6,000 surveyed in the UK about spending in retirement…
And lookie here:
“Which? has surveyed more than 6,000 real retirees to find out their spending habits, to help you answer two key questions when it comes to planning your retirement:
- How much income money will I need in retirement?
- How much money will I need to save in advance to deliver that income?
Households spent a shade under £2,220 a month, or around £27,000 a year, on average when we carried out research in 2019.
This covers all the basic areas of expenditure (which had a combined cost of £17,800 per year on average) and some luxuries, such as European holidays, hobbies and eating out. Aiming for this level of income will provide a good platform for your retirement.
You’d need £42,000 a year if you include luxuries such as long-haul trips and a new car every five years.”
Wait a second! As that genius Ralph Wiggum would say… “That’s umpossible.” Haven’t they got the memo? Retirement is supposed to be out of reach!
But as the author of the article goes on to say:
“Many people overestimate how much they’ll need to live on in retirement, thinking that they’ll spend the equivalent of their wages.
The common perception is that you’ll need between half and two-thirds of the final salary you had when you were working, after tax, to maintain your lifestyle once you retire.
This is because as you might have paid off the mortgage, will no longer be bringing up children and won’t face the cost of commuting once you’ve retired.”
In the video that’s embed in the article, a number of folks are interviewed about their experience in retirement. One guy says, and I’m paraphrasing, “do it (retire) while you still have your facilities to enjoy it.”
Another guy adds that his income has gone down but not his standard of living because his “outgoing” has gone down too. Shocking, no? Income drops, but outflows drop and thus you’re still right where you were.
In fact, wait till tomorrow when I do a couple follow up videos on this topic where we analyze a white paper from the Society of Actuaries “Retirement Adequacy in the United States: Should We Be Concerned?” And then we’ll analyze an article from Matthew Walker of the Fraser Institute “Why Interest Rates are So Low” and my addition “why they’ll stay low.” Believe it or not, these papers have something to do with each other.
The point I’ve been desperately trying to make since I started my YouTube channel is that I don’t believe the naysayers. Yet the naysayers have drown out all other voices. And now most Americans are worried of a “retirement crisis”.
Well, there isn’t a crisis if we actually have a better sense of what retirees need. And, unfortunately, that is the area that has been avoided in the dialogue, be it deliberately or otherwise. It’s time for more people to inject some reality into the discussion. Articles like the one cited above just further prove that there is more than one side of the story.