Mortgage Rate Rises

Slam62 said:
Yes, per couple, but I think 72k is quite a lot.
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Depends what lifestyle you're looking for. That works out about 5.5k a month after tax for 2 people. Sure, it's fine if you have a mortgage paid off, but if you're currently a high earning couple it's not going to feel particularly extravagant. And as said, it won't be nearly as much in future money.

ETA: screwed up initial monthly calc.
 
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Slam62 said:
Someone said to me that when you retire you have to change from saving money to spending, for me this has been a psychological barrier, I have been saving all my life and paying of debts quickly. Now I have no debts, a small income and I’m cash rich, I want to save some cash to give to the kids when they buy a house, if they ever do. I expect a large portion of the remaining will disappear down the black hole of care home costs.

You need to compromise between spending and saving during your working life, for me, because I suffered the ruthless Maggie whirlwind during my early career, the priorities were becoming mortgage free and financially secure, I’m not sure that would be possible or desirable these days.
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Same here, still saving into retirement. I have about 10k state pension, about 15k personal company pension and my wife has just retired with only state pension.
We spent about 10k doing up a house last year but living in it as well. We spent about 10k on a new car.
We have saved all our working life, buying stuff for cash rather than credit. Now unless we start taking expensive holidays or eating out a lot we will not spend our joint income by some margin.
 
EvilRob said:
Depends what lifestyle you're looking for. That works out about 4k a month after tax for 2 people. Sure, it's fine if you have a mortgage paid off, but if you're currently a high earning couple it's not going to feel particularly extravagant.
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I would assume a lot of high earners have a huge mortgage cost?
Or some other vehicle they put money in.

This is the gist I get from the forum anyway.

So if you're a high earner you will have some sort of super retirement with a valuable house, great pension, maybe properties etc.

Now you may not want to unlock the value in your home etc. But it is there.
 
Mind you my wife still hankers after that particular bungalow that has not transpired for the last twenty years so may never.

One more move! Groan.
 
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413x said:
I would assume a lot of high earners have a huge mortgage cost?
Or some other vehicle they put money in.

This is the gist I get from the forum anyway.

So if you're a high earner you will have some sort of super retirement with a valuable house, great pension, maybe properties etc.

Now you may not want to unlock the value in your home etc. But it is there.
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Agree. All depends on your expectations and the lifestyle you want to have. How many people really end up downsizing unless they have to? A target pot of £1.8m in future (10 years, 20 years time? posted didnt't say) money is definitely sounds on the comfortable side. But I wouldn't describe it as silly.
 
EvilRob said:
Depends what lifestyle you're looking for. That works out about 5.5k a month after tax for 2 people. Sure, it's fine if you have a mortgage paid off, but if you're currently a high earning couple it's not going to feel particularly extravagant. And as said, it won't be nearly as much in future money.

ETA: screwed up initial monthly calc.
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72k a year pension :cry:

Not sure where your based but thats more than most couples earn a year while working
 
413x said:
I'm opposite of FIRE

If I did FIRE I'd have little quality of life now when my health is good. And more time when it's (possibly) not.

I'm pulling back on saving now and doing more holidays etc.
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Was discussed this with my friend over the weekend. Now shes 42, her daughter is grown up. She's now saving for holidays, enjoying them while shes fit and healthy. Putting the minimum away for retirement.

We have known a few people who haven't made it to retirement or even 40 years old :( due to various health issues. We are seeing more and more of our older generation being hit by health issues just before or just after they retire. Making their retirement fairly miserable.

Then you need to ask yourself the question. Are you saving for retirement or saving for death? :(
 
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EvilRob said:
Silly? No, sensible. Too many people massively burying their heads in the sand about how much they will need to fund retirement at a similar lifestyle. Mortgage costs will likely be gone but you also have a lot more time available to spend. Even in today's money, 1.8m is £72k a year/36k per couple before tax at a 4% drawdown rate.
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Yeah but you'll also be 70 years old...
 
malachi said:
Was discussed this with my friend over the weekend. Now shes 42, her daughter is grown up. She's now saving for holidays, enjoying them while shes fit and healthy. Putting the minimum away for retirement.

We have known a few people who haven't made it to retirement or even 40 years old :( due to various health issues. We are seeing more and more of our older generation being hit by health issues just before or just after they retire. Making their retirement fairly miserable.

Then you need to ask yourself the question. Are you saving for retirement or saving for death? :(
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Once you hit 40 odds just go up every year of something.
Be it terminal or something else.

I'm 38 now and beginning to become aware of mortality really. Probably for the first time.
Not meaning "omg I'm gonna die in a few years".. But more that I need to start living a bit more.

Can't think of much worse than dieing with loads in the bank + regrets.
 
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Everytime I tot up our monthly costs, I shudder. Don't get me wrong, we can afford but it makes early retirement look a challenge and that's without a mortgage.
Council Tax £240
B/Band TV etc £100
Insurance Cars/House £150
Dogs Food/Insurance/Vet £150
Petrol £100
1st Car Lease £300
2nd Car depreciation £300
Utilities £200
Mobile Phones (x4) £50

Thats £1550 before we eat, clothe, go out or fund the children.
Currently I reckon we spend c£800/month on food, £100 on clothes, make up! and maybe £100 on birthday's/Christmas so call it another £1000.
£2.5k net is near £38k gross pay which is quite a lot of money considering that State pension at 67 is only c£21k for a couple.
Realistically you also need to factor in a depreciation factor on your assets also, for things like new appliances, soft furnishings, property maintenance, family events (kids weddings etc) and holidays. All of which is easily £500/month.

So I reckon to live comfortably as a couple with two grown up kids you will need in the region of £50k/year in today's money. Not quite the £72k quoted but that level would be subject to more tax anyway.
To have £50k gross a year you'd need a fund of c£1.25m excluding any state pension.
Personally my biggest challenge is to fund a gap between getting the state pension and a deferred DB scheme that kicks in at 65 as I can't see me lasting at work into my 60s!

As stated, most people underestimate their expenses and it can be a sobering exercise to actually track them, especially if you have two children!
 
Calpol said:
Everytime I tot up our monthly costs, I shudder. Don't get me wrong, we can afford but it makes early retirement look a challenge and that's without a mortgage.
Council Tax £240
B/Band TV etc £100
Insurance Cars/House £150
Dogs Food/Insurance/Vet £150
Petrol £100
1st Car Lease £300
2nd Car depreciation £300
Utilities £200
Mobile Phones (x4) £50

Thats £1550 before we eat, clothe, go out or fund the children.
Currently I reckon we spend c£800/month on food, £100 on clothes, make up! and maybe £100 on birthday's/Christmas so call it another £1000.
£2.5k net is near £38k gross pay which is quite a lot of money considering that State pension at 67 is only c£21k for a couple.
Realistically you also need to factor in a depreciation factor on your assets also, for things like new appliances, soft furnishings, property maintenance, family events (kids weddings etc) and holidays. All of which is easily £500/month.

So I reckon to live comfortably as a couple with two grown up kids you will need in the region of £50k/year in today's money. Not quite the £72k quoted but that level would be subject to more tax anyway.
To have £50k gross a year you'd need a fund of c£1.25m excluding any state pension.
Personally my biggest challenge is to fund a gap between getting the state pension and a deferred DB scheme that kicks in at 65 as I can't see me lasting at work into my 60s!

As stated, most people underestimate their expenses and it can be a sobering exercise to actually track them, especially if you have two children!
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In your example the cars are the big cost?

Everything else looks 'typical' and fairly close to ours.

You certainly wouldn't need a lease car at retirement age?
 
Calpol said:
Personally my biggest challenge is to fund a gap between getting the state pension and a deferred DB scheme that kicks in at 65 as I can't see me lasting at work into my 60s!
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Can't see working to that age either. I'll make compromises to be able to retire in mid 50s. No kids helps financially.
 
The main point of a pension is to put money into it so you pay less tax and to take it out when your tax band drops so you are saving on income tax.

If anyone want's a real budgeting challenge, try living off state pension amount of £203.85 per week, £10,600.20 per year... millions of OAP are doing it at the moment.

Anything that you don't expect to be paying for when you retire like your mortage should be removed from the budget..

Personally I'm currently living on about 3k per month, that's what I'm basically living on at the moment once I taken out Tax/NI and penison and pre salary investment schemes.

Over 25% of what's given is going into additional savings/investments and a 1K of it is going into mortage.

I'm aiming for a penison of 3k a month but I'll be more than happy with 2.5k per month adjusted for inflation.

My pension pot isn't that great, as I didn't start till I was 30 and worked for places that paid under market vaule in public selector and charity. I'm just at the stage of my life when "Cash Rules Everything Around Me", I'm in a good job that offers good schemes and trying to stay in there for as long as possible and earn as much as possible at the moment.

The issue about saving and investing, is that life can pass you by.. I know a guy who is so tight yet he has 4 houses, none of them are in a livable state as he refuses to pay for them to be repaired and maintain so he can't really sell them or rent them out.

I'm in similar situ with my car, I love the car but it's over 12 years old now. I know I need a new second hand car but the market prices are silly.. I keep repairing it and patching it up so it allows me to get to A-B, yet anytime something goes wrong with it; I think it's just cheaper in the long run to replace it with another.
 
slinxy said:
If anyone want's a real budgeting challenge, try living off state pension amount of £203.85 per week, £10,600.20 per year... millions of OAP are doing it at the moment.

Anything that you don't expect to be paying for when you retire like your mortage should be removed from the budget..
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Take away car and mortgage costs and it is definitely doable. But it will be a very basic life. Add rent into the equation and there is no chance.


I can see many people clinging on to jobs they are no longer suitable for because they can't afford to retire. I can't imagine doing my job well into my 50s, and forget about 60s!
 
slinxy said:
The main point of a pension is to put money into it so you pay less tax and to take it out when your tax band drops so you are saving on income tax.

If anyone want's a real budgeting challenge, try living off state pension amount of £203.85 per week, £10,600.20 per year... millions of OAP are doing it at the moment.

Anything that you don't expect to be paying for when you retire like your mortage should be removed from the budget..

Personally I'm currently living on about 3k per month, that's what I'm basically living on at the moment once I taken out Tax/NI and penison and pre salary investment schemes.

Over 25% of what's given is going into additional savings/investments and a 1K of it is going into mortage.

I'm aiming for a penison of 3k a month but I'll be more than happy with 2.5k per month adjusted for inflation.

My pension pot isn't that great, as I didn't start till I was 30 and worked for places that paid under market vaule in public selector and charity. I'm just at the stage of my life when "Cash Rules Everything Around Me", I'm in a good job that offers good schemes and trying to stay in there for as long as possible and earn as much as possible at the moment.

The issue about saving and investing, is that life can pass you by.. I know a guy who is so tight yet he has 4 houses, none of them are in a livable state as he refuses to pay for them to be repaired and maintain so he can't really sell them or rent them out.

I'm in similar situ with my car, I love the car but it's over 12 years old now. I know I need a new second hand car but the market prices are silly.. I keep repairing it and patching it up so it allows me to get to A-B, yet anytime something goes wrong with it; I think it's just cheaper in the long run to replace it with another.
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Same as me.
My pension pot is much lower than it should be. Because I didn't really start paying in until 30.

So I think in all the various jobs I have about 60k at 38 years old?
Considering now it's 500ppm (mine + company) it was a slow start.

But my friend raises a valid point of if you put too much in you get the uplift from tax avoiding but you also can't access it freely.


Not having kids means locking money away is more of a consideration. And it's why I'll be unlocking maximum from value of the house and downsizing too. What's the point having that money inaccessible?


I still don't know if I should or shouldn't pay more into my pension. Due to the above.


As to living on the state pension.. That's no life. It's barely existence
 
413x said:
In your example the cars are the big cost?

Everything else looks 'typical' and fairly close to ours.

You certainly wouldn't need a lease car at retirement age?
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Agreed, however it's not extravagant compared to some. I reckon it's hard to run a decent, reliable, family/dog car for much less than £4500 a year all in. Realise there will be many who run some old banger for £800/year but thats not realistic for us.
 
Trifid said:
Take away car and mortgage costs and it is definitely doable. But it will be a very basic life. Add rent into the equation and there is no chance.


I can see many people clinging on to jobs they are no longer suitable for because they can't afford to retire. I can't imagine doing my job well into my 50s, and forget about 60s!
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If you look at heating alone, especially as you're older and need it more.. 200 can easily be eaten up on just that.
 
Calpol said:
Agreed, however it's not extravagant compared to some. I reckon it's hard to run a decent, reliable, family/dog car for much less than £4500 a year all in. Realise there will be many who run some old banger for £800/year but thats not realistic for us.
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Yeah it's probably as low as you can go on ls lease? We run an old banger.
Cost was 3k outright.
200 on tax a year ish
Servicing/mot is probably 200 a year
Repairs and tyres etc probably about 300 a year.
I think insurance is between 150 a year..renewal won't be fun.

So it is cheaper. But obviously you're in the roulette wheel Of significant repairs.

Total a month?
Probably 60-70 a month. And little deprecation at this age.

Petrol is much more. Probably 150 a month. Even with WFH
 
413x said:
If you look at heating alone, especially as you're older and need it more.. 200 can easily be eaten up on just that.
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On a big house, it can be very expensive. My parents spend a fortune heating the old family home. My place would be much more suitable for them if they downsized and I spend £130 on gas and electric.
 
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