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.

We're not really thinking about it yet but funeral costs typically come out of the estate, I don't plan to die with so little that there isn't ready cash to cover the cost of a funeral (typically under £10K). If you're on a low income the government covers some of the costs but you can get a funeral plan to cover the cost as well. That's not life insurance though.

We have savings of around £60k. I suppose it's a belt and braces thing!

If you're concerned about funeral costs then a funeral plan would be more cost effective than life insurance at pensioner age. Or even better, put away the same sum into a savings account each month.

I'm not concerned. I just think having it is normal.

Sadly, I've already used up that option 😔
My fault really. I persevered at self employment and lived on a shoestring and making no pension contributions, much longer than was wise. Hindsight...

Absolutely!

I think it’s also a really useful exercise to keep track of all your spend it and categorise it for a year so you can figure out what will “go” in retirement and from there work out what you may need.

e.g. once the kids leave home, the food bill will drop and we won’t be having to pay for their EC activities. Obviously this does t account for kids having to stay at home once adults but you could add in a lump sum contingency for that.

also, I think you should look at the go go years (probably until around mid 70’s) as where you will likely spend more before the glow slow years when you may not travel as much or at all

lucky that where I live there’s no government taking your house for care but if it ever got to that I’d off myself as would rather leave my assets to my kids.

the more I think about it, the more I don’t want to go beyond 58 (at least not full time). I’m also quite a simple person and easily pleased - even now I like choir, walking, book clubs, baking, so can’t really see that changing in retirement.

we’re also considering getting a motor home to allow us to travel cheaply in retirement though appreciate that is also capital outlay!

I basically don’t want to work anymore but will have to until at least 58!

I’m 63 and can’t afford to retire early … or even late … I earn an ok salary (just tipping over into 40% tax) and have a couple of small pensions from my late husband but the outgoings on my house/car etc are more than my salary. We bought this place together - he was a relatively high earner (but rubbish saver). I have no mortgage so you’d think I’d be fine but all the bills add up to a scary amount and I’m dipping into savings each month. I work mostly from home so don’t really have many work-associated costs, don’t travel much, cook pretty much everything from scratch and am vegetarian, hardly ever buy new clothes. We do have animals though and their vet bills constitute a large chunk of spending, along with maintenance of the house and fields. My daughter’s currently setting up a business here so my hope is that she will eventually be able to take on some of the costs - if not, I’ll have to sell up

I appreciate many posters honesty here, as I do think one of the biggest barriers to effective financial planning is that people dont like to talk about money.

I am v far from retiring at 42, with 3 young children under 8, and a bigger mortgage than we would like. We are trying to work out if we should move house or not. We live in a 4 bed inner london house that really needs a kitchen extension to allow space for growing family.

Im just coming off maternity 3, but have been overpaying into my civil service pension so I know I have at least £17k pa now. That plus both our state pension i reckon will now be enough at 68. We are hoping to rely on my husbands work pension for the gap between 57 and 68 to retire early, but that will at current rates only cover 6 years of early retirement.

Husband has just been made redundant so making me think if staying in london is worthwhile as we could live jist on my income in a cheaper house. We love the life, but cant really afford to save for a kitchen and overpay our mortgage (overpaying will be crucial to clear our mortgage before 65). The other benefit to me is that london is probably still best place for educational and work opportunities for the kids so they can stay with us if they need. Ofcourse who knows what will happen with this.

My husband and I feel grateful we did not get help from family to buy, unlike most of our friends, just hard work, saving and minimal holidays.

Its just really starting to feel like a hard slog though right now with no real contingency!

How are other posters accounting for help for kids and being around grandkids?

Life insurance policy was to cover my mortgage

living in London sounds so blooming expensive: especially with 3 kids. How feasible is it to move further away to a lower cost area? Jobs? Family ? Other support? X

This is very interesting OP. Given me hope. Thought we’ve got to get two through uni first.

Do you find yourself feeling mean with money? For example if you’re out with a group of friends and you know the bill will be split equally, but some have ordered the steak and are downing cocktails, does that make start to feel anxious?

Maybe that’s a bad example as some people/ friendship groups don’t split the bill equally in the first place. My in-laws for example will calculate what they’ve had to the penny. But one of the benefits of earning decent money is being able to be generous, to relax and enjoy an evening out without counting the pennies.

I've done my sums and reckon I could retire at 60 (I'm 49).
But is it better for me to keep working? Maybe not in my current role but doing something similar, in an ad hoc way to keep my brain active. My MIL only retired last year at 70 something and she's the most glamorous on-it woman I know and I think that has something to do with her working.
My dad retired ages ago and he's very with it too but has pretty much volunteered full time since he retired.

Maybe for you. Not for me. My family agree

In general.

My parents had a direct cremation which is increasingly popular. About £1000. You can always have a get together as well for the price of a buffet in a restaurant or hotel. Or even hire a room and have speeches and food and drink. Way cheaper than a traditional funeral.

Yes, I've found this too on retirement. Things you save on: not having to travel during school holidays saves a fortune; not buying work lunches, coffees and work clothes; not commuting; national train travel with a senior railcard saves a fortune on trains by going out of peak times; getting free prescriptions, oyster card (London) and public transport if over 60; not relying on a car for work (more walking and public transport) and paying for parking; having time to prepare food at home / growing in the garden, so paying less and eating better.

Once you get to 60 and have free travel, London living is so much cheaper, and there's lots to do

I'm sure James Bond got paid a lot more than the equivalent of 70K! 😂

If anyone is willing to share (those working and those retired) how much net income do you want / expect / have per month in retirement. Assuming mortgage is paid off, kids self sufficient etc. I had a meeting with a pension advisor this week and they said you need £45k net (as a single person) £65k net (as a couple) for a comfortable retirement. Thoughts??

As I stated above, I get by on £20k pa. Single person, own house.

I get 24K from my company pension, approximately 6K from my part time evening job, that's 30K.
I have about 170K in savings from my retirement lump sum invested.
I'm doing very much OK. Holiday abroad once a year, 3 or 4 long weekends away in the UK staying in pubs/inns etc., run a car and don't want for anything really. One child self sufficient and one at University where I've put aside enough for her to not incur student loans or to take a job. That will partly come out of the 170K and partly we had already started saving for both kids Uni fees years ago.

We currently get £3000 net between us. No mortgage, 1car. DDs are about £400. We pay council tax, car insurance and golf/football season tickets yearly from savings interest.

So we have around £2700 a month for food , going out, weekends away etc.

Live in Scotland so free prescriptions, bus passes etc though we haven’t applied for the bus passes.

Will get state pensions in 3 years for husband. 4.5 years for me.

This is really reassuring to see. I’m mid-50s and regularly panic about retirement but I know working has costs attached that soon add up.

I buy clothes/shoes for work, clothes to cheer me up because said work is stressful, treats during the office days to cheer me up, lunches because I’m too tired to make a packed lunch and takeaways or ready meals, again because I’m so bloody tired! Add in regular travel costs and a fair chunk goes on “working”.

Sounds like wildly overestimated!