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.

Don’t tell Healy!

Wait until you have been retired 10+ years and your savings have been depleted by unexpected expenses ( often due to unavoidable health issues) and your pensions don't have the purchasing power they did previously.
The stress of that knowing that you run the risk of imposed "downsizing" and perhaps having to move away from family and friends, at a time in your life when you want to relax and enjoy a quiet life.
11 years ago my retirement was quite comfortable, not so much now!

If I didn’t have a mortgage and only had the state pension I would be absolutely fine. It’s more money than I currently have as our mortgage is over £2k a month.

When I worked in an office, there was a bit of 'spending competitiveness'; come payday, most of us would stagger back from lunch, laden with bags of clothes from Monsoon, Next, etc. I would do the same, but return them for a refund on the way in to work the next day.
Food for lunch would always be something bought from Pret or similar. Coupled with train tickets, parking at the station and handbags, it's a wonder I had any money left for living.

Most people who retire early plan for this stuff though.

My DH and I have found we spend a lot since retirement particularly on memberships for our hobbies and travel. However pensions continue to grow at a much faster rate than we are drawing down so it seems so far so good.

I retired early, no SSP for me for another year. I have nearly no private pension (it's about £600 a year), so I saved enough to allow myself £1k per month and I'm living off that and self employed income of around £300 per month.

I'm lucky enough to own my house and car which helps, but I am currently living very nicely on what I have. I never earned much and when SSP comes in I won't know myself!

I've said this before on here, but it's something our financial advisor said that helped me transition to retirement.
He said the biggest barrier to people leaving work is that they are scared of changing from a mental state of "acquisition" to one of spending their assets.
We save so hard to be able to afford retirement but then we are scared to make the move.

This is quire reassuring OP - DH wants to retire and I am quite nervous about it money-wise, although I would carry on working part-time and earn a decent amount, I can probably work the same hours but change my working pattern to get more free time to add onto weekends.

I agree working costs money especially if you have an expensive commute. Although I think that's his only cost, he takes a packed lunch most days. I think he used to get a coffee but the Costa near his office closed so he doesn't anymore!

Also if AI is going to kill us we might as well spend our money now.

I am tempted to retire early but only have 1.5 years to reach 30 years with my employer, which is a great time to retire, pension wise.

I do worry though. Every time I think we have plenty (one very high pension, and one moderate pension), moderate savings - I see an article asking is $3,000,000 in savings enough to retire on? We are nowhere close to that! We are in the US now and will receive some social security benefits.

I will always worry about living in a cardboard box under a bridge, I think.

When I've been retired 10 years, I'll have two occupational pensions and a state pension, all of which are currently increasing more quickly than wages.

Yes, that will be why I haven't spent the full £20k pa I allocated from savings. It's hard to switch from being a saver to a spender.

I don't think I was competitive about it, but I was living in a world where regular nail appointments and designer handbags (which never interested me) were the norm so my new leather bag seems sensible and frugal, when I didn't really need a new one at all.

So very true. I'm in that position. We both run our own small businesses and both have "enough" saved for retirement, but we're both still struggling on, albeit now both part time/semi retired, but we are both scared of calling it a day, and neither of us really know why. We could both stop tomorrow and we'd be fine financially, but there's always that little niggle at the back of our minds that keep us carrying on. I think in my case it's because it would be a hassle to actually stop trading, i.e. telling all the clients, helping them transition to new accountants, etc - it's the "easy option" just to carry on.

So what is your rough budget:

Bills
Food
Socialising
Car
Any other regular costs (gym etv)
Annual holidays

I'm over 67 but I'd be very much in favour of all tax and NI being merged so that everyone paid if their income was high enough. I don't see why the young generation should pay more tax than me.

We never had lifestyle inflation as we got older and better off. That means we saved instead of buying fancy cars or moving to a bigger house.
Day to day costs are lower.
No travel to work, no lunches at work, no clothes for work.
Admittedly I've always been a bit frugal and took packed lunches but if you're at home you are more likely to use up whatever is in the fridge.
Holidays are cheaper because we're not tied to school holidays.

DH and I retired 10 months ago (I'm 57) I wasn't planning to retire for another few years but burned out. We were middle earners but were always sensible with money and paid our mortgage off a few years ago. We have money left over every month. Our lifestyle hasn't changed much except we are fitter, slimmer and healthier.
We found the biggest change was not financial but was about adjusting to a different routine, at first we were focussed on schedules and timetables! Now we are totally chilled. We go out for boozy lunches! Put a film on in the middle of the day! Indulge in our hobbies, meet friends, do jobs for our adult DC (eg take their cars for MOTs, fit flooring, tidy their gardens).
We've had 2 weeks in the med, 3 weeks in Cornwall, 2 city weekends away and we are going to Scotland for a week next month.
The things that we enjoy the most don't cost much (gardening, nature, gym, art galleries).

I'm mindful that I have already lost several close friends who never got to retire at all so we are making the most of our retirement now! Not when I'm 75 and possibly unwell.

I don't know. It could be £££ one month and practically nothing the next. I don't have a regular income, so I don't account for anything monthly.

Eta I don't feel the need to budget as such these days because there's plenty to cover whatever I fancy. I've never turned down a trip or a night out for financial reasons.

I'm the opposite end -- student living with my folks. I only have 50 a week to live off of due to the nature of my degree (PhD, funded via loan), but living at home rent free, some food provided, etc. I'm also earning via work -between 50-200 a week depending on shifts- and that goes straight into my savings.
right now I've got £7k just sat there in the bank, not earmarked for anything. Last year I'd depleted that reserve doing my MA (rent and food cost) but my parents' generosity is really helping me right now to stay on my feet. I've worked silly hours over a short span of time to refill that pot of money. I can still travel if I like with that money, or Go and get coffee.
Even when paying rent, bills, etc, I was living off of maybe £15k a year, including my car. Its taught me to be really good with Money

Really glad to hear. Contrary to popular belief, most people massively oversave for what they spend in their 70s and 80s. The rational approach is to spend much more in your 50s and 69s, while still healthy to enjoy activities. Read “die with 0”, an eye-opener. I have stopped work in my mid 50s.

Ha ha! 69, a freudian typo? 😂

I just meant rough spend.

i think you’re doing great. I don’t spend much so it doesn’t surprise me. Some people like expensive holidays, gym memberships costing 100s, expensive dinners, costly clothes. If you’re not into that obviously money goes a lot further.

An occasional car replacement/ costly home repair would put it up though.

Amazing how well off retired people are on here, having accrued huge savings and pensions, yet we hear so much about poor pensioners everywhere else. Are there any mumsnetters on here struggling in retirement on the state pension, or perhaps state pension and small occupational pension. I’m the latter but I’m not struggling, I can afford to heat, eat, clothe myself, holiday etc on my very modest state pension and work pension of less than 18k, plus some savings if need be. There must be more like me!

You do massively reduce your desire to spend I think . I know that we don't need two cars any more . Don't eat as much . Not really interested in traveling abroad annually as it is getting more hassle . Only thing is heating in winter time and maintenance of property . Still have enough for meals out or to treat grandkids . I certainly don't need to buy more clothes or shoes for different events .
I think the predictions seemed geared towards people who want to still spend as much as they used to .
And if you have too much , it will all go to your Care needs anyway . Maybe that is why people want to have large assets .

I'm retired and see lots of my fellow retirees posting their back-to-back holidays, restaurant visits, day trips, art courses etc on facebook. They do tend to have had well-paid public sector jobs, and/or benefited from inheritances / had a wealthy DH / not had children.

I didn't have that but I did go freelance later in my career, luckily in a field which required very little initial outlay or running costs, and got used to living more frugally. I was amazed to realise how much I spent on coffees, eating out and 'treats' to get me through the working month. I've got some savings but am aware how soon they can be wiped out through divorce, illness and any number of happenstances. I agree that returning to work after DC is crucial in building finances back up and 'getting your years in' to qualify for a full pension.

So I don't get complacent. I still work, to a lesser degree, and try to stay as healthy as I can. I've always exercised but now I also eat a lot less, which isn't always easy but ultimately makes me look and feel better and saves money too. Because I've a feeling we won't be able to rely on the NHS or state pension provision so much in future.