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?

I always feel a bit inadequate on the savings threads but comfort myself that I'm taking the middle ground so it's reassuring to see others with that mindset.
I'm taking a middle ground of ensuring mortgage is paid off by 60, trying to build up a £400k pension pot, and enjoy life now - holidays abroad, trips nd experiences in the UK and funding activities for my DD. It's not possible for most people to have everything, I don't spend much on clothes or stuff for my home, buy in the sales and TK Maxx and I'm happy with that.

@FindingMeno

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.

@FindingMeno

I had a decent education to secondary level , however my desire to be financially secure came from watching my mother spending every penny they had, nothing saved , always spent and now she bemoans her lack of fluidity.

We ( my siblings and I) support her state pension in Ireland (so she gets about £11,00) we all chip in about another £3,000) and still we get the poor pensioner routine.

That is where my financial savviness comes from, I always felt poor, even though they were spending.

So I am not truly privileged, nor was I financially literate, I just knew I never felt secure.

@FinallyFluid I hadn't actually considered that scenario. Big admiration for taking the initiative in your own life.

I once met a woman who retired, got bored and went travelling to India. When she was there she visited an orphanage and decided her retired life was so boring, she'd spend as long as she could going from place to place volunteering on children's projects instead. She could live quite well on her pension out there and was much more fulfilled than if she'd been watching telly!

I live abroad and interestingly a Spanish friend with a high earning husband (she is medium earner) put all their spare money into property rather than pensions. They feel they’ve got better control over that, better access to the money if they need it and who knows how long you’ll live after retirement so what’s the point of “giving” it to the pension fund.

Personally I’m for middle ground. I’m early 40s and last year increased my pension to the top possible amount. I have a good salary abd a generous employer pension fund. But my husband, through a mix of being self-employed and a stay at home parent, has nothing.

This does worry me, in case I die first. We do have uk property and savings and I’ve also opened a small private pension/savings thing.

And in the meantime we will enjoy holidays and day trips and life in general. But I do appreciate that we are in a fortunate position to do all of this.

Enjoy life. My DF never made retirement age either.

Well don't fall into the trap of saving for retirement/a rainy day and then when you get there refuse to spend it.
PIL continue to live thriftily despite being very well off, with no one seemingly enjoying it. Money just piling up whilst they sit in the cold and do everything on the cheap.
If DH is lucky enough to inherit then he'll damn well spend it on enjoying life rather then repeating the miserable process.
That I don't get.

I'm from a family that bites the dust early. I'm not too fussed about pensions. I have a chronic illness that means the quality of life that I have now is as good as it's going get and I'm not wasting that freedom on jam tomorrow.

I also hate the thought of squirrelling money away and then if like my mother I die single with no dependents my pensions will just go back to the government/ pension company

Dying before retirement and never getting to spend your hard-won savings is a risk for sure, but it's unwise to ignore the other risk of a miserable retirement in poverty. The increase in life expectancy means the latter is much more likely to happen these days than for previous generations.

I don't personally get the need for huge wealth in retirement. Or actually the need to retire early.
I'll retire when I'm worn out.

Do both, but try not to waste money on things you don't need. X

I'm just planning to semi retire at 57. I'm 55 now. Luckily I have an nhs pension that allows me to do that but it helped I started paying into it at 21.

I think both. I paid into a DB scheme for 30 years and now pay 7% into a D.C. scheme which my employer then pays 14% into. I had DS later in life so will be working probably until 60 but by then I hope to have a reasonable pension.

As I have paid into my pension since I was 18 I have always considered it a bill much like my mortgage and made decisions on holidays, housing etc around the fact that it had to be paid monthly but I don’t feel like I am not living now.

My ~65yo aunt & 70yo uncle just got evicted from house they rented for 30+ years. Not because they are bad tenants, house is being sold to someone who wants to live there themself. Aunt retired due to ill health & they are waiting for uncle to retire (at age 72 he can start drawing on 30 yr pension, I think), but still can't afford to buy where they live. At least they will have his pension to live on, thank goodness.

"We can't afford to buy a home!" Aunt always said.
"You can't afford not to buy!" my dad (her brother) argued with her.

They did spend money on plenty of fun things... some financial planning for future is good thing, anyway.

Both it doesn't have to be either or.
We do all, slightly over pay mortgage each month.
Save long term.
Have sipp and work pension

Not much in anything I might add as we don't earn much but go for slightly chipping away approach. I'd like to increase saving payment and will be working on that this year and also open a sipp for dc.
We put money aside in pots for everything including fun and holidays.
But our holiday is always done as cheaply as possible.

@Mia85 thank you for that link. It is helpful to see the different levels of retirement income.

It is easy to get lost in the pension jungle but when I sat down and worked it out it was also fairly straightforward to get back on the path again.

Spending that time has given me a lot of comfort to see that we should be okay in retirement. My big worry was not wanting to be a burden on DCs.

I know so many folk that either didn't make it to retirement or got ill very quickly after retiring and weren't fit enough to enjoy the pension fund they built up or died not long after retiring. It's so bloody sad and life is too short. Yes u cld have another 20-30 yrs once u retire if ur very lucky. How many of those years are in gd health though?

You need a gd balance don't struggle to put lots of money in ur pension fund but don't be splashing the cash and wasting money.

I imagine that if I make it to 75 after that age I'll probably have health problems (if not before) and won't be going away on fancy holidays etc so won't need much money. My preference is going to be to retire as early as I can. I may even just see if I can go down to 2/3 days and wfh for those rather than retire completely at a younger age. I currently work 3 days as I have young kids & working part time is fab!

One of ladies that I work with only went part time for a year or after coming bk from mat leave and now she's taken a step up too. She told me she'd never go bk to working full time. Now she's decided to work full time and make as much money as possible and retire at 55. She's only about 10yrs away from that. She's earning great money now and we have a generous pension at work. However in my opinion she's sacrificing time with her child for this, they are only little once. It just depends what's more important to you. I don't think her choice is right or wrong it's just personal preference.

I’m 62, semi retired because I saved enough in my pension to allow me to retire at 59 and work very part time. If I needed to, I could afford to live off my pension. Id hate to have to keep working to live! I get to spend time with my grandchildren, have time for myself, have almost no stress anymore, in other words, enjoy my life!
My grandma was 101 when she died, my mum is 86. I dont want to be poor in my retirement!!!

@FindingMeno

I don't personally get the need for huge wealth in retirement. Or actually the need to retire early. I'll retire when I'm worn out.

Having enough money to comfortably fund your retirement when you are unable to work means you will need a considerable pot. Eg. Retire at 67 and live until 87 . Thats 20 years which you will need to fund. Good luck with working until you wear out. Sounds grim to me. I retired at 55 ( NHS special classes midwife) and work PT also. I made extra contributions to allow me to do this. Its bloody marvellous!

Women in particular at at huge disadvantage if they dont contribute to a full pension and saying you dont care about retirement is massively sticking your head in the sand.

I'd like to enjoy my whole life so I've been saving into pensions since I was 23. I'm now 47.

I don't fancy living in poverty in my later years.

I think you have to get informed first to be able to decide what the right balance is.

So, you need to know what the impact on your retirement will be in you put in £100 to pension or £400 a month.

You need to understand what any defined benefit pensions will pay you per month in retirement and what any defined contribution pit will allow you to get as an annuity pension in retirement per month, or if you drawdown 4%. Once you know that, you can decide what is a ‘middle ground’

When lots of people look into this, they realise their pension will pay them less than £3k per year in retirement and also that they will only get £3k from state pension as they are well below 35 years of contributions. They realise this is nowhere near enough and so then they decide to put more into pensions now and spend less now,

A few people realise their pension will deliver vast sums and they can afford to spend more now.

So, you need to create a government gateway account so you can see what your state pension is worth. Is and what it will be worth at the time it pays out at your state retirement age. Assume nothing. You need to find out what any pension pots are worth and what likely monthly or yearly income will be from them. Then you can decide.

This approach of ‘middle ground’ which means randomly choosing a percentage to put into pension, and randomly selecting spending money each month is daft because it’s random and based on nothing. You need to be informed to actually choose a middle ground. Many people are choosing an option wincing will leave them in poverty in old age.

For those with defined contribution pensions (most people now who aren’t public sector workers) you can work on a basis of £30k spent on an annuity will buy you around £1k of yearly pension. Or, you can work on it being affordable to draw down 3.5% of the pension pot, each year from retirement to cover a typical length of retirement.

Look at what you’ve got so far and if you go at the current rate what you’ll have at retirement. Don’t put your head in the sand and just say ‘I’m middle ground and putting something into pension and something into treats for now.

Difficult isn’t it? My health has been so poor at times that I wonder whether I will make it to retirement age, so it feels like way more of a gamble putting money into a pension fund than it did when I was young.

I’m currently in limbo as my situation is likely to change when my last child finished school next year. Kind of hoping for a miraculous change in my professional life (long shot, but not impossible).

When my final child leaves home, and if the miracle doesn’t hit, I think I might aim for a job where I work through winter and will have the summer months free for travel or for alternative work. The idea seems exciting right now as I don’t love my current job and there’s nothing holding me here, other than my son’s schooling.

Basically I think I’d rather enjoy life now, though I won’t wholly throw caution to the winds. I’ll still be putting some money away to live off afterwards. But I’m not going to work long hours in a job I don’t enjoy with only the hope of a retirement I might never reach keeping me going.

[quote FindingMeno]@FinallyFluid I hadn't actually considered that scenario. Big admiration for taking the initiative in your own life.[/quote]
@FindingMeno

Thank you.

@FindingMeno

I don't personally get the need for huge wealth in retirement. Or actually the need to retire early. I'll retire when I'm worn out.

I think the problem many people are worried about is having enough to retire when they are worn out rather than trying to amass huge wealth for retirement. The state pension age is going up and it wouldn’t be surprising to find its value goes down for those who are middle aged or younger now. Plenty of people struggle with health in their late 60s and it would be miserable to have no choice but to keep going. Of course hopefully we’ll all be wonderfully healthy and finding work incredibly rewarding then but that’s not the reality for many.