# What is the average cost of living in retirement



## 3CC (23 Mar 2014)

Hi,

While trying to estimate how much it takes to have a reasonable standard of living in retirement, I came across [broken link removed] report which says that €48k (presumably net) is plenty for a retired couple living in an urban setting.

Does anyone have any thoughts on whether this is a reasonable estimate?

Many thanks,

3CC


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## Sue Ellen (24 Mar 2014)

Some possibly relevant previous AAM threads .


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## Bronte (24 Mar 2014)

3CC said:


> Does anyone have any thoughts on whether this is a reasonable estimate?


 
Depends on what one wants as a lifestyle in retirement.  As a starting point, how much are your current needs, work from there.


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## Steven Barrett (24 Mar 2014)

There is no one size fits all. As Bronte said, it depends on what you want to do. As in pre retirement life, people have different lifestyles. 

You also have to take age into consideration. When just retired, you will want to do lots of things, travel a lot and do things you never had the time to do. As you age, the thoughts of all those flights becomes less appealing and your spending needs gradually decreases to where warmth and comfort are what you spend your money on. 

A good financial plan with life long cash flows will give you an idea of how much you need, whether you are on track to achieving that or what you need to do to get there. 


Steven
www.bluewaterfp.ie


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## Janet (24 Mar 2014)

Some of the threads Sue Ellen linked to look really excellent. Just had a read through the first one and it's great. Will have to remember to come back and read through the rest of them. I came across an early retirement blog called Mr. Money Mustache recently and have been really enjoying it. Although it's aimed more at a north American audience (he's Canadian, living in the US), there's still lots of useful and thought-provoking stuff in there.


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## 3CC (24 Mar 2014)

Many thanks for all your responses. 

The reason for the question was a comment in the NERI report that suggested that pension companies over-estimate what people need in their retirement in order to generate business. So for that reason, I wanted to get a feel for the average as opposed to for myself or an individual.

I realise that it will vary from person to person but I just wanted to get a feel for an average is that is possible.

I see from the threads that you linked, Sue Ellen, that a number of posters suggest €18k - €24k per year for a couple but as far as I could glean, this did not include one off costs such as replacing a car or exceptional medical expenses. 


I also came across a report by TCD [broken link removed] which seems to indicate that the vast majority of pensioners have an income of €200 - €250 / week or or €10,400 - €13,000 per annum (per person). 

From all of the above, I am inclined to believe that €12k + say €2k-5k for one off expenses would be a good baseline figure, per person per year.

Assuming (I know it is an assumption) that the state pension will cover ~€11k, the average pension needs to be €3k - €6k per year, increasing with inflation.

That's a lot less than I would have thought.


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## Steven Barrett (24 Mar 2014)

I have advised a lot of clients in retirement and those who are enjoying their retirement the most spend more now than they did when they were working. 

Think about what you want to do when you retire. If you think €17,000 a year would get you that far, then fine. 

I would start by printing off a years bank statements and looking at what you spend your money on now. It will give you an idea of what you will need in retirement. 

And don't think the kids won't cost you anything when you retire. It's a lot different now to before. Generation X will be the first generation to be poorer than the generation before them. With the cost of everything now, that will probably continue. 


Steven
www.bluewaterfp.ie


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