Is it better to save for retirement or enjoy life now?

[malificent7]

Starting out on new career so dont earn loads nut low mortgage...i'm 43. I am aware that i need to prep for retirement and will enrol on another pension scheme ( i did have some as a teacher).
However, as a health are worker I am aware that life is short and i want to spend the money I earn now on holidays etc.My mum died at 58 before she took retirement.
Aibu to think only high earners can both save and enjoy life now?

It depends how you define 'enjoy life'. I think it's possible to do a mixture of saving and enjoying life (when you're lucky enough to have money left after bills. I appreciate not everyone is in this position), but it hinges on how expensive your tastes are relative to your income. The odd meal out, treating yourself to small things that bring you joy (eg buying the better bottle of wine in your weekly shop or a jumper you see and love), a holiday now and then? That seems reasonable and worthy of reducing your pension contributions a little for.
My DM died a couple of years after retirement, but my DGM (DM's mum) lived to 94. I going to hedge my bets with the middle path.

Yabu.
There's a middle ground. Very few people gave it all. You make choices.

I would prioritise your pension and prioritise what matters to you elsewhere and cut fat from the rest.

I would rather be putting an extra £50 pm into a pension and taking a packed lunch to work vs "enjoying life" and popping out and buying it each day.
I'd rather shop around and visit a holiday resort slightly off season and pay £500 less and put to difference in a pension.

A pension doesn't mean day to day misery - in fact it is tax efficient

I’d do both. I think you get used to budgeting on the leftover income once the pension contributions are taken out and all the treats mean that much more.

And I think it’s important to get pleasure from free or cheap things. Being able to do that benefits your life both now and later

I lean more towards enjoying life. Many of my family members died in their 50s or early 60s. I would rather work longer but travel now whilst my health permits.

Agree with @Totalwasteofpaper

In my early 20s, one of my brothers was a financial advisor, and set up a pension for me. I didn't pay in masses, think more of the order of the packed lunch and a coffee and my bus fare (walked instead), but over the past 30 years it's not done badly at all so when I retire I shall have my lunch out and catch the bus etc. if I wish to, it won't be a choice forced upon me.

I guess it depends how you define 'high earner', but I voted YABU because I don't think you have to be a very high earner. I think I'm lucky because I quite enjoy saving - seeing the amount tick up is very satisfying! - even if it's more my retirement years away rather than for something imminent like a holiday next summer. Like everything in life it's about a balance. Some treats (of whatever makes you happy) - yes. A designer handbag or the latest tech gadget - no, I'd rather save my money.

I think most people can save & enjoy life but to have the savings most people would recommend on here would generally involve high earnings.

We also took the middle ground. Our work pensions offer an opportunity to pay in a couple of percent more so we have both increased to the maximum there. Plus (we don’t live in the UK) we have the option to pay into a private pension to offset our mortgage, which is a double whammy savings-wide as it’s tax efficient too. Are there tax savings/advantages to be had in the UK by paying more into a pension?

Also it depends on your circumstances, do you have dc? if not then you don't need to save for them & could use equity release in the future for example.

@Ariela

Agree with *@Totalwasteofpaper*

In my early 20s, one of my brothers was a financial advisor, and set up a pension for me. I didn't pay in masses, think more of the order of the packed lunch and a coffee and my bus fare (walked instead), but over the past 30 years it's not done badly at all so when I retire I shall have my lunch out and catch the bus etc. if I wish to, it won't be a choice forced upon me.

To be fair, pensions are very different and not as generous now. I work in the NHS and pay 9.3% of my salary towards my pension, which is about £250 a month

I definitely think there is a balance to be struck. And if I could only do one it would be enjoy life now because I agree we aren't guaranteed a long life.

However, even small amounts paid into a pension /savings can make a big difference. So even if you just save £10 a month, it's a start that you can build on if you get more money in the future.

I agree saving these days is not the same as it was. Literally harshly anything interest, pensions are less generous. Even my s&s ISAs are so so.

I pay into a decent pension and we have a house we pay the mortgage on and the rest of my money I use to enjoy life. I’ve lost enough people young to know I don’t want to miss out on the now by saving huge chunks of money but I don’t want to screw myself over for old age

I'm afraid I'm for "enjoying life" while you have it....not popular here and definitely not considered wise by financial advisers.

It depends...if you have enough money to save as well as enjoy life, it isn't a problem. I didn't. My marriage disintegrated after 21 years and I had nothing plus 2 teenagers to feed, not even the proceeds of a house as it was tied to my husband's job. I struggled for years and saving was the last thing I could do, I ended up with debt just paying the normal bills.

But as soon as I was more secure and the children gone, I resolved to live life to the full. No-one was going to support me except myself, no-one was going to take me places or to travel except me. So I got a job with decent pay and accommodation provided (in education) and spent all my long holidays travelling the world. I have been to good hotels, trekked through jungles, desserts, arctic wastelands and numerous other places. I have done courses, learned new languages, met different people, educated myself via art, literature, concerts and ballets, understood other cultures and different political systems...

I have had some fabulous experiences and don't regret any of it. It all cost money....all of my money. In later life I developed an illness which is now under control but which means, if I'd saved up my money and waited until retirement to do all those things, it would have never happened. I also watched my parents die, my mother gave up everything for her children, never had any 'life' of her own, and died having seen nothing of the world at all. What a waste, we only have one life and we spend a lot of time dead. Now COVID has altered things again, I'm doubly pleased I did everything I did as it isn't so easy during a pandemic.

These days I am facing retirement in a couple of years or so, and have no pension whatsoever, except the state pension. I have a small flat which I rent in a retirement complex where I am perfectly happy, my state pension will cover everything when I stop work. My home is pretty, comfortable, safe; I live rurally and there are beautiful walks to be had in glorious countryside while I'm still active. I don't feel I need masses of savings now I'm older; once I stop working I shall take part in village activities, paint, read, go walking, write etc......plenty to do. I shan't be travelling except to see family. I am quite content with this as I have already had an exceptionally varied life and don't feel the need for anything more.

So for me, I certainly believe it is better to enjoy life while you have it (and the health to do so). If you were looking to go down the same route I would seriously look at what it would mean for your old age if you did so, and what the possibilities are if you reached retirement with very little savings, and make some decisions from there.

I try to tread a middle line.

But I don’t have lavish tastes, so for me my main luxury is time: I work 4 days not 5. (Appreciate I’m fortunate to earn enough to do this.)

Also my definition of “enjoying life” includes spending time cycling & walking, visiting the beach with my DD, browsing the local charity shops & Vinted in search of a bargain, reading & visiting the library and I’m happy with UK breaks & meals out at the local pub.
I rarely drink alcohol & treatments like massages & manicures are birthday / Christmas pressies only.

So it’s easier for me to “enjoy life” while still saving for a pension than my friend whose definition of “enjoying life” is regular 2-week long haul trips to the Maldives, luxury spa breaks, buying all the latest gadgets, personalised number plates, wearing nice watches etc

I think @MeanderingGently makes a good point actually. It's ok not to save for retirement if you're making an active decision and you've given some serious thought to what your retirement could look like with no savings. It's different if you spend (on non essentials) now, and then moan in the future when you have to cut back.

I'm 51 and hoping to retire at 60.

It's pretty scary when I look at the relatively low amount my 3 work pensions will bring in, but then I remember that the state pension will hopefully still kick in at 67 and now my DPs are in their 80s, they hardly spend anything as they're not able to travel far,can't eat that much and thankfully don't need carers.

So a bit of a mixture of both. Outside covid we go away a lot, but tend to do it on the cheap so s/c rather than 3 star. I always like the idea of a luxurious 5* hotel, but then I look at the price.

Also when I hit 60, I fully intend to retire from my corporate job, but I might be amenable to a part time low stress gig if such a thing existed.

I also think there's a middle ground.

My mum is a financial planner specialising in retirement. She says it's not unusual to come across people who are sitting on huge amounts of money well into retirement but are scared to spend it so live a very frugal life. Her own dad was like this too - at the age of 90 he was still "saving"! He lived through a war though which I think impacted his attitude towards money.

Anyway, she says there is an art to getting to a middle ground. Having an understanding of your personal priorities and setting out some milestones also helps.

Also a member of the middle ground club!

My luxury is working 4 days not 5. I pay into company pension as do they so that will be ok ish when I retire.

Overpay the mortgage so that'll be paid by the time I'm 50 and if needs be I can take a step back or out of corporate life.

Flip side is we budget, shop at Tesco, have holidays in my DMs caravan, drive a 10 year old car.

I look at AI 5* hotels in Spain and then look at the £3k price tag that comes with it and just could never justify spending that on a week.

The right answer is to do a bit of both. There is a happy medium between one and the other, although where the line sits depends very much on your priorities.

I have always worked in a sector that made no pension contributions until it was a legal requirement and I never had much spare cash to prop it up.

But I have concentrated on building enough pension that with my state pension will give me ‘enough’ quality of life.

The way I see it is that I can more easily enjoy myself in less money now than when I am newly retired, older but with the interest and energy to get out and about.

Now I really enjoy camping and walking. I love finding a non-peak period self catering apartment and a cheap flight, I don’t need a 5* ‘Resort’ hotel.

Work out how much you will need to live on when you have no mortgage, don’t need to commute or buy work clothes, etc.

Work out how much pension you can expect from teaching plus state, and how much more you would like.

You get such great tax benefits from paying into a pension, and if you name your kids as beneficiaries they will at least inherit it if you (sadly) don’t make it that far.

I think it’s a gamble to be relying on the state pension only - particularly with the cost of living increases that we’ve seen recently. You certainly hear of older generations living in poverty unable to heat their homes properly and I wouldn’t want to be in that position. You could potentially live 20 or 30 years more after retirement. That being said I came to saving pretty late in life and it’s only the fact I’ve worked for a public sector organisation for 23 years and paid 11% of my salary (more now) into my pension that’s giving me the opportunity to retire soonish ( in my 50s). I think there’s a middle ground to be found and that’s what most people I know seem to doing.

I live for now. None of us may even get tomorrow.

Who do you expect to fund your retirement? Or will you just keep working till you die?

If you rely on the state pension your living standards will drop considerably. Do you really want that? Or be forced to have to work?

Middle ground all the way for me.

You don’t need to be a high earner to save for retirement and enjoy say an European city break every year. With cheap flights and hotels.

Even high earners won’t save much if they keep going on luxury holidays.

What each individual needs to do is use one of those online calculators/see a financial planner.

If you have £50 left after bill fair enough but if you have £300 you can always split between pension an holidays.