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Nov 2020
4:30pm, 20 Nov 2020
7,062 posts
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Northern Exile
Addendum: I was going to say that anyone doing their sums should not underestimate the difference it makes when you're not paying NI or higher rate tax.
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Nov 2020
4:37pm, 20 Nov 2020
3,702 posts
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um
And if you’re drawing down from cash (eg that 25% tax free bucket) there’s no deductions. If you’re drawing down from pension funds, you can take the tax free element then.*
*unless Rishi changes the rules to pay for Covid. That may be a reason to get as much out tax free ASAP?
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Nov 2020
4:39pm, 20 Nov 2020
22,302 posts
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TRO Saracen
Yes, lifestyle is crucial. I think most, me included, dreamed of retirement as a 52 week holiday with accompanying ‘jet around the world’ ambitions.
But, probably over the last 2 years and certainly since Covid the importance of those has declined but replaced by wanting beautiful precious time. Relaxed, unplanned time and as much as possible, as early as possible.
My perspective changed when I started comparing 5 years of retirement aged 55-60 to a nicer car and more holidays aged 60 onwards.
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Nov 2020
4:42pm, 20 Nov 2020
201 posts
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Minimag
Also, no travel costs, work clothes, work socialising (lunches, coffee's etc). When I did the calculations on the minimum we would need to lead a comfortable existence it was less than half of the 50k Mandymoo's sister wants
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Nov 2020
4:56pm, 20 Nov 2020
10,488 posts
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Mandymoo
We do keep telling them that its ok working every hour to save for retirement etc, whilst living a very social lifestyle (obviously not so much now), but they need to make it to retirement to enjoy it. Health has not always be kind and they seem to be working themselves into early graves. But each to their own.
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Nov 2020
4:56pm, 20 Nov 2020
1,343 posts
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mushroom
Hi folks
I'm a few years away from retirement. My youngest is 12, so I'm planning on waiting until she's 18+, but I've been enjoying the thread and the mostly positive thoughts and experiences.
The lifestyle one has really helped to focus my mind as I've got older. My partner and I have consciously made decisions on current spending based on how it'll impact retirement age, ie. bring it forward, rather than retirement income.
For example, a few years ago, we had to change cars and had the option to buy a new or newly new car, but we chose to spend £10k less on a decent quality 2nd hand one that would last several years.
I still have a working car but, in my eyes, that £10k can mean I finish work a year earlier. We don't cut out, but we do think ahead - every few hundred quid I don't spend means a month earlier retirement!
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Nov 2020
5:01pm, 20 Nov 2020
49,913 posts
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Velociraptor
I think people sometimes make the mistake of thinking they need to replace their pre-retirement income instead of taking their projected expenditure as a starting point. We'll probably spend a bit more in retirement than we do now because we'll go on more cheap holidays in the UK and eat out more.
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Nov 2020
5:07pm, 20 Nov 2020
37,484 posts
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♪♫ Synge ♪♫
V’rap has hit the nail on the head - it’s not a question of retirement income, it’s all about working out your desired retirement expenditure.
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Nov 2020
5:19pm, 20 Nov 2020
46,083 posts
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Lip Gloss
I’m earning very little as I only work part time but don’t think I’m missing out on much as we never really go on expensive holidays although over the years I’ve did okay. I have my own car and I have no mortgage and OH is the same with his car and property. I keep thinking of my ex ( not in that way lol ) but he had to half his pension buy me out so had to remortgage the property and now has 2 young children and by the time he is 60 his youngest will just be starting school. Don’t think I would like to swap places
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Nov 2020
5:33pm, 20 Nov 2020
37,485 posts
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♪♫ Synge ♪♫
We have worked out what we think we will want to spend per annum once we retire and given this figure to our financial adviser. (It's a lot less than £50k per annum!)
He has details of our various pension schemes (mine are all defined contribution, Dr S has a bit of a mixed portfolio of DC and DB) and savings and he has done projections based on our planned expenditure figures which essentially drive an income requirement. This runs from a planned retirement date.
Dr S's DB scheme provides one element of income and the rest is achieved through income drawdown against our DC pots. The income drawdown requirement falls considerably once state pension at age 67 comes into the picture. Of course, it's all based on assumptions about investment returns and life expectancy, but I guess that's the same for everyone except the super-wealthy.
We did think we might try and retire this year, but the numbers didn't quite work. In hindsight, we're both pleased we didn't take the risk. We're fortunate to be in employment, both enjoying WFH and currently both part time, so getting a bit of a feel for what retirement might be like.
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Jigs 
Any pension experts out there?
Oct 2024