# Thinking of retiring early - what's comfortable to live on ?



## Daddy

Hi,  I am wondering what is a comfortable amount to live on as I am now 53 and would like to retire at 63 and so am coming up with this 10 year plan.  I reckon by 10 years time I will all going well have 300k in savings and my pension pot will be approx 200k and my wife will be 60 then and her pension pot will be approx 200k also.  The kids will have finished college.  I  would like to enjoy a bit of time with my wife while still relatively young.  We are both tee totallers. The mortgage will be cleared.    
So I know the pensions plans could go haywire and throw a spanner in my calculations.

But my question really is I what are people in my situation able to live on comfortably at the moment who have retired in the last few years.  I would like to think that I would not have to work on until 67 in order to qualify for state pension and that I would manage from 63 until 67 when it would kick in.  I would intend using 15k of our savings each year towards our annual costs.  

Any thoughts welcome.


----------



## Eithneangela

Totally depends on your life style. If you smoke, drink, eat out a lot, entertain a lot, maintain 2 cars, play golf, travel abroad, heat a large house etc. etc. then you are going to need sufficient income to cover these costs. The first thing you should do is identify all of these costs (go through your bank statements, highlight all DD's/SO's - and see if you actually need all of the stuff you're paying for or is there another less costly option, e.g. Freeview instead of Sky). 

Health Insurance cover is going to increase along with your years, and it is likely for the foreseeable future that we will suffer increased income tax, USC, PRSI, Water Charges, Property tax, etc.) so these will also need to be considered for the longer term.

I think you may also need to consider what you propose to do at retirement - travel, new hobby etc. When you are not working you will have considerable time on your hands - sometimes there are costs associated with this.

10 years is a long time to plan for your retirement but looking at the sort of income suggested by your figures, unless you have a seriously expensive lifestyle to maintain, then I think you could live quite happily on the equivalent of €20,000 today.


----------



## Gervan

I have a feeling your "comfortable" would not recognise mine, but I live very comfortably with a spouse and teenager on about €25000. 
We travel abroad when school holidays allow, but very rarely eat out or attend concerts. We fit our spending according to our income, rather than our desires. The mortgage is paid, there is an old car which needs very little attention.
Like you, I feel time with the family to be more important than how much I could earn if I had not retired early.


----------



## putsch

Gervan said:


> I have a feeling your "comfortable" would not recognise mine, but I live very comfortably with a spouse and teenager on about €25000.
> We travel abroad when school holidays allow, but very rarely eat out or attend concerts. We fit our spending according to our income, rather than our desires. The mortgage is paid, there is an old car which needs very little attention.
> Like you, I feel time with the family to be more important than how much I could earn if I had not retired early.



Do you mind me asking if that is 25K net or gross? Facing in to early retirement too but am not too good at living on a budget!


----------



## Daddy

Thanks for replies so far.  Was speaking to my brother who has no family and he and his wife can live comfartably on 10k a year and have no kids no mortgage and 1 car.    Without doing the figs I probably think that 20k should adequately cover today.  So in 10 years I would think 25k should do it.    Time is precious to me and I don't want to give all my life to the job.  I look forward to hopefully reaching my targets of retiring at 63.   But do please keep your thoughts opinions coming.


----------



## Gervan

Putsch the 25K is both net and gross, as we are under the 36K income tax exemption for over 65s. There was a little USC to be paid last year, but not this year.

I can't imagine living on €10k though, and I thought we were living very simply.


----------



## Daddy

Thanks Gervan.   You have a teenage daughter.  I am just talking 2 people.   I have teenagers and their expensive.  But 10k is very low I know.


----------



## wbbs

You would be living a very frugal life on 10k even for one person, there certainly would be no holidays etc.


----------



## Bronte

Take the amount you live comfortable on now minus the mortgage etc and that should give you a very good idea of how much you need.  Factor in further tax increases and costs of health care/home care going foward.


----------



## goingforgold

Based on the information re your lifestyle in retirement etc I would have thought you will live very comfortably. You will have 700K in a retirement fund (300K savings and  400K private pension pot). You will also be entitles to the state pension which is currently c.25K per annum for two people. You expect to live quite comfortably on the state pension alone so it would appear you will be very comfortable indeed.

Hope all goes to plan and enjoy


----------



## Daddy

Thanks again.  My projections are based on us holding our jobs of course and the pension funds staying level and is just based on our/employer contribs.  Pension returns for the last 10 years have just been flat really.  We have 140k in savings right now and between sticking those in the P O Bonds/Certs and saving a regular € 750 a month I think we'll nearly reach the 300k in savings.   So I hope all this euro collapse talk just does'nt come to pass that may scupper our plans.


----------



## eirefinq

Daddy said:


> I reckon by 10 years time I will all going well have 300k in savings and my pension pot will be approx 200k and my wife will be 60 then and her pension pot will be approx 200k also.


 
Re the future (estimated value) of your pension, you should consider what funds your pension is invested in at the moment i.e. are they high, medium or low risk or a mixture of all 3. As you are nearing your chosen retirement date i would recommend that you give serious consideration to progressively reducing your exposure to high/medium risk funds. 

If it were me I would switch 10% of the pension pots into safe low risk cash funds each year for the next 10 years. This means that in 10 years time when ready to retire the risk of/exposure to a sudden drop in the value of the pension pots is significantly reduced as I would have near 100% invested in very low risk cash funds. Moving 10% into a safe cash fund each year provides a safeguard for your pension pot but also allows for increases in other fund prices over time to be reflected in the pot also.

This gives you the best of both worlds...

There are alot of people out there who intended to retire with pension pots similar in value to yours over the last few years but due to the huge drop in markets etc the value of their funds have dramatically reduced and they have had to defer their retirements as a result....


----------



## Firefly

Daddy said:


> ..*I would like to enjoy a bit of time with my wife while still relatively young.*


 
Hi Daddy (saying that feels weird I must say). I don't have any financial advice I can help you with and I am over 15 years younger than you. However, as I am unfortunately going through a difficult time personally with an ill family member, I would highly advise that you put this as your number 1 priority. There are a lot of things that might or might not happen between now and your planned retirement age. I'm not saying to ignore your finances..far from it, but investing in good times now e.g. by travelling together is IMO just as important as any financial investment so whatever you plan on putting away, I would keep a decent portion of it for weekends away and holidays every year.


----------



## SoylentGreen

We live comfortably on about €18k per annum. Light drinkers, non smokers. We run two cars but only need one. Hardly worth our while getting rid of the second one at this stage but if it claps out it will not be replaced. We have about 4 holidays per year out of high season. Make use of coupons, special offers, cheap flights and hotel offers.  Biggest expenses are health insurance and utilities. No mortgage. Retired at 50 and have never regretted it. Thankfully both in pretty good health. We keep the house and garden in pretty good shape and decorate as needs be and replace worn furniture as needs be. No interest in clothes or bling.
We have back up savings just in case but we have not had to use them yet. This gives us a bit of confidence.


----------



## Daddy

Firefly said:


> Hi Daddy (saying that feels weird I must say). I don't have any financial advice I can help you with and I am over 15 years younger than you. However, as I am unfortunately going through a difficult time personally with an ill family member, I would highly advise that you put this as your number 1 priority. There are a lot of things that might or might not happen between now and your planned retirement age. I'm not saying to ignore your finances..far from it, but investing in good times now e.g. by travelling together is IMO just as important as any financial investment so whatever you plan on putting away, I would keep a decent portion of it for weekends away and holidays every year.



Thanks Firefly . I showed your comment to my wife and she was impressed.


----------



## browtal

I would love a breakdown of how you manage on this amount.  It seems very small and it is admirable that you can do this. 
I would really appreciate a breakdown of your spending and would appreciate if you could email me privately.
 I often have to help Older People make out budgets for their income and I don't find it easy.  Regards Browtal


----------



## TrundleAlong

Browtal. Who are you asking?


----------



## browtal

My question is directed at *SoylentGreen* or anybody that live on €20,000 or less . Would love a breakdown.  
Thanks Browtal


----------



## niceoneted

browtal, apart form my mortgage I reckon I live on well under 20k per year. You've set me a challenge to check same over the next few days.


----------



## Gervan

Browtal, not under €20K but there are three of us, parents and schoolboy in late teens. No rent or mortgage.

Groceries, personal & household cleaning     €4875
Travel including insurance                                                3343
Entertainment & Books                                                         3068
Vehicle running costs inc. Insurance                    2808
Property expenses: heat & insurance                  2378
Gifts                                                                                                         1605
Teen's pocket money                                                            1167
Sundry                                                                                                   1096
Furniture & equipment                                                              834
Telephone & Post                                                                          804
Clothing                                                                                                  674
Medical Exp                                                                                         641
Dentist                                                                                                     449
Schoolbooks                                                                                        153
Haircuts                                                                                                   141
Bank charges                                                                                      132
Total Household expenses   2011             24,168


----------



## browtal

Hello Gervan, 
Many thanks for taking the time to detail your outgoings. It is interesting to see how good housekeeping and records show the picture.
Regards Browtal


----------



## SPC100

My advice, is to try your retirement budget today.

Spending is a personal thing. Some people like to live in ice boxes some like to live in saunas, some need gadgets, some need new cars etc.,

You need to get a good way to get a handle on your current spending, and estimate based on that.

I would also advise enjoying your life sooner rather than later.


----------



## mtk

Gervan said:


> Browtal, not under €20K but there are three of us, parents and schoolboy in late teens. No rent or mortgage.
> 
> Groceries, personal & household cleaning €4875
> Travel including insurance 3343
> Entertainment & Books 3068
> Vehicle running costs inc. Insurance 2808
> Property expenses: heat & insurance 2378
> Gifts 1605
> Teen's pocket money 1167
> Sundry 1096
> Furniture & equipment 834
> Telephone & Post 804
> Clothing 674
> Medical Exp 641
> Dentist 449
> Schoolbooks 153
> Haircuts 141
> Bank charges 132
> Total Household expenses 2011 24,168


 
This looks like a good bench mark - all seem reasonable to me and i think we would be similar ( 2A plus 1 teen) except for some differences 
school fees+4k and 
food 800 pm so 9.6k =plus 4.8k and 
eating out 1 k so 
so would be 34k living well which is about right i think for us


----------



## TrundleAlong

I must say that I could shave 20% off the €20k above figure. In fact I am doing just that. However I live in an area that is close to everything so my travel costs are much less. (Based on 2 people). Food and groceries are just less than €3k. Heat and insurance about €2k.


----------



## dub_nerd

I retired last year and budgeted 40k after tax as a generous living allowance. That's to run one and a half households (although no dependants). Don't think I'll be able to spend that much though. Many things are coming in under estimate.


----------



## Daddy

As I started this thread do keep us informed dub nerd and any others who care to.  Thanks.


----------



## mtk

Hi Daddy are u on track 3 years on ?
Thanks


----------



## Daddy

By 63 I hope to have savings of €200k and pension pots of minimum €200k each factoring in an annual say 3% return.   Education and car costs are having and will have a more detrimental effect on my savings plans than I thought.


----------



## Daddy

I should add that my personal circumstances have changed at work through choice so that too has had an effect on my original savings plans.   You could say it's a lifestyle choice that allows me more time away from the office and ties in with my original plans to spend more time away from the office.


----------

