Affording retirement

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  • Savvy_Sue
    Savvy_Sue Posts: 46,017 Forumite
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    Isn't affording retirement a bit like affording children? If you thought about it too hard in advance, you'd never do it! At least, I am hoping that's the case, 'cos I can't see any way of affording it any time soon! Got a while before my state pension kicks in, possibly even longer than I think atm knowing the way things are going ...
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  • mhoc
    mhoc Posts: 19,262 Forumite
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    Interesting discussion.

    I think its a good idea to keep a day to day chart of your everyday spending - food,toiletries, newspapers, magazines, alchol, house, garden, hobbies expenses, how much you spend goign to the pub or cinema etc and then you can see if there are any areas where you can cut back.
    I've been doing this and I reckon we would still need £1500 a month to pay the bills (no mortgage), run cars and do everything that we now do. The only thing I would not be doing is saving the amount I have been able to save. Also on this amount we could only afford holidays unless the money came out of savings
    Over the last 2 years I've gradually cut back all of the bills where possible as this is really the bottom line now, nothing else to be cut back.

    I've been saving as much as I can each month. My OH is earning the most now he has ever done in his working life but if his health failed then it would be a huge financial blow so for now we carry on saving and hope he can work for as long as possible.

    Where retirement gets expensive is when you no longer enjoy good health and you have to start paying for extra help. My Dad was paying for a gardener to cut his lawns, a window cleaner, someone to clean out the wheely bin once a month, a cleaning lady to come in once a week, someone came to the house to do his feet everything - all thing she would have done himself before he became more frail. Later on he had a hot meal brought to him each lunchtime so that we even more expense. He was also due to have carers come in twice a day and he would have paid for them as well.
    If you dont have the income to cover these expenses the money has to come out of savings.
    “Create all the happiness you are able to create; remove all the misery you are able to remove. Every day will allow you, --will invite you to add something to the pleasure of others, --or to diminish something of their pains.”
  • tescobabe69
    tescobabe69 Posts: 7,504 Forumite
    £24k is a huge income, especially spread over two people, stop worrying and just keep an eye on expenditure.
  • margaretclare
    margaretclare Posts: 10,789 Forumite
    susiejq wrote: »
    Hubby and I have 18 months now tilll we retire and we estimate our income, before tax, will be in the region of £24,000 a year.
    We have been wondering if that's enough, although we can't do much about it if it isn't.
    We will have a mortgage but should have enough in savings to cover the monthly payments (or pay it off if we have to) but the interest rate is much less than what we got on our savings so not in any rush to pay it off.
    We want to run our car (cheap tax and very economical) as well as our motor home so we can travel.
    We live in a band C property and have fairly average bills for utilities.
    We have life insurance and a small dog who we insure. We also have a small boat that we sail locally.
    Does anyone have any idea as to whether our income will be enough or have any first hand experience of retiring on that amount of income. I'm very frugal where I can be which is why we can retire at all. Any comments very welcome.:beer:

    A bit similar to us. We don't consider ourselves to be rich, but we're a very long way from being poor.

    We haven't the dog, the motor home or the boat, or life insurance. No mortgage to pay - we did equity release in 2003 which freed up the amount we were paying on the mortgage. Also band C property - have spent quite a lot over many years on modernising and making this 1930s bungalow 'user-friendly' and comfortable. Every year has seen us spend on this - last year was re-doing the access down to the back garden to make it safer. The previous year, access at the front. Important to look at any areas where you, or someone coming to the house (postman etc) might trip and fall. Also, important that it doesn't get neglected-looking - this is a dead give-away to opportunist thieves and con-artists.

    We're still able to run the car and to save. 'What are you saving for?' is a question I've been asked many times. Just that we don't know what we may need in time to come and a stash of money is always useful.

    We do pay for windows cleaned and for help in the garden.
    [FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
    Before I found wisdom, I became old.
  • chesky
    chesky Posts: 1,341 Forumite
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    Before I retired I too worried about whether or not I'd be able to manage financially. After retirement, two things happened:
    Firstly, I decided to be very careful in what I spent in the way of groceries, clothes, etc.
    Secondly, I joined the CAB as an adviser.

    I soon discovered that people were managing to live on a great deal less than my income - and bring up a couple of children at the same time. So it dawned on me that if others could manage, then so could I.

    I've ceased to be frugal and as a result, I no longer manage to add so much to my savings as I did when I first retired but I live pretty well and certainly much better than I had expected.
  • pollypenny
    pollypenny Posts: 29,393 Forumite
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    Same here, I am a worrier about finances.

    However, we are better off than ever. No mortgage, no feeding hungry teenagers, let alone seeing them through uni. No huge petrol bills for OH to get to work, no need for smart clothes to be replaced often.

    We can take advantage of discounts, like yesterday. Orange Wednesday before 5.15 Seniors price - £5.50 for us both. Lunch using vouchers.

    Great! :D
    Member #14 of SKI-ers club

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  • It sounds like you will have enough for now. I would be more concerned about what your income will be in 10 years time and will it have increased enough to keep you in a similar style.

    The transition will be from cash-rich time-poor to time-rich cash-poor. You say you are pretty frugal but when you retire you will find more time to take advantage of all the offers you see on MSE. My advice buy a big freezer and visit Tesco and other supermarkets when they are marking down food.
  • Am I the only one who thinks that the only way the bankrupt government (and a large proportion of the country's population) can see to get out of the increasing mountain of debts, is to devalue the currency ?

    Remember the rule of 72.
  • PasturesNew
    PasturesNew Posts: 70,698 Forumite
    Name Dropper Photogenic First Anniversary First Post
    susiejq wrote: »
    Hubby and I have 18 months now tilll we retire and we estimate our income, before tax, will be in the region of £24,000 a year.
    We have been wondering if that's enough
    It's more than a lot of people ever earn, plus they have the costs of going to work, clothes/hair for work etc.

    Sounds a lot to me.

    When I retire I'll just be on the regular state pension - and single. I expect to be better off than when I was working with that amount.
  • cos_2
    cos_2 Posts: 624 Forumite
    First Anniversary Combo Breaker
    I'd hope you'll be fine with your new income level along with the other investments/savings you've put in place. Looks pretty good to me :)

    I 'retired' 18 months ago and gross income fell from £43000 to £14000 (occupational pension), but I received a good redundancy payment that got rid of the loans/CC debts.

    I kept my mortgage as, like you, the interest rate is lower than savings rates, and I've enough to cover it in savings if rates change.

    Every month we have to dip into our reserves for running costs, and we also use them for funding holidays. My wife's American so we try to spend time over there every year.

    The good news is that I've calculated that we can continue to do this until my wife's U.S. pension becomes due in 2022. My state pension is due in 2026, and we should still have a bit of capital left over.

    As others have said it's pretty scary anticipating such a large fall in income, and I swithered about trying to avoid redundancy and take another post. At the end of the day I made the right decision and thoroughly enjoy my new freedom!

    I stopped working at 51 (still have to pinch myself) and am richer than ever with the things that matter. I'm sure you'll never regret it either :)
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