Retiring and less disposable income

[smileylady1]

I’m going to retire from my teaching job next summer. I’m early 60s and DH is 6 years younger he’s going to do roughly another 5 years before cutting down.
I’m already spending less money each month to get used to having less. Once retired I’ll have roughly £170 a week for myself after our combined bills and my gym/mobile have been covered. I’m putting my lump sum into an isa account so I can earn the interest but keep some in an easy access account for extras.
I’ve decided to do this now as my physical health cannot sustain my job with nursery children any longer after 30 years.
Is anyone in a similar situation? I’d be interested to know what disposal income you have once everything has been covered.

I retire 5 years ago so have had time to adjust. I have a little more disposable income than you but I don’t need it.
I have spent a lot less on clothes, fuel and extras since retiring. I still eat out, have regular hair appts (£50 a time). You can spend less on food if you want to.. cooking from scratch is far cheaper.

I suppose it depends on your lifestyle but £170 a week pocket money is plenty

My pocket money would cover hair appointments and taking my grand daughter out during the school holidays. Also coffees and lunches with friends.

My husband stopped work about a year ago and qualifies for a state pension soon. He got made redundant and has lived frugally on that and is just about to take his private pension a few months early.

He is significantly happier. Essentially it has got a lot less expensive without commuting costs or in his case picking up food for lunch for work every day. He no longer needs working clothes or tools. He will have a lot less disposable income each week than you, but enough to afford to run a car and have a coffee out every few days. He mostly gets exercise from walking and cycling. He is looking forward to getting his bus pass as that will hugely help in terms of allowing him to travel without cost.

Can you monetise your home. Get a lodger. Downsize? I know its not possible or practical for many.

The state pension is £230/week, for many people that is there only income and they have to pay all their bills out of that as well. You cut your cloth to fit your circumstances.

I’m looking forward to not having to travel so fuel costs will be minimal. I’ll have 5 years to bridge the gap before I get my SP but if needs be I can do some supply if i want some extra money. The difference to me will be I’m working because I want to and not because I have to.

Sounds good to me OP.

You should put a decent amount into your instant access account (from your lump sum). I did that and "fed" my fun money from there if I wanted to spend on something for me when the usual pocket money was dwindling!

That's my one piece of advice. Do not scrimp if you don't have to, life is for living and it's only for a few years until you get SP. You won't need to dip in to the access account very often, but knowing it's there will make you feel secure and you don't have to count every penny when deciding what to do that week.

Other expenses reduce quite a bit in retirement. No work clothes, travel expenses, the car can last a lot longer with no commute (!). And so on.

Try to ENJOY the freedom of retirement, it's what you want. No point in fretting over things if you can't relish it.

Best of luck in your new life. You will not regret it for a minute!

I work full time and have less disposable income than that and live a reasonably comfortable life.

Will you therefore have £400pw fun money when your SP kicks in?

I mean, I don't know how much you spend but that's quite a lot for most people. In other words, I wouldn't worry too much about dipping into your pot in the 'bridging' years.

What is also key though is your DH's pension provision. IME there is no point one partner having loads and the other minimal, you spend fairly equally. So will he also have enough fun money or will yours need to stretch to cover his fun too?

Ultimately you need a great big (joint) spreadsheet with

• outgoings - current and tweaked for future (and by outgoings I don't mean a list of your DDs, actual tracked spends including everything - it's very different!). Tweaked for future includes any big trips and one off expenses such as home improvements, cars etc.
• incomings per year, changing with your drop, his drop + each SP kicking in
• balance of any DC pots / savings pots
• then you can see your annual shortfall, work out how much DC or savings you need to draw and how long those pots would last. You can then adjust your planned draw down or up - many people don't actually spend their pots as it is hard to switch from save to spend mode.

All the best!

I retired at 58 after being made redundant, I really don’t spend much on myself, hair cut every 7 weeks, mainly coffee and cake out once a week, lunch out maybe every 2/3 weeks. It’s the bigger items that take a dent out of my money, but these are maybe just a couple of items each year. When reached 60, I look the 25% tax free from my 3 small pensions that I have and put the money in ISA’s and I took out annuities out for the balance of the pensions. DH although he said he would carry on working, he actually retired at 63.

Chewbecca's post describes exactly what I did.

Excellent post and advice.

To the OP and others, are you happy you have enough for larger one off expenses? Eg car and home repairs?

Yes, I include these things in my plans.

£170 per week
is a decent amount I think.

The couple of things I would say is that prices are rising, particularly in hospitality. A lunch out and a couple of coffees out a week quickly mounts up. In the longer term, you might want to think about other ways to socialise.
Is everything in your house/garden as you want it to be? I’ve had the past few months off work and it’s surprised me how many little things I have found to improve around the house, all of which have cost a few pounds here & there but quickly mounts up. I’ve also spent quite a bit on bulbs and other bits for the garden. Again, the long term benefits will be worth it. None of this was necessary and, if I’d needed to, I could have postponed some or all of it or simply not done it but you might surprise yourself at how many things you notice when you’re at home more —and have more time to spend browsing in places like Dunelm or The Range—.
The good news is that, as a teacher, you can easily pick up supply work, ad hoc tutoring or some sort of childcare.

My ex teacher friend is an ad hoc exam invigilator and gets decent money.