Key Post How much will you spend in retirement?



Just a couple of things re my post

That is just a snap shot of eleven years, the middle 2017 and the two bookends, it hides the sometime expected and unexpected expenses
Like the House insurance & maintenance in 2021, Mrs C informed me she was tired of the "derelict" look so the house was painted €5K
2020 my walk in shower needed fixing €1k and both my oven and microwave oven packed in €950 and another €1k spent on electrical repairs
2018 both my TV and laptop went down so €2k for the TV and €1300 for the laptop

While my essential expenses stayed relatively the same over the last eleven years I fully expect there to be some big changes over the next few years like our food shopping will move upwards from €80ish to around the €100pw mark,
I just got my gas and electricity bill in there and had a little mini heart attack where normally this gas bill is in and around the €350 mark, €874
With the electricity bill been around the same thanks to the Government credit

So it will be interesting to see how the next five years will compare to the last
 
I’m retired for five years and to be honest we’ve watched our expenses somewhat on a daily basis so that we would not score own goals. You’re a retired couple, do you still need two cars? If you do, then that’s probably own goal number one. Is your heating on all day everyday? Own goal number two! Etc etc.

You can tailor your expenses to suit you. Retirement Expenses Calculators are mainly for some financial advisors to suit their sales services. You can over cook for your retirement too, something that some financial advisors advise e.g. AfterLife loans etc.

The important things for me in retirement:-
1. How long more will I be around?
2. How can I make everything easier for ourselves?
3. Not to fall into the American Sum-Day-Hun Syndrome. (Some day honey I’m gonna . . . ). And nothing ever happens, of course.
4. Do what we like doing.
5. Stay healthy.

The last thing we need is some 25 year old financial apprentice telling us we need to over-think our finances. We’re not thinking of Las Vegas blackjack tables.

If you wish to use a financial advisor do so when you need them, not when they need you.
 
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Laughahalla said:
is that 30k for both including state pension of approx. 26k per year.
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30k for both excluding the state pension. But what matter how the 30k is constituted? My thinking is that 30k in 2030 should cover our (myself and spouse) living expenses, excluding holidays and hobbies.
 
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Bluefin said:
I agree about the car thing.. Purchased a 3 yr old car with 37km, 10yrs later I have 330km on it with no mad repairs.. Always service as per manufacturer guidelines
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My current car costs about €45k new (Skoda Superb - not a BMW or Merc). If I drive it for 7-8 years it will only be worth approx. 7K-10K. If I want to replace it with a new car I will need approx. €35K. That's where I am getting my 5K per year for replacement costs. I know I could drive a smaller car but for safety and for my size I like a bigger car. If there's a push for electric cars this could be more imo.

On the subject of energy bills. A neighbor who has one of those new greener heat exchange heating systems in his new air tight house - got an ESB bill for €1600 for two months.......
 
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We've upgraded our house, use about 2000kwhr a year electricity and 1000kwhr a year gas, with someone working from home. The house is set up for retirement, right sized, very manageable garden, warm, etc.. [Disclaimer, our energy use was low before upgrading, but its more comfortable now]

We've put serious thought in to getting rid of our car on retirement - about 15 years away. We look at my father in law, never had a car, with great health in his 80's. We attribute lot of his good health down to walking versus driving. Very easy where we live, shops, buses, go cars, cafes, etc.. all in easy walking distance. When we moved here we went to 1 car without trying.

Most important thing for me, health! Really trying to prioritise it.

We both typically get a lot of pleasure from little things in life, that is its not the big meals out, or big holidays that make us happy. My back of the envelope figures suggest we can live happily on not very much.
 
We spent 25 years visiting garden centres and developing our garden with nice and unusual shrubs, growing lots of vegetables, fruit bushes etc.

Unfortunately this meant lots of work but we enjoyed it.

Three years ago we set about undoing most of the work. Mainly because hedges, shrubs, trees needed constant pruning, sometimes three times a year. We reduced the number of our raised vegetable beds from 9 to 6. We now just grow, easy to grow veg, that we like and can freeze. We have removed most of our fast growing shrubs that needed constant pruning and clipping and replaced them with plants that look after themselves.

I still cut the grass but pay someone to prune my garden trees. I no longer clean the windows in my house but pay for a window cleaner. We mainly potter about now mostly. I have started removing one last shrub that requires maintenance. It's a lovely shrub but it is taking up too much time and space.

We have booked holidays abroad for March, April, May, June, September and October. I reckon about €6k will be spent on these DIY efforts. I have booked some flights and some accommodations, hoping that some prices might fall back. So far they haven't. In fact my Ryanair flights that I could have purchased before Christmas have now trebled in price. So what, I am lucky to have the money.

I now just want to sit somewhere abroad and have a few nice menu del Dia type meals and a glass of Leff Double.

The reason why I post this, is that, we are constantly changing. The thoughts that you have as a 40 year old about retirement will have changed when you get to retirement. Your tastes, needs, outlook all change.
 
What a fabulous post, Odea

Do you mind sharing how much you think is a reasonable budget for a comfortable retirement for a couple?

What I'm picking up from this thread is that around €40k net per annum allows for a comfortable retirement when annual costs and expenses that occur every couple of years (car replacement, work on the house, etc.) are considered. Does this sound about right?
 
Currently i`m 56 and will look to retire around 62. At the moment i`m trying to max out my pension contributions, and the company pay a good chunk into the pension too, so trying to ride on this. My mortgage should be finished in about 4 years and have fixed that for 2 years at a lower rate then the ECB rate. I`ve also invested in solar panels, and have a 6.2KW array and a 10.1KW battery. I work from home, and even during the winter this pays for most of the daytime electricity, and during the summer i expect to have no bills. I was looking into an electric cars, and you can pick up a very good MG4 for 30K new (look at the reviews they are very good). So a new EV car isn`t outrageous, infact for me i will be driving around in the summer for free. Also with the battery i can fill it up on night rate electricity and then use it during the day on the dearer rate during the day in the winter. I think electricity prices are just going to go up and up.
I`m trying to fix up the house and buy some of the gadgets i want to use in retirement. Love DIY and carpentry so looking to buy a table saw now, worth 2.5K, so buy these kind of things while i have the money and spread it over a few years. Also doing some of the repairs on the house that need to be done soon, instead of leaving them for later.
I will have a state pension from the UK and not quite a full one from Ireland, hopefully at retirement i`ll have around 500k in personal pensions, both in the UK and Ireland, plus a big 4 bedroom house in Wexford. With the kids flown i might look at selling this and down sizing, i would think would be my plan if things start to go astray on what i can afford further into retirement.
 
Yes €40k is adequate assuming you have no mortgage and you take a few holidays by DIY route and you have a constant car loan. I am on my 5th year recording expenses and the last three years have all been approx 42k and 3.5k of that has been on mortgage 4k on car loan and 5k in holidays.
 
Just a thought:- When you and your spouse/partner retire, it’s all about both of you and nobody else. The mistake of thinking about others is an incurable Irish disease. Just think they’re thinking how much and when. There are few exceptions to this thought. Remember you can only play with what you have. Your mid sixties or later are no times to take risks.
 

Hi Leper,

Your posts are great and I enjoy reading them.

However, the above is misguided. A switch doesn’t flick the day you retire.

Most of the same issues and concerns remain.

Gordon
 
Hi Gordon, I’d love to share a long train journey with you and we’d never run out of debatable subjects. I agree you cannot jump into retirement within seconds of sparse preparation. It took me ten minutes to clear my desk and I never look back except at the good times. My existence doesn’t cost me anything like that retirement calculator says I need.

Some people near and dear to me struggle with retirement and they began preparing financially years ago. But, they refuse to stop making money. Their problem mainly is they are refusing to spend what they’ve earned. Remember what I said in an earlier post about the Sum-Day-Hun Syndrome. Their offspring will be very happy some day kicked off in a hotel bar after the funeral. If there is anything I’ve learned after 70+ years on this planet it’s money is almost unenjoyable until you spend it.

Some financial advisors are very good at spending your hard earned money. You can lose, they can’t.
 
Myself and my wife went for a good long walk yesterday. One topic of conversation is that when we retire, and when it gets too much, or most likely, when it is more of a hindrance than an enjoyment, we will sell the house and downsize. The house, while great, in a great location and with great views, is not the sort of house you can pull the door closed and leave for 6 weeks. There is always some maintenance, either the house or garden. So, in the future, when we spend a lot of time on holidays, we'll get a small house that you can just pull the door closed on, and it will be fine for a few weeks. Also, as dem_syhp said, somewhere where we can walk everywhere.
Luckly, we're both on the same page on this.
 
On the downsizing issue there's been quite a few threads on this issue over the years. One thing I have noticed with elderly relatives is that the older they get the more difficult downsizing becomes. There's an understandable intertia about moving and also a reluctance to sort through a lifetime's worth of stuff. It is sometimes for easier for the elderly to live a cluttered house rather than make difficult decisions about items to keep and what to get rid of.

I have also been thinking about what income I will need in retirement. I am in my early 50s but in a realtively high-pressure role that, while lucrative, is no longer sustainable. Having spoken to peers about their retirement plans it seems to be that those who save and invest most seem to overestimate what they will need when they stop working. Ironically, the personal characteristics that enabled me to save a large prorpotion of my income over the years seem to work against me now that I am thinking of stopping. I guess thrift and caution have become so ingrained that giving up work is a daunting prospect. Nonetheless, I get surprising comfort out of retirement and budgeting spreadsheets that tell me what I already know deep down which is that I can afford to stop.
 
Just to share my experience, I had a grand plan to retire in Portugal and save a fortune in tax.

We both love it there and would happily live there all other things being equal.

But Mrs Gekko doesn’t want to do that, and would prefer to stay in Ireland to be near the kids and to help with grandkids if they came along.
 
Well I'm sure you could still meet up, each time you pop back !
 
Out of interest if you were to become a full-time resident in Portugal what tax rate would you pay and how many days a year would you be able to spend in Ireland before you became tax-resident there?
 
LondonIrish said:
Out of interest if you were to become a full-time resident in Portugal what tax rate would you pay and how many days a year would you be able to spend in Ireland before you became tax-resident there?
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0% on dividends and 10% on pension for 10 years, plus 28% on capital gains.

On average, 139 days in Ireland.
 
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