I think it’s probably going to be the case that your spending requirements are going to be higher when you are younger and want to be more active and travel etc, more so the earlier you retire, and your spending requirements are likely to be less in your old age, until you need to start paying for care.
My parents are in their mid-80s with health issues that mean that they haven’t been on holiday in years and they don’t buy new stuff unless they have to because what they have will “see them out”, so they spend very little of their pension income. Obviously at some point they’ll either need to pay for care and that will absorb their accumulated savings or they’ll die before that happens and the tax man will take 40% of it in IHT
In an ideal world, you’ll save for your retirement and you’ll spend your last £ the day you die. In practice, people tend to either run out of money and spend their later years in poverty or they live frugally and die with a load of cash in the bank.
TBH I don’t think I’d want to end up relying on the State in my old age, so I’m probably going to end up in the latter situation and with no kids, I think some charities are going to do well out of me.
I’ve come up with similar figures - £3K a month without any mortgage commitments should be plenty.
£2K a month should be manageable.
The complications that I’m just trying to work through are:
Wife is younger so need to factor in whether she wants to continue with her career or whether she expects to down tools at the same sort of time as myself, in which case we need a fair bit more money in the kitty! I’m trying to get to grips with her pensions too, they are more complex than mine
With pension income coming from different sources, I need to model how investments and pensions will grow into the longer term future. Factoring in inflation and investment yield can have a dramatic impact (both up and down).
How much to put aside in case retirement age from state pension goes up?
I think in reality, my first, finger in the air, estimate of how much more money is needed, that I did a year ago is probably about right - and that the contingency for living a full on rock & roll lifestyle in my 60s is to downsize the house when the money runs out.
Looking for something similar to sparky, and they are roughly similar figures that are mentioned by the pension forecasters. Something around £30k PA for me, I’m less bothered about a flash car but will need something, but definitely the travelling. This is just for me BTW, myself and the GF basically look after our own finances and put an equal amount into the house fund every month, and top it up if required.
Hadn’t really thought of reducing it at 70 but it makes sense so I’ll have more when I am young, it all depends on how the AVC goes in the next few years and when I decide\can afford to finish working.
But it’s just over 3 years until the very earliest so I’ll just keep watching how things change.
House is also shared and no kids. But obviously it depends if either of us ends up needing care, but any assets and pensions will at least contribute towards it.
I don’t think I will realistically be able to stop work, we would possibly have enough once we went back to Oz to start the superannuation clock ticking but my concern is providing for LO.
We’ve got her most expensive years hitting just as we should be retiring, so if it were possible, I’d just keep working. Endless summer surfing out my days will be off the menu now but that’s ok.
People seem to need loads of cash to retire, my basic wage is £100 pounds more than my pension will be in 18 months time,if I retired then and I’m fine.
That said next month will be my biggest ever monthly wage due to overtime and they can’t super tax it !
Might even be able to fill all three cars up at once?!?
I’m certainly spending less in my 50”s than I was in my 40”s, in my 70”s I won’t need much … I hope
I think we are back to the question of what is it that will make you happy/satisfied.
Perhaps I am being a little greedy but that is what I want to do (You have one life). In reality I will start with a pot of cash and a yearly income. In my sixties and early 70s my spending will be greater than my income but with age that will eventually reverse. The trick is to not to run out of cash before this reversal. It is this on which I spend way way too much time trying to work out.
Genuine question but when you retire what do people actually want to do with all of that spare time?
Currently I train, play computer games, garden, go out, travel/have holidays and I seem to be able to do that whilst working. So what the hell do I do with those extra hours?
I don’t have an answer but would love to know others plans, perhaps for inspiration
I ran some calculations and I’d have to work until 60, possibly more for that ‘ideal’ retirement life we all dream of.
I then re ran the numbers, taking early retirement at 52 with 18 months salary as a lump, taking my pension from 55, doing a part time (3 days/week - zero stress, lovely) job until 60.
A bit of a downturn in the disposable income from 60 - but not as much of a downturn as I’d feared but the clincher: a MASSIVE increase in quality of life from 52 to 60. A life changing reduction in stress, and a huge bump in available time to do stuff.
So I went for it - seen too many from my work slog until the grave (or drop dead <18 months after retirement). Haven’t regretted it for a second. Time is the most beautiful commodity we get, there’s more to it than just holidays, nice cars and big houses when you’re aged 60 +, IMO.
I went part time ( 19 hours a week ) at 46, it’s the best thing I ever did.
It feels that I work when I like and earn what I need, overtime is well paid and at times unlimited.
The trap to stay on is financial, between 56 and 60 our lump sum increases every year buy more than you annual net wage, basically over doubling your wage for that year, personally I still enjoy my job but I’m not sure it’s a “ safe” profession anymore.
Intrigued by your comments about a safe profession, is that physical safety, someone remembering you, or the fact that jail is increasingly not seen as the best way of dealing with a lot of offences? So less prisons and staff?
as a retiree - enjoy the time. we volunteer, get out with the dog, took on a large house project (but moving again now) and have done a fair bit of travelling. in fact we’re probably busier now than when we worked
My dad was made redundant / took early retirement. Financially, the pay off compensated for the few years of service he missed out on, but those first couple of years did take an adjustment, as he mentally still had a couple of years of 9-5 left. He was never a particularly social guy, didn’t drink in pubs or do hobbies with work mates, but with no work he definitely missed it for a while, he did go to a few re-union meals and drinks - even went to a conference at one point.
He redecorated the whole house. Got a camper and went on long touring holidays in UK and EU. Had a knee op which meant he could not run anymore, but walked the Thames path and then got a bike and cycled LEJOG. So I would say he’s fully embraced retirement now.
What others have written sounds similar to what I’ve been told by those I know / meet. Clubs, activities, volunteering, new skills … people find good ways to fill their time. A friend of mine took up the piano in his late 50s, my mum teaches conversational German at 85 - the only limit is your own laziness!
As a freelance worker, I get gaps between projects now that can very from a few weeks to 6 months, depending on the market and how hard I push to get back onto a project. I typically get onto the backlog of DIY projects and read more. Perhaps surprisingly, I don’t tend to exercise much more but the cycling I do is more interesting (fewer short rides, more going further afield from my regular areas).
When I have a gap and a project to go to, there’s no stress about whether I’ll find work - that’s as close to what I imagine retirement will be like and I love it.
The one downer is the lack of intellectual challenge - depending on how I manage that, I might just gradually drop the amount of work I do. I’m not a detailed planner, I’m comfortable that things will work out when I get there.
There was a particular type who struggled with retirement from my old work (BT). Generally they were lifers who’d joined aged 16; their entire social network and self esteem were tied into their status at work.
They’d been through the good times (pre privatisation) when fiddles, drinking, unimaginable largesse and travel opportunities available on expenses were all rampant - and there was barely any need to do proper work.
Since privatisation they’d moaned like buggery as every abuse was (far too slowly) reigned in, yet steadfastly refused to leave as the job was their life. My old manager was a classic case, finally pushed out aged 57, could have lived the retired life of a king on the pension and pay off he got to go.
He cried at his leaving do and was a broken shell 18 months after leaving.
My guess is that we’ll generally live to our means, and for those of you with a lot of capital in a house, downsizing could well be an option? At the moment I’m generally planning around what I live on now, but I doubt I’ll be doing IM brand races in years to come, particularly beyond 60. TRO’s idea of making the most of your 50’s is very appealing, and sounds like it is working well for Mungo.
I enjoy reading the different approaches people have taken here, from the part-time work that Mungo & TRO have done, to Sparky aiming to go in a few years.
Although the Uni isn’t exactly the same as how TRO explained BT, I did work there for 15 weeks in 1992 and can still remember some of those people. One thing I’d remember is how some of them would say to their boss they were having their 2 weeks sick leave this month! And although I’m about 10 yeas behind the equivalent staff in the uni I’ve just about got some of the benefits of a nice working culture for most of the time, good pension etc., but a lot of them also got nice voluntary severance payments and pensions made up to reduce the workforce.
Equally there’s people that have been on cruise for a lot of years because they get reasonable money for not a lot of responsibility, this is often based around friendly upgrades or time spent in previous posts. There’s also various examples of people who have little social life outside of work or family and could quite easily spend their remaining days going in spoons every day.
I’m sure it will take a bit of adapting, I partly like the idea of part-time for a few years but not sure it will work in my current job.
Travelling is one thing I plan to do, might also get back into gaming, or even trying to dust off my programming languages, although I’ve a hatred of computers ATM I also suspect things like walking, plan on doing the Wainwright’s and various other things. Obviously some of these require money. But could equally look at doing some volunteering.
But, it’s pretty much 3 years before I can get any pension so at least for now I need to get up in the morning!
