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

[Nostrovia]

I'm curious about the £20k/year type figures being discussed as being adequate. Is this between 2 people? If so, then the state pension gives £17400 (for 2 people), so there isn't much to make up.

Then considering early retirement. Retiring for example 5 years before state pension, would require £100k (5 years at £20k) to make up. Again, this seems like a modest amount.

Is this what everybody is talking about? £20k/year, for a couple with no mortgage or other outgoings?

I'd have thought £30k/year for a couple (or 2x £15k if that's how you want to put it) would be closer to the mark.

For a 5 year early retirement, that would mean £150k to fund before the state pension, then about £12.6k to fund after the state pensions begin.

 

[Fragle]

Well I’m 70 retired on only the state pension, I doa few bits an bobs for cash. That keeps us going. We’ve had 10 weeks away in the van, mainly Holiday Rallies(cos they are cheap) had a fortnight in Menorca and just had a tinsel an turkey holiday ( don’t ask). We spent this year about 13500.but with no savings or margin of error. It can be done if you are careful.

Excellent. I think I might just enjoy the challenge. Was just discussing with she who must be obeyed as to rota for the Asda knockdown isles run..

 

[Lenny HB]

My £12000 covers all including motorhome ins/service /rd tax its obviously cheaper up north our council tax is half yours for a 4 bed semi in nice area

That sounds very low, we are tight arses so spend very little. Most of our shopping is done in Lidl, only put £25-£30 a month petrol in the car, we make use of our bus passes. When we go away most of the time we are FLT, our last trip of over 6 weeks only spent €32 on camping. Our annual expenditure is around £22k.

 

[busby]

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.

I have been retired 20 years this coming May having retired on my 50th birthday. To be honest, I have no idea how much it costs to retire early, all I know is, every time I go to the hole in the wall money comes out.

Same here,,retired 20 years next April.. Bit tough at first with no pensions as I was only 54..Got better as pensions kicked in.Just remember this life is not a rehearsal for better things to come and you can't take your money with you when you die so enjoy it whilst you can, BUSBY.?

 

[busby]

Excellent. I think I might just enjoy the challenge. Was just discussing with she who must be obeyed as to rota for the Asda knockdown isles run..

You can't afford ASDA,SAINSBURYS or TESCO when you retire,,much too expensive and rip off,,Get to Lidl or Aldi.BUSBY??

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[Fragle]

I'm curious about the £20k/year type figures being discussed as being adequate. Is this between 2 people? If so, then the state pension gives £17400 (for 2 people), so there isn't much to make up.

Then considering early retirement. Retiring for example 5 years before state pension, would require £100k (5 years at £20k) to make up. Again, this seems like a modest amount.

Is this what everybody is talking about? £20k/year, for a couple with no mortgage or other outgoings?

I'd have thought £30k/year for a couple (or 2x £15k if that's how you want to put it) would be closer to the mark.

For a 5 year early retirement, that would mean £150k to fund before the state pension, then about £12.6k to fund after the state pensions begin.

nearer to the £100k pot. £30 k for a couple would be great but not in our planning
We don't spent anywhere near that now to be honest

 

[Ivory55]

That sounds very low, we are tight arses so spend very little. Most of our shopping is done in Lidl, only put £25-£30 a month petrol in the car, we make use of our bus passes. When we go away most of the time we are FLT, our last trip of over 6 weeks only spent 32 Euro on camping. Our annual expenditure is around £22k.

£30 a month petrol, put more than that in for one day hospital visiting this weekend. When we think we are having a good month with money something comes up , all ways does.

 

[The Wino]

I managed on a lot less than that while I was still working part-time in the run-up to getting a State Pension.

It got me used to a frugal way of life. Living on a small pension income meant no change of lifestyle except the removal of work itself. I have no desire to go back. Work sucks.

Events scuppered my detailed financial plan to retire at 55. Fully costed spreadsheets turned out to be utterly wasted!

I suppose it's good to have a plan but also a plan b, plan c etc

 

[Lenny HB]

£30 a month petrol, put more than that in for one day hospital visiting this weekend. When we think we are having a good month with money something comes up , all ways does.

Blimey, how far is your hospital, we have one to the west & one to the east both under 4 miles away and for outpatient treatment get a choice of which one to go to.

 

[Ed 57]

I retired early age 60 in May 2017, I took the largest lump sum and smallest pension and bought a 2nd hand van with some of it.
I don't get the state pension until May 2023. My wife now gets hers and we live mortgage free on less than £20k. You can live well very cheap if you like without having to scrimp.
Last year we managed 62 nights away in Europe & UK. This year we have only managed 57.
After working in a job I no longer liked where I was working away from home a lot,
I have no regrets on early retirement.
The only downside that we had not considered was having to mind the Granddaughter to enable her Mum to work. But that is for another discussion.
My advice is to go for it, if you are short you could do some casual work in between holidays.
Ed

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[SpeedyDux]

I suppose it's good to have a plan but also a plan b, plan c etc

Lost count of financial plans - I must be on the F Plan by now.

Not worried.

 

[Madcaravanner]

I HAD to retire thanks to being ill
Steph took early retirement at 55 to help me as my carer

MY Main private pension is index linked basically we get around 14k a year

We have a small back up fund as well

We save everything we can so that when we go away for our meanaders we then have a decent travelling fund
We Spent from Jaws Thetford Bash until the first week of September away from home and we spent a grand total of 4.5k

So if you have your sums done and have a surplus going into the bank then mke your decisions

 

[The Wino]

Odd that people think there's an amount that you need to manage on and that it will be the same for everyone!!!. I bet there's a huge difference between what people on here spend I know there must be when I see the morello thread!!!!!. People manage on all sorts of income we saved up for a long time so are off skiing twice this year while the knees last! But at the end of the day it's that calculation again years Vs pounds.

 

[SpeedyDux]

Dont get caught out, just because you have enough years in doesnt mean that you will get the full pension.
I was reading a post on the caravan forum that somebody retired early from the police force and thought that because he had the years in that he would get the full pension.
But when he reached old age pension age he was told that he wasnt going to get the full amount as he hadnt paid any stamp for the last couple of years. They told him he could pay a lump sum in and get the full amount or have a reduced monthly pension.

Peter.

Paying a lump sum to gain missing NICs years retrospectively so you qualify for a bigger State Pension is a bit of a bargain. The lump sum pays for itself very quickly. You have to be careful because the Rules are a minefield.

 

[carolyn]

Odd that people think there's an amount that you need to manage on and that it will be the same for everyone!!!. I bet there's a huge difference between what people on here spend I know there must be when I see the morello thread!!!!!. People manage on all sorts of income we saved up for a long time so are off skiing twice this year while the knees last! But at the end of the day it's that calculation again years Vs pounds.

The OP is trying to get an idea of whether or not his calculations are about right as a minimum at the frugal end of the scale. I don’t think it’s odd. I wouldn’t like to manage on that amount but it sounds like it’s doable for quite a few on here. Motorhoming appeals to such a variety of people.

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[The Wino]

The OP is trying to get an idea of whether or not his calculations are about right as a minimum at the frugal end of the scale. I don’t think it’s odd. I wouldn’t like to manage on that amount but it sounds like it’s doable for quite a few on here. Motorhoming appeals to such a variety of people.

But he may have a very fuel inneficient house not live on a bus route have high council tax etcetcetc. I think if you are going to take the plunge at the frugal end of the scale it might be best to try and live off that for 6months or so first. We based our projected spending on what we spent the year before. It's easy to say that you can manage on less and no doubt it can be done but before you go for that lifestyle in terms of spending why not try it first the same as you might rent a MH before buying. You are right that what suits one certainly wouldn't suit another but some of the posters on here do show its possible.

 

[Paddywack]

I avoided paying 40% tax rate by paying any extra into additional pension. That way my income when I was at work was reduced, so I learnt to live on less, and my pension now retired is much increased. In fact I take home more now retired than when at work. And happy that the taxman has helped me so much!!

Would you not have been better taking the additional pay and then paying it yourself into a pension, thereby getting 40% relief on it?

 

[The Wino]

Would you not have been better taking the additional pay and then paying it yourself into a pension, thereby getting 40% relief on it?

It's the same either way more or less but he might have avoided paying some NI

 

[busby]

Blimey, how far is your hospital, we have one to the west & one to the east both under 4 miles away and for outpatient treatment get a choice of which one to go to.

Can easily walk to our local cottage hospital,,only 3 or 4 miles but can catch bus to our two main ones using bus pass and saving on parking..Only use our car for big shop once a week,,,walk everywhere else..Let's face it when your retired what is the hurry.BUSBY.?

 

[nicholsong]

In the year you ‘finish work’ you can still do carry forward of unused relief using the last 3 years un-used relief.
Recycling is only relevant if you are already drawing ‘pension’ income, but if you haven’t started drawing, then not an issue.

But what if you can show the contributions are from other income, i.e. rental income so not recycling?

Geoff

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[Nigel Tate]

Your 25% tax free lump sum is a one off. Can only claim it once.

 

[The Wino]

Your 25% tax free lump sum is a one off. Can only claim it once.

But if you have several pension pots you can take 25%of each one and you can take it in bits at a time.

 

[Fragle]

Odd that people think there's an amount that you need to manage on and that it will be the same for everyone!!!. I bet there's a huge difference between what people on here spend I know there must be when I see the morello thread!!!!!. People manage on all sorts of income we saved up for a long time so are off skiing twice this year while the knees last! But at the end of the day it's that calculation again years Vs pounds.

I think the most interesting thing about having the motorhome is the number of different views and people you meet.
I don't think I would ever have even considered finishing if it wasn't for the lovely people we have met on the road. Away for months at a time living a simple life. some having sold up, others renting their property all giving us hope that we could do the same instead of racing through life on a 2 week holiday, sorry can't stop to enjoy life.
Don't get me wrong we have a great life, brand new motorhome paid, house paid, money in the bank. Racing through life but not living.
I thank all the people we have talked to on the road and here and realise everyone has different needs. Suppose we are just looking for a simple life but stepping off the roundabout is hard after 40+ years. All advice is helpful.

 

[bigtwin]

Would you not have been better taking the additional pay and then paying it yourself into a pension, thereby getting 40% relief on it?

It's the same either way more or less but he might have avoided paying some NI

If his contributions were made as part of a salary sacrifice arrangement he would have been considerably better off doing as he did as his employer may well have surrendered their NI contributions into his pension pot (as mine did). Bang for buck you can’t beat contributing to your ‘works’ pension scheme (Especially if you’re a higher rate taxpayer).

Ian

 

[The Wino]

But what if you can show the contributions are from other income, i.e. rental income so not recycling?

Geoff

I thought the limit being reduced to the current level if you have no income was to limit recycling I don't think there is any need to show where the money comes from

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[Ivory55]

Blimey, how far is your hospital, we have one to the west & one to the east both under 4 miles away and for outpatient treatment get a choice of which one to go to.

It was visiting not treatment, even so we have not got one as close as you. I dread to think what Jim’s petrol bill has been lately, we are fortunate not to be as bad.

 

[Otter Spotter]

But what if you can show the contributions are from other income, i.e. rental income so not recycling?

Geoff

It doesn’t make any difference where the cash has actually come from as long as it deemed to be earned taxable income and not dividends, if you are in Drawdown then there are specific rules which I will quote word verbatim tomorrow when I get back in the office

 

[Lenny HB]

saving on parking.

On principle I never pay for parking, if not using the bus I park outside the zone and walk for 10 min.

 

[Vipar]

With pension & investments I get a total of £1400 pm the wife gets £280 pm we get by on that. Have to be careful. Neither of us drink and we don’t eat out. Fish and chips once a month and take away Chinese once a month. No mortgage I am 78 been retired 12 years. We look for bargains wherever we can get them, bulk buy if we can.
Our philosophy is if we can’t afford it we save until we can.

 

[Paddywack]

If his contributions were made as part of a salary sacrifice arrangement he would have been considerably better off doing as he did as his employer may well have surrendered their NI contributions into his pension pot (as mine did). Bang for buck you can’t beat contributing to your ‘works’ pension scheme (Especially if you’re a higher rate taxpayer).

Ian

But he suggested the additional payments kept him out of the higher rate tax bracket?

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