Everyday Ordinary Man Approaching Full Retirement at 59.

Legacy_user
Legacy_user Posts: 0 Newbie
edited 19 November 2016 at 9:00PM in Over 50s MoneySaving
I am setting up this thread as an ordinary everyday man moving towards full retirement.
I say ordinary, in the sense that I am neither poor nor extremely well off. I have been reading these forums for several years especially the sections about savings and investment.
Of course they provide lots of great support and advice but for the most part for people whose savings and pensions are the stuff of dreams for most of us. I do not say that as a criticism just as a point of fact. Indeed I nearly fell into the trap of measuring myself against other people in these threads and found myself becoming a little bitter and envious which I know is irrational! In my heart of hearts I know I am extremely fortunate. So I decided to set up this thread as therapy, a reality check and a genuine place for discussion for everyday folk approaching or into retirement. The emphasis initially will be on implications for finance and life plans for the next phase of our lives. It is not for advice but more for the sharing of ideas and experiences of other everyday folk. Let us see where it goes!

First of some background about myself. I taught full time for 35 years until August 31st this year. I am now working just under two and a half days a week until next June when the plan is to finish completely. By then I will be just shy of my 59th birthday. I took phased retirement at 55 and the rest of my pension at 58 albeit reduced. I took the maximum lump sum as it suited my needs. Of course such a decision was met by derision from the pension experts in the other place but to me quality of life has become much more important than maximising returns! I am very fortunate in having a defined benefit pension that is index linked. It was reduced owing to taking it early and also taking the maximum lump sum. I also have a very small annuity that pays the grand total of £37 after tax a month! However it is better than nothing! I have recently received a state pension forecast which owing to being contracted out for nearly all my working life is currently £119.54 a week from the age of 66 (due in 2024) As I am working until next June I will add another year ‘contracted in’ this amount. When I finish work next June my income will be about £1350 a month after tax until 2024 (all at current prices) Quite interesting that although I will have contributed for 40 years to the state pension they only include(at the moment) the 35 ‘contracted out’ years in my pension calculation and none of the others!

I co-own a house with my mother. My grandmother lives with us too, who is still going at the grand age of 101. Hopefully this means I may be retired for quite a while! My total share of the house will allow me in this area to buy myself a decent house in the future. (After other members of the family have received their share of the proceeds of the current one) Sounds morbid to talk like that but one has to be practical. I am debt free and the house is mortgage free too. We did some upgrades recently and have plans in hand to redo the drive and the kitchen in the next 2 to years. I may also need to change my car in the next couple of years. I have a lovely extended family that includes several nephews and nieces who are very special to me. Unfortunately I lost one of my sisters four years ago at the age of 42. She left 4 children. Such a tragic event certainly makes you re-address your priorities! Other illnesses in the family also provide timely reminders to enjoy life rather than worry too much about the finances!

I used part of my pension lump sum to clear the mortgage and all other debts. I had some left over and have done the following with it.
  • A Loyalty Saver. Easy access and includes emergency fund.
  • Cash ISA
  • S&S ISA (See this as long term and will not look at it for 8 years!)
  • Premium Bonds
  • Nationwide Regular Saver (5% at moment! Started with £500. Can add £500 a month for a year only)
  • Personal Current Account
  • Joint current account for all household expenses. (We all contribute each month to this)
Hopefully by next June I will have total savings and investments of just under £50000 before my income drops by 50% as I give up work completely. It sounds healthy but I am planning on being around a long-time! I also want to travel. Any constructive comments about any of the above most welcome.

I do feel guilty about not having managed to save more during my working life but things happen. For example, I lost a lot of money during the property crash in London in the 1980s. Interest rates on mortgages were then 15%! I had to borrow to sell! Fortunately that is all behind me now and I have been fortunate to work solidly for 36 years. When I entered teaching I had little idea about the pension scheme. I do feel fortunate now.

To my shame I do worry about money and probably should not. I suppose as we approach retirement we all get nervous about the regular salary stopping. Of course I could always do supply in an emergency but after 36 years I feel I have done my bit! It’s just in the past I went through some close financial calls. I do want to enjoy my retirement and tick some things off the to do list!
I have planned my finances for after June 2017 and after all expenses and spending money should still be able to save some money each month.
I also want to spend some savings travelling. I am keen to do the train journey across the Canadian Rockies as well as maybe spend some time renting a property in Cyprus an absolute favourite place of mine! We are fortunate that also my mother and grandmother also have adequate pension provision.

So that is my introduction. I am now just off to walk the dogs and then meet one of my nephews. I am fortunate that I live in a semi-rural area with plenty of countryside around me. Weather not looking too promising though. Have some schoolwork also to do. Working part-time has been great for getting the garden organised and actually being ahead with the Christmas shopping! As 2017 approaches I now need to plan more activities and long term aims for the retirement years.

I do hope you will join me on my journey and feel able to share aspects of yours too!

Thanks for reading.
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Comments

  • System
    System Posts: 178,093 Community Admin
    Photogenic Name Dropper First Post
    edited 19 November 2016 at 3:18PM
    I must say I am looking forward to full retirement even though I will miss my colleagues and the students immensely. The job has been such a big part of me and my life for so long. However I really feel it is time to 'leave school' and have some new experiences.
  • Caterina
    Caterina Posts: 5,919 Forumite
    First Post First Anniversary Combo Breaker I've been Money Tipped!
    Dear excelpaul,

    What an interesting post, and what a good idea! It looks like you have really thought this through very carefully and I am sure you will enjoy a good retirement.

    I am going to subscribe to your thread and look forward to reading about your adventures in retirement-land, or semi-retirement for the time being.

    Meanwhile, have a look at the Old Style thread, there are a lot of really good suggestions on how to live well with very little. It made me smile that you called your £37 per month annuity "paltry", as in the OS forum you will find a thread on how to live for £1 per month! Not that you need it by what I read, but just as an example that no income is paltry if you administer it wisely.

    Looking forward to new posts, all the best!
    Finally I'm an OAP and can travel free (in London at least!).
  • Gers
    Gers Posts: 12,024 Forumite
    First Post Photogenic Name Dropper First Anniversary
    You sound really sorted! Well done.

    My SP date has been moved to 2019 so I was fortunate enough to be able to take my occupational pension in March 2014, moved back up north from a life in the NE and now doing the retirement thing too.

    After a wee while I got ''restless brain' from missing the teaching / learning environment and now do one day at week at the local college plus a couple of other bits and pieces.

    Once major items have been bought and mortgage paid off it's amazing how ones needs shrivel. I no longer need to have new clothes or shoes etc (just an example). Not being near to tempting shops each day sharpens the mind about organisation and removes temptation!

    I too took the lump sum which set up everything nicely and allowed me to kit out the new home just the way I wanted, no compromises anymore. Now I'm bought out, more than surviving on pension and earnings.

    As for your SP - I have 46 years NI contributions and am still two years short of achieving the full new SP. You can buy voluntary class 3 contributions or work part time to get credits.

    Have a look at the pensions board, there are loads of people who are willing to help and very knowledgable too. They helped me in my investigations into class 3 contributions and, when I messed it up, gave me great advice about claiming some back.

    Enjoy your retirement whatever you do! My only sibling died at the young age of 54 and his second eldest child died this year at the age of 33 and that certainly does concentrate the mind!

    Do what you need to do... and have fun doing it.

    :beer:
  • System
    System Posts: 178,093 Community Admin
    Photogenic Name Dropper First Post
    Many thanks for your comments GERS. As for increasing my state pension entitlement I am seriously considering leaving things as they are. I will have enough for my needs. I think I would rather use the extra contribution NI lump sums for some memorable short holidays! We shall see:)!!
    By the way have also had a similar discussion on the TES forums. A couple of people there still dithering at going early with hundreds of thousands of pounds behind them. What are they waiting for! Also trying to keep rational and not feel envious of being in a such a position!!:D
  • srn
    srn Posts: 114 Forumite
    First Post Name Dropper First Anniversary
    A very interesting post, I too will look forward to following it.

    My husband (then 58) took voluntary redundancy a year ago last april so I (then 61) decided to retire as well. We also worried about the reduced income but we did our sums and have not regretted a minute of it, in fact we spend far less, without denying ourselves anything, than we thought we would. We aren't huge spenders, but enjoy our caravan, we went away for 8 weeks this summer, wonderful, we toured the south east of England. To be honest I agree with you, if you think it's possible do it, it's the best thing we ever did.

    Savings returns are rubbish at present and I don't hold out much hope for the immediate future. We have spent a fair bit future-proofing our house.

    By the way our youngest son has just started his NQT year teaching Computer Science, he loves it, but is exhausted, I didn't realisse that teachers put in 12 hour days!
  • Caterina
    Caterina Posts: 5,919 Forumite
    First Post First Anniversary Combo Breaker I've been Money Tipped!
    With regard to taking the lump sum or the higher pension, in our case there is no doubt, take the money and run. DH suffers from a life-limiting disease and much as we would love to think that he has many years ahead of him, we would much rather enjoy what time he has on this Earth, and me too, who knows what's around the corner? Since his diagnosis last October we haven't looked back.

    Had he not needed to retire on health grounds he was planning to work past his pension age, he loved the project he was working on, but now he sees that not working does not mean getting bored, his time is full and enjoyable.

    We have to be a bit careful even with lump sums etc because there might be a point when we might need serious money to get him care and comfort and will not want to scrimp on that just because we splashed beforehand, so it is a balancing act for us at the moment.

    This November is the first month that he hasn't had a salary but only a small occupational pension, we are holding back from claiming his SP until February 2017 when he will be 66 and will have accrued another nice little lump sum, then get the regular state pension. At the moment we make do with his occupational, my bits and pieces of babysitting and supplemented by savings and bits of the lump sum.

    From Feb 2017 we will be in a much better position to assess what our regular income and expenditure will be, and at that point we will be able to see how much we want to draw from his private pensions, as yet untouched.

    In August 2017 I will be able to claim a couple of small occupational pensions of my own, although my SP is not until 2023. Overall we make do with very little on a day to day basis but splash a bit on travel. We only travel by train for example as I don't like flying and he does not like it on environmental reasons (I am terrified as well!), so if we go to Italy to visit my family it is overnight with a sleeper, much more expensive than a cheap flight but much more pleasurable and civilised, we find. We can do this because we are very careful in other areas.

    I find it very interesting to read how others manage their retirement finances because we are just at the beginning of this adventure and sincerely hope and pray to have quite a few more years to enjoy.
    Finally I'm an OAP and can travel free (in London at least!).
  • Such an interesting and considered post.

    I am not at this stage yet but I will be so it is very interesting to me to see how people have a staged retirement. I think I would like to retire at 60 and start to decrease work from the age off 55. However, I might change my mind!

    I have subscribed.

    I wish you a full and happy retirement.
    If you have built castles in the air, your work should not be lost; that is where they should be. Now put the foundations under them.

    Solicitor/survey savings 300/1700
    Emergency fund 0/1000
    Buffer fund 0/200
  • Katiehound
    Katiehound Posts: 7,548 Forumite
    Name Dropper First Anniversary Combo Breaker First Post
    edited 21 November 2016 at 11:38PM
    I took very early retirement due to ill health and before the SP kicked in was living on an incomplete occupational pension. I certainly paid voluntary contributions to make the full state pension.

    Treats were certainly allowed as long as they were on the thrifty side! Think 2 for 1 meals , orange wednesdays and similar

    I would suggest with your savings that you look at the banks and budgeting thread. When you have a bit of time on your hands you will be able to play the current a/cs game. Even if TSB, Lloyds & Halifax are reducing their incentives in January they are still paying considerably more than a savings a/c. There's also cashback on debit contactless and credit cards for at least part of next year. It was possible to get £60 per month! plus £100 switching deals.

    Then with your little bit of extra dosh go out and enjoy life.
    There are still reduced rates for over 60s, they are not all tied to SP age

    Make a list of all the things you want to do (oh yes, the bucket list!)

    Above all.... enjoy!
    Being polite and pleasant doesn't cost anything! --
    Many thanks
    -Stash bust:in 2022:337
    Stash bust :2023. 120duvets, 24 bags, 43 dog coats, 2 scrunchies, 10 mittens, 6 bootees, 8 glass cases, 2 A6 notebooks, 59 cards, 6 lav bags,36 angels,9 bones, 1 knee blanket, 1 lined bag,3 owls, 88 pyramids = total 420 total spend £5. Total for 'Dogs for Good' £546.82

    2024:23 Doggyduvets,27pyramids, 6 hottie covers, 4 knit hats,13 crochet angels,1 shopper, 87cards=161 £86 spent!!!
  • System
    System Posts: 178,093 Community Admin
    Photogenic Name Dropper First Post
    Many thanks for your comments Katiehound. To be honest I am not really into the current account chasing and switching banks games. I am vey happy with my provider but do keep a check that my savings keep as far as possible up with inflation.
    I do quite well with Nectar points and my Boots card though. Just managed to buy several Christmas presents from Boots using the £125 I had accumulated with them. As a household we will have about £160 on our Nectar card to help with the Christmas shop. We probably make in excess of £400 a year with the Nectar card. It helps having a Sainsburys Credit card which we pay off in full each month and as a reward are credited lots of points. We also seem to get lots of coupons for certain items, triple points and money off petrol (which we also buy with the CC)
    Also have an M&S Sparks card. I am known as the M&S man both at school and at home!!
  • Katiehound
    Katiehound Posts: 7,548 Forumite
    Name Dropper First Anniversary Combo Breaker First Post
    excelpaul wrote: »
    To be honest I am not really into the current account chasing and switching banks games. I am vey happy with my provider but do keep a check that my savings keep as far as possible up with inflation.
    Well, you could open a couple of 'donor'accounts or maybe open 2 xTesco current a/c s paying 3% on £3,000 (or £6k in total) with no minimum pay in or outgoing DDs. easy peasy pocket money!!

    I suspect you have seen that there is a Nectar points double up on now- which ends- weds? I use Tesco so don't know the details
    Being polite and pleasant doesn't cost anything! --
    Many thanks
    -Stash bust:in 2022:337
    Stash bust :2023. 120duvets, 24 bags, 43 dog coats, 2 scrunchies, 10 mittens, 6 bootees, 8 glass cases, 2 A6 notebooks, 59 cards, 6 lav bags,36 angels,9 bones, 1 knee blanket, 1 lined bag,3 owls, 88 pyramids = total 420 total spend £5. Total for 'Dogs for Good' £546.82

    2024:23 Doggyduvets,27pyramids, 6 hottie covers, 4 knit hats,13 crochet angels,1 shopper, 87cards=161 £86 spent!!!
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