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Mattoutandabout you told us on a thread about installing DIY Karndean a couple of weeks back the new house was 95% built yet dreaming of a Speyside self build
Hope you're not another Angie
Mattoutandabout you told us on a thread about installing DIY Karndean a couple of weeks back the new house was 95% built yet dreaming of a Speyside self build
Hope you're not another Angie
Promise I'm not! We move shortly to new oab_towers locally.
But retirement plans involve somewhere a bit more rural, likely Perthshire or Speyside, mebbe Royal Deeside...
In 20 years your £40k a year will be worth £10k an year
28 including bank holidays is the legal minimum IIRC
I wasn't including Bank Holidays...
Most jobs are 25 days (plus bank holidays) it would seem... Some are as low as 20 (plus bank holidays)... My GF gets 33 (plus bank holidays) and can buy up to 10 more through salary sacrifice.
In 20 years your £40k a year will be worth £10k an year
That's why you don't leave it all in a standard savings account as it will be eroded by inflation.
I've got about 43k in a stocks and shares isa and I made £1043 last month, tax free.
Granted that was a good month and you can only pump it with £20k per year so you'd have to drip feed it over years, but you'd be absolutely laughing with a bit of planning.
1 mil ? I'd turn professional at riding bikes tomorrow. I'd never win anything, probably never even enter any actual races - but would have the time to ride every day.
And in the remaining time, become a near full time Labrador tamer.
That's why you don't leave it all in a standard savings account as it will be eroded by inflation.
I've got about 43k in a stocks and shares isa and I made £1043 last month, tax free.
How do you balance against large losses in market crashes? Use other savings in the ‘recovery’ years?
If I won a million, I wouldn't work for someone else another hour in my life. Plenty of other opportunities out there when there's no pressure to provide.
At this stage of my life (51), yes, I could live on that, probably comfortably too. But then, I don't really take expensive holidays, drive an economical small van and have no real desire to change that for something more expensive. I might put some new tyres on it though. Possibly fix some of the rust.
I'm 46 with about 60k left on the mortgage. Going by the maths on here by cleverer people than me, if a million quid landed in my bank account today I'd hand in my notice tomorrow, tell MrsDoris to do the same, and we'd be somewhat wealthier in our later years than we currently expect to be.
TBF I don't have kids. if I did, I'd probably work another 5 years so that I could be sure of giving them a house deposit or whatever.
I do find it interesting that people think they could live off £1m.
If you’re not working anymore what would you do? It costs quite a lot of money these days to do nothing, let alone to make good use of all this spare time you would have
30 years ago £1m was considered a wealthy person with no financial issues ie truly a millionaire. I think with £1m today you would still need to do some financial planning to make it last
I do find it interesting that people think they could live off £1m.
If you’re not working anymore what would you do? It costs quite a lot of money these days to do nothing, let alone to make good use of all this spare time you would have
30 years ago £1m was considered a wealthy person with no financial issues ie truly a millionaire. I think with £1m today you would still need to do some financial planning to make it last
I find it interesting that you think you couldn't. I'm 53 and haven't yet earned £1m in my lifetime. I'm sure I can live quite comfortably on £33k a year for the next 30 odd years as that's what I do now, more or less based on take home. Factor in the buying, doing up and selling of a few homes in the intervening time and I'm sure the money would do me and the wife fine and leave a good chunk for the kids when I pop off.
I do find it interesting that people think they could live off £1m.
Going by the figures above, 5% returns give you 50k a year. Inflation would play a part, so you'd draw some down after a while. But from 68 you get the state pension, to further offset inflation.
50k a year in retirement, after tax, would put you in the top 20% of household incomes.
Agree that you'd want to do some financial planning so that you didn't balls it all up, it's not the crazy amount that it used to be. But it's still quite a lot.
I'd just work winters. It gets boring having no work but not enough money to travel somewhere with good weather. Every Spring/summer off for the next 20 years sounds good to me!
At 60 years of age of course you could live off £1MM. You may not be aware but there are many people living off the state pension of £12K so having another £40k a year for 20 years would make if extremely easy for them to live off of the extra £1MM
"I do find it interesting that people think they could live off £1m."
Invested in a conservative fund, 1M at age 60 with a full state pension kicking in at 67 will give you an excellent chance of a post tax and inflation adjusted income of 50K per anum, reducing to 40K after the age of 75.
ref: 11:00 minutes in here
You need a salary of £69K to get a post tax income of 50K
ref: https://www.reed.co.uk/tax-calculator/68000-annually
That would place you just short of the top ten percent of earners in the UK
ref: https://www.statista.com/statistics/416102/average-annual-gross-pay-percentiles-united-kingdom/
I find it intertesting that anyone would think they would struggle to live like this!
I do find it interesting that people think they could live off £1m.
If you’re not working anymore what would you do? It costs quite a lot of money these days to do nothing, let alone to make good use of all this spare time you would have
Easy for me. the income would be more than I have ever earned, it costs next to nothing to amuse yourself if you are thoughtful. I'm retired on much less than a million total pot.
At any age in my life I would never work again if I had had a spare million
Edit - the4 last 3 years I have cycled to spain, spent two months in winter in the Yukon, spent 5 months in the antipodes all for a lot less spend per year than the interest of a million ( plus numerous other short trips away)
edit 2 - total spend for those 3 years is around £25 - 30 000 each year. Thats everything the trips away and time spent at home
Regarding the OP's question about whether £1,000,000 is enough for you & your partner to retire happily at the age of 60 - a lot of it depends on financial outgoings and what it takes to make you happy.
Still paying a mortgage & wanting a millionaire lifestyle - nope.
Mortgage paid off & happy to live a 'normal' life - absolutely do-able.
Personally, I hope to have the mortgage paid off by then & we don't particularly live an extravagant life so I think it would be perfectly possible.
I'd probably still work part-time but find a job with min stress & max enjoyment. My neighbour has a part-time job delivering engineering equipment for his sister's business. He loves it. Just gets to work, loads the truck up & delivers stuff in the local area 3 days a week. He has regular drops where there's a cuppa & biscuit waiting for him & his most stressful days seem to be if there's a road closure or some other traffic related problem. I could cope with that.
Nominally yes, 50k (or whatever the agreed intrest is) is more than enough for my lifestyle. No interest at all in a yacht or a plane.
Having said that, with 365 days of the year to fill, the things i would want to do would cost money.
Going on holiday is expensive
Riding bikes all day in the alps is expensive.
Skiing is pressumably quite expensive.
I guess i would have to move to Verbier or similar, so all you would need to fund would be lifts, bikes, and fromage.
I've just Google AI'd it and £40k drawdown per year based on 4% interest PA over 25 years means you'd still have the more than the original £1m.
- Starting Balance: £1,000,000
- Interest Added: The annual interest rate is 4% (0.04).
- Withdrawal Taken: The annual drawdown is £40,000.
Yep and although £40k per year won't get you as much in 20 years I don't expect most people to be spending as much when they are 80. Also have to add state pension and any other pensions onto that £40K per year. I am sure a lot of people in the country would find this conversation and whether you could live on £1MM pretty vulgar...
I think there's an idea of a "millionaires lifestyle" which, perversely, you couldn't afford if you had a million quid. But having a million quid, mortgage free at 60 you'd be able to retire and be far far more comfortable than most of your peers.
I read somewhere you need about £5M to have a "millionaire lifestyle". That's inflation for you.
Having said that, with 365 days of the year to fill, the things i would want to do would cost money.
Going on holiday is expensive
Riding bikes all day in the alps is expensive.
It doesn't have to be. see my post above
Said it before - if you don’t pay NI you don’t get state pension
I've just Google AI'd it and £40k drawdown per year based on 4% interest PA over 25 years means you'd still have the more than the original £1m.
4% PA is quite a pessimistic return IMO. Invest it properly you can probably expect much greater returns, although you'd have to reserve a chunk to target capital growth which would reduce the annual income. 1 million is probably enough to live on an modest income for a lifetime let alone from age 60 onwards. Having bugger all to do all day whilst living on around 30k a year isn't going to provide a decent quality of life though. Probaly a recipe for becoming a daytime tv couch potato.
You would also have to hope Conservatives get back in power as Labour appear to want to tax the hell out of ‘the rich’ 😂
"Said it before - if you don’t pay NI you don’t get state pension"
Most 60 year old males will have the 35 years contributions needed for a full state pension.
Said it before - if you don’t pay NI you don’t get state pension
But the OP's question was at 60 - when most people will have accrued a full or nearly full NI record and can easily pay the minimal NI to qualify for full state pension when the time comes.
"Said it before - if you don’t pay NI you don’t get state pension"
But the OP's question was at 60 - when most people will have accrued a full or nearly full NI record and can easily pay the minimal NI to qualify for full state pension when the time comes.
Can't you also 'buy' contributions to ensure you make enough to qualify (for example, if you missed some for a period when not working)?
I've just Google AI'd it and £40k drawdown per year based on 4% interest PA over 25 years means you'd still have the more than the original £1m.
4% PA is quite a pessimistic return IMO. Invest it properly you can probably expect much greater returns, although you'd have to reserve a chunk to target capital growth which would reduce the annual income. 1 million is probably enough to live on an modest income for a lifetime let alone from age 60 onwards. Having bugger all to do all day whilst living on around 30k a year isn't going to provide a decent quality of life though. Probaly a recipe for becoming a daytime tv couch potato.
I can't see any reason why 30K a year with no significant outgoing (like a mortgage or pension) isn't going to deliver a perfectly decent quality of life. Lavish no. But decent. Less so for a couple, but then when state pension comes you will be doing better at that point.
That's why you don't leave it all in a standard savings account as it will be eroded by inflation.
I've got about 43k in a stocks and shares isa and I made £1043 last month, tax free.
How do you balance against large losses in market crashes? Use other savings in the ‘recovery’ years?
Yes you wouldn't put the full million in stocks and shares, you'd put maybe 300k in, have 300k in (safer) fixed rate savings/premium bonds or whatever, so you can ride out any stock market dips.
That leaves you 400k for coke and hookers.
If we assume you have no mortage, and will also get state pension at some point, and possibly a work place pension or SIPP too...
You'd still need acess to liquid cash, house might need a new roof or some other big expense may come along, pay off the kids uni debt or give them a chunky deposit for a house or whatever...
You'd be totally made as long as you are sensible with it... just don't go buying any yachts or Ferrais and you'll be ok.
Can't you also 'buy' contributions to ensure you make enough to qualify (for example, if you missed some for a period when not working)?
yes you can.
Said it before - if you don’t pay NI you don’t get state pension
at my age I'm counting on not getting any - NI paid or not.
But there are plenty ways to get them paid up.
So... 60, no private pension, but a home that's paid for, and a million quid.
For me it's more of a question of 'what's the alternative?' Work for another 5-8 years because you had some grand plan that was going to net you another £900k or something? That million quid has bought you a retirement that's more than sitting in front of the TV when you're not queuing in the Post Office just to chat to the Lady behind the Counter and frankly another 5 years of working isn't going to make a material change to what your retirement is going to look like now.
I do find it interesting that people think they could live off £1m.
If you’re not working anymore what would you do? It costs quite a lot of money these days to do nothing, let alone to make good use of all this spare time you would have
30 years ago £1m was considered a wealthy person with no financial issues ie truly a millionaire. I think with £1m today you would still need to do some financial planning to make it last
I am soooooo glad I don't suffer from your lack of imagination! And who said anything about needing to live a millionaires lifestyle?!?!
If I could pay my mortgage off tomorrow (probably £325k, certainly not £1m, and shared with my GF too), I certainly wouldn't work a full time job ever again... People get used to spending money on things to numb the pain of the "capitalist dream" that they have been sold... OK so you're not going to be buying new expensive toys very often (and when they are purchased, they're carefully planned for), but looking after the ones you've got and getting good use out of them is far more fun anyway...
If my mortgage was paid off, I could survive easily on £1k per month... I'd have time to ride my bikes more, probably volunteer a bit, maybe pick up 10-15hrs paid work per week doing something meaningful that I enjoyed but with no stress (a bit of gardening, odd jobs, driver for the local old folk's home or similar).
Having bugger all to do all day whilst living on around 30k a year isn't going to provide a decent quality of life though. Probaly a recipe for becoming a daytime tv couch potato.
FML!!! Are you being serious?!?! WOW!!!
With £30k a year, BOTH me and my GF could do what we wanted pretty much when we wanted and still afford a holiday or two per year (carefully planned for) and probably stick a couple of hundred quid a month into the "new bike fund" each month too...
Easy for me. the income would be more than I have ever earned, it costs next to nothing to amuse yourself if you are thoughtful. I'm retired on much less than a million total pot.
At any age in my life I would never work again if I had had a spare million
Edit - the4 last 3 years I have cycled to spain, spent two months in winter in the Yukon, spent 5 months in the antipodes all for a lot less spend per year than the interest of a million ( plus numerous other short trips away)
edit 2 - total spend for those 3 years is around £25 - 30 000 each year. Thats everything the trips away and time spent at home
This... Many times this... Fun doesn't need to be expensive!
For what it's worth, my Dad (71) has a property that's been his pension pot for some years now, it's commercial and as long as it's being let out it pays him about £11k per month before tax. Obviously, he's subject to tax and NI on this, so he probably sees around £6.5k per month after tax every month... He lives alone, his rent (he sold his last house a while ago when he moved in with his last GF and spent the capital god knows where) is £1k per month... His bills, car payments and the like are probably another £1k per month... He spends the rest pretty much on holidays, playing golf or in the pub... Every month he's skint! And when I say "in the pub", he's not even a heavy drinker, he's just the kind of person who thinks he's being rude if he doesn't buy everyone a pint and then decides to eat his dinner in there too 5 nights a week... He'll spend £3k on a holiday that if I spent 20mins on the internet shopping around for, I would probably find for less than half that. He buys a new car, then 12 months later decides he's having another new one, and just rolls the depreciation into the new monthly payments every time. He contracted a very nasty kidney infection not so long ago that left him homebound for about 10 days and stuck in bed for 5 days and his comment to me about being unable to believe how much money he saved by being sick and stuck at home has stuck with me!
Me and my GF are the exact opposite... Don't get me wrong, I have some nice bikes all bought and paid for, but otherwise we're really not bothered by the trappings of an expensive lifestyle, we just want the time and freedom to enjoy what we've already got (which getting rid of the mortgage would afford)...
Does anybody remember the 1970's sitcom "The Good Life"...? Think back to how much happier with their lifestyle Tom & Barbara always were, and how much more fun they were having than Margo & Jerry...
Said it before - if you don’t pay NI you don’t get state pension
Well it's illegal for an employer not to pay it for you, and if you are on benefits you get credits for it for the time spent on benefits. If you are self employed and dodge paying it, well, that's pretty damn silly!
You need 35 qualifying years for the max amount, and 10 qualifying years for the minimum amount...
If you look at it as an investment, it's pretty good value for money... but of course the age to get it keeps creeping up, so it may become less attactive.
only for gaps in the previous 6 years though, gaps older than that, you cant do anything about.
Well, assuming the £1m wasn't won more than six years ago and the winner then didn't work for a significant time, it wouldn't be a problem to top up with a few quid from that million. And most people, at 60 (which is what the OP mentioned), will have paid into the NI pot for the required minimum of 35 years to get the maximum pension anyway.
Well it's illegal for an employer not to pay it for you, and if you are on benefits you get credits for it for the time spent on benefits. If you are self employed and dodge paying it, well, that's pretty damn silly!
But you’re missing the title of the thread. ie retiring after winning £1m
Most people won’t have contributed 35yrs, and if your lucky enough to win the £1m in your 20’s or younger you would get bugger all state pension
Most people won’t have contributed 35yrs
But the OP said 'assuming 60 years old' – most people, at 60, will have paid in for more than 35 years.
Most people won’t have contributed 35yrs, and if your lucky enough to win the £1m in your 20’s or younger you would get bugger all state pension
But you can still pay NI to get a % of the pension and its very cheap to do so. I( know someone who has less than 10 years NI paid in the UK and lives abroad. They have paid about £8000 in NI payments to make up her record and will get £800 a month UK pension
They have paid about £8000 in NI payments to make up her record
See that’s £8k of your £1m gone already 😂
My Two penn'oth:
A million in cash is not that life-changing these days. It's a bit like having another £50k a year income. That doesn't mean flying first class to Barbados and staying at Sandy Lane 2 or 3 times a year.
As far as State Pension entitlement goes, as long as you have a bit of self-employed income or property income (which wouldn't be out of the question if you organise your affairs right) then the NI contributions are tiny but still count as full years for the totting up.
I can't see any reason why 30K a year with no significant outgoing (like a mortgage or pension) isn't going to deliver a perfectly decent quality of life.
Aye you're probably right. I was working on the assumption of an existing mortgage + bills etc. Obvs with a million quid you'd pay the debts off or buy a house if you haven't already (talking about younger people not 60 year olds) but that would remove a chunk from the 1M on which to earn income. Either way though it'd be possible to live a lifetime off 1M if you're financially savvy and don't succumb to temptation to spend it. The question about what you'd do with yourself still stands though. I'm don't exactly love my job but I do wonder what I'd do with all that free time.
A million in cash is not that life-changing these days.
Give over. I'm relatively well off and I guarantee it would change my life a lot!
The question about what you'd do with yourself still stands though. I'm don't exactly love my job but I do wonder what I'd do with all that free time.
Its not difficult. I find this sad that folk ( and you are not alone) could not fill their days purposefully. I do ( apart from too much time on here) I am away visiting folk overnight most weeks, go away regularly on trips, ride my bike, go for walks. I do not know how I had time to work