Regret retiring too early with not enough money?

alinstour

Premier league? Facebook? Luxury cruises? Nah! I used to work 18 hours a day, would work weekends, Christmas, have even put off flights to get the job done. No, I'm 59 by the way, I work about three hours a month and do the "boring" things like walk the dog, write, read, listen to music, listen to nature.
Sure, I haven't got "enough" money. But what is enough? I haven't got enough to drive the Aston Martin DB9. I have got enough to pay for virtually everything I want and spend time with friends and family.
These matters, IMHO, are about choices. I choose not to earn more and I choose to spend less.
Hey ho, each to their own!

AnotherJoe

michaels wrote: »

Thanks for all those giving their success stories. What would help if not too personal would be ballpark numbers for the annual income that supports each model of retirement and even how this and the lifestyle compared to that enjoyed whilst working. Thanks.

My plan is that my post-tax post-savings income after retirement will be the same as before, around £3k/month. My "worry" is that i can see my spending could easily be higher, as I'll simply have more opportunity to spend as I'll have more time. Plus my income will be less assured than now*,as it will be mostly from drawdown for the first 4 years until SP kicks in.

So I'll have to budget a bit more than I do now (which is not at all really), but the budget will be more regarding can I afford bigger spends such as flights and hotels, rather than whether I am buying a LIDL value meal or Harrods food hall.

* though thinking about it, I (or anyone here) could get made redundant at any time, so how assured is that income in reality anyway?

MacMickster

michaels wrote: »

Thanks for all those giving their success stories. What would help if not too personal would be ballpark numbers for the annual income that supports each model of retirement and even how this and the lifestyle compared to that enjoyed whilst working. Thanks.

The problem here is that everyone will need a different amount to fund similar lifestyles depending upon their individual circumstances. Consider a "free" activity such as long coastal or country walks.

A couple who live on their own in a small coastal town surrounded by countryside will have virtually no transport costs to access these walks. If their only car use is to visit the supermarket weekly and the occasional day trip (maybe 5K miles per year in total) and they have a fairly new car then that car could last them for 15+ more years with a low spend on fuel and maintenance.

Another couple living in the centre of Birmingham, with a teenage son relying on Dad's Taxis will spend far more travelling to their "free" walks. Add in the extra mileage ferrying their son around and having to replace their current 5 year old car 2 or 3 times over the next 15+ years then a lifestyle which, on the face of it appears fairly basic, costs far more than the first couple.

It really all comes down to your personal Number based upon your circumstances.

Northamptonblue

A couple of years ago I read what seemed to be sage advice in answer to your question:

10K = survival
20K = comfortable
30K = 'luxury'

Your definition of luxury may, however, be different. I am retiring this year on £32K though I do have substantial savings for capital spend such as holiday of a lifetime and a replacement car.

Triumph13

AnotherJoe wrote: »

My "worry" is that i can see my spending could easily be higher, as I'll simply have more opportunity to spend as I'll have more time.

A technique that helps me with those worries is to think about things in terms of a daily budget rather than a monthly or annual one. Say that your 'bills' total £900 a month out of your £3k leaving you £2,100 of disposable income. That's £70 a day. Before you start fretting about all the things you might want to do that would cost more than £70 for the day, think about all the ones that would cost less but still be a much better day than going to work. If I spent a day cycling in to town, buying seafood, game, cheese, etc from the market, a nice bottle of wine from somewhere, etc, then pottered around for the afternoon cooking and we had a truly OTT gourmet meal in the evening, I'd probably come in under £30 for the day and have enjoyed myself massively. That day of excess would actually have saved me £40 so another day I could do something with a £110 budget - if I wanted to. Once your daily budget is high enough that you can easily come up with enough different days of fun below it to fill up your time then you are laughing.

And don't forget to add in the fact that as you get older and have less energy the ratio of quiet days at home (=cheap) to 'activity' days (=?) will tend to increase naturally.

MacMickster

Triumph13 wrote: »

A technique that helps me with those worries is to think about things in terms of a daily budget rather than a monthly or annual one. Say that your 'bills' total £900 a month out of your £3k leaving you £2,100 of disposable income. That's £70 a day. Before you start fretting about all the things you might want to do that would cost more than £70 for the day, think about all the ones that would cost less but still be a much better day than going to work. If I spent a day cycling in to town, buying seafood, game, cheese, etc from the market, a nice bottle of wine from somewhere, etc, then pottered around for the afternoon cooking and we had a truly OTT gourmet meal in the evening, I'd probably come in under £30 for the day and have enjoyed myself massively. That day of excess would actually have saved me £40 so another day I could do something with a £110 budget - if I wanted to. Once your daily budget is high enough that you can easily come up with enough different days of fun below it to fill up your time then you are laughing.

And don't forget to add in the fact that as you get older and have less energy the ratio of quiet days at home (=cheap) to 'activity' days (=?) will tend to increase naturally.

I couldn't agree more, and this is more or less how we arrived at our Number before Mrs M and I took the plunge. We also further manage this by drawing a weekly amount of cash (ie 7 times our daily amount) so that we can see how we are doing each week. Most weeks we have money left over, so we draw less from the bank the following week. Consequently our savings are continuing to build up and so we could reevaluate should we feel the need and then increase our daily amount.

My experience is that those who have been astute enough to save for an early retirement tend to be fairly cautious when calculating their Number. I have certainly found that we spend significantly less than I had made provision for, so could probably have made the leap rather earlier.

Edit: For information our daily amount was only £50, but most weeks our discretionary daily spend averages a little over £40. We really don't feel that we are failing to do much that we want.

Moby

Triumph13 wrote: »

A technique that helps me with those worries is to think about things in terms of a daily budget rather than a monthly or annual one. Say that your 'bills' total £900 a month out of your £3k leaving you £2,100 of disposable income. That's £70 a day. Before you start fretting about all the things you might want to do that would cost more than £70 for the day, think about all the ones that would cost less but still be a much better day than going to work. If I spent a day cycling in to town, buying seafood, game, cheese, etc from the market, a nice bottle of wine from somewhere, etc, then pottered around for the afternoon cooking and we had a truly OTT gourmet meal in the evening, I'd probably come in under £30 for the day and have enjoyed myself massively. That day of excess would actually have saved me £40 so another day I could do something with a £110 budget - if I wanted to. Once your daily budget is high enough that you can easily come up with enough different days of fun below it to fill up your time then you are laughing.

And don't forget to add in the fact that as you get older and have less energy the ratio of quiet days at home (=cheap) to 'activity' days (=?) will tend to increase naturally.

Just checking.....is the daily budget you describe above per person or per couple

Triumph13

Moby wrote: »

Just checking.....is the daily budget you describe above per person or per couple

The £70 per day was just taking AnotherJoe's £3k budget and picking a random number for bills that made the maths easy. I don't know if AnotherJoe is single, half of a couple or part of a polyandrous harem. The £30 day I described for myself was for a couple.
As to whether you should think in terms of combined or individual budgets, that would come down to the couple and their relationship. We're comfortable with a combined budget. Others may differ.

AnotherJoe

Triumph13 wrote: »

The £70 per day was just taking AnotherJoe's £3k budget and picking a random number for bills that made the maths easy. I don't know if AnotherJoe is single, half of a couple or part of a polyandrous harem. The £30 day I described for myself was for a couple.
As to whether you should think in terms of combined or individual budgets, that would come down to the couple and their relationship. We're comfortable with a combined budget. Others may differ.

Well, I suggested the polyandrous harem option to Mrs AJ and she says I can start sleeping back in the bedroom next week.

Triumph, thanks for your "daily budget" post just upthread, that's one of the best posts I've read here, blazingly simple and obvious but it didn't occur to me at all, Doh ! A fantastic way of looking at it, each day is a savings opportunity, and a way to "carry forward" spend to the occasional big item.

Sapphire

Just to say, very interesting posts, and informative on the different choices people make in their lives!

I'd like to add, though, that – as someone pointed out – they concern relatively affluent people. There are many people who simply never had the opportunity or chance in life to build up pensions and savings. There are people like that in my family, and I don't actually know anyone who retired early in my profession (in publishing, which has always been renowned for being interesting but paying relatively little, hence it always used to attract those who often worked for literally nothing, thus often women from affluent backgrounds!). And some people are/were employed in jobs that never paid enough to fund savings/investments, etc…