A while back MrsF and I went through 12 months of bank statements, and worked out what we spent over the year. This is Total spend in a 12 month period.
We have savings in a mixture of cash and equities, about 50:50 as MrsF is more risk averse than me. My mum has a portfolio of equities that I set up which yields a 4% income and has done for 7 years, plus some capital growth which has meant her income has risen. However I'm well aware of the markets being at record highs and expect that to change.
There will be State Pension and some other pensions coming along in a decade or so which will provide just over 50% of current spend, but MrsF doesn't want to eat into the capital too much so we need to get our current spend from savings income.
Assuming our spend is £30k (for ease of calculation) then I reckon £1m would do it - half in equities at 4% is 20k, and the cash half yielding 10k.
This "man maths" means we need about 30x annual spend and can nibble the capital slightly if required, and as coincidence has it we're pretty much there. With ISAs and a proper division of assets, there should be virtually no tax to pay under current rules.
However now we're getting there, the goalposts are moving towards 35x or 40x (I did mention someone was more risk averse than me
![Smile :)](./images/smilies/icon_e_smile.gif)
Am I missing something, or is my theory feasible, assuming we can always sell shelves in Ikea or similar if things do take a turn for the worse.
Thanks
Paul