How much do you live on in retirement?

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Re: How much do you live on in retirement?

Postby Chicken Run Supreme on Tue Sep 05, 2017 11:16 am

DasNutNock wrote:Dont *have* to buy an annuity though, do you? Or have I misunderstood?


No you are correct. Prior to George Osborne's well overdue upheaval of the options on retirement for a defined contribution pension, there was no alternative to commuting your pension fund to an annuity. The only option was that you could take 25% of the fund as a tax free lump sum or convert the entire fund to an annuity, but you would be liable to tax on the annuity income. The options are now far more user friendly.
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Re: How much do you live on in retirement?

Postby The Old Man of Storr on Tue Sep 05, 2017 11:26 am

I have a cunning plan .
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Re: How much do you live on in retirement?

Postby Wembley1966 on Tue Sep 05, 2017 11:47 am

I've just started to drawdown some income out of my pension. I only contributed to company schemes for the first couple of years of working and for the last 40 always had private pensions.

During the dot com boom years of the late '90s I made quite a bit on my share options which were treated as income and taxed at 40% so maxed out on my pension contributions (when you could carry back and forward unused allowances). Getting the 40% tax relief on the contribution made it a no-brainer - where else was there an instant 40% return at virtually no risk - although some of it was with Equitable!

I do consultancy through my own company so flexible in what I pay myself in salary and dividends (although the government has cut back on that nice little earner). I'm delaying paying any salary to myself at the moment as next year I'll be 65 and won't then have to pay any national insurance on any salary I take out of the company - so this year I'm taking income from the pension instead.

Like the OP, I'm constantly playing with calculations and the various online pension calculators about how much the pension fund will potentially give you and for how long. I've no idea how much we need to live on in retirement - apart from no mortgage to pay I can't see many other areas for reducing expenditure but only increasing it, as I now start doing all the things ageing hammer has been doing for the last 10 years. Oh - and the eldest daughter has just announced that she's going back to uni later this month to do a masters!
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Re: How much do you live on in retirement?

Postby Hello there! on Tue Sep 05, 2017 12:10 pm

I'll keep working until I'm no longer physically capable. As I have no pension or savings and don't own a house, the govt will then have to provide for my housing, bills and food.

On a positive note. The buy to let landlords who I'm forced to rent from will have made plenty of money from me so that's good. It's always nice when people can make money from those who are less well off.
Last edited by Hello there! on Tue Sep 05, 2017 12:23 pm, edited 1 time in total.
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Re: How much do you live on in retirement?

Postby Wembley1966 on Tue Sep 05, 2017 12:21 pm

^^^ That won't happen as you'll always pass their "Fit for Work" test.
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Re: How much do you live on in retirement?

Postby Hello there! on Tue Sep 05, 2017 12:29 pm

Wembley1966 wrote:^^^ That won't happen as you'll always pass their "Fit for Work" test.


Quite probably true.

At some point I will reach a point where I won't be able to make enough to pay my rent.

In that case, Either the govt will provide or I'll be living outside and stealing stuff.
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Re: How much do you live on in retirement?

Postby DasNutNock on Tue Sep 05, 2017 12:41 pm

On the plus side, the crippling pension contributions I'm making mean that I can have the child benefit back that Osborne robbed off me.
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Re: How much do you live on in retirement?

Postby Burnley Hammer on Tue Sep 05, 2017 12:43 pm

I have no pension. I could spend the next 25 years worrying about that but I choose not to.
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Re: How much do you live on in retirement?

Postby Mega Ron on Tue Sep 05, 2017 12:47 pm

warp wrote:see, possibly the only good thing about being in my thirties at this moment in time, is that i will never have to worry about retirement!


I'm just worried that your mum might retire.
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Re: How much do you live on in retirement?

Postby Chicken Run Supreme on Tue Sep 05, 2017 12:55 pm

DasNutNock wrote:On the plus side, the crippling pension contributions I'm making mean that I can have the child benefit back that Osborne robbed off me.


What they give with one hand they take away with the other.
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Re: How much do you live on in retirement?

Postby Hammers Dad on Tue Sep 05, 2017 1:14 pm

Hammers Dad wrote:Good idea, then you can plate your house in gold and live off caviar and champagne :asleep:
DasNutNock wrote:
Yes, that was my expectation.

Everyone I know who went into the public sector makes quality money and has a pension unavailable to most of the people I know who work in the private. Appreciate that not every state employee is in that position, but don't kid yourself that those sweet salary/pension deals don't exist.

My mate edits a quango newsletter. 90k plus a projected 55-60% pen after 42 years (or something along those lines, I went into a catatonic state when he told me the numbers). I'm saving over a quarter of my gross income, with a young family to support, and I'm just hoping to see something like the equivalent of 15-20% of my final salary.

Defined benefit pensions were scotch mist in the private sector when I started working. I should have targeted a public job with one, or tried to find one of the hens teeth in the private if I'd known how grim saving in defined contributions schemes would work out.

Then you obviously know very few Public Sector workers because I can assure you very few earn £90k or even close to that and none of the ones I know (and I know hundreds if not thousands in my job) will have 55-60% pension after 42 years.
I will have to quote my pension statement for you when I get home later and you can work it out for yourself.
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Re: How much do you live on in retirement?

Postby Turns to Stone on Tue Sep 05, 2017 1:24 pm

I may be a bit of a rarity here, but I don't actually expect to maintain my lifestyle when I retire. I'd expect us to downsize, go on holidays rarely (and cheaply outside of the holidays). I won' texpect to eat out or drink as much as I do now and I'd imagine the wife and I will probably spend less on clothes than we do now.

I'm 36 and I just can't imagine that many people my age would expect to maintain their same lifestyle when they stop working. Why would you?
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Re: How much do you live on in retirement?

Postby DasNutNock on Tue Sep 05, 2017 1:27 pm

I probably do know very few Public sector workers, but the ones that I do know all have enviable employment packages, at least in terms of income and pension. That those thousands that you know do not doesn't change anything.

A qualified Nurse joining the NHS pension scheme at 25, contributing 7.1% of their £22k salary, and remaining in her role for 40 years (same salary band etc) can expect to receive a pension worth £30k per year (in today's money), which equates to more than 66% of the final salary (c £45k). To get the equivalent rate from an annuity, you'd need £2.2M at today's rates.

I don't begrudge any nurse who does an important and difficult job from receiving that kind of package. But if I'd known at 18 what I know now, I would have given far more serious consideration to targeting a job that offered those kinds of retirement plans.
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Re: How much do you live on in retirement?

Postby Estuary on Tue Sep 05, 2017 1:37 pm

I'm 36 and I just can't imagine that many people my age would expect to maintain their same lifestyle when they stop working. Why would you?


One of the points coming out from posters is that many are trying to do exactly that, save to a level to be able to live a comparable lifestyle, while others are saying, that's all well and good, but you may never live t spend the money, and if you do you may not have the health to do what you can do when you are younger.

A little note of caution to the thirty somethings reading this, the years go bye quicker and quicker, especially when you are a parent and your kids get to secondary school age. Your parents and older relies will, without you even noticing, turn old at an alarmingly quick rate once you hit your forties, and you yourself will one day walk past a shop window, look in and wonder who the old guy staring back at you is?
The time it takes for you to age from late thirties to late fifities takes roughly the same amount that used pass between guy Fawkes Night and Christmas Eve when you were a kid.
Carpe Diem my friends.
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Re: How much do you live on in retirement?

Postby Mega Ron on Tue Sep 05, 2017 1:39 pm

Turns to Stone wrote:
I'm 36 and I just can't imagine that many people my age would expect to maintain their same lifestyle when they stop working. Why would you?


We won't have a mortgage but I think we will downsize anyway. I expect to travel more and have more disposable income than I do now.
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Re: How much do you live on in retirement?

Postby fjthegrey on Tue Sep 05, 2017 1:42 pm

I actually am not too worried about it all. I'm 30 and have made meagre contributions to the few pensions I have. The scramble to plough money into a pension seems a little futile to me. I also recently read about a philosophical perspective whereby saving money for your future self (without a goal in mind on which to spend that money) is akin to giving money away to a stranger.

Money is money. A renewable energy source. There's always a way to get more of it, even for the forgotten and ageing unwashed such as my future self. I have become accustomed to a way of life which is not particularly expensive to maintain. My interests do not cost vast sums of money.

Most people could cut back on some of the crap they waste money on and be no less happy or satisfied with life.
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Re: How much do you live on in retirement?

Postby sendô on Tue Sep 05, 2017 1:48 pm

EvilC wrote:1) Public sector debt interest accounts for around 5% of total public spending.
2) Why should we all expect to get that type of pension? I could do that, but I'd have to pile a load more of my wages into my pension or other savings that is a de facto pension. I can't really afford that without going without a lot of **** that I can't/won't go without.

I think you might have missed the point that I was trying to make.

We're talking about pensions and if the public sector have it too good - should it not be a basic right in this country to expect a decent standard of pension upon retirement?

There's so many different types, state pension, private pensions, different companies offer different contribution percentages, for different people at different wages that may or may not have a bigger or smaller pot, or might get an annuity, or might take a lump out and so on.

Why not just have a system where we all pay into a government backed pension pot - a bit like a tax I guess, you could call it something catchy like National Insurance - and then at age 65 or 68 or 87 or whatever the **** we can all expect to draw from said pot.

Anything else you save yourself will be a bonus.
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Re: How much do you live on in retirement?

Postby devonshire flu on Tue Sep 05, 2017 1:54 pm

My plan is to have a £100,000 tax free lump sum when I retire, plus about £18,000 per year.

My wife is aiming for a bit less, maybe £70k plus £12,000 per year.

We paid the mortgage off a couple of months ago, so I'm hoping we can do plenty of travel in the 10 years or so before we retire.
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Re: How much do you live on in retirement?

Postby Hammersfaniow on Tue Sep 05, 2017 2:04 pm

I'll be 40 next year, I'm lucky that I've worked hard and am now mortgage free. Been self employed for the majority of my working life though, so I made the choice not to put money away for a pension until the house was paid. Now that's done I'll have about 25 years where my outgoings will be minimal and I can start putting money away for hopefully a decent retirement pot.
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Re: How much do you live on in retirement?

Postby warp on Tue Sep 05, 2017 2:05 pm

DasNutNock wrote:But if I'd known at 18 what I know now, I would have given far more serious consideration to targeting a job that offered those kinds of retirement plans.

if you worried about retirement when 18 you'd be an even more miserable **** now!
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