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 don’t think the OP is saying she’s being frugal though. Thats the whole point of the thread. She’s saying that without the costs related to working, she can get by on a lot less. She’s doing the things she wants to do and isn’t scrimping. And it’s costing less than she expected.

We will still be renting. Fairly cheap rent for a lovely place but we totally missed the boat for buying. It does worry me. My pension will be ok and obviously life will be cheaper when DC leave.

I am retired. I earned well, and built up large pensions. when your "working" there is significant cost associated with working. Travel to work, saving into a pension, tax you pay etc. Even lunches and "coffee" at work plus clothes for work, (which are likley to be higher for females than males) Once you retire a lot of those costs disappear and you can also save money by doing things differently. for example many pubs have offers prior to 5 or 6 pm. or Monday to Thursday. We eat out twice a week or more for what we spent once at weekends, and enjoy it more too because it seems more relaxed. So yes you do need a lot less for the same standard of life than your gross. but your disposable income from your salary probably wasn't that much different. most probably just never worked it out

Others have cautioned on your pension. you need to investigate this carefully. esp as the labor government keep changing the rules, (or are tempted to) and cant resist the large sums in pensions. Do you take all the 25% lump sum, or take it with a monthly payment etc. more concerning the stock market may crash. i separated my pensions into short, med and long term to protect against a crash just when i planned to take them

As you get older, travel gets more difficult, (and more tiring) insurance costs more, and health issues can arrise. travel then gets planned around health appointments or restricted by it for example.

if your good with money you can make it go even further, for example interest free credit cards that you put money aside earning interest to pay off the debt

you can currently even still pay into a pension when retired (3600) gross up to age 75 and still get tax relief.

I don’t understand. My mother living alone I her 80s and going nowhere has 200 plus on gas alone, then electricity, water rates and I think council take is 240. Then phone and house repairs occasionally plus food and household items. Oh and home insurance. Ir is about 1200 a month and imagine if she has a car to run. The other 1200 income she has on top goes to carers. Is anyone factoring the cost of that in? Please explain the 700 outgoings only you have as bills alone are more?

It's not about whether they're doing OK, it's that they're waxing lyrical about how ruddy marvelously they're doing, sailing through life without having to worry, when others, who haven't been as fortunate (and I'm NOT talking about the feckless 'I could have saved a fortune, but I chose to fritter it away' types here) often through no fault of their own, are having to exist on the basic state pension.
I don't see why they feel the need to point it all out, even down to the amount of savings, etc, they have. Firstly, it's like rubbing it in the face of the have nots. Secondly, it's akin to boasting. Thirdly, it's just bad manners.

Yes, please explain

Don’t be silly. People are allowed to chat about their finances and look for input from others in a similar situation. You’re the one projecting your insecurities by accusing them of boasting, gloating and lording it. Who cares what people on the internet think?

I had a similar thread and was a mix of sensible input about what to realistically expect from a modest single retirement income and a few angry people who wanted to tell me I was either incredibly privileged or that I would be broke, sick and lonely and die in poverty and eaten by my cat.

Another in agreement here.... we're astounded at how much less we need in retirement.... not given anything up, still eat out occasionally, still spoiling grandchild, still have holidays. Wouldn't return to work for double the salary. So much easier to budget when the extra expense of going to work is eliminated. If you possibly can...do it!!!! And it's amazing how you can fill your time doing whatever you want.

Must be nice to have current workers pay taxes to hand over triple locked pensions, winter fuel payments, and Freedom passes.

@Boomer55
Here you go, these are our fixed monthly costs. Insurances and car tax I pay in full.

Council tax £162
Water £36
Gas/Elec £127
Food £350
Broadband £25
Mobile £9 - don't have a landline = £709

We live in a very cheap area of the West Midlands in a new ish 3 bed semi. Might spend a bit more on food too occasionally.

Bitter!

See everyone saying government overstates what you need - I have priced up what I need and it’s not far off. That based on today’s spending and then working out what I won’t have for kids. I don’t think I’m that extravagant so I am not sure what drives it so high. The only big item there is about 650 a month in today’s money for holidays (I have a lot of places I want to go that I cannot do currently)

I have also allowed 400 a month towards household work / repairs. wouldn’t expect to spend this monthly but likely to need a new roof, kitchen, bathroom etc over that time.

what’s scary is how much those monthly numbers are in 35 years time with inflation (I am early-mid 50’s).

Once a mortgage is paid that a big chunk of salary /money saved

enjoy your retirement - sounds like you worked hard so reap the pleasure now

Tbh, it's wealthy to me too - wealthy is not worrying about bills. But it is not wealthy amongst the people in our area (Dorset). Someone pointed out to me that you don't know about poverty if you don't live in a poor area, like a deprived inner city. We live where everyone wants for nothing really.

I agree with OP. I retired early through ill health, so no SP for a few years yet. I’m living what I would consider a comfortable life on relatively little in comparison to when we were working. We have no mortgage, and our DCs have left home (no GC as yet). Kids + mortgage probably accounted for 70% of our income a few years ago, so it’s easy to see how we’ve now got more to spend on ourselves even though our income is a fraction of what it once was.

How old are you?

My dad is retired on his SP and my mum is working 3 hours a day term time. They dont have a mortgage but are doing perfectly fine with one holiday a year overseas. It won't change much when my mum gets her SP and stops work. They have always been frugal so really the 2 state SP will be fine for them they say. Their main social activity is their allotment and visiting kids/family. They are constantly on the go as a result despite my dad's poor health. Its a nice retirement so far! They only hiccup could be if they need care, when I expect my siblings and I will have to step in.

I dont understand people on the full SP and no mortgage who plead poverty. It must be tough for women who won't have the full years for a SP tbf. My mum has only ever worked v part time as a dinner lady etc so is lucky that was enough to cover her NI contributions.

On the other hand we have my in laws who retired early as 55 and 60 on FiLs teacher pension. No mortgage, 2 grown up kids, 5 grandkids. They chose to move straight away to some remote part of the country, visiting my husband or his sister a couple of times a year. They spend all their time gardening, doing their one walk a day, and nothing else. They have alot of money, are healthy, but dont go on any trips, see people, do anything other than clean their house. They are nice but increasingly difficult people to visit and socialise with.

Now 15 years later they are apparently "winding down"! They may have retired early and had a huge amount more money than my parents but I would not have their retirement for the world. It really is what you do with the money that makes retirement worthwhile or not in my view.

She isn't claiming the State Pension. She's living off her occupational pensions and ISA investment income.

Perhaps you should feel inspired by this and make efforts to emulate it, rather than stewing in your bitterness?

Who do you think was paying for your health care, education, infrastructure, social care, security, justice, environment etc when you were a kid - it certainly wasn't just your parents?

This is such a lovely post. I am far away from retirement, atleast 20 years but this gives me so much hope. I have been diligent in my 30s in saving £250 every month into my LlSA and other investments. I will gradually increase this sum whilst paying more on my mortgage so I can have a debt-free and relaxing retirement too.
thanks for sharing.

And Boomers come in for stick. They are constantly being told in the media that they are the best off generation. Would love to have been able to retire in my 50s and be so financially secure. Spent a huge chunk of money (paid fees, accommodation) with 3 DC at Uni at same time(2 year gap then twins) took years to recover and no I was not in a low paid job. The cost of basics has rocketed recently, energy, fuel, food but good luck, seems you may well be one to join the no one needs a state oension brigade.

Thanks @Reproician for an interesting post.

It's reassuring to hear and i think the ability to enjoy these years is key and sometimes overlooked.

I'd rather live modesty and hope I'll be in a position to do something similar.

But I'm aware that switching from accumulation to spending will be tricky mentally. How have you found that part?

I can’t stand these boasting threads. Completely tone deaf

I am amazed at the bitterness on here. We are all very lucky to be born into a country with health care and education a given.
We all have had opportunities to save, earn more or better ourselves. Some didn’t make use of this.
Yes, some people had handouts from wealthy parents or jobs lined up for them, but the majority did not. I have never received a penny.
If you are not happy with your lot then look in the mirror.

I'm 58, planning to retire or work very part time at 62 and expext to live on not very much. We're about to downsize to a bungalow, no money gained on the sale due to area. But the cost of maitaining a family home is too much and seems a waste of money when its only half used.4 kids who visit alot but only all together at xmas. We'll still have room for everyone, but a tighter squeeze.

People have said what about paying for care? Thats my worry as ive done care work and see how miserable life is for housebound elderly. So we're staying in the area we know with buses, shops close by. Being clise to these things saves money and makes for an easy lifestyle
This makes us sound very dull people but we're not!

I think its also worth saying that making retirement age older has not been good overall. Its taken away a cohort of active older people who used to run community activties for free. Yes, those people are still there but fewer numbers.