Wedding … or retirement savings

I was reading a paper online today and came upon an article about wedding costs.
The average wedding the UK now costs 30K (so a leading rag says and backed up by … actually its £30,355 so they claim) … wow. But I guess that includes the obligatory stag & hen weeks in Ibiza or Majorca. Includes the monumental honeymoon and all the bling and trappings.

Weddings are big business.

Not very long about our niece got married – she had all the barbie bling. Shiny shiny; horse drawn carriage etc etc etc followed by a couple of weeks in the Maldives. (Can’t argue about the last one as we had our honeymoon there !!).

Our niece was 23 (coming on 24) and her husband the same age. I doubt the wedding and everything cost £30K, but it would not entirely surprise me if the better part of £20K was not spent.

What if… what if …. half had been spent (say £10K) and the other £10K invested.

With a real terms growth rate of 3% (after fees and inflation), in 40 years (so aged 63/4) that lump would be around £32K in real terms.

So going back to the £30K touted by the rags. If a very modest £5K was spent. Something intimate and a week away in Portugal (a lovely place), and £25k invested that would give around £80K (in real terms).

So how much do you need ? – a common question

We have calculated (and I detailed in an earlier article) a summation, and around 19K pays the basic bills. Add a few odds & sods and £24-£25K is a modest retirement. Does not pay for a new car every 3 years, or several holidays a year, but a modest life.

Using a very sustainable Withdrawal Rate of 3%, that 80K would generate a real terms income of £2.4 – £2.5K. So that £25K invested to an earlier retirement would generate around 10% of retirement income.

….. for life !

Another way to look at it is a stag & hen do in Spain, one day with all the all the trappings & bling, mega honeymoon etc etc etc that however nice the memories, they will fade and be replaced by other memories has a real value of 10% of needed retirement income 40 years down the road..

Now that is food for thought !!