Regret retiring too early with not enough money?

atush

justme111 wrote: »

Well , it was not enough for sustainable living for years to come at the standard the poster would wanted. I am not sure she fits into "retired too early" description though as we have no idea of how her circumstances happened, one bit of info was that her husband has died unexpectedly I believe. Still far from breadline , I agree and in any case she could live the way she wanted to for a few years ; I think she just was trying to optimise using her resources rather than deal with immediate lack of money for her living standards.

I think she does fit the criteria as she cant afford to live w/o enough income. So should think about work.

She retired too early in that she was relying on her OH's income supplimenting hers, and neither of them looked into t he situation that would occur if he pre deceased her. Which they should have.

jennyjj

atush wrote: »

I think she does fit the criteria as she cant afford to live w/o enough income. So should think about work.

She retired too early in that she was relying on her OH's income supplimenting hers, and neither of them looked into t he situation that would occur if he pre deceased her. Which they should have.

I'd say that one almost qualifies as 'retired too early'.
However, reading the thread, she was widowed some time around age 63 and had only very limited capital of about £50k and only state pension to rely on. That's a pretty sad way to launch into 'retirement' and barely qualifies as voluntarily retiring too soon.
I suspect most who join this thread wondering if early retirement is viable would do so from some level of financial security such as significant near cash assets and/or a personal or company pension.
State pension has never even been seriously factored into my own projections.

atush

They really did no financial planning re the death of the husband. He may have retired and bought a single life annuity- or never had any work pension. I assume they were living on 2x basic State pensions and lost his when he died?

So really, neither of them could afford to be retired at 63 or earlier if they didnt have enough to live on later. They should have kept working til they had enough saved.

I am really hopeful looking to all on this thread have taken the time to plan and save enough that they can retire early.

Triumph13

I also think that if that person faced up to reality, there are ways that they could be okay financially and live a perfectly happy life. The issue is that they arrived at retirement without any planning and are determined to stick with a lifestyle that they can't afford ie living on their own in a £300k house. That's a pretty well guaranteed route to unhappiness.
If they took in a lodger the income should then be sufficient, but they don't want to.
If they sold up, bought a flat for half the money and used the difference to defer state pension they'd be okay, but they don't want to.
I'm afraid I was left with the impression that, despite having failed to plan for retirement, they somehow thought that the taxpayer should be giving them more money so that they could keep their house, their lifestyle and their savings. I respectfully disagree with that view.

Ganga

atush wrote: »

Never said she was skint right now, but in 4-5 years she will be at the rate she is blowing thru those savings. Esp as her income is not sufficient to cover her outgoings, and she does not want to move.

Perhaps you need to go back and re read it?

She retired w/o enough income- which was the question in the OP.

She has an income of £6535 from her state pension,topped up by her small part time job ( she says 0-150 pounds once a month,say £75x 12-£900 ) this gives her £7435 a year,if she uses £3000 a year from her savings this gives her nearly £10,500 a year to live on without blowing her savings pot quickly,for a single person living in a paid for house this would seem a lot.She needs to adjust her spending habits/life style.

Snakey

At the risk of veering off topic, I did read an article a few years ago about how it was not unknown, back in the stereoptyped days of man = breadwinner and little woman stays at home and leaves all the difficult financial stuff to him because her soft feminine brain can't deal with it, for the husband to deliberately buy a single life annuity so he could enjoy a better standard of living and never mind what happens to her after his death. Wifey would have no idea until it was too late.

It's stories like that which make me a) very grateful that I was born when I was and not e.g. 50 years earlier, and b) determined to sort things out for myself and not rely on anybody else.

I also think that we shouldn't be talking about the living-beyond-her-means woman "behind her back" as it were. She's only in the next-door thread, in the grand scheme of things.

mikeeboy

I only stumbled across this thread this morning but it got me hooked, read every post, fascinating reading.

It's no surprise that there's so many positive posts from the baby boomer generation. How will this thread look in 20 years time. In 40 years time, when the draw down money has run out, this thread could look really different.

I'm 'only' 44, but retirement has been on my mind a lot over the last year or so, not retiring, but the thought of when I'd be able to retire. Mainly because there's virually !!!!!! all in the personal pension pot, maybe I should have thought of it earlier.

But I think only in relatively recent times I've had the spare income. Now that I've saved up a buffer (new car etc) for the next 15 years I think I can still generate a pot of some sort.

I think I'll be hitting 60 before I even sit down and do the maths, certainly won't be before then. I have a dream of retiring to Spain, how difficult that will be after Brexit remains to be seen. I'm not anticipating requiring much of a salary if I pull it off.

Oh and after reading this thread, I looked up World Cruises. I really fancy that, I haven't seen much of the world andthat seems a great way. I've never even done a cruise before, but pretty sure I'd love it.

Still, I suspect that any regrets are likely to be financially related and only time will tell, when the 25% takers are still alive into their 90s and their money has run out. They'll probably still have no regrets :T

jamesd

No great need to expect trouble if drawdown money runs out, in part because:

1. Anyone who does as I suggest will have deferred their state pension as longevity insurance.
2. With average investment returns there would still be money left if a suitable income level and drawdown rules were used.
3. Those in drawdown can recalculate their withdrawal rate at any time if it appears that they might live longer than originally planned for.
4. Annuities become good value for money well before 40 years and those who do as I suggest will have done a reasonable amount of annuity buying over the years.

There's no need to have a doom scenario after 40 years. The same sort of planning that was used initially will protect against it.

chiefie

mikeeboy wrote: »

I only stumbled across this thread this morning but it got me hooked, read every post, fascinating reading.

It's no surprise that there's so many positive posts from the baby boomer generation. How will this thread look in 20 years time. In 40 years time, when the draw down money has run out, this thread could look really different.

I'm 'only' 44, but retirement has been on my mind a lot over the last year or so, not retiring, but the thought of when I'd be able to retire. Mainly because there's virually !!!!!! all in the personal pension pot, maybe I should have thought of it earlier.

But I think only in relatively recent times I've had the spare income. Now that I've saved up a buffer (new car etc) for the next 15 years I think I can still generate a pot of some sort.

I think I'll be hitting 60 before I even sit down and do the maths, certainly won't be before then. I have a dream of retiring to Spain, how difficult that will be after Brexit remains to be seen. I'm not anticipating requiring much of a salary if I pull it off.

Oh and after reading this thread, I looked up World Cruises. I really fancy that, I haven't seen much of the world andthat seems a great way. I've never even done a cruise before, but pretty sure I'd love it.

Still, I suspect that any regrets are likely to be financially related and only time will tell, when the 25% takers are still alive into their 90s and their money has run out. They'll probably still have no regrets :T

I agree on the generational thing. Think that I will have to start pensions on behalf of the kids as they will be too busy renting and not being able to save for a house deposit.

I suppose in my increasing years the lesson is for me that some, not all, perhaps have spent bits of their income when it could have been saved. There are choices, new car or second hand, latest fashions or fewer outfits, holidays on the credit card or in a caravan. Some on low incomes don't have these choices and I think something has to be done more than today to get employers to pay more in. They should have a responsibility to the longevity of society if they want to profit now.

The problem is also that we are inundated with advertising to spend now as it will make us lovely and bright like the people on tv. Not too much to incentivise to give something up now for a better life in 40 years 😔

ex-pat_scot

mikeeboy wrote: »

It's no surprise that there's so many positive posts from the baby boomer generation. How will this thread look in 20 years time. In 40 years time, when the draw down money has run out, this thread could look really different.

I'm 'only' 44, but retirement has been on my mind a lot over the last year or so, not retiring, but the thought of when I'd be able to retire. Mainly because there's virually !!!!!! all in the personal pension pot, maybe I should have thought of it earlier.

But I think only in relatively recent times I've had the spare income. Now that I've saved up a buffer (new car etc) for the next 15 years I think I can still generate a pot of some sort. :T

Hmm.
I think you have unfortunately been looking at it entirely the wrong way about.


You have, at age 44, "sorted" your finances out. New car and cash savings. Only now do you think of retirement and generating a pot of some sort.


Frankly, you're 20 years late to the party.


In your shoes, my priority would have been sorting out pension provision first, with new car a long way down the list.
You now have 20 years ish to build for retirement; had you started earlier you would have had 40, and the benefits of compounding over a far longer time frame.


Sadly, you seem to hasve fallen into the "i'll pay in to the pension with anything left over at the end of the month" trap. There's never anything left over; best to take money out at source, so it was never there to spend on anything else.

Finally, your thoughts of starting to contribute now, then calculating how much you might need only when you get to 60, is absolutely the wrong way to look at things.
You need to work out NOW what sort of money you would like in retirement (and when), then translate that into how much it will require in contributions from now on.
Then sit down and have a stiff drink.
Then work out what might be realistic each month, and see what that would get you in retirement. Eventually come to some sort of compromise.


The alternative will probably mean putting £100 per month away now, blissfully unaware that it will be woefully inadequate, but realising at age 60 that you had done too little.




BUT


Not all is lost.


You are late to the party, so will need to make up for a lot of lost time.
The general truism "contribute half of your age as a % of your salary, when you start the savings" is very broad brush, but not a bad starting point. In your case, that would mean contributing a total of 22% of your salary (between you and employer contributions) from now on.



FINALLY.


Don't be too harsh on the "lucky" boomers.
The more they saved, the luckier they got.
Frankly (and in very general terms) they were disciplined in not getting into debt, not borrowing to finance expenditure (apart from property), and saving diligently towards their retirement from an early age.
Their success is not to be resented - it is a consequence of life-long financial discipline that we (the next generation) have largely lost, seduced as we were by cheap loans, huge LTV mortgages and lower interest rates than have ever been seen.