Oh, stop it!
G
I already corrected myself stating that it would be for single person household and it was euro (not that it makes any big difference nowadays). Rough break down would be:
- 600 for accomodation
- 600 for car (very modest one)
- 800 for food (at home)
- 100 for subscriptions (various)
- 100 for eating out & occasional drinks
- 100 for entertainment (movies, concerts etc)
- 200 for various other e.g. travelling & hifi (2400/year)
1 Like
I’ll be lucky to reach the comfortable level of retirement income. No way I can contribute to the levels mentioned here just not possible with two kids, a good sized mortgage and one decent but not excessive salary.
It’s daft combined saleries we are still on less a year than when we bought the house 16 years ago. I guess letting my partner have her choice career after returning to work has not been easy. She’s loves it but the pay is so bad. I’m getting to the ceiling for my career to so large rises are a thing of the past.
Looking at my property to get us through the shortfall well likely have Bought in London just before it went too crazy so sitting on a nice lump sum even though it’s dropped down over the last few years. Got the kids to get through Uni to so unless we get a major windfall a nice pension is not looking on the cards.
This is a very difficult area in which to generalise. I don’t think it is possible to suggest a ‘one size fits all’ figure, as so much depends on the income to which you are accustomed, and your desires for retirement.
Looking at some of tge suggested figures, €30k pa (2.5k p.m.) would be a pretty good pension for someone only earning that before retirement, while 2/3rds of current earnings would be very tight - but for someone on, say €150k pa 2/3rds of current income is a pretty generous pension, while €30k would seem paltry.
As for what is sufficient, it depends what you want to do in retirement! If you want to be able to continue upgrading black boxes from time to time, or even replacing when they reach end of life, maybe an awful lot more than 30k is required…
Points up the difference between the UK and Europe I guess particularly in respect of accomodation (most UK pensioners will have paid off a mortgage) but:
-
600 for car (very modest one) - you would get a top of the range Merc or BMW for that money a month in the UK and have change.
-
800 for food (at home) - Is that a banquet every night? you must live in a very expensive country.
Understand, my tongue is very firmly in my cheek here!
1 Like
Graeme, a quick look at the USS website and the contributions being made by Employer and Employee suggest you have a very sound scheme.
The scheme I had from my final employer would have delivered 2/3 final salary if I had worked 40 years for them. I got pro-rata that for the actual years worked. But note, the “Final Salary” was my Basic salary. It didn’t include Overtime, Car Allowance, Bonus Scheme Payment or Long Term Incentive Plan, all of which greatly increased my “take-home” pay. If you can make AVCs, I probably would. Most people at my last place did that and many were able to retire on what amounted to a full salary pension. But I appreciate the rules seem to have changed this past 7 or 8 years. I also appreciate that different schemes define “Final Salary” in different ways eg highest in the last three years, highest 3-year average in the last 10 years etc etc
Nevertheless, as HH mentioned, these Defined Benefit Schemes provide extremely attractive pensions both in value and security. My guess is that if you don’t need to take any lump-sums from your pension pot, you will have a very satisfactory, secure and Index Linked retirement income, enabling you to live very much in line with your current standard of living. And IMHO, you can’t really ask for much more in retirement.
2 Likes
I think you are ignoring the costs of tax, insurance, petrol/diesel, servicing once out of warranty, tyres etc, maybe parking charges, speeding fines! Buying the car is only the start.
Best
David
2 Likes
Used Toyota Avensis costs here 519€/month so if that is good enough there is a potential saving point but anything better cost at least 600 (note this covers everything: car, maintenance, fuel, taxes etc.)
Food – I am no much of a cook so that might have some impact on the money I have to reserve for that item. However, I did not include healthcare as a separate item so that is more than likely offset any possible savings.
Accommodation - even if the house/flat is paid there still is maintenance, electricity, heating etc. to be paid…
Cheers for that Don.
G
I was advised against AVCs in the USS scheme, but times have changes as have the variants under the USS umbrella. So it is impossible to generalise on this. Instead I was advised to make contributions into a private pension because the UK government provides tax relief on these. As a higher rate tax payer this means you get £100 in your pension pot for every £60 you pay in. This really is a no-brainer, although there have long been rumours that this tax break could be revoked because it costs HMG too much. Again, I cannot stress too much that independent expert advice is essential.
2 Likes
Oh come on David. Tax, virtually nil with the right car. Insurance, you are talking about us geriatrics here so next to nothing. As for the rest - minimal 
FairPlay Osprey, different countries and as for healthcare then thank god for the NHS. As it happens both myself and my wife are retired in the UK and our outgoings including one car are c£1500 per month including food but not ‘entertainment’.
3 Likes
Another factor to consider with pensions perhaps is that your requirements will change during retirement and what you intend to do, though something I’ve noticed is how comparatively quickly decline can set in during old age.
Chatting with work colleagues we’d noticed that parents tended to live fairly active lives in their 60’s, but became more cautious about many things, especially travel abroad during their 70’s as their health started to decline.
Significant changes to population demographics in terms of living longer (which have now slowed or reversed apparently) have resulted in wide-ranging changes to pension legislation, and I’ve seen numeorus changes in the last decade which have made it very difficult for me personally to plan ahead as goalposts keep shifting.
My occupational pension has been revised a few times with increased contributions and changes from final salary to career average. I have an old pension component which will be final salary with a planned retirement age of 60, but the revised component will pay out at state retirement age and increasingly I question this as that’s a potentially moving goalpost that a significant number of people may never reach.
Equally, as I’m the higher earner and statistically my other half would live longer, I wonder if we’d not be better bolstering her pension arrangements as spousal benefits upon my death would be significantly lower than the full pension. So do we put money where it’s most likely to give longer term value? All very morbid, no one has a crystal ball and very difficult to know.
Public sector pensions are often criticised by politics of envy, most are far less attractive than they used to be, but ultimately if they were deemed to be good surely we’d be trying to pull private pensions up to a similar level rather than dragging public sector ones down?
Ultimately I think you probably need good income in the early years of retirement, possibly supplemented by retirement work, thereafter as we become increasingly infirm income will potentially be frittered away on community care or nursing/care home arrangements which will increasingly be means tested.
1 Like
Yup - better to blow it on a Statement.
1 Like
One of the challenges of a pension income is paying for lumpy things - new boiler, the roof, carpets, curtains, furniture, a kitchen at some point etc etc. Try to keep saving a bit each month? Use the life savings? You really can’t spend up each month and this seems to be taken into account very rarely in the advice as to what you might need. I’ve still not worked out the answer.
3 Likes
Graeme.
You’re very mischievise; you knew very well this would turn into the end of year/decade argument. 
I’ve been looking into my retirement finances recently, I’ve come to the conclusion that as time goes by, the amount of pension I need will reduce. At 80 I won’t be as active and won’t be spending as much.
One thing that does concerm me is the consequenses of either me or wife needing care and going ito a home. Whoever went into a home would fund the care from their savings, earnings and assets. As far as I can tell, the best option is to divide savings, earnings and assets equally between spouses. If one spouse had all the savings and assets, then went into care, the other spouse could be left with nothing.
2 Likes
In the real world, life is much more expensive than that. Anyway believe what you want to.
Best
David
1 Like
Wise words. We have always shared everything equally and I’ve no intention of changing that in retirement.
G
Hi G, on a tangent, have just sent you a msg via the comms route we had a few years back.
I was being just a bit ironic!