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?

Why should I wait until I'm retired to enjoy myself?
Nobody can predict health

I work FT

I pay into a pension & have other savings too

I'm booking something to do every month this year

I want to enjoy life now

So I do a bit of both

Do both. You have a fair while to retirement and investing in a good SIPP will accumulate over that time. I think some pension funds give very low returns because they are very safe investments. Depends on the level of risk you are prepared to take to get the returns you need.

Best thing I did in my 40s
I travelled, I tried new things
In lock down, I had all my photos & memories of all the places that I had been to, the people that I had met

I paid into a pension too

Another vote for 'both', but an intentional and planned 'both'.

Work out your current pension situation is. If you were in the teachers' pension for a while you probably already in a better position than many people. Get the information from that and your state pension forecast.

Then work out what your likely to need to live to a reasonable standard in retirement. Of course it's difficult to predict 25 years beforehand but research like this should be able to give you a rough starting point www.retirementlivingstandards.org.uk

Once you know how close you are to a reasonable level then you can make a plan on how to balance between enjoying now and having a decent standard of living if you live to old age.

Where are these cheap hotels in Europe? News to me.

I probably can't afford either, but I would rather enjoy life. I'm not planning on living that long! I won't be able to retire and the government will want us working until we're 200 any way

@malificent7 I think a sensible balance is key
My mother died last year also at 58
I ended up with enough money to pay off my mortgage as a result
I've asked a few questions on here about the money and many people told me to put it in pensions but I'm reluctant due to the fact I only have this money because she died before she retired
I'm going to spend it on living somewhere nice and enjoying life and providing a better life for ds in the here and now
I pay the max into my workplace pension and that's good enough for me

Depends on your plans for retirement. While we will have paid off the mortgage we still would have to pay for all issues with the house. I don't fancy selling and then renting like one of my old colleagues did, major upheaval every year or every second year when the rental contracts run out.

I think you can do both, I am an oversaver as I want to enjoy my retirement. So I may not go out all the time, go on lots of holidays or buy clothes. I do all of this but on a budget and shop around.

Saying that my mum and my in-laws are all mid-80s by now, apart from cancer all my aunt and uncles lived long and prosperous. So chances are I will make it a bit longer.

Also, all my pension will go to either a surviving spouse and DD, so the money is not wasted.

I agree with everyone else

Balance is needed

I probably could save more than I do, but I’m lucky with my workplace pension. Of course that does come out of my salary too!

You need to plan for the future, but I'd look at retiring early in a smaller pension

I never saved a penny when I was younger and the kids were small. We had a business that gave us a lovely lifestyle, big house, nice car, good holidays and then it failed, we were bankrupt. No house, no car, nothing so at 56 years old i'm starting again. I have some money left in my pension (most was used rental deposits, a 2nd hand car and for my ex husband to pay off his some of his customers). I'm having to put away as much as I can every month from my not so big wage, as I know the state pension won't even cover my rent. Having said that I'm having a lovely life - amazing how far you can stretch a very little money!

We have a final salary which will bring in a decent income before tax, we also have a sizeable pot (before tax) which we will use to pay holidays, we also have a sum invested for emergencies, boilers, new cars etc.,

We arrived at this by keeping our shoulder to the wheel for the last 25 years back then we really couldn't afford to live (we had a large mortgage due to moving North,South) but when things eased up we made sure that we stuck to our plan but saved the surplus to spend on one decent holiday a year.

Neither of us are acquisitive by nature and both drive thirteen and fourteen year old cars.

Middle ground is best. IMO

The only issue is housing, it sounds as though you have that sorted, so I'd say don't over worry about saving for retirement. On average your energy levels change after the menopause, alcohol is no longer your friend. I'm glad I didn't waste my 30/40's, saving and being sensible, now I'm mid 50's. I live in an area with nice over 55 housing and free stuff, your wants change if the shit hits the fan I'll be ok. I'm happy with three/four day breaks.

I'm in the 'both' camp. We are nearer retirement than you, probably 2 years for dh and 5 for me. We sat down and worked out what sort of life we wanted post retirement and how much we would need to fund that. It does focus the mind

I'm a live for the moment but it's not by choice.
I agree that putting money aside for an early/ luxurious retirement is for the privileged or those well-enough educated to have good financial literacy from an early age.

I dont have a pension. Im 38. I grew up poor working class in a council estate. I will never inherit. I had debt in my 20s.
I am focusing on buying my own home over a pension. When I calculated the literal of hundreds of pounds a month I would need to contribute just to be mildly comfortable at (lets face it, will be close to 70 retirement age the way they keep putting it up) I just do not think it makes sense at all. There's no getting that money back. Theres no guarantee that the money will do well.
I would rather own my own home and build up a savings fund and also live life now.

I'm retiring in August. I have always tried to strike a balance between what I contribute to my pension and how much on having fun. I've been very fortunate to be able to do both. I think the best bet is to have a public sector job as the pension scheme is so much better than anything you can do yourself.

I'm definitely on the enjoy your life side (while still being sensible) I have a modest mortgage on a 3 bed terrace house, which will be paid off when I'm late 40s (33 now). I pay 8% of my salary into a pension. But otherwise I enjoy my life, I have horses and a horsebox, go on amazing holidays, eat nice food/drink nice wine!

I think it's important to work out what makes you happy and what level of cost/quality is worth it for you. So I buy charity shop clothes and second hand furniture, don't bother with posh hotels or all inclusive as those things don't make much of a difference to me. I'll happily spend £80-100 on a decent meal and drinks out for 2, but wouldn't spend £150+ it doesn't feel twice as nice as the £80 meal. But I'd rather cook at home than eat at a weatherspoons or harvester as I just don't enjoy that kind of food.

Work out what makes you happy, focus your spending on those things and be a little bit sensible too!

What's great about the answers to this thread is it shows that the answer is different for everyone. I have found peace of mind with this question by taking a long hard look at my situation. There's a free service that the Government offer called Pensionwise that helps with this - but I looked at (a) how much state pension I had already built up, and how many years I had left to get the maximum under the current system (b) the pension that I had, how it had performed (private pension, not occupational), how much it would pay out if I bought an annuity or used drawdown (c) how much I might need to live off in retirement (d) when I might retire (e) what else I could do to bring in money (downsize, have a lodger, continue working part time, run a small business that could bring in some income in later life) (f) whether I could up my savings into my pension or into a stocks and shares ISA (g) what was on offer if I didn't save into pension in terms of benefits etc (h) thought about what things were really important to me now that I wanted to spend on, and what I was wasting money on.

Learnt heaps that was totally new to me about investments and tax and how it all works, and now I feel that I have made conscious choices with all the information and have a plan that works for me. Living for now, for me, involves not working myself into the ground and spending time with friends and family and saving into a pension so I am not forced to work full time to 67+ if I can't or don't want to.

We are doing both. I have recently started a new job which is giving a much better pension and savings potential. I will be honest that this was a significant factor for me. I have 10 years to go until I will ideally retire at 65.

I have started to pay attention to pension matters more now. Getting myself clued up on tax implications of different choices.

In my view the first few years of retirement will be the most expensive. This is when we will be at our most active so we may want to take some holidays, do some work on the house. So I am factoring this into our savings plans.

I've been paying £20 for each dc into a pension since they were born as it's a start for them. I can't see them either getting a state pension. I also pay 9% of my salary into my employer's pension and they match it so it s a no brainier. I'm a bit big fan of saving.

@MeanderingGently

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.

Your attitude is very very similar to mine. The only thing I struggle with is the thought of not being able to be of much financial help at all to my adult children or even be able to spend or enjoy times together (e.g not being able to travel to see them if they lived abroad). This will be in contrast to their wealthy father. Worse still would be to be 'poor old mum' whose finances and care THEY would have to worry about. If it was just myself I honestly couldn't give a damn but that really niggles at me.

I'm wondering what happens pension wise if you're part of a couple, do all your financial planning as a unit, and then one of you dies 10-20 years earlier than the other - I assume there are some pension benefits that pass to the other person but it won't be all of them? And one person can't easily live on half of what two people lived on.

@Drunkpanda

I'm wondering what happens pension wise if you're part of a couple, do all your financial planning as a unit, and then one of you dies 10-20 years earlier than the other - I assume there are some pension benefits that pass to the other person but it won't be all of them? And one person can't easily live on half of what two people lived on.

This will depend on the pension but broadly:

Many defined benefit pensions come with protection for the surviving spouse/partner/dependent but this will depend on the terms of the pension and is not a requirement. For example, DH and I would both get 50% of each other's pension under the terms of ours and that is not unusual.

If it is a defined contribution scheme then usually it will be passed as a lump sum to the beneficiaries the deceased has specified. If they were under 75 at the time they died then it will usually be tax free.

Bit more here www.unbiased.co.uk/life/pensions-retirement/pensions-and-inheritance

That said, I wouldn't plan on those rights as of course your partner might run off with someone else and divoce you just as you retire! We plan on the basis that we should each have enough independent pension provision that we'd have a reasonable standard of living as a single person. Hopefully that will mean that combined we will have a much more comfortable standard of living as a couple.

Thank you very much @Mia85 Food for thought!