my salary would make life incredibly dull, but at the same time, I know I need to make good headway in sorting things out now whilst my family life is still a child free zone.
I’d love to say the current me would give the 23yr old me a slap, but I wouldn’t, I’d do it all again. Just need to suck it up and take my medicine now
Safe to say I could not live on my pension. Based on my own current projections I will be some way short of the money I want to be bringing in through retirement, never mind the prospect of sacking off work earlier than state pension age.
All my own doing/fault. Finish Uni, straight in to contracting for 5 years. Never earned enough salary to start paying off my student loan naturally, buying a flat and going motor racing seemed a far more desirable use of my monthly monies. Next job, took a dose of permiecillin and took a take-home pay cut and suddenly had no option but to pay my student loan back, pension contributions I believe I set at 1% with employer matching it, really just to get me the free life cover than was bundled along with it and continued to spunk my earnings on racing. Stayed there for 5 years and for the last 6 months started to take my pension more seriously paying real attention to what it was invested in.
Year and a half in to my 3rd job, I’m taking it much more seriously. 4% is the maximum my employer matches so that’s been going in from the start and I’ve just upped it to 8% personal contribution. In the process of selling my flat and much as firing the equity in to an M4 is extremely temping, I think it’ll be getting spread across a S&S ISA and various other investments.
At 34, my total pot was 1/6 of my annual gross salary, now at 36 it is up to 1/3 of my annual gross salary via bigger contributions and growth in funds. I console myself in knowing I’m not starting from zero, because 18% of my salary would make life incredibly dull, but at the same time, I know I need to make good headway in sorting things out now whilst my family life is still a child free zone.
I’d love to say the current me would give the 23yr old me a slap, but I wouldn’t, I’d do it all again. Just need to suck it up and take my medicine now
Cotty said:
Speaking to someone the other day who is retired, I suggested £1,000 a month is what I would need to retire and they said that is what they live on/budget for. Just need to put away a st load of money before I get made redundant.
Speaking as one who is retired..t load of money before I get made redundant....it so easy to spend more money when you are not at work. Just nipping out for a coffee & a bun then a bit of lunch & there's £20 done which you probably wouldn't have spent if at work. If you are not careful this is half of your £1,000 per month before you've even thought of holidays etc.
It's expensive this doing nothing lark.
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