Can we retire please? How much money do you really need need? (1 Viewer)

[Fragle]

Help. We are looking for some real world advice on if we are near or have already reached the point of retirement.
I have 8 years to pension age the better half has 2 years and both of us have had enough of being beholden to work. The better half has a few issues we feel its time to enjoy life.

Being very lucky to have paid the mortgage and the motorhome and the bills are just everyday stuff from having a property. We don't really want to full time so having done the maths I think we can do it

Ive broken everything down that we can think of insurances, services to car and motorhome, gas electric etc multiplied and divided and computer says yes it can be done. Just.
Happy days.
But the question is? Is there an amount, a real world figure people have found they require. A couple we saw a few weeks back said friends of them had set a target of £15000 per year to live off and only spent £13000. This seems to match our figures. So is this figure realistic? Do you already live on a smaller budget?
New decade new life Any advice is helpful

 

[Ivory55]

One thing that you can do if you find it’s getting a bit tight is do some seasonal work just to boost the pot to carry on.

 

[Riverbankannie]

I think you need to think carefully about the unexpected. Whilst living from day to day off the amount you state is doable, I would want to have a decent amount to cope with major expenses. For example, in ten years time would you need to find a lump sum for a replacement MH, what happens if the house roof needs repair and so on.

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[63720]

Remember to include inflation into your calculations and have you access to more funds in say 5 years because nothing comes down in price.

 

[Langtoftlad]

How much?
More than you want
Less than you think.

 

[Fragle]

Yes. We were thinking of this option. Quite fancy a bit of grape picking in Bordeaux for free parking

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[Lenny HB]

Sounds a bit low to me I would say a minimum of £20k and if you want a few holidays a bit more.

 

[Southdowners]

Sounds a very tight budget to me...

Have you factored in items such as replacement car, home maintenance, etc, etc.

 

[PEM]

We were in a similar situation 2 years ago both 60 fed up of work could we fund retirement until 66 when old age pension kicks in having done the sums we take £12500 ea so we dont have to pay tax and have managed ok on this. We have taken 4 3 month trips paid all Bill's on house and have found money left at end of year. If you think you could afford it go for it life is to short to worry.

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[Boringfrog]

Yes. We were thinking of this option. Quite fancy a bit of grape picking in Bordeaux for free parking

Sounds idyllic, but in reality it will be backbreaking and tedious.

 

[Fragle]

Remember to include inflation into your calculations and have you access to more funds in say 5 years because nothing comes down in price.

Thanks. No didn't include inflation but as Ivory55 says seasonal work may be an option to boost the coffers

 

[Caggsie1]

I’m going to keep an eye on this post, we’re being forced into a retirement due to hubby getting redundancy and me having some serious back issues. Although I still do have a job at the moment. I’m a teacher in FE college. So still classed as employed just waiting on one more procedure to get fit and fiddly again. Hubby feels as I’m less able to work he would like to continue to work. I’m not against this but do feel that he could do with some time to chill and get stuff done around here. He’s been working 12 hour days and away quite regularly. I keep thinking it’s the fear factor. How many peeps come on here and say they don’t know how they managed to work they are that busy. He’s 62 and I’m 57.

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[Fragle]

We were in a similar situation 2 years ago both 60 fed up of work could we fund retirement until 66 when old age pension kicks in having done the sums we take £12500 ea so we dont have to pay tax and have managed ok on this. We have taken 4 3 month trips paid all Bill's on house and have found money left at end of year. If you think you could afford it go for it life is to short to worry.

Way to go
Its easier to make the decision when you hear it works in practice. Life is to short and we are glad its working for you
Ultimately We don't want to be the richest people in the graveyard do we.

 

[Poutie57]

We retired 3 years ago and do 10-12-12 weeks away coming home in the peak periods and took some of my pension £11800 to avoid paying tax and also £4000 per annum of my 25% tax free allowance so in total just short of 15k
we seem to manage ok we allow €50 a day inclusive of ferries, diesel, food, general spend and campsites whilst away and always come inside budget ( even in Scandinavia)

 

[Silver-Fox]

I’ll be watching this as well.
We’re just looking to downsize the house when the market picks up again.

I suppose a lot depends on your life style and how much your utility and council tax is.
Unfortunately these are difficult to trim back.

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[Fragle]

Sounds idyllic, but in reality it will be backbreaking and tedious.

Ok maybe just the free parking then. Oh and the wine

 

[Ivory55]

Depends where you intend to be at times of year. The show season in the summer in uk needs seasonal workers. Parking firms for events like motor sports or derby day etc. Amazon type use seasonal workers at Xmas for distribution warehouse etc.

 

[Silver-Fox]

We retired 3 years ago and do 10-12-12 weeks away coming home in the peak periods and took some of my pension £11800 to avoid paying tax and also £4000 per annum of my 25% tax free allowance so in total just short of 15k
we seem to manage ok we allow €50 a day inclusive of ferries, diesel, food, general spend and campsites whilst away and always come inside budget ( even in Scandinavia)

Are your figures per annum or just a one off.

Ive asked a few if the 25% draw is rolled over to each year but never got a yes or no answer.

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[Fragle]

We retired 3 years ago and do 10-12-12 weeks away coming home in the peak periods and took some of my pension £11800 to avoid paying tax and also £4000 per annum of my 25% tax free allowance so in total just short of 15k
we seem to manage ok we allow €50 a day inclusive of ferries, diesel, food, general spend and campsites whilst away and always come inside budget ( even in Scandinavia)

Very helpful. Thanks. Are you allowed to take lump sums of money from your pension pots every year ?

 

[Stonemags76]

We took early retirement at 54(me) and 45(him), and although hoped to manage on £15,000, in reality it is about £20,000 to live comfortably. Means we are taking from our savings pot until my pension kicks in (I’m WASPI, so it’s at 66). Only three years to wait, but it’s probably low interest rates that have made the whole thing a bit scary! As others have said - you can always do a bit of work if needs be! Time together, and time to live has been invaluable, and well worth tightening our belts. Too many folk wait too long, and unfortunately several of our friends haven’t made it! Go for it - if your house is paid you’re sorted really!

 

[bobandjanie]

My life changed at 50, I lost the sight in one eye, ? and went from a self employed lunatic working 8 days a week that involved having an HGV licence. ?
To a very stressed worried person, and as my time in and out of the eye clinic went on, you realise there are people out there worse off than you. ?

So decided lifes too short, and after many years working for yourself it's very difficult to work for someone else, so got our first motorhome, ? and no more visits to the eye clinic that had gone on for 3 years, no more steroid injections in the eye, no more laser or drops in the eye, ? and the most important thing, no more telling me at least the other one is still alright, because that just turned me to alcohol. ?

All my friends were concerned, ? your only 50 what you going to do when your money runs out , that was 14 years ago, ? my reply was how long are you going to live.?
Janie goes to see her brother often he got cancer at 58 now 60 and responds well to the treatment, but it's in his bones, ? ex self employed flat roofer, I would say just do it, you never know what life is going to throw at you. ?

We had 2 years fulltime until we found our perfect for us life, and will admit it's not for everyone, and it can get a bit boring, we now have 5 months in the motorhome and rent our apartment out here in Spain, the other 7 months is in the apartment leading a normal life and we love it. ? Bob.

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[RowleyBirkinQC]

Very helpful. Thanks. Are you allowed to take lump sums of money from your pension pots every year ?

Does that depend on the type of pension you have, such as one targeted for drawdown (flexi-access drawdown or similar) as opposed to annuity?

I am 50, largely clueless about such things, so will watch this thread with interest given my pension pot growth is less than reassuring...

 

[The Wino]

We approached this from the other end working out how much cash we would have then comparing it with what we spent each year less the costs of going to work.
Th first thing to do is set aside an amount equal to the state pension each year until you reach state pension age . Then work out any other income from investments/savings and I set it up on a spreadsheet with an allowance for inflation.
Our finances were a bit complicated so in the end we visited a financial advisor who we had used before he used a computer program that did the spreadsheet thing a lot better. You input all your assets and incomes (pension etc). At the top is a timeline with a symbol of an umbrella on a beach that you can drag to your retirement age and a skull and crossbones that you set to the expected date you might pyc. The program then calculates given the level of cash you expect to draw how your savings reduce over the years. You can choose things like inflation, interest rates of assets like shares/ISAs/property etc and see how your assets are likely to last or not. You can then alter the drawings to see what the effect is of taking more or less cash.....its huge especially if you take more out in the early years. It was very useful for us as we have some rental from property and the program is smart enough to assume you sell when you have no savings left then have an increase in cash but less income.
We were lucky we had visited him before and he neither charged us or tried to sell us anything just said he was happy to say it looked like the sums added up and made sense so just do what you think best. Of course there will still be things you can't predict (Labour were proposing to heavily affect our rental income with tax and increased regulation) . He suggested a plan to the age of 100 I hope he's right!!!!!
It's a big decision and we aim to re-do the financial calculation every 3 to 5 years.
So it's sharpen your pencil and fire up the PC but remember two facts. You can have more money when you retire and less years or more years and less money but not both. And there are no pockets in shrouds.

 

[Stonemags76]

You can have more money when you retire and less years or more years and less money but not both. And there are no pockets in shrouds.

Love this, & so, so true!

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[Burgo]

We're in a similar-ish position and for my money that's a bit of a tight budget. Certainly doable, but there can't be much in your budget for contingencies.

We estimated our expenses based on the previous 3 years actuals, at quite a low level of granularity on a monthly basis with separate budgets for the likes of house maintenance, water, electric, council tax, community fees, insurance, gas bottles, mobiles, firewood, dog food, vet fees, dentist fees, optician, prescription fees, family birthdays, an allowance for Xmas excess / pressies / etc, a separate budget for drinks & tapas, separate budget for a monthly "special meals out", Food shopping, Car Ins, Car tax, Car fuel, Car servicing, MH ins, MH diesel, MH storage, MH servicing, Site fees, etc etc. Then allow for inflation each year to do forward projection. Then on top of each year add at least 10% contingency on the top of it all for when s*1t happens.

For MH fuel we used how many "driving days" we did per month in previous years, multiplied by 200 (which is the most km per day we would normally do) multiplied by .10 (we average 10l/100km), multiplied by €1.51 (which allows for diesel, oil & washing). Tyres, cam belts, brake pads, etc are in the MH servicing pot.

As each bill come in we log it and let the spreadsheet recalculate what the budget looks it will be for the future - even to the level of supermarket, local shop, bread shop, greengrocer, market, etc some months so we know exactly if we are on track for food shopping or not. As a result we have a pretty sound idea of exactly where every euro goes and whether we are on track or not.

Below this we then input how much UK pension we get paid, apply exchange rate to get euro amount and then we know if we're home and dry or in the claggy. Remember the wise words of Mr Micawber: "Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six pence, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery".

The only other thing not to do under any circumstance at all (forgive me if this sounds a bit "preachy" but for a long time in a previous life I did this kind of thing for a living at quite a high level) is to miss out the contingency pot. If your estimating is bang on then, you didn't miss anything out and nothing goes wrong , great, have a small treat then buy some premium bonds / invest it and start the next year on that year's bare budget. One day, the proverbial will happen, and you will need that contingency pot you have, hopefully rolled up.

Of course, all the above may be a going a bit too far for some, but for yrs trly it made sense and gives me an understanding of what, realistically, the financial picture looks like. And, once you've set up the spreadsheet, only takes a few minutes each week to update and Excel then does all the heavy lifting.

Everyone's take will be quite different on budgets like this - for example our total "dog budget" is probably as much as a single persons food allowance - and we do like a drink out so our drinks & tapas budget is higher, probably, than some. As they say, YMMV!

 

[Fragle]

I’m going to keep an eye on this post, we’re being forced into a retirement due to hubby getting redundancy and me having some serious back issues. Although I still do have a job at the moment. I’m a teacher in FE college. So still classed as employed just waiting on one more procedure to get fit and fiddly again. Hubby feels as I’m less able to work he would like to continue to work. I’m not against this but do feel that he could do with some time to chill and get stuff done around here. He’s been working 12 hour days and away quite regularly. I keep thinking it’s the fear factor. How many peeps come on here and say they don’t know how they managed to work they are that busy. He’s 62 and I’m 57.

Same here. Long days working away as well. Our thing is the number of people that say they waited and waited. Then it was to late to enjoy.

 

[westhamman]

I would encourage everybody to retire as soon as possible. The best day of my life bar none. If you retire now have you accumulated enough contributions for a full pension, when the time comes.

You know your outgoings, how do you holiday, motorhoming yes at the moment, I like campsites, those who wild camp will obviously pay a awful lot less than I do.

If you can afford to pay your bills, some which will increase if you are at home, heating etc in winter but also considering you are away from home more often. on your travels. Have some savings for emergency purposes.

THEN GO INTO WORK TOMORROW HAND IN YOUR NOTICE, THEN FEEL THE RELIEF.

I used to hate coming home after holidays knowing I had go go back to work, now I don't care.

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[PhilMary]

I’ll be watching this as well.
We’re just looking to downsize the house when the market picks up again.

I suppose a lot depends on your life style and how much your utility and council tax is.
Unfortunately these are difficult to trim back.

We just downsized also, it freed-up some cash to re-invest in the pension pot. A big side benefit is smaller house is less housework, smaller utility bills, etc.
I would say Fragle , I think you'll need more than what you suggested.
Phil

 

[PORKSTER]

I work hard in a job I hate but money is ok. I am 54 next birthday wife is 64. A 25 year mortgage is paid in full by my birthday so 6 years early. For a few years we can save a good lump. Were fortunate enuff to have a little emergency fund so coverd there.
Wife's pensions should be okish mine will be worth zilch only paid into one for 10 years. But the plan is to retire go traveling in a few years say 3 from now god willing. Somehow we will make it work maybe rent house maybe do a bit of work. I'm not gonna write the plans in stone but we have an itch to scratch. So we're make it happen. Life's to short and things can change in a blink of an eye. So sometimes ya gotta do what's best for you.
Luckily I dont drink or smoke. Our only extravagance is our motorhome.
So just do it better to loved and lossed than never loved before

 

[jollyrodger]

Sounds idyllic, but in reality it will be backbreaking and tedious.

It was very tedious watching them doing it

The guy on the picker does it all and covers a huge area I was told.
But the samples and free Aire was good

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