Can we retire please? How much money do you really need need?

[Tombola]

It's not so much about what you want to give up of what you do now but what you want to do with your life from now on ...

2 very informative posts from you Minxy and Nasher
food for thought, thanks

 

[Langtoftlad]

Sadly, at least the last 25% of your post retirement life is unlikely to be as energetic as you are now.
So your spending needs are unlikely to be linear.

I'm spending capital now, enjoying life, whilst I have the energy to do so.

Definitely a tricky balancing act, whatever your resources.

 

[spikehcm681]

Well that's the million dollar question. How long do you plan for.?....... Why 40 years? I personally have a family history that long lifespan was not in the equation

I'm 60 in May and 20 years would be fine by me. after that its state pension plus anything I don't spend, and atm that's 10k a year given that we only spend 18k a year now

I've just put your age into the O.N.S. Life Expectancy Calculator (please excuse the liberty!) and :-

Your (i.e. the average) life expectancy for a male of your age is 85 years
However there is a 1 in 4 chance you will live to 92 years.There is a 1 in 10 chance you will live to 97 years.There is a 3.3 percent chance you will live to 100.

I'm 75 soon and my life expectancy is 87 (the longer you live the better it gets - kind of). If you'd asked me at your age "Would you be happy to stop travelling at 80" I may have said "Perhaps" - but now that I've got this far I'm hoping to do it until I'm 80 - 85.

As long as my health is ok this is, in my experience, not unrealistic. I've met lots of over 80s driving around Europe over the last 10 years.

When I can no longer drive we hope to spend our winters in Europe but staying in a holiday let, You never know, by then "they" may have sorted the 90 day rule!?

 

[Fragle]

I think your plan has a flaw
Where do you think you will be able to find a bank in 25 years

Oh bugger

 

[Garfields]

Lots of different ideas and opinions
Only thing left that I read and will add
"Every day working is one less in retirement"
If you can do what you enjoy not everone can

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[Fragle]

We are in a similar situation, if we live longer we will take equity release from our home

Yes. Exactly the same for us

I've just put your age into the O.N.S. Life Expectancy Calculator (please excuse the liberty!) and :-

Your (i.e. the average) life expectancy for a male of your age is 85 years
However there is a 1 in 4 chance you will live to 92 years.There is a 1 in 10 chance you will live to 97 years.There is a 3.3 percent chance you will live to 100.

I'm 75 soon and my life expectancy is 87 (the longer you live the better it gets - kind of). If you'd asked me at your age "Would you be happy to stop travelling at 80" I may have said "Perhaps" - but now that I've got this far I'm hoping to do it until I'm 80 - 85.

As long as my health is ok this is, in my experience, not unrealistic. I've met lots of over 80s driving around Europe over the last 10 years.

When I can no longer drive we hope to spend our winters in Europe but staying in a holiday let, You never know, by then "they" may have sorted the 90 day rule!?

No problem thank you lets hope the computer is correct

 

[bigtwin]

Yes. Exactly the same for us

No problem thank you lets hope the computer is correct

I’d prefer that it’s wrong and that I’d last longer!

Ian

 

[gus-lopez]

Thanks, it had me really excited for a few minutes.

To expand further you actually have to continue paying until your normal state pension age.If you continue working after that then no NI is payable.But that doesn't count in an early retirement thread.

 

[Otter Spotter]

I’m seeing the same summary.
That inability of future NI payments to improve the pension isn’t very encouraging for our next ~14yrs is it?
There’s a message/warning that the contributions are used for other things but not enough info to keep me interested in full time work

Your supporting the NHS with your surplus NI contributions

 

[Otter Spotter]

To expand further you actually have to continue paying until your normal state pension age.If you continue working after that then no NI is payable.But that doesn't count in an early retirement thread.

Unless you actually stop working then you don’t have to pay As long as you have already paid in 35 years. Be aware that governments are prone to changing things and the years for full contributions has varied between 35 and 40 yrs and could change again and if they did then you could get caught out.

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[EuroTrotters]

I’m not sure what other people or experts think.

But age 55+ with something close to £500,000 pension pot for two.

But a lot depends on your existing outgoings.

Mainly Mortgages, rents, council tax and cars etc.

 

[The Wino]

I’m not sure what other people or experts think.

But age 55+ with something close to £500,000 pension pot for two.

But a lot depends on your existing outgoings.

Mainly Mortgages, rents, council tax and cars etc.

I think you're "pot" would be the amount after paying of mortgages cars any other loans/credit. I also think you need to ask an expert not on here.
But I think your 500,000 pot 10 years off state pension is roughly 10 years state pension worth put aside say £180k leaving £320k. If you budgeted to live to 90 that would leave 35 years to cover so you could expect to have roughly 9k a year so you could have a total of 27k a year between you with no tax to pay.
I know this doesn't allow for any interest you can get or investment returns but thats the way I would calculate it to be on the safe side. If you still owe some mortgage then take it off the£320k and do the same sums.
On the outgoing side just look at the payments out for the past year if theres a mortgage or car loan which is going to be paid off and take that off the spending plus any work related expenses and see how close that is to your projected income. If you're spending more look at what on and think if you would miss it. Don't forget to allow for periodic big bills repl car/ MH/ house repairs etc.
All the figures are guesses without a calculator so they need checking.
Another way of looking at it would be to compare take home income to the£27k. If the incomes a lot higher there should be a fair amount of saving going on at the moment or there will be a big change in lifestyle!
I think it's doable but both partners would need to be of the same opinion on any lifestyle changes.

 

[MC 55 FUN]

We are finding ourselves in a bit of a pickle, Sharon attained S.P. age 3 weeks ago but only has 13 years N.I.C.'s which translates into an almost insignificant state pension.
She also has a N.E.S.T. pension pot that's currently valued at £7k, this could be taken in total & tax free after April 2021.

She works in a high-ish risk industry ( care home ) & we are now juggling the health v wealth equation, retiring would mean a net £20k p.a. reduction in take home income, however dying of covid is far, far less palatable.

We are erring on the side of health before wealth.

 

[Oscar]

We are finding ourselves in a bit of a pickle, Sharon attained S.P. age 3 weeks ago but only has 13 years N.I.C.'s which translates into an almost insignificant state pension.
She also has a N.E.S.T. pension pot that's currently valued at £7k, this could be taken in total & tax free after April 2021.

She works in a high-ish risk industry ( care home ) & we are now juggling the health v wealth equation, retiring would mean a net £20k p.a. reduction in take home income, however dying of covid is far, far less palatable.

We are erring on the side of health before wealth.

Has your wife spoke to the Future Pensions Service helpline (08007310175) to get a cost of what the extra years contributions would cost & what the increased state pension would be? Possibly worth a call......

 

[Odd-no-more]

only has 13 years N.I.C.'s which translates into an almost insignificant state pension.

If she has been caring for someone, she may be able to get a NI credit for that period, Mrs. Ex had a credit for her childcare years.

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[MC 55 FUN]

Has your wife spoke to the Future Pensions Service helpline (08007310175) to get a cost of what the extra years contributions would cost & what the increased state pension would be? Possibly worth a call......

It's too late, 13 years worth of N.I.C's was the most she could achieve, she's now in receipt of her S.P., the first pro-rata payment was received yesterday.

Thanks anyway.

 

[MC 55 FUN]

If she has been caring for someone, she may be able to get a NI credit for that period, Mrs. Ex had a credit for her childcare years.

The 13 years N.I.C.'s & associated S.P. derives from only being a U.K. resident for 13 years.

 

[The Wino]

We are finding ourselves in a bit of a pickle, Sharon attained S.P. age 3 weeks ago but only has 13 years N.I.C.'s which translates into an almost insignificant state pension.
She also has a N.E.S.T. pension pot that's currently valued at £7k, this could be taken in total & tax free after April 2021.

She works in a high-ish risk industry ( care home ) & we are now juggling the health v wealth equation, retiring would mean a net £20k p.a. reduction in take home income, however dying of covid is far, far less palatable.

We are erring on the side of health before wealth.

Hopefully she's had the jab possibly both which should reduce her risk a lot.

 

[Minxy]

The 13 years N.I.C.'s & associated S.P. derives from only being a U.K. resident for 13 years.

May be possible to stop receiving it and boost it:

Thousands opt to stop state pension payments - FTAdviser.com

Pausing your State Pension: boost your pension payments by 10% (lovemoney.com)

Can I stop taking state pension and keep other benefits instead? | This is Money

 

[Bluemanc100]

I was made redundant at the end of March last year at exactly the same time as we first locked down...

I was thinking about going anyway once my MOD pension went up to the full value at 55 (i commuted to get a bigger lump sum when I left the RAF so it was frozen until that point). The first 10 months have been pretty unrealistic to be honest because of Covid as , apart from a two week trip to Scotland and a week in Devon, we've been nowhere...

Hard to say whether our income is going to give us a luxurious lifestyle or not until we start "living" again but currently the money in our current account is slowly going up which is a bonus considering some people are struggling

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[MC 55 FUN]

May be possible to stop receiving it and boost it:

Thousands opt to stop state pension payments - FTAdviser.com

Pausing your State Pension: boost your pension payments by 10% (lovemoney.com)

Can I stop taking state pension and keep other benefits instead? | This is Money

Thanks Minxy, those equations don't work for us as Sharon's starting point is far too low and she'd need to live forever to make up the difference, so it does make financial sense to take her S.P.

She had intended to work on for just one more year, but the care home death stats' are truly frightening, after working for 40 years out of her 50 year working life so far in Hospitals & Care Homes in four different countries, I think she's more than done her bit for others & it's time to retire.

We just need to get our heads around having £20k p.a. less to squander . . . , in reality its only for a year though, as the same conundrum would arise this time next year, by which time I'm a year closer to drawing my S.P. to top up pensions I'm already in receipt of.

Of course health wins every time versus extra £.

 

[Minxy]

Thanks Minxy, those equations don't work for us as Sharon's starting point is far too low and she'd need to live forever to make up the difference, so it does make financial sense to take her S.P.

She had intended to work on for just one more year, but the care home death stats' are truly frightening, after working for 40 years out of her 50 year working life so far in Hospitals & Care Homes in four different countries, I think she's more than done her bit for others & it's time to retire.

We just need to get our heads around having £20k p.a. less to squander . . . , in reality its only for a year though, as the same conundrum would arise this time next year, by which time I'm a year closer to drawing my S.P. to top up pensions I'm already in receipt of.

Of course health wins every time versus extra £.

Am I right to assume she's not entitled to anything from the other countries?

 

[Nasher]

Of course health wins every time versus extra £.

Absolutely

 

[EuroTrotters]

I think you're "pot" would be the amount after paying of mortgages cars any other loans/credit. I also think you need to ask an expert not on here.
But I think your 500,000 pot 10 years off state pension is roughly 10 years state pension worth put aside say £180k leaving £320k. If you budgeted to live to 90 that would leave 35 years to cover so you could expect to have roughly 9k a year so you could have a total of 27k a year between you with no tax to pay.
I know this doesn't allow for any interest you can get or investment returns but thats the way I would calculate it to be on the safe side. If you still owe some mortgage then take it off the£320k and do the same sums.
On the outgoing side just look at the payments out for the past year if theres a mortgage or car loan which is going to be paid off and take that off the spending plus any work related expenses and see how close that is to your projected income. If you're spending more look at what on and think if you would miss it. Don't forget to allow for periodic big bills repl car/ MH/ house repairs etc.
All the figures are guesses without a calculator so they need checking.
Another way of looking at it would be to compare take home income to the£27k. If the incomes a lot higher there should be a fair amount of saving going on at the moment or there will be a big change in lifestyle!
I think it's doable but both partners would need to be of the same opinion on any lifestyle changes.

I wasn’t referring to our pot

 

[MC 55 FUN]

Am I right to assume she's not entitled to anything from the other countries?

You are sadly right Minxy, no such thing as S.P. in Rhodesia / Zimbabwe & South Africa.

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[Jake Royd]

depends if you were 'contracted out' ifso all those years come off of any state pension payable under the post 2016 state pension

Because they state you have the benefit of the contracted out payments in to a firms pension.The new state pension wasn't to give youa full state pension + your firms one

only if you have the time to make up contracted out payments. I was 6 or 7 years contracted out , Retiring in 2019 under the post 2016 pension scheme means I was only allowed to pay for the 2016-2017- 2017-2018 & 2018 -2019 years Any before 2016 did not count.

It is 40% more than I manage to live on.

No it doesn't matter what it says the only 100% guaranteed pension confirmation is when you contact the "Future pensions forecast team"

Mine said I had far in excess of the required years on the 'state pension forecast' I did , unfortunately any contracted out years do nit count post 2016.Even the HMRC national insurance help desk will only tell you what full years you have paid in for They have no idea whatsoever whether ALL THE YEARS COUNT. They now are required to tell you when/if you ring " Have you spoken to the Future pensions forecast team" as an opening statement due to many people paying in for years before 2016 that do not count towards pension rights.

Apologies if this has already been discussed.
When you check your OAP contributions online you will get to a page listing all the years and the page will list 'Years that are not full'.
Each year will then list how much your Class 3 contribution for that year will cost.

You would then think it would be logical to start with the oldest incomplete year and pay them off in that order.

Do not do this, talk to the Pensions Service, they will tell you which years you can pay which will then increase your pension up to the max.
These are usually the latest years after the New pension scheme started.

A few years ago we did just this, arranged with HMRC to pay the oldest year, then noticed it made no difference to the forecast. When we called the Pensions Service at first they did not know either what the problem was.
We were fortunately able to get the £700 or so transferred to a year that did change the forecast.

Nowadays HMRC when you call to make an arrangement to pay will ask you if you have checked with the Pensions Service.
Talking to them (4 years ago now) the guy spoke to agreed this issue was at the time causing a lot of distress and confusion.
This is due to the complexities of each persons pension and issues between the old and new schemes.


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As others have said it's a nobrainer , if you can afford it £700 ish gets you £4/week more.
Payback , not considering tax is about 3 or 4 years. You'd be silly not to do it.

If I'm correct, you can also pay incomplete years retrospectively and increase your pension even if you are already drawing it but there will be a cut off somewhere along the line for this

 

[busby]

Don't spend too long working out if you can afford it,,do it ,life is too short to worry about retirement,,retire and enjoy it,well when we can.BUSBY.

 

[wyliecyotee]

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

 

[bigtwin]

wyliecyotee, in answer to your question take a look here:

How much income will I need in retirement?

Ian

 

[St Piran]

Don't spend too long working out if you can afford it,,do it ,life is too short to worry about retirement,,retire and enjoy it,well when we can.BUSBY.

Yep, only worry about the things you can control.

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