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I want people telling us about how they fill their later years with joy and fulfilment. How they wish they’d done it earlier. How little money they actually need.
I retired in march. My income will be ( until I am 60) £8000 pa
MY plans and sums got rather buggered due to my partner dying
I have no mortgage and have a chunk of capital ( lump sums from pensions / my dead partners pensions)
I can easily live on the £8000 pa - I do not have expensive tastes. I do not own a car and am not materialistic at all
My chunk of capital will be used to pay for expensive trips ie next winter I am going to go to the Yukon for 3 months. I know people there. the air fares will come out of my capital, I will easily be able to live on my income
the following summer will be spent cycling around europe for several months. Again I will do this out of my income and should have no need to tap into the capital
While I am out of the country for long periods I intend to holiday let my flat - getting up up to the high standard I want will come out of the capital but then the income from rentals will be used to top up my capital funds. rinse and repeat for as many trips as possible
As above plans got somewhat buggered otherwise I would have been away to south america this autumn/winter.
But "cutting your cloth according to your means" means that for example the South america trip would be done on local public transport and staying in cheap accommodation not using expensive tour companies and accomodation aimed at westeners
cycling around europe next summer means cyling not flying, camping not hotels and cooking for myself not eating out
Its perfectly possible to enjoy a good adventurous retirement on a small income.
Its perfectly possible to enjoy a good adventurous retirement on a small income
With respect I think that is far easier to do when you have a house and capital as backup. I am trying to advise an elderly relative at the moment who lives on her state pension and has close to nothing in savings. Even though she lives frugally, every time she has an extra bill - boiler breakdown, washing machine packs up etc, it sets her back really badly. She can only spare £10 or £20 here and there and that takes an awful lot of months to cover the £500 boiler repair.
If she had a backup pot, this would remove that stress and give her options.
Hooli - I totally agree - I am in a very lucky position in many ways ( though Id rather have my partner alive and have a much smaller capital pot - her death led to much of the capital coming my way)
Just trying to demonstrate that it is possible to live fine on a much smaller amount than £33000 pa
Well I've taken the next step and signed up with an estate agent to sell my house - going to be moving to the Rhondda valley (as in the moving to Wales thread).
Probably play some golf with my mate in Caerphilly but will be biking an awful lot more than at present as the obviously hills are right outside the house and it is about a 14 mile cycle to Afan. Try and get some fitness back before it is too late...
Not planning on buying any more bikes for a while - I have a few Turner mtbs (inc one for the girlfriend) that should last a while, and a Tripster, although I might fit CYC X1 Stealth ebike motors to two of them.
Mix it up with some walking in the Beacons, etc.
Big sports center across the road and a Bowls club for when I get older.
Girlfriend works in care so plenty of jobs around for her.
Based on my keeping track of my expenditure for the last 3 months and banging up a decent spreadsheeet to manage everything easily, my expenditure should be WAY less than when I was employed.
I think for people on here the articles in the press about how much you will need to retire on are not applicable - if you are primarily an outdoors person your entertainment costs are going to be a lot less.
Now we're talking 🙂
I mentioned it a while back but one of the most useful things I did was to "shape" my spending over several years (actually done it until my wife receives her state pension which is the last significant financial event for us, that we can predict!)
I finished in July but not sure yet if I am between jobs or retired. I was an IT director and although I generally enjoyed it it is not a job you can easily just do part time. It can be a bit consuming so you are either in or out. At the moment I don't think I have the enthusiasm to enter that field again and the danger is that I actually have just about enough to live a good lifestyle now without working (Mrs Surfer works and wants to carry on for a bit longer yet) and as I have said before (I was 57 last week) it is about stages of retirement. I run, cycle and walk as much as I can and want to do more of that. In 10 years time I will receive my state pension but for the next 3 or so years I will draw heavily on my SIPP/ISA but then our outgoings reduce significantly. The "4%" rule wont work for me if I go now so the next few years looks more like:
7%
6%
5%
5%
6%
4% for 4 years then 1% forever
There is risk that taking larger amounts earlier erodes the capital but assuming overall 4% growth pa means that by year 11 my savings will actually start to grow again and by the time I am 71 will be larger than they are now.
I can only do this by remaining invested in equities (I also have a couple of DB pensions) which of course brings its own risk.
I applied to Prince Albert Angling Society in May 2020 knowing there was a 2 year waiting list but I had my acceptance email through this week so I'm getting ready for a bit of winter fishing. I've got Hatchmere (Delamere) on my doorstep so I can pop out for an hour or so with the spinning rod and try and get into the pike. I can also be on the Dee at Farndon in 20 minutes or further upstream at Erbistock or Llangollen for some fly fishing. Great hobby for clearing your mind.
i just need to find some more cycling buddies as the ones I usually ride with are still working.
We've just come back from 2 nights in North Wales as the weather looked settled so we booked a last minute midweek break.
Don't miss working one bit.
I'm just trying to work out whether I'm between jobs, semi-retired or fully retired.
I have basically climbed loads since my last contract ended - great for my mental state but it's simultaneously building and destroying my body. I live in one of the best bouldering areas in the country ( 10 mins to Caley and Shipley Glen, 30 minutes to Almscliff, 40 to Brimham) and loads of bouldering gyms within 30 minutes. I have become obsessed with pushing my grades now I've got the time!!
I may ease back on that a bit and do more on the bikes and hiking.
I also am learning the guitar. In the past I've painted to a reasonable amateur standard, but got out of the habit - partly lack of space with two home offices - should really get back into that
If I decide I am actually retired I will take up some part time voluntary work ( I've already got a few weeks lined up) as I like the structure of having a job
I'm terms of money - I think is dependent on what you spend and what commitments you have. Paid off mortgage and no responsibility for kids make it much easier to cut cloth accordingly. Also having savings for unforseen costs as mentioned above really helps. As does budgeting. I've been tracking monthly spend for over a decade - including depreciation on vehicles - and so have a really good handle of what I spend.
Prince Albert Angling Society
Made my eyes water...
I’m just trying to work out whether I’m between jobs, semi-retired or fully retired.
Ditto - I retired from my last job in July @ 55 (got fed up with fighting the short-sighted corporate ethos), but haven't yet put my pension into payment. I'm doing a few odds & sods for my previous employer which is keeping the wolf from the door for now. It still feels like a holiday at the moment.
For ****’s sake. Please can someone divert this conversation away from talk about investment and the dire state of the NHS and working life in general.
It's been just over a year since I asked "Retirement: what's it really like?" and just under a year since I retired. Covid has meant that I've been slightly less adventurous than I had hoped but overall it's been good and I don't regret it at all. I've walked a lot, cycled a lot, and fixed up a load of things around the house and garden. When not completely locked down I've really enjoyed my days volunteering for the local Wildlife Trust. I'm probably fitter than I've ever been, certainly faster on the road bike than ever before. The one thing I regret and will try to change is that I spend far too much time on here, with the result that I haven't read as many books as I'd hoped.
The money side has been fine - probably Covid helps with that as it has reduced opportunities to spend, but I think we'll be OK even when the pandemic is over. As many have said, if you have paid off the mortgage and your children are independent, you really don't need much to live on. I'm very lucky in that I have a pretty good DB pension that kicked in when I was 60, which means that I haven't had to touch either savings or my SIPP.
Prince Albert Angling Society
Made my eyes water…
Yes, I'm not looking forward to the initiation ceremony.
Another thing about retirement I've found is the weather is not as crap as I thought it was, and quite often you get a day that is rubbish in the morning and good in the afternoon (or vice versa) so you can shape your day accordingly.
a day that is rubbish in the morning and good in the afternoon (or vice versa) so you can shape your day accordingly
Definitely this. If you look out the window and see some unexpected sunshine, you can just get a bike out and ride. I have loved the freedom to do that.
Two weeks to work before retiring on the first of December; looking forward to it greatly. 😁😁
got to agree with the weather thing.
after 37 years of cycle commuting, inc nights and shift, the weather was a proper bastard sometimes. having to set off at 5am in winter icy rain was the worst.
now i wait for the rain to stop and then go out.
I am 5-6 years away yet, by then mortgage/car will be paid, eldest 22 so hopefully starting to earn, youngest 18. But then I start thinking.....ok 18yr old may need a few years uni funding, our house will be 25yrs old so may need a few bits doing (eg kitchen) etc so maybe I need to work another few years to pay this etc. In all honesty, I hate my job but can stick it out for 5 years as I see the end in sight, not so sure I want to do another 8+ but may need to financially. My biggest fear is stepping off the treadmill of a well paid job......let’s see where I am at in 5 years time.
I'm loving reading your stories. I'm 42 so a few years off yet but I'm interested in what planning and prep you did, especially if you retired at 50-55.
I have ~15 years left on a mortgage but can overpay, 2 kids @10 and 12 and a few investments and pensions here and there. What are the big decisions you made? What went well for you and what would you have done differently?
thanks!
I had a meeting with the financial advisor a few months ago,she did the sums,my outgoings, as expected were less than £1100 a month plus holidays.
I guess it's really linked to how much you earned when working and whether you're on your own etc. For us, after a lifetime of each of us earning probably +3x average wages no way would we want to have to live on so little. TBH my OH probably spends somewhere near that on her horses...
Mid-50's and we've postponed retirement, waiting for Covid/Brexit to 'settle' - purely due to both working from home for the considerable future, uncertain short-term finances (for the UK) and the main reason is that while we're both earning very good money and can still do everything outside of work we want/need to - why not. Next step will be reduced days per month.
We are 'lucky' though, as we've always put into pensions and will have a good income, whenever we decide to take them (60 at the latest).
Ditto – I retired from my last job in July @ 55 (got fed up with fighting the short-sighted corporate ethos), but haven’t yet put my pension into payment. I’m doing a few odds & sods for my previous employer which is keeping the wolf from the door for now. It still feels like a holiday at the moment.
With respect, you've not 'retired', you've changed jobs.
Deary me.
What went well for you and what would you have done differently?
What went well
Transferred to a private fund - income is variable, and wife gets 100% of pension when I pop my clogs. When she goes, the money is still there for other people to fight over. Company pension gave fixed income (plus inflation) and 60% to the wife, and the fund died when we were both gone
What would I have done differently
Set the ball rolling earlier than I did for the pension transfer, it can take a couple of months
Put more money into the pension.
Colleagues that put in extra (can't remember how much, but it wasn't poverty inducing) had a decent amount of tax free lump sum available more than me, circa £20k more IIRC
Id say work out what you actually need in retirement, budget wise. Working extra years to boost a pot more than you need, you will never get back.
Biggest problem is figuring out how long you'll live. I could pop my clogs tomorrow, never touching a penny of my pension, but there's something like a 3% chance I'll live to 100, which is 50 years away....
Id say work out what you actually need in retirement, budget wise. Working extra years to boost a pot more than you need, you will never get back.
Lend us your crystal ball...
For ****’s sake. Please can someone divert this conversation away from talk about investment and the dire state of the NHS and working life in general.
I want people telling us about how they fill their later years with joy and fulfilment. How they wish they’d done it earlier. How little money they actually need.
Okay here you go then. We retired a few years ago at 52. We had missed out on lots of holidays etc when we were young in order to finance early retirement (a couple of nice redundancies helped too). Not doing the "live for today" thing when we were younger was a gamble, but a calculated one and it's paid off big time. The advantage now is we can afford to do the holidays we missed out on, and also do them for longer eg we spent a month in France and Germany in our van a couple of years ago, and planning a month in Canada next summer. We're quite happy in cheapish accommodation (it's a just a bed to crash on for the night) so longer holidays aren't much more than shorter ones.
It also reduces the number of flights we will take, which admittedly is something we've only started to think about in recent years. And in fact having more time means we've been doing more by train rather than plane. And as going by train is so much more enjoyable than flying it's a win win.
Covid has put things on hold obviously, but we're just home from a few weeks down on the south coast spending time visiting assorted friends and family down that way. Very laid back, relaxed trip. Great catching up with people in real life, plus plenty days in-between to just chill and wander around.
I can hand on heart genuinely say I'm happier now than at any time in my life. Retired five years and haven't been bored for a single second.
Oh and we bought bodyboards last summer so get to behave like daft teenagers in the water!!
Lend us your crystal ball…
This! Someone up ^ there gets by on ~£13k per year, the recent nonsense articles talk about £31k for a 'comfortable' lifestyle.
For people like kennyp who retired in early 50s - are you living on savings and investments now, before your pension kicks in? Did you pick a £number you could afford to live on and divide by the number of years you think you're likely to live?!
The transfer to private fund makes perfect sense btw! Hadn't heard that before.
Only you can work out how much you want/need in retirement. Personally, I'm planning my pot to last until 90, as I will always have my RAF pension & State pension to fall back on.
We are both in good jobs with decent pension provision, so fully aware our position is better than many. 60 is our target, but if investments perform well, that could come forward a few years. My job has an incremental pay scale, so my best earning years are just prior to retirement, which makes staying working longer an easy option. I am already 50% part time, so taken the first steps on the path...
For people like kennyp who retired in early 50s – are you living on savings and investments now, before your pension kicks in? Did you pick a £number you could afford to live on and divide by the number of years you think you’re likely to live?!
We had planned to go mid-fifties, but redundancies and some other stuff allowed us to bring that forward a bit. We reckon that our life expectancy is probably mid-80s, though obviously who knows what lies ahead. We also reckon that from mid-70s onwards our expenditure will drop dramatically (I know, care home fees etc etc but would much rather have fun now) so basically plan to live well (without being silly) for the next quarter century, then see where we are.
The transfer to private fund makes perfect sense btw! Hadn’t heard that before.
Be very, very, very wary of this. We transferred out our DB schemes and into SIPPs and it's worked very well, but both worked in financial services for a long time and comfortable enough with the pros and cons, plus have plenty contacts. It can be a great thing but give it an awful lot of thought before you do. In most situations it's far better to stick with your existing pension. The general advice is don't.
The general advice is don’t.
Not sure if that was the point being made. I understood it as being move your DC pensions to a SIPP, which in my view is good advice. Ref moving DB pensions, this is quite tricky now given the mis-selling that has gone on but I would say often it would be prudent to transfer them also, assuming you are very careful and understand the implications fully.
To use me as an example. I have an old DB pension that is worth around £250k (I cant get the exact figures so this is an estimate based on the benefits) I will get a lump sum of around £30-40k tax free then receive around £400 per month for life. I would have to live around another 40+ years to get my moneys worth. In reality I would rather add the £250,000 to my SIPP and pay myself around another £1000 per month for the next 25 years. I am 57, in 25 years I will be 82 (or dead) and much less active and likely living comfortably on a fraction of what I would like to live on now. Having "large" amounts of income in later life is a waste.
In some ways DB schemes are almost as restrictive as annuities (which were the biggest scam ever) and it pains me to say it but thank goodness for pension freedoms...
as annuities (which were the biggest scam ever)
They really weren't.
It's simply that people don't realise how difficult it is to guarentee a set income each month for life from a lump sum, given you don't know how long you'll live and have no control over the stock markets.
For every annuity where the insurance company made a profit as the recipient died early there is one where the recipient lived longer than average and they probably made a loss.
It’s simply that people don’t realise how difficult it is to guarentee a set income each month for life from a lump sum
They didnt get the opportunity do try. People were forced to take annuities and the market was uncompetitive and stacked in favour of the actuaries. With consideration to inflation, spousal benefits etc the annual income from each £100k was derisory and forced many people to work right up until they were to receive their state pension.
If they are so good will you be taking one?
Id say work out what you actually need in retirement, budget wise
or conversely decide when you want to retire and then adjust your spending accordingly?
In some ways DB schemes are almost as restrictive as annuities (which were the biggest scam ever) and it pains me to say it but thank goodness for pension freedoms…
Hmm, takes a look at one of my DB schemes with it's inflation linked minimum 5% pa uplift..., and the others have equivalent uplifts and spouse pensions.
And looking at my Mum, she's +20 years into her DB pension and 5 years getting the spouse 2/3 from my Dad (he got 20 years before passing). My MIL got 5 years of 2/3 from my late FIL, who'd had his running for +25 years too. All guaranteed, no depending on investments etc.
My granny probably had the best, 40 years of her DB pension and 35 years of my Grandads' 2/3.
Personally I'll leave my DB's where they are and just have my DC's 'exposed'.
or conversely decide when you want to retire and then adjust your spending accordingly?
That's now my approach. I'm currently 40 and I'm hammering away what I can to my pension for the next 5 - 6 years, at that point I'll switch to saving into 'not a pension' to give me money to bridge the gap from retiring somewhere in the region of 50-52 and getting access to the pension at 57. The 50-52 time window is the fixed point, the finances will be what they will be
With respect, you’ve not ‘retired’, you’ve changed jobs.
Well a pension from 55 might allow a change in direction. I have no desire to retire from "work", because I enjoy science too much. It's my passion, vocation an hobby. Taking my pension might allow a salary cut to do so elsewhere. Once I get the two dependents off the payroll! I've not looked at cashing in a DB, but it closes next year anyway, so makes decisions a little easier.
They didnt get the opportunity do try. People were forced to take annuities and the market was uncompetitive and stacked in favour of the actuaries.
The market had plenty of insurance companies competing with each other, so I'd say that was competetive. If it was such a rip off, it would have been easy for a new entrant to enter the market, under cut the others and clean up, yet that never happened.
If they are so good will you be taking one?
That's a good question, to which I don't know the answer.
The option of draw down carries plenty of risk and either requires someone to actively manage your portfolio for you (which will cost and only be applicable to large portfolios) or requires you to manage it yourself. The latter scenario, I would guess, is only of interest to a very small percentage of retirees.
Whilst having options is good, I personally think the recent pension freedoms are probably a bit too free and will end up with a lot of people running out of money early and/or being badly advised / defrauded of their nest eggs looking for better returns.
I personally think the recent pension freedoms are probably a bit too free and will end up with a lot of people running out of money early to being badly advised / defrauded of their nest eggs looking for better returns.
unfortunatly I think you are right and I know one person in that position.
unfortunatly I think you are right and I know one person in that position.
Being able to budget and also sit on a large nest egg avoiding temptation are two things which aren't universally present in human nature!
The market had plenty of insurance companies competing with each other
Really? Its almost as if large financial institutions were in a "competitive" market, bless em.
That’s a good question, to which I don’t know the answer.
Its a bit different when you have a 7 figure pot.
Being able to budget and also sit on a large nest egg avoiding temptation are two things which aren’t universally present in human nature!
Totally agree but I dont think the only alternative is to be fleeced
And looking at my Mum, she’s +20 years into her DB pension and 5 years getting the spouse 2/3 from my Dad (he got 20 years before passing). My MIL got 5 years of 2/3 from my late FIL, who’d had his running for +25 years too. All guaranteed, no depending on investments etc.
My granny probably had the best, 40 years of her DB pension and 35 years of my Grandads’ 2/3.
Interesting and without knowing more detail its difficult comment other than your Gran had a fantastic innings and if she took her pension at 60 had a wonderful 40 years until she received her telegram from the Queen, outliving her peers life expectancy by up to 25 years!
The point is life expectancy (although improving) was far less years ago than it is today. Having a pension that pays out for life sounds wonderful until you die a handful of years after taking it. My father retired at 64 and died at 72.
Having a pension that pays out for life sounds wonderful until you die a handful of years after taking it. My father retired at 64 and died at 72.
But basing your judgement on an outlier case is also rather unwise, 81 is the current average male life expectancy in the UK.
I'm 50 and apparently have a 3% chance of reaching 100. Do I want to be trading shared at 90 in FB's metaverse (or whatever share trading looks like in 40 years time) - probably not.
For every annuity where the insurance company made a profit as the recipient died early there is one where the recipient lived longer than average and they probably made a loss.
is that true though? best buy annuitys seem to sit around 3.5% for a fixed amount (and dropping significantly for one that tracks inflation). The same amount is generally considered "safe" to withdraw from a fund with no reduction of the funds value over the long term. how are annuity providers losing out unless they invest really badly?
btw, I know that market forces mean there probably isn't a lot of money to be made providing annuitys, it just seems odd when the maths on drawdown seems so much more attractive
But basing your judgement on an outlier case is also rather unwise, 81 is the current average male life expectancy in the UK.
84 for me, with 2/3 expecting to live to 90 - so that's 30 years of retirement to 'finance'.
Key thing though is that once you reach a certain age, your expenditure does reduce - based on parents & in-laws, but I can never see it reducing enough to live on £1100 a month...
I’m 50 and apparently have a 3% chance of reaching 100. Do I want to be trading shared at 90 in FB’s metaverse (or whatever share trading looks like in 40 years time) – probably not.
Odd. FF is clearly very good at investing, and says a lot of wise things, but I'm starting to think he's just arguing for the sake of it. The answer to the above is "no, you don't want to be trading at that stage, so obviously you stick it somewhere where someone else manages it for you"
And IIRC you were one of the strong advocates of investing over trading anyway, so it's a bit disingenuous of you to ask if it's not a bit of a bad idea to be trading as a nonaganarion. (sp)
With respect, you’ve not ‘retired’, you’ve changed jobs.
No, I’m definitely in the process of retiring. It is a surprisingly big psychological jump from building up savings, pension, etc. and starting to draw on them.
84 for me, with 2/3 expecting to live to 90 – so that’s 30 years of retirement to ‘finance’
But a scheme that offers you the equivalent buying power when you are 90 as when you are 60 is unlikely to be good value. Security yes but anything that promises this will be offering a paltry return in the years when you can most enjoy it in order to guarantee it in 40 years time.
No, I’m definitely in the process of retiring. It is a surprisingly big psychological jump from building up savings, pension, etc. and starting to draw on them.
yep.....
I 've no plans to sell my db pension, the recent pay increases have been mid single figures and it's guaranteed. I know it dies with the holder/spouse but when you get offers of c35x income you have to question why.
The meaningful money podcast covered this v subject and he s an if a so vested interest in selling something.
Anecdotal observation but the wealthiest pensioners I know are actually the most frugal, nor is a miserable way but they just know the best tips for living well for less.
Love this thread, my own pension pot is well diversified in property, shares, state pension and private pension. If 1 goes pear shaped the rest should still perform.
I don’t hold rental property, but my own house will be paid off by mid 50’s. Currently a 4 bed so downsizing definitely an option in retirement.
I do have a RAF pension (15kpa from 60, & 3x lump sum) and we’ve both pretty good DC pots.
When I left the RAF I had the option to roll it into my company scheme, but very glad I didn’t. 15k index linked from 60 will always be there, plus state from 68(?) so that gives me leeway to play more aggressively with my DC pot. I manage it myself within the wrapper of my company scheme. Planning on moving it to II for drawdown as I hate the Aviva platform, but a lot will change between now and then.
My plan is retiring at 60, use my 25% lump sum to fund my retirement sailing, keep 90% of the remainder invested in funds, with 10% in bonds/cash to pay my drawdown income, keeping below the HRT threshold.
I’m fully aware I’m in a much stronger position than many(although still not as good as some) I just hope some find the spread/ plan useful.
The thing is, if you do run out of cash at 85 there's always the option of releasing housing equity to fund the last few years. Most housing is probably worth enough to be able to release around 10k a year at that age
Plus if my pot ran out when I’m 85 I’d still have £25k/Yr (RAF + state) and I can sell my retirement boat if necessary.
If I'm in sound enough health & mind to spend anywhere near £25k/yr when I'm 85 I'll be a very happy man 😀
More seriously, I guess it'd fund some half-decent home help...
Steering away from the finances a bit again - one thing I've not seen anyone mention is the advantage of having free time to look after your parents and partner. At the age most are looking to retire, it's likely that their parents could already be infirm or ill, needing support and assistance. That was certainly the case for me when I first retired at 50, with both my folks dead before I was 53. And now not having the worry of trying to balance work with supporting my wife through her cancer is another positive .
Do you love your job? My immediate response to your post is to ask why you're waiting till you're 60.
You having given any DC detail, but I'm getting the impression you could retire a helluva lot earlier.
( not judging BTW, just interested)
You having given any DC detail, but I’m getting the impression you could retire a helluva lot earlier.
( not judging BTW, just interested)
I was thinking the same. I'm just crunching my numbers at the moment and if I had that pot I'd be out of here.
For now, I’m still paying the mortgage (SE England, but not bonkers) & have 2 kids to fund through uni.
I do still enjoy my job, yes (airline captain). I’m typing this from Barcelona, where I’ve been on a stand over, walking around the city & chilling in coffee shops. If I get back to long haul flying, I used to take my road bike with me, and regularly did 100km rides on my days away in San Francisco, Tokyo, San Diego & many others.
I deliberately didn’t put any DC fund sizes up. My employer pays in 15% and I add 6%. I’m 50% part time, so already get a fortnight off a month. My wife enjoys the intellectual challenges of her job (lawyer) but does find it stressful. If the pension investments perform to/above expectations, we could well retire a few years earlier than 60.
As for the caring point, very much so. My mum (74 ) has just moved into our village to be near us, and my wife’s parents are close by too. They took care of Jackie’s Nan in her final years, even though she stayed independent in her own house.
one thing I’ve not seen anyone mention is the advantage of having free time to look after your parents
That certainly figured in my thinking, but the opposite way around: I was banking on having 5-10 years carefree while still fit enough to make the most of it before being drawn into the inevitable care duties.
The general covid stasis and my mum having a heart-attack and a Parkinson’s diagnosis have buggered that up though (she lives alone, at the opposite end of the country).
We play the cards we’re dealt…
one thing I’ve not seen anyone mention is the advantage of having free time to look after your parents
I wish 🙁 One died at 29 and the other at 71. I’m thinking take the DB and lump sum at 55 (220 days), and work at something else. Life expectancy for me is 85, so a possible thirty years of what could be a healthy salary/pension plus an extra income is possible. Also resigning to another job loses benefits that retiring maintains.
My great grandfather retired at 65 and had 34 years of gas board pension.
Interesting thread....
I'm 37, self employed chippy. No kids.
Although I enjoy what I do I'm quite sure that my body won't want to be working as much in 20 years time as it currently does.
I own zero property.
Thanks to some savvy tips and not spunking cash up the wall when younger I've got a pot of ~£350k.
~90k in an ISA that I can no longer invest into (resident in Germany for the last 14 years).
~110k in a SIPP. (am I right in thinking I can't touch this till I'm 57?)
~150k in a fund and share account.
I've no UK state pension as I left the UK with only 9 out of the required 10 years of NI contribution.
I've no pension pot here in Germany.
My plan is to use the F&S account cash to buy a property somewhere for around 150-200€ south of the alps (had enough of long, cold winters and I've no desire to spend my time wrapped up indoors whilst paying stupidly high heating costs) in the next few years. Due to being outside of the UK for so long I'm no longer eligible for capital gains tax in the UK. (was thinking about coming back to the UK (at least on paper) to make up the missing one year NI contribution, but that'll wait till I've made use of the cash).
Hitting my numbers into a compound interest calculator says my 200k should be around 450k when I'm 57 (based on 5% annual growth (up till now I've averaged between 7-10% growth pa))
Using this website ( https://www.which.co.uk/money/pensions-and-retirement/pensions-retirement-calculators/income-drawdown-calculator-a5pj57u5134k) and assuming I can start drawing on my SIPP/ISA at 57 I should be good.... Like forever...
Which has got me thinking.... Look to buy a cheaper property (~100€), keep playing with my funds and retire mid forties.
The GF is likely to inherit (along with her sister) two Munich flats together valued at ~1m€.
The crazy thing is... This seems so surreal as we can barely afford a decent lifestyle here in Munich on the money we earn (the tax man rapes my bank account monthly... Yay for Munich's ridiculously high business tax rates).
Alpin - looks like you have a decent plan.
TiRed - has the pandemic accelerated your plans at all? Be careful with taking your pension at 55 & working caps future pension input quite substantially.
TiRed – has the pandemic accelerated your plans at all?
Not really. A trip back to academia is one possibility of interest. Or civil service. I’m in the fortunate position of a full LTA by 55 since I saved hard in AVCs, so future pension contributions will incur full tax liability.
Alpin – looks like you have a decent plan.
Does it? Feels like I'm winging it.
However, speaking to friends a good 15 years older than me I would say I'm in a good position.
Hitting my numbers into a compound interest calculator says my 200k should be around 450k when I’m 57 (based on 5% annual growth (up till now I’ve averaged between 7-10% growth pa))
I think 5% is a sensible number to use, but don't forget to throw in the effects of compounding inflation. 2% pa inflation takes net growth down to around 3% per year (effective spending power), and if doing drawdown the same thing needs to be considered
I don’t know how pensions work in Germany, but there must be some tax breaks for pension input. It might be worth some professional advice to find a way of inputting money from your savings to your pension & reducing your tax liability.
If it was the uk, you could pay money into your pension, and claim tax relief via your tax return.
There is talk that next year there'll be a rule meaning all self employed in Germany have to pay into a state pension pot.
Mate just got given advice from a pension adviser. The funds he was suggested had an average growth of an amazing 3.5%!
Need to talk to my accountant regarding tax breaks and pensions/efficient savings.
However, speaking to friends a good 15 years older than me I would say I’m in a good position.
Scary isn't it, I'm 49 now and have been saving into a DC pension since I was 25. I'm not going to be rolling in it when I decide to retire but we'll be ok, but the number of friends my age and older who have nothing other than the state pension, some of them banking on inheritance to save them...
Sadly that’s all too common. For some, money is so tight there is no choice, but many have chosen to live for now instead. Every penny spent on booze, fags, holidays, bikes, satellite tv, Netflix, iPhones etc is a choice. With choice comes consequences.
If you plan on inheritance, hope your elderly relatives don’t need care for another two years. Because social caremageddon is coming with increased NI payments and a lifetime cap of £80k (per person of course).
When is an 80k cap not an £80k cap? When you add the accommodation & food costs too! The £80,000 social care cap is only for actual care costs, so you will pay double that in total. Each.
Alpin can u buy some gap years back from uk good, I think u can buy back up to the last 7 but that may have changed. I m not sure what the min years is to get something, it's 15 here in Spain and you can add years from another country.
I would be making my own provision then you can do what you want.
if i had done what some of you fellas are doing, looking into figures and percentages, i dont ever think i would have retired. would have confused the hell out of my self.
stop overthinking it all. just do it. spend less, spend time doing nice things. it is easy.
stop overthinking it all.
very much this
stop overthinking it all. just do it. spend less, spend time doing nice things. it is easy.
Pah, we've read loads of books and Internet posts on investment and money advisors. What makes you think you know anything about retiring, enjoying yourself and getting on with living the best life you can?
😉
stop overthinking it all. just do it. spend less, spend time doing nice things. it is easy.
Most definitely this IMHO
Well, I retired yesterday - for the second time. This time I'm going to do it properly.
My previous experience was probably a bit spoiled by the first lockdown coming soon after, so I didn't get a lot done, and ended up letting tasks expand to fill the time available. I got a bit bored so went back to making furniture for money. See the "What have you made" thread for pictures of what might be my last job. But that's given me a much better perspective, so there'll be no time-wasting now. I spent today tidying up the workshop and fitting mudguards to a couple of bikes so there'll be no excuse not to ride. I've sorted out the neck of my winter wetsuit so I can windsurf all year round without cold water pouring in and my first day of a "make your own guitar" course is booked for Tuesday. Wish me luck, guys!
^^ think if you're handy with your hands then there's always the option of carrying on working.... you just get to be a little more selective with what you do.
For all the "just do it" comments, here's a confession. I'm a bit scared of retiring. I am fortunate to be in a financial position where I could quit tomorrow but something is stopping me and I think it's the fear of boredom, isolation and depression (I've got lots of history with the black dog and am not good with people). So at the moment my plan is to drop to 3 days a week next spring then see how I'm going in the autumn.
one thing I’ve not seen anyone mention is the advantage of having free time to look after your parents
That's an interesting idea that had never occurred to me, and I've never considered that my parents might still be alive when I retire.
But as the average UK retirement age is 64, I imagine it's only a consideration for the lucky few who are wealthy enough to retire significantly earlier than that, or perhaps people whose parents were young.
My dad was 28 when I was born- not particularly old but he will/would be about 90 if I manage to retire in my early 60s, as I currently hope. Which, statistically, him reaching that age is unlikely to happen.
That’s an interesting idea that had never occurred to me, and I’ve never considered that my parents might still be alive when I retire.
The other point I mentioned is the health of your partner - and that definitely applies to more of us.
Yep, true, and as MrsDoris is a few years older than me I'm quite mindful of that. Hence being very keen on retiring by at least 62, i.e. when she reaches state pension age.
I’m 47, and not allowed to draw my pension until 57 under current rules so no matter what I can’t retire until then. My window to choose is between 57 & 60.
is that true though? best buy annuitys seem to sit around 3.5% for a fixed amount (and dropping significantly for one that tracks inflation). The same amount is generally considered “safe” to withdraw from a fund with no reduction of the funds value over the long term. how are annuity providers losing out unless they invest really badly?
There's absolutely no guarentee with the 4% rule, if the market dips 40% (happens every so often), you have to either reduce the 4% or eat into your capital faster. An annuity provider looks after billions and has to pay our the annuity rate come rain or shine, year after year for decades. Investing in stocks would be too risky, so they tend to go for safe assets eg utilities which have a reliable income across the market ups and down.