What is an appropriate goal?
What is an appropriate goal?
We all need to set aside money for our retirement. But how much are you going to need? Well of course, it depends - but that's not a very helpful answer. Take a look at these people to help think about what life could be like for you.
Fred & Margaret's story
Fred & Margaret's story
Fred (74) and Margaret (71)
- Retired
- Moved to a smaller rented house
- Financially independent children
- Margaret has no State Pension of her own
Fred and Margaret retired about ten years ago. Life has changed considerably for Fred and Margaret since they've stopped working. Their children have left home and are financially independent. Fred and Margaret have been able to move to a smaller house and no longer have to help their children financially. The new house is nearer to their son's home too, so that saves them money on travelling.
Fred and Margaret's spending habits have also changed. As well as not having to buy things for their children, they no longer need to buy work clothes, so they are spending less than they used to.
Margaret has no State Pension of her own so they are now living on just over half the salary Fred was earning before he retired.
Conclusion: Spending less money than they did when they were working.
Li's story
Li's story
Li (58)
- Retired early for health reasons
- Had to make changes to home
- Can't get out much so high electricity and heating costs
- Spends less on clothes and car
- Hopes to get a motorised scooter
For health reasons, Li had to retire earlier than she'd hoped to. Since then she's had to make changes to her home with things like a stair lift and extra hand rails - all sorts of things she hadn't planned for.
She's not really able to get out much, so the TV is on most of the time and she uses a fair bit of electricity on lighting in the winter - not to mention heating costs.
Li is finding it difficult but then some of her other costs have come down. For example, she doesn't buy as many new shoes and suits as she used to - and of course she doesn't commute any more so the cost of running her car has dropped a lot. However, she'd really like to get herself a motorised scooter.
Conclusion: Struggling to cover her living costs.
Bill and Mary's story
Bill and Mary's story
Bill (62) and Mary (60)
- Retired
- Own small house
- Financially supporting children at university
- Spends less on running a car
- Hope to travel more
- Hope to help children more
Life has also changed for Bill and Mary since they've retired, but it isn't like one long holiday! They were hoping to be able to travel the world by now but have only managed to hop across the channel a couple of times and visit friends.
They had children later in life so their children are still at university and in need of financial support. Over the next few years, Bill and Mary would like to help their children out with things like buying a house. Once their children are independent, Bill and Mary plan to travel to New Zealand, which is a lifelong ambition.
One thing they're not spending as much on these days is the car. The mileage is much lower because they only pop to the shops and go on the occasional drive out, rather than driving 35 miles to work and back every day.
They are relieved that they started planning for retirement early.
Conclusion: Planned early and are enjoying their retirement.