dantsw13
Have a look on the which pension drawdown calculator.

Following links from that, I found this which is very useful & helps validate my own conclusions (55 in ~3 months!)

How much do I need?

the problem with retiring is – you’ll need to do something with all that free time

I’ve been retired four years now and haven’t had the slightest problem filling my time. I also know loads of retired friends and a quite common remark amongst them is “I can’t believe I ever had time to have a job”.

You don’t need to be spending much money either. Once the coke and hookers novelty wears off (roughly six months for most folk) you’ll find loads of cheaper ways to fill your days. Lack of imagination is the only reason not to.

I’d def try and reduce days working to start with, you might find you enjoy work more if doing less of it (and find retired life is more boring than you first thought – if having to watch the pennies). And maybe start recording your outgoings for a few months to make sure you’re spending what you think you are :p

I looked at this recently and we worked out what salary we would want. We said current take home. Then worked out how much we could release by downsizing the house and other savings.

There are extra things to spend money on and spending reductions in retirement. The Mrs and I have spend most of our retirement locked down and it is very inexpensive. I think when you only have so much free time you tend to try to get the most out of it which can involve expense, when you have lots you aren’t as frantic to do stuff. But for me, giving up work was more than just not doing a job, it was also letting go of the urge to be productive, which had kind of extended to my leisure time. In different circs., we would have spent more on travel (but we would have tried to get the most out of out old gits travel cards as well). But I have found space for a good bit of idleness in my life which I am enjoying at the moment (just as well really).

It does really depend on what you are going to end up wanting to do with your time, which may not be apparent at this stage.

C’mon people. I call End of Thread. This is a non conversation.

JFDI

Definitely, JFDI! Bin the job off and do a poo in the boss’s top drawer if you must.

The amount of money we have as a family saved in the last year is surprising, shows how much is frittered away on inconsequential stuff. Makes you realise how you could live on a lot less.

Tilly – yes, there’s lots of good pension stuff on that Which? website.

My Grandma use to say that “no one ever laid on their death bed and wished they’d spent more time at work.”, but, for some folk work is everything.

My old boss, still working a full shift at 79 – worth +£10bn.

https://www.walgreensbootsalliance.com/about-us/leadership-team/stefano-pessina

Sounds like you’re like me, and my Grandma 🙂

Some wild estimates on here. I think my basic living costs – bills + weekly shops is over £1k a month (excluding mortgage which i assume is paid off). So I would guess £15k is the base amount but I would add to that running a car and maintaining my house so for a car all in with depreciation say £2.5k annual and I’d want to have that as well to spend on the house. So I’m up to £20k and I haven’t even left the house yet. £25 – £30k Seems a ball park figure for me as a fairly basic annual retirement budget – I’d like to have at least another £10k on top for holidays and expensive hobbies.

I guess that is me and the wife and current figures are with the kids living at home – how much the bills drop and how much less food etc is the unknown. My gut feel is they dont drop by that much.

The amount of money we have as a family saved in the last year is surprising, shows how much is frittered away on inconsequential stuff. Makes you realise how you could live on a lot less.

100% This.
I’m amazed at home much money we must have wasted on eating out/coffee shop trips/shopping for non-essentials/etc.
It has made us re-evaluate things a lot.. which is all good.

In your position you appear able to retire with some degree of comfort. However – is the pension a final salary valuation or is ti actual cold hard cash/shares in a defined contribution scheme? If the former, will you want to convert it to a lump sum (multiple of say 35x annual), and is there a penalty in taking early retirement. Normally this is 55. I imagine a 6-8% investment return is not impossible in share land.

As others have said, no dependents, no mortgage, congratulations you have made it. Do something you enjoy and find rewarding. I happen to enjoy work very much. And they pay me to do it. That is not typical and I realise that I am very fortunate.

Seek financial advice.

Threads like this are a good source of info sharing. Everybody’s pay/pension savings are different. Can we please not be judgemental on others circumstances. The concepts are the same whatever the budget and making judgemental comments just stop people posting.

Not aimed at any particular poster btw.

FML. I need to stop reading these threads. 2 dependents, mid-forties, £60k left on mortgage, house worth ~£280k, mrs doesn’t earn a lot, paying into both our pensions from small business with ~£25k in each. I’m screwed for probably another 20 years. Obviously I’m still lucky to even be in that position but if I were you I’d be retired or part-time, buying a camper and just riding or walking every day.

I don’t think that is enough to support a comfortable level of retirement from 55 – I would wan to be able to travel, eat out as well as boring things like maintain the house and keep running a car.

With no dependents you can equity release or sell the house to fund a comfortable level of care – do ensue you have someone who can step in when needed if you become incapacitated mentally.

Can you look at reducing your time at work? 3 days a week? Buy more holiday?

I’m working to a mortgage paid of by 55 and retire at 60 plan but would love to be able to drop days from 50/55 down from 5. In fact, I would love to go down to 4 now but seems crazy when I am in my working and earning prime.

@mulv1976 – I would say the now is the time to read these threads and make a plan, but you might be surprised how quickly the pots can grow if you keep feeding them

Ive dropped to 50% part time now. Having been grounded through the pandemic makes the idea of spending so much time away very unappealing.Age 46, planning to retire at 60, mortgage pays off at 58. 2 Dependants & a wife.

My pension is a DC scheme, which I self manage. It is interesting that even though my company contributions are pretty generous (15%) it is the compound interest that is growing my pot much more than the contributions. Going part time has had a much smaller impact on pot size than I imagined.

Taking an active role in managing your funds, whaterver the size, is the biggest difference you can make

I am trialling retirement this year, well I never really did much anyway work wise.

Filling a day is really quite easy if you live by the sea and enjoy working out. Beach walk, kettlebell routine, sea swim that’s the morning done. Lunch, gardening, diy, Pilates.

My income is rent so it’s pretty passive, pensions kick in in 7 years so I can easily fund the gap.

The above post ‘re earning 12.5k pa is the win, no tax.

@Nick – yeah, I’m trying. Paying as much into our pensions as we can afford, plus paying off the mortgage, plus trying to pay something into the kids trust funds/ISA. It’s tough going when you’re pretty much the only one earning in a family of four, but I know my other half works hard with house/kids etc so can’t complain. Just keep going, and hope I get to retire or semi retire with some physical ability still left 😂

uwe-r

So I would guess £15k is the base amount but I would add to that running a car and maintaining my house so for a car all in with depreciation say £2.5k annual and I’d want to have that as well to spend on the house. So I’m up to £20k and I haven’t even left the house yet. £25 – £30k Seems a ball park figure for me as a fairly basic annual retirement budget – I’d like to have at least another £10k on top for holidays and expensive hobbies.

That Which link I posted above, for a couple living together, comes up with:

£17k PA to cover the ‘basics’
£25k PA for a ‘comfortable’ retirement
£40k PA for a ‘luxurious’ retirement

(Based on a survey of >6000 retirees – There’s a breakdown of spending for each option on the web site.)

So roughly in line with your estimates. And mine, as it happens.

FML. I need to stop reading these threads.

They must all be public sector workers with those gold-plated pensions that I keep hearing about.

@mulv1976 I’m in a similar position to you! 40s and taking almost everything I earn just to pay food/energy/mortgage(300k left)/childcare for 2 kids and a partner out of work, nevermind saving anything up. Think i’ll be working until i’m dead. In fact that might not be enough lol

Not me, I worked in the foundry at the Nissan plant in Sunderland for 28 years.

They did have a very good DB scheme until a couple of years ago (they added double my contributions). I topped their pension up with 2.5 years of pension from my previous employer. The current pension scheme they have is worth about half what mine is/was

@mulv1976

There are a lot of people in worse of position than you. I have a mate who is a hair dresser. Earns and lives mostly cash in hand. Has no pension although he does own his flat. I asked him once what is retirement plans were and he said its basically his inheritance.

That Which article is interesting, lower figures than I was expecting…..

My pension is a DC scheme, which I self manage. It is interesting that even though my company contributions are pretty generous (15%) it is the compound interest that is growing my pot much more than the contributions. Going part time has had a much smaller impact on pot size than I imagined.

Taking an active role in managing your funds, whaterver the size, is the biggest difference you can make

I need to do this but haven’t a clue how to pick the right funds etc. Also don’t really trust IFA’s, I mean really if you’re that good at financial advice, surely you’d be a millionaire! And not giving the advice anymore.

Dan, have you not got a closed DB scheme too?

@tilydog
That Which link I posted above, for a couple living together, comes up with:

£17k PA to cover the ‘basics’
£25k PA for a ‘comfortable’ retirement
£40k PA for a ‘luxurious’ retirement

(Based on a survey of >6000 retirees – There’s a breakdown of spending for each option on the web site.)

So roughly in line with your estimates. And mine, as it happens.

Interesting. I guess the harder calculation is what lump sum equates to that and how and when it might reduce down. I’d like to be into coke and hookers in my 90’s. I will more likely be dead.

@uwe-r “There are a lot of people in worse of position than you.”

Yeah, I appreciate that which is why I said I was still lucky. Reading some of these threads makes me nervous though and realise I still have a long way to go.

My pension is a DC scheme, which I self manage. It is interesting that even though my company contributions are pretty generous (15%) it is the compound interest that is growing my pot much more than the contributions. Going part time has had a much smaller impact on pot size than I imagined.

I don’t pay into mine anymore, nothing I can afford to add will make the slightest difference. 30+ years of compound growth and it’s out earning me (in a good year).

BMfs18 – no , I joined my company just after they closed the FS pension. I do have a military pension from 60 though.

Its hard and quite scary self investing. One thing that has changed is the government pension freedoms, meaning you no longer have to take an annuity when you retire. Most company schemes automatic investment strategy still work on this basis though, so in the last 5-10 years they go very defensive, trying to avoid hitting the retirement D-Day (When you had to take an annuity) in the middle of a crash, so losing money for ever.

With the pension freedoms, the date no longer matters. You can afford to stay invested, reaping growth into retirement and riding out short term blips. A basic understanding of compound interest will tell you that the later years of your working, when the pot is at its biggest, are when you will get the biggest annual return (5% of 400k is a lot more than 5% of 100k).

guess the harder calculation is what lump sum equates to that and how and when it might reduce down

It’s all on the Which site (bottom of the page I linked to tells you what pot is needed, and the original link was to the draw-down calculator).

Its hard and quite scary self investing.

I manage mine and I’d say it was neither (but I appreciate we’re all different).

I do nothing exciting, don’t chase anything new and shiny eg Bitcoin / GameStop.

I split my money into chunks and invest them in either trackers or managed funds. I asses their performance once a year and if something is doing poorly and I don’t think there’s a good chance of it changing, I sell it and buy into another fund.

I make sure I have a reasonable geographic and type of industry split to mitigate risk.

If I’m paying for a managed fund it has to do well, if not it gets binned. The trackers are all low fee, so barely cost anything.

I’ve had some big successes (SMT) and some very poor choices (Woodford funds), but as I never had all my eggs in one basket, the duff ones were limited in damage and overall it performed OK.

Must say that 400k seems insufficient to retire on if it’s a defined contribution pension. I was assuming you need to get to a million – draw down on 400k is 16k pa for 4% (which is slightly risky) or 12k pa on 3.5%. A million will get you 30-40k pa which seems more like what you need for a non-extravagant retirements (but at the same time still going on holiday etc).

Have I got my maths wrong and should be shooting lower?

FF – I’m very similar to you. Its all monitored on a spreadsheet and I’m a member of several chat groups with people far more knowledgable than I on the subject. Many people just aren’t comfortable with playing with such big numbers though, so I do get that it isn’t for everybody.

My RAF pension from 60 gives me a bit more leeway to take risk (within limits) and I am happy to look through all the short term noise at the long term trajectory.

Ewan – I don’t see 4% as risky at all in a fully invested drawdown portfolio. Risk is personal, but I have no intention of giving up on compound interest in my retirement phase.

@ewan –

one way I’ve looked at it is the 16k you mention is just you. My wife will also have a decent pension (no idea what it’s worth, but she’s worked well for the same length of time as me, with a couple of DB pensions thrown in).

So yes, 16k for just me (or especially me and her) might be a challenge. But [say] 32k for two of us will be more than enough I’d’ve thought

Pension calculators never seem to take the spouse into account

That Which link I posted above, for a couple living together, comes up with:

£17k PA to cover the ‘basics’
£25k PA for a ‘comfortable’ retirement
£40k PA for a ‘luxurious’ retirement

(Based on a survey of >6000 retirees – There’s a breakdown of spending for each option on the web site.)

So roughly in line with your estimates. And mine, as it happens.

This underlines my point…

Basic = 17k pa = 480k pot @ 3.5% draw down
Comfortable = 25k pa = 712k @ 3.5% draw down
Luxurious = 40k pa = 1.1m @ 3.5% draw down

Obviously, two earners put a different spin on things, as does any final salary contributions.

They have much more optimistic figures (poss inc State pension as part of the income)..

[url=https://flic.kr/p/2kxHhF3]Which numbers[/url] by Ben Freeman, on Flickr

The thing with a drawdown is you probably don’t want to take it out in a linear fashion. How much you need at 55 will be different at 65 and almost certainly at 75.

They have much more optimistic figures (poss inc State pension as part of the income)..

How on earth did they get those figures?

I just looked at an annuity calculator (aviva but i guess they’re all the same) for age 55. £500k gives you 16k a year.