Retirement stages

ChrisJBSC · 13 October 2016 at 10:42PM

I am 60, and trying to decide when to retire...
Most pension calculators seem to say: Decide what you need, tell us what you have available, and then they calculate the same thing year in, year out for 30+ years (AND tell me I cant afford it!)
BUT that feels wrong to me.
I feel as though I need lots of money now (fun, enjoyment, long holidays) for around 10 years. Then a period of calm, serene settled life with little needs for 10 years. Then a period of rising costs again, as I need carers or support or care home costs for the last 10 years.

Are there any calculators that will show me these differing early / mid / late periods? Are there any products that will help me?!

ChrisJBSC · 13 October 2016 at 10:43PM

Additional: I was thinking of:
Using up my pension pot (from about 4 different pots from 4 different jobs) over the first 10 years. Then living on State pension for 10 years. Then down-sizing the property for the last 10 years. Does that make sense? Is it do-able??

ex-pat_scot · 13 October 2016 at 10:59PM

far too little information to allow meaningful response, I'm afraid.

The #general# comment here is that an annual income of £24,000 pa is desirable in retirement.
I don't know if that's net or gross (the tax on one person drawing £24,000 gross in retirement is £2,600 so not a huge drain).
I don't know if that's per couple or per person.
Frankly - I have no idea of your circumstances, "base running costs", monthly ongoing commitments (children still (semi) dependent?), mortgage.

I've seen research suggesting a U shape to retirement spending: higher early on, as people tick off the travel and adventure whilst they have their health, and gradually diminishing as health deteriorates and the wish list is completed, before possible care costs increase the end-of-life cost profile.
All of that is very subjective.
The number of people requiring expensive care is relatively low.
But that can be £35-£60k per person per year, depending on the level of care required.

From the information given, i'd ask why you are thinking of downsizing only once the funds are depleted and SP kicks in. Why not downsize earlier and make more of the freed-up-cash perhaps? (although be warned that you might not be able to free up quite as much cash as you think- bungalows and retirement friendly accommodation is small but not cheap).

THe way I see things, you can take one of two approaches:

1. do a lot of planning around what cash you need at each stage, and work for a long while to try and achieve the funds that it will require. As you note, this is a scary amount, and you will spend a lot of time working to generate that amount.

2. Jump in and make the most of what you have now. Downsize if you can to free up cash and minimise ongoing running costs, then work out what you can achieve with what you have. It's a bit more scary but I suspect would be a lot more fun

badmemory · 14 October 2016 at 1:11AM

the problem with downsizing is that once you reach a certain age ANY change can be detrimental. So if you are factoring in a downsize as part of your financial plan you need to be absolutely convinced that it is also going to be feasible which means that it should be early enough to actually be feasible!

chiefie · 14 October 2016 at 6:22AM

Once you go into care your income just gets taken in full by the council until it is more than the care costs. And if it is less the council then ask family to top it up. My dad had a good pension but it was less than the cost of very basic care. We had to top this up to get him into a home that didn't smell but the service was still poor. Don't be fooled. Take your own money and give it away asap.

jerrysimon · 14 October 2016 at 7:41AM

Very simlar thoughts myself though I am younger at 56.

I plan to leave around March next year. Our budget will be around £1500 net a month with both my wife and my pension. No morgage and I will also have a lump sum of around 60K. Downsizing plans are uncertain as well. We have about 500K tied up in our house. Initially we plan to stay put. Our house is not huge but is in a major city so it would probably mean moving out and we love city life. Have already travelled exstentively so not got any big plans on that side yet. Of course in 10 years time we can add add another 13K+ for both our state pensions. Unless the government chnage the rules again of course.

I have spent the last six months going round and round the figures. This forum helpded be a lot and stopped me be impulsive when I almost resigned because work was being very difficult. But slowly I am putting the plans in place by looking closely at monthly income, working on bills and thinking about different things that we will do (need a bucket list).

Its both exciting (feels great to think I can ditch the daily grind) but also quite scarey. At 40 I always wondered why people procrastinate so much over retirement. Now I am much less judgemental.

Jerry

ChrisJBSC · 14 October 2016 at 10:13AM

I agree to the downsizing early enough comments - I know the trouble we have had with my parents in moving them from their family house before / after it got too big for them to manage. The longest we have lived in one house is around 20 years - and we expect to be living in retirement for longer than that! So moving at that point will be a big issue.

Thanks, Jerry - your thoughts confirm that something similar is possible. Its all a case of keeping the flexibility for as long as possible. If I can live on pension pots for longer, and therefore delay the taking of the SP, then that allows the SP to be larger and more useful into the future. This automatically means a pension drawdown arrangement early on, rather than an annuity.
Maybe the down-sizing has to happen earlier - but it is something that can be varied and flexible depending on financial position at the time.

Silvertabby · 14 October 2016 at 10:23AM

Have you requested a State pension forecast? If any of your 4 pensions were contracted out, you may not qualify for the full £155 per week.

westv · 14 October 2016 at 10:39AM

Rather than downsizing I think I'll consider equity release when (if) I get into my 80s.

Stirfry · 14 October 2016 at 11:32AM

Having just moved out of our home of 26 years at the age of 59 years I can understand why some people on this forum say if you are going to move do it while your still young and fit enough. Do not underestimate how much unnecessary junk you have collected over the years.

We moved to retire in another area and free up cash, having planned to do so for 2 years.

Silvertabby · 14 October 2016 at 12:03PM

We love our home and have no intentions of moving/downsizing. We may well look at some form of equity release to help pay for a cleaner/gardener when the time comes, but it's different for us as we don't have any children to leave the house to.

Retirement stages

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