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.

For eg. if you've not been able to build up much of your own pension pot due to health reasons (out of your control) you might be personally bitter about the state of affairs...and be terrified (and bitter) about the future

Ah. Yes agree. I do think people forget that some people are less fortunate through no fault of their own. Not even health reasons, just money reasons. I hate that people are pitched against each other. It's awful eh?

The original proposal was means tested to account for the poorer pensioners, and yet it was demagogued, "They want to freeze grandma"

And after they caved, now someone making 34.9K gets it. Not exactly the poorest section of our nation.

I came to the end of my career at the start of this year. I’d spent the last 10-15 years bolstering my pension. I’d chosen my mortgage wisely and paid it off early then continued with the same payment but into my pension. I was fortunate to be paid an annual bonus and took advantage of salary sacrifice tax savings.
Whilst kinda obvious now, it hadn’t occurred to me that when I started to draw down from my pension the remainder of the pot still continues to grow.
I know I am in a fortunate position, but much of this growth is as a result of good financial advice. Everyone should talk to PensionWise (it’s free) and consider a financial advisor - my experience (and that of others I’ve spoken with) is that their fees are easily covered by the extra money they make for you.

Hardy a micro pension, mine is a third of that!

What about carers? Who would ever have enough for that on these incomings? My mother has 1000-1200 outgoings a month on bills, council tax, home, insurance, food then the other 1200 she has goes on care. And before you say it she also has local authority paid care visits. Now they are 20 to 30 mins max to get her up, wash and put back to bed. The rest of the time elderly people who are incapacitated lie in bed or stay in the chair. Fortunately my mum has live-in family member but they work and so her money left over goes to the visiting private carers during the day. I think everyone here thinking retirement is not so costly has not even thought about the care aspect

Thanks for this. Can concur as a civil servant in London. The London weighting doesn’t touch the sides although the progression prospects are much better. DD is a CS now on 54k and could only afford a 1 bed flat. Not even a nice one.
I always use the argument when people moan about Londoners coming in and buying up retirement properties. I have never been able to live in a lovely property as a public servant in London. Many years of sleeping in the living room. After 40 years I will damn well move to a lovely market town and buy a pretty house with a sunny garden if I want!

I have a question… for those with partners who say “we’ll have more than enough with 2 state pensions”… what if one of you dies?! Have you thought about that? Modelled for it?

Absolutely x

divide and rule.

No, words written on a page can’t make people feel inadequate, they aren’t that powerful. If you are feeling those things that’s not the ops fault.

not everyone is struggling and it’s disingenuous to suggest they are. This is a helpful thread for some people, if that’s not you then don’t engage.

Financial eduction at a young age is very much need in society/schools. People need to be aware what compound interest is, how credit card charges work, how and what mortgages are vs rent costs, etc. Basics of how to budget. Then people can make more informed choices.
By the time we get to 30/40/50 and start thinking of retirement or further planning it’s almost too late.
Its about saving as much or as best you can for as long as possible to enable choices.
Government ‘quick’ wins: Winter fuel allowance could be linked to pension credit. Right to Buy abolished.

@Cadeaukatze @pklhr The pensioners who struggle most with their heating costs are not eligible for pension credit because they worked hard, saved when they could and have tiny private pensions. They are not anywhere near £35k. They will mostly be older and so probably also sick.

As I said no-one suggested winter fuel payments should stay for everyone. Ideally the government would target energy improvement schemes at poor pensioners - but they are generally limited to people on benefits too. If they dont have the sense to do that they could have kept WFP but a lower income level.

I've always been brought up to be frugal and financially savvy. I started saving for a pension at age 21....also managed to get on property ladder at age 23 (back in late 90s).....so it's not from lack of education or from trying. Unfortunately ill health meant I could only work part time since my 30s and then not at all for 8 yrs as a SAHM with chronic fatigue. I now have an absolutely crap projected personal pension of about £300 per month. Sometimes shit just happens through no fault of your own.

Yup, definitely needs a lot of advice/information at schools.

I was talking to one of my son's friends a couple of weeks ago who is now a Maths teacher, and has just started his first ever GCSE class (year 10), and we were discussing class discipline etc. and got onto talking about Maths that the average person would never need to use, hence the lack of interest, I mentioned simultaneous equations and he mentioned compound interest!! He genuinely didn't realise that compound interest was relevant to the vast majority of people via mortgages, savings, investments, pensions, etc - he just saw it as yet another equation! If Maths teachers can't see the real life implications of compound interest and aren't preaching it to their students, it's easy to see why so many adults haven't a clue and make poor financial decisions.

But she is out and spending some of her money, she’s living a decent life but it’s not costing as much as she expected. And if she got through the whole of her savings and private pension in the next 15 years and then needed to rely on the state for care, you would probably complain about that. It’s a balance, spend enough to enjoy yourself and have a good life, but keep some back in case you need to lay for care costs. And they don’t come cheap, trust me.

Most people of the boomer and older GenX generations have had as little say in how property prices and interest rates change as you have.

I’m sorry things have been difficult for you and I really do empathise. My post wasn’t having a dig at people not helping themselves, it was more of a general comment. Completely get that life throws curve balls and we can’t plan for health issues. Apologies if my post offended, wasn’t the intention 💐

OP, what type of investment gives £12k p.a. income? Is that just skimming stocks ISA gains or something more complicated? Bonds, dividends, options? Thanks in advance, planning for my own retirement.

I'n dreading winter. Nobody knows about the curve balls life throws at you.

No worries....no offence taken, but thank you so much for your kind words - they mean a lot as MN can be brutal xx

For those asking about investing - I started putting away €350 month into an investment account about 3 years ago. I use Scalable. It’s free. You just choose the funds you want to invest in.
I rarely look at it (this thread reminded me to redownload the app). I live in a country where there aren’t the ISA options.

I give all the kids €35 /month to put into investments which will be the best thing I ever do for them. And should give them the habit of saving. Seeing it grow is incredibly satisfying.

I will have an income of about €20k from furnished and unfurnished rental properties (I finished paying 4 mortgages this year). I planned to retire this year at 55. But instead I started a new business 18 months ago. Made 0 so far but hopefully that will change eventually. DH will retire in 7 years. At which point so will I. He should have a little over €2k/month.

This thread is very encouraging!

Reading with interest.

If you assume typical growth of 7% on investments (e.g. a S&S tracker ISA) a typical assumption is you can take 4% pa which still allows growth. So to get £12Kpa you need £300K invested. That's more than double an average private pension (public sector workers usually have have defined benefits that are more generous). You can of course take more than 4% and erode the capital so it depends how much you want to pass on to your children.

From OP’s mangled spelling I take it a bottle or 2 of vino is on the shopping list.

I don't see any mangled spelling but could you be any more judgemental?