Pleasantly surprised how cheap retirement is..

[Reproician]

Two years ago I was earning £70k and living very nicely on it.

Then stuff happened and I decided to take very early retirement. I have good pensions to come in 5 years' time, but meantime have some casual work which earns £4k pa and investment income of about £12k. I planned to live off savings to fill the gap and budgeted up to £20k pa.

Now, I realise I am very fortunate and I am definitely not claiming poverty. I realise being well set up and then moving to a lower income is entirely different to a lifetime lived on a low income. My mortgage is paid off etc, but I am finding I only need to draw on the saving for one off big purchases. I've drawn £6k altogether in 2 years.

I'm still living a good life. I still spend without thinking to hard on the things I want, I still have a busy social life, I still travel multiple times a year.

Being able to be fully flexible means everything is cheaper. I can at the time of the week/month/year when flights are cheapest etc. And the money I must have been spending on clothes, food, travel for work etc. PlusbI think when you're working hard there's a tendency to spend on "treats" that you don't feel the need for when lofe is.lore relaxed.

Just me and an adult son at home. He pays some keep, but I don't make any profit out of him.

I think spend more money if I was retired than i do going to work - more time to go places, eat out etc......

Yes, that's what I thought, and I do eat out, do several "activities" a week and travel a lot, but it's a few pounds here and there, not massive expenditure every time.

I used to spend a lot on eating out when I was at work because of lunches and always being tired or short of time.

I found the same after retiring 4 years early, 15 months ago. I often wonder what I actually spent my salary on...

I get 2K a month pension, and I also got a lump sum of over 180K which I've barely touched. I also get about 450 per month from a job that I do two evenings a week, totalling 10 hours.

I don't eat out, I enjoy a glass or two of wine most evenings, don't smoke and very rarely eat out. Still go away abroad once a year, but love long weekends away exploring parts of the UK I haven't been to or not in a long time.

If I make it to state pension age in 5 years, I'll give up the evening job, but I don't really even need that now.

Price of petrol is a PITA though!

I agree OP. I was pretty exhausted and time poor when working so my savings really relate to that aspect of life being lifted (thank goodness).

I think food is my biggest saving. I never looked at the cost of any food, it was all about speed and effort to get it to the table and we had takeaways at least once a week and ate from Pret or Itsu or in a restaurant most days. Now I spot bargains and offers and eat seasonally and have time to eat well for so much less. I do enjoy cooking, mind you. We do eat out still but but usually either an occasional very, very good meal or a lunch special.

I spend loads less on clothes too. And can be bothered to make sure I get them when on 20% off or whatever, rather than just when I had time.

I do spend an awful lot on travel, but only within my means and always travelling on the cheapest days!

Love retirement.

Yeah I would imagine it is pretty cheap if you're rich to start with. 🙄

I did say that...

I wonder how you will find it as the years go buy - I guess as more stuff needs replacing? Interesting how much you save/spend according to your lifestyle though. I know we saved an absolute fortune during covid (and yes I know some people were impoverished by it - just an example).

Yes, but this is only for 5 years until my pensions kick in. I think I'll stick be spending considerably less than I did when working.

What would your life look like if you lost 20 - 30% of your pension and inflation increased considerably?

How much of your pension should you be saving for your later years when you might need care?

Thank you for this. I'm 52 and plan on retiring in 10 years. All I hear about is how you need to have ££££ to retire, so this is nice to know as I won't have a large budget!

Atm I don't have a pension, but I budgeted for £20k pa in addition to my "income" and so far I've spent £6k from a £40k budget, so I think there will be people much worse off than me if inflation increases.

TBF, if this happened then most of us, retired or not, would be up shit creek.

Working is expensive, and added to that people get themselves into a system of paying for stuff they don’t need

time is precious

That is reassuring to know. I'm in my 50s, still have 2 teenage DC at home and one at University. So an expensive time of life and I find it so difficult to know how much we'll spend when we are retired because while some large expenses will obviously completely disappear (e.g. saving for retirement, mortgage), others will reduce but I don't really know by how much. So I fluctuate between thinking I'll be fine and worrying that I won't have enough.

This is heartening to read. I'm mid fifties and have had serious health problems in the last year. I'm desperate to retire partly because I've been reminded that life is short. DH and I are hoping we might be able to retire in about five years. A lot of the stuff I like doing is cheap or free anyway.

Thank you for this thread, OP.

I'm obsessed with interested in early retirement. I keep bumping into threads, blogs and articles that talk about needing huge amounts of money every year.

But this is really reassuring and chimes with what I see from my mum and in-laws who're absolutely not rich at all. And actually what I've also been thinking about. At the moment, we spend about £3K on Christmas because its a small island of joy in the bleak autumn/winter work period. When we're retired, I can't see us spending that much on it because there won't be anything to 'escape' from.

I'm planning on seven more years of work....

I could also work more if I really needed to.

I'm on the cusp of retiring and am fairly confident my expenses will be low. This has a LOT to do with (finally, after decades of expensive trial and error) living in a place I really like, so I'm not fussed about travelling on hols etc. I think that is just as important as savings when it comes to scaling down on income.

So with your earnings, investment income and using some of your savings you have an income of £36,000 pa (the savings spending presumably not being subject to tax).

That's a pretty good income to be honest for 1 person - especially as I'm assuming is mortgage free. I don't think I'd be using the description cheap but I'm glad your plans are working out for you.

The companies who forecast those things are having a laugh. You don’t ‘need’ even half of what they suggest.

My fathers pension wasn’t massive, but once he paid off his final debts he found he didn’t actually need it all. We discovered that the older you get, the less you tend to eat. He still enjoyed a drink and cake - but not all the time. He socialised down at the Welfare or at friends houses having games nights. It wasn’t pricey. He still Went on foreign holidays until the medical insurance costs got too high due to his health issues - and then just switched to Uk trips.

if you’ve set yourself up OK during your working life, don’t gamble or ahave an addiction, and are vaguely sensible, you’ll be fine.

That was what I thought I needed, and yes I agree it's a decent amount to live on. I'm saying it's been much cheaper than I expected because actually I'm spending much less.

I retired last year. My teachers pension is just under £20k. I have my lump sum invested and haven't touched that at all. I have been doing some odd supply work which has earned me about £5k but I've not actually earned anything for 11 weeks as supply is very sparse at the moment.

Im debating giving up the supply work as I can obviously manage on my money. My outgoings are very low (about £700 a month) and I have money off my son for food etc.

Im just terrified of pulling the plug on 'no work!'. I'll be 58 in February.

They say to have a comfortable retirement you need £45,400 p.a. for a single person. You're at c.£19,000 p.a. and sound quite comfortable!

I'm going to do the Rebel Finance School to get a handle on my numbers!

So you’re living on about 19k with no rent or mortgage and another adult contributing to the house. Seems about right if you’re fairly frugal.

Yes, there is a ton of cost associated with work itself, so you can live on a lot less than you think when housing costs are taken care of.