What annual income for retirement?

I've done some calculations of my own needs, but just wonder what anyone views as sufficient annual income for a comfortable, if not luxurious, retirement. Colleagues have widely varying views, so I thought i'd put it to you lot!

Re: What annual income for retirement?

Surely that varies very widely from person to person. What one person might think a reasonable standard of living, would be penuary to another.

Re: What annual income for retirement?

I have my own Excel spreadsheet that I update on a regular basis orangutan detailing all our income, after tax etcetera with another section covering essential expenses which, for us includes the 'phone, broadband and satellite TV.

I've run this now many years, since well before my last redundancy (6th!!)and I've found it useful in determining how we cope on what for us is very nearly the same as our retirement income will be once I get to 65.

We can also plan ahead because I include annual expenses like insurances but I include them on my spreadsheet across the whole year and put money into a savings account that is purely for those annual expenses.

A quick check on my spreadsheet avoids my suddenly finding I've got a big expense coming up that I forgot simply because the spreadsheet's updated at least once per week.

Yes, of course not everyone lives to the same standard or level because it's down to their income but micro-managing our income and expenditure keeps us on our toes with our income and we know that it's hardly going to change much over the next 3 years.

We do sometimes find that accumulated "essentials" money exceeds our needs over a three month period so we then move some from an esaver account into an ISA and that gives us just over 3% which we rarely ever need to draw that back out again.
The esaver isn't that far behind though, percentage rate-wise, these days unfortunately - I don't think we'll ever get those 5% days again!

Only once in the past five years did we hit a major crisis but that came out of the blue with no warning and we dealt with it and knuckled down to a little more austerity until we got back up on our feet again.

I do have carefully-calculated figures of what we live on now and what our income and expenses are likely to be in 2016 orangutan but I'm afraid I do not feel safe putting that here!! stevmk2

Re: What annual income for retirement?

Throwing ourselves onto the charity of the state as we have been on low wages all our lives, we don't need much as we are not used to having much. Worked since we were both 15 but just never earned enough in the jobs we have done to save. Been a life of caring for elderly members of our families and children of various siblings, so I have paid very much less stamp than I need for a pension, but firmly believe they can't let us starve so they will have to provide something.

Re: What annual income for retirement?

Of course! Which is exactly why I ask the question. I think many people overestimate what they need, and others underestimate. And expectations vary widely. I am just curious about what others expect in retirement.

Re: What annual income for retirement?

While I haven't done a spreadsheet, I have planned in a similar fashion, so am aware of my expenditure and likely needs. But may follow suit, as I like your approach!

Re: What annual income for retirement?

Before I retired my retirement fund here in Oz gave me a fact sheet about retirement income which expressed it in term of what people need/want. It gave three rough bands of income based on a 'basic' lifestyle, a 'modest' lifestyle and a 'comfortable' lifestyle. It had a checkbox with it so you could work out the sort of lifestyle you were currently living and what you would see as a minimum need in retirement. It was a useful way of looking at it and caused me to increase my super payments for the last ten years so we are now comfortably retired.

I didn't do as much planning as stev but I did do some with my super fund adviser who gave me loads of information, all useful. I think most people would prefer not to be any worse off in retirement than when they were when working but that's not always possible for everyone so you have to cut your cloth to suit. As others said everyone has different circumstances and different expectations so it's hard to generalise. Some people tend to be good forward planners and some aren't.

Re: What annual income for retirement?

One thing you can be sure is that the amount that a superannuation company tells you is necessary is greatly exaggerated.

I don't have anything like the amount they claim is necessary for a comfortable lifestyle but I think I live a very comfortable and active lifestyle yet I keep accumulating savings (not a lot but at least $100 a week). With a few grand in the bank I have enough to tide me over the peaks and troughs of annual expenditure and allow for a major breakdown (car, fridge, whatever) without drawing out any super.

The money will run out at some point and I will be 100% dependent on the state pension but according to my calculations I will be in my mid 80s and I suspect a lot of what I do now will be a thing of the past.

You have to be realistic too, my father and grandfather both died in their late 60s and early 70s so if I survive until then I will be a very happy camper.

Re: What annual income for retirement?

I would think that, in the UK and with your house paid for, a couple could have a very comfortable existence on £20k/year.

Re: What annual income for retirement?

That depends on what you wish to do in retirement I suppose. That amount wouldn't be nearly enough if you liked going on luxurious cruises every year and generally enjoying a very high standard of living as do some of my rellies, for instance.