Would anyone like to share their pitfalls of early retirement

[LetterOfTheLawFella]

Dh and I are both early 50s and looking to retire within the next 5 years. Other than not having enough money to live on (!) what other factors have negatively impacted your early retirement? Just want to be able to balance the positives.

This is the issue with my friends, their pension is ok, not great, but about 35k a year between them, but they have a large house that costs to run, two cars etc. she proclaims to be happy, him not so much.

the issue is their pension is about a quarter of what they earned working, and us, their friendship circle are all still working, which means we are at that stage of life where we have some disposable income, and want to do things like live music, meals out, drinks out , weekends away etc but they either have to decline or when they come they can be very tight.

for example I’ve been at all day events with them where they haven’t bought a round, but let everyone else buy for them, or events where we as usual wanted to go for something to eat and a drink before the gig and they’ve decided no, they want a meal deal which has meant us all doing that. We will suggest a kitty and they say no, let’s do rounds and then they don’t take their turn. Once we bought for them all day and then stopped, drinks were very expensive, and he was sitting without a drink, when I went to the loo he took mine and drank it. When I challenged him on return, he just nodded, yes he was drinking my drink.

They can afford to clearly buy a round or a meal but are choosing to do this as they resent the cost, the I’m not paying a fiver for a pint or a tenner for a curry, there also seems to be a thought process emerging that we can all afford it. So why not let us pay. But they chose to retire.

in addition we do lots of stuff at each others houses and that’s changed too, now it’s the cheapest food they can find and in min quantities, like the worst frozen burgers or potato curry, and if you spend a weekend at theirs, arriving on a Friday, you don’t get breakfast or lunch, just an early dinner on the sat. Where as at all ours, clearly we provide all 3. I was genuinely very hungry last time I was there and had to ask for a little food in the early afternoon.

money has become a signficant thing for them and they constantly compare what we all have v what they do, but they chose to retire very early, they knew their pension impact. It’s not our job to subsidise them.

we love them dearly, want them included, but I can’t lie the behaviour is now becoming very awkward and to an extent unacceptable.

@Frasers Yes I can see how that is awkward and annoying for those of you who are either subsidising those who chose to retire early and now have to accept lower disposable income. I think I would have to say something about that but understand that can be awkward.

Retiring early usually does mean a lower income although in our case we cashflowed our income streams and the various points they all kick in. We then had an IFA who checked it over and reassured us we did not need to adjust our lifestyle and in fact managed a few extra holidays from when we were working. I think people do need to check they actually can afford to take early retirement and do the things they want to. We also have grandchildren locally which we help out with and I have an elderly mother. Now I love spending time with my family and helping out but in my pre retirement course they called some family "time suckers" and said that some family tend to think if you retire early that you will be at the disposal of them whenever now you no longer work. We set boundaries and said that yes we would have more time to help out but only to a limit we were comfortable with. One of my friends who retired roughly the same time as me in their late 50s has found herself tied in to lots of visits to elderly siblings and doing lots of childcare for grandchildren so she has less time to herself than when she was working. However she may be happy with that (I wouldn't be) but I know some who aren't but are unwilling to upset their relatives by saying no.

@Cloudburstings You make a good point re the cost of care in later life but the stats are most people who go into nursing homes only tend to be there for 18 months. Our IFA costed it for us when assessing our pensions/investments and when our state pensions kick in.

I think there is a balance to be struck. My dad died at 63 with no retirement even though he could afford to retire. That is why we saved during our working lives to be afford to retire when we wanted to not when the government told us we could. Since retirement we have seen friends die in their fifties and early 60s, my own husband had open heart surgery two years ago at 61, one friend has a husband with a terminal illness and unable to get out of the house and then there is a large percentage of us who are walking more in our 60s and 70s than ever while working and are therefore fitter in retirement. I personally feel time is running out and I am glad we did not delay retirement to 66 as there was a strong possibility my husband may have died if he was working with the heart condition they discovered. There are a lot of what ifs in life but for most the most expensive time of retirement is in the early years when you are out and about travelling. My mum is late 80s and spends hardly any of her income but then she is still able to live at home with the help of family and some outside care.

@Cornishclio yes I agrée there is a balance to be struck. I work for a big corporate and have seen a few colleagues die before or just after retirement.

my husband works v hard and I often remind him we have to make time to enjoy life now. Retirement doesn’t come for everyone.

@Frasers example os also thought provoking.

the OP asked about pitfalls of early retirement and it was crazy there could be three pages of replies and moine even mentioning that you have to think hard about money and your income sources and what your expenses could be in different scenarios when the obvious pitfall is you don’t have enough.

i also think you have to be aware of the bigger picture. There’s no garantie the current cap on care costs will stay. The facts are healthcare Nd social care costs for older people are rising and rising as a total cost to the U.K. as there are so many older people. Both the baby boomer bulge of demographics and that we are living longer with most people having a long period of multiple conditions and frailness so needing help in the final few years.

the state cannot afford the status quo. There aren’t enough working age people to pay for all these rising costs from more taxes.

so pensioner benefits like winter fuel allowance will have to be changed (means test that! It’s crazy my affluent parents get it). The state pension will have to change (triple lock will have to be broken soon, who gets it and when will narrow). The model for social care funding will have to change. Personally I don’t see why the state should protect inherited wealth.

so if you are 55-60 now you need to look 20 -30years ahead and it’s foolish to assume the state can afford to be as generous then when it’s obvious now there’s a funding shortfall that will only get worse

It's one thing to make reasonable plans and have a nest egg, but planning in minute detail for 80 when you're 50 could mean you sacrifice a lot of todays for a tomorrow that might never happen.

There's a balance to be struck and a whole world outside of the rat trap of feathering a nest you might never sit in (and paying a shed load of tax in the meantime). The massive nest eggs mentioned up this thread are not necessary. All that's necessary is to live within your means.

Since I've retired I've discovered a whole world of people who have a very happy, comfortable existence on very little money. Unfashionable seaside towns are full of folk like this who have gone there because the property is cheap and funds can be spent on living.

These are people who grow their own on allotments, eat handsomely as a result of that and judicious shopping. People who make their own clothes or buy vintage, have a little side hustle going, who travel widely in their camper and mix in circles where lavish entertainment isn't required. I live like this and have done for a decade. I'm not 60 yet.

I volunteer for the National Trust and various conservation and animal charities where I meet like-minded people. I study and have a wide range of winter and summer hobbies. I wild swim and walk miles. If I go out for the day I take a picnic and flasks. I can eat what I like, where I want and save at least £15 on lunch out every time I do it. My friends do the same and so we have sociable, dog tumbling, fresh air days out for a pittance. A lot of cultural activities are free of charge - museums, galleries, community choirs, arts trails and we do this together.

After a professional career alongside property renovation I've downsized. I own my own home and live to my heart's content on about £15k a year. I have a nest egg and, should I need care my little home could be sold.

It's a very modest, small, peaceful, happy life and whilst it might not suit some, for me it's a paradise and I look at those tired, grey faced people my age trudging to the office and wonder how on earth they find the motivation to press on in what seems like an increasingly hideous commercial/driven world just so they can have posh holidays, a new sofa and a spangly new car every two years.

Looking to retire early within the next two years.

I am certainly not going to worry about having half a million sitting in the bank to fund care fees. And most people would never have that even if they worked to state retirement age. I typically hear that type of idea from those that want to keep working which is fine but after over 35 years of full time employment I want my time to be my own.

It's a balance. I have done long haul and expensive lifestyle activities when working but now I want the simpler things in life. Long walks, having the time to exercise and growing my own food sound like heaven and those things don't cost a lot.

Having seen too many people become ill or die to enjoy their retirement I am determined not to be the richest corpse in the graveyard.

@BiteyShark Totally agree with everything you've written there. It's amazing how hollow the "long haul and expensive lifestyle activities" looks when you are on the outside looking in on it. I used to live that lifestyle as compensation for working such relentless, grueling hours. When you quit the treadmill you don't need the expensive sops, but I can tell you have already seen through that trap.

Go for it - I reckon it will exceed your expectations.

Yes, spending to compensate for the long gruelling work certainly resonates with me.

I am looking forward to getting off that particular treadmill 😁

Yes I can see how that is awkward and annoying for those of you who are either subsidising those who chose to retire early and now have to accept lower disposable income. I think I would have to say something about that but understand that can be awkward

yes it’s awkward, and writing that post made me realise I’m quite annoyed by the behaviour. There is also constant little diggy comments, like I said I was going away for a weekend and she commented well at least you can afford that in a snippy fashion and said I’d never pay for that tyoe of thing. He also makes comments a lot. Will complain of the price of a drink, make snarky comments that he’d rather starve than pay a tenner for a bowl of pasta as we are entering a restaurant, it’s just all so bloody awkward.

id fully get it if they were forced into retirement. But they weren’t, it was a proactive choice, they could both be working and earning now.

ive come to realise this is the golden age for some people as you enter your fifties, mortgage either paid off or much lower, kids young adults who need less financial support, higher income due to career progression, so more disposable income and the free time to go and have some fun whilst your health allows.

but if you give that decade to 15 years up for retirement, then like some posters on here you need to be happy with any financial constraints that brings. It has a price.

Not be bitterly declaring its hollow or compensation for working to go on a long haul holiday or resenting folks who now have the disposable income to do more of what they please.

I plan to retire soon, at 60. Husband already "retired", altho not yet claiming his pension. He has loads of hobbies and activities, so always busy - no regrets at all.
I already volunteer, so I can step that up when I retire, as well as taking on other activities - it will need a bit of planning, I accept. And we both want to travel more.
I work pretty much solo, dislike group things and don't have particular "friendship circles", so spending time alone is not only normal but positively appealing 😂
I find it intriguing that people talk about maybe having 30 or 40 years in retirement - how do you know?! I might die in my 60s, it's certainly not uncommon, so I want to retire ASAP to make the most of whatever time I do have available.

@Frasers I'd be really annoyed if we had friends who did that. They cut their cloth and need to live accordingly. But I can see how it's not easy to address this issue with longstanding friends.

I can completely relate to one's 50s being a golden age of earning well, costs decreasing as mortgage nearly paid off and DCs being older and independent so more free time. This is where we're at and I'm really enjoying it. We'll be able to live very well on about 30% of what we need now once you take off pension contributions, mortgage, loans, school fees, uni support all of which will drop out of the equation after 5 years.

Very useful comments earlier from @CatOnTheCarpet - I feel very similar ! As with anything else in life, retiring earlier comes with positives but there are also some potential negatives that need to be worked through

I found that "everyone loves a volunteer". I needed to be more assertive & say no more when asked to help out, as I ended up running a lunch club, a dementia cafe, a family carers' group, a mental health mate's walking group, and doing voluntary youth work. In the end I thought it would be less stressful to go back to work, plus I'd get paid for it! It was useful though, as I discovered I had organisational and people skills that were transferable and I could rejoin the workforce doing a job that I felt was a good fit with my skill set.

placemarking - as thinking of retiring next year (at 60) and getting a part time job in a shop or cafe.

And no - I don't have anywhere near £500k saved up but do get approx £600 a month from workplace pension already.

Have saved up around £60k so far and mortgage paid off.

Me too @littleblackcat27 I’m the same age, though it’ll be 2-3 years at least !

I really can’t think of any pitfalls for early retirement if you have a pension that is sufficient to support the lifestyle you intend to lead. You just cut your cloth accordingly.
DS was in private education until this year so we knew that we could manage on the residual income after school fees which is approximately the same amount as my pension.
Im continuing to work one day a week which significantly boosts our income after tax and allows us to save a little for DS’s university years ( then he’s on his own).
Due to health issues we will not be able to do all the things we wanted to do in retirement and have a good lump sum of savings.
We will both receive state pension and will be very comfortable.
It really does depend on what you want.

Why do you ‘love’ people like this?? ….. they are using you and you are letting them

Great thread. Frasers can imagine that behaviour is draining. I think stay in if people dont want to spend! Think a hobby good. I have a small dog he gets me out 😄

Sounds like your friends could do with downsizing @Frasers so they have less fixed costs and more spare cash to do a few things which are enjoyable.

@Frasers

Yes I have a friend like this and it takes a while to notice but when you
do you can't un-notice . Very tiresome. It wasn't just the always last to the bar it was tickets for events , oh you get them I'm too busy , I'll pay you back , and of course that never happened .

Yes its not nice hattie had that at cinema she wouldnt pay next time.. now I have my money exact for these cute cf lol and pay my own

Ditto!