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Learning to spend

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  • swindiffswindiff Forumite
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    cfw1994 wrote: »
    I think having DB income to cover "the basics" and a DC pot for "the luxuries" is perhaps the ideal scenario.
    Sadly my DB pots are teeny tiny, & annuity rates not really appealing enough to sway my view, but nonetheless, having some kind of split and control would be a GoodThing™, IMHO!!
    My model is to have our DB pots as our baseline pension (we work in academia and NHS so still both currently DB). We are building DC pots to bridge the gap between when we want to retire at 60 and when state pension kicks in at 67.
  • BrilleyBrilley Forumite
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    I suppose the biggest fear is always "running out of money". However (excluding potential long term care costs), my spouses pension which is index linked would pay for all our basic "essentials". When my state pension kicks in we will have a combined income of roughly what we had been spending prior to retiring. On top of that there will be spouses SP, + some old deferred private pensions (not index linked), + any income from savings and investments.

    I have now modified our spreadsheet that we do monthly (recording income + expenditure), to include a column that also shows "underspend against budget"! I am hoping this will encourage us to spend more! We did buy a newer car but apart from that we are still struggling to spend what we should be and I just can't get my head around spending "for the sake of it"?
  • coyrlscoyrls Forumite
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    [FONT=&quot]It’s hard to draw the line between being realistically conservative about spending in retirement and being over cautious. I think I have a tendency to be over cautious but I am now facing a series of “one off” expenses, mainly house repairs and maintenance, that make me think that perhaps I was being realistically conservative after all.[/FONT]
  • DT2001DT2001 Forumite
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    Triumph13 wrote: »
    We will be in exactly that wonderful position by the time our SPs are in payment. A bit trickier for the intervening 15 years!
    If, as friends of ours, expect expenditure to reduce post 74 then maybe you can be more aggressive with your withdrawals in the 1st 15 years in the knowledge that you’re basics will be covered come what may from SPA. Does any 4%SWR or Guyton Klinger sc!nario deplete funds in 15 years?

    Make your bucket list and try to do it without stressing yourselves about money left thereafter.
    My thoughts having had 3 friends/relatives fighting cancer recently and all in their 50’s or younger (fit, healthy diets and no family history).
  • enthusiasticsaverenthusiasticsaver Forumite, Board Guide
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    DT2001 wrote: »
    If, as friends of ours, expect expenditure to reduce post 74 then maybe you can be more aggressive with your withdrawals in the 1st 15 years in the knowledge that you’re basics will be covered come what may from SPA. Does any 4%SWR or Guyton Klinger sc!nario deplete funds in 15 years?

    Make your bucket list and try to do it without stressing yourselves about money left thereafter.
    My thoughts having had 3 friends/relatives fighting cancer recently and all in their 50’s or younger (fit, healthy diets and no family history).

    That is the mentality we are using in that we want to do long haul holidays on our bucket list in the early years of our retirement while we are both fit and healthy. We were lucky in that DHs company pension offered a "smoothing pension" with an extra £3k per annum approx which will disappear on state pension age to give us more money in the early stages between age 58 and 66.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to [email protected]
  • TheShapeTheShape Forumite
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    When I worked for Nationwide Building Society I met a number of elderly people (mostly widows) who would tell me how they were forced to live a grim existence surviving on beans on toast, heating just one room of their house due to rising costs and their meagre pensions. They'd present you with a savings book they'd like updating and almost invariably there would be a six, and not uncommonly high six-figure balance in these accounts. Note: The branch was in an affluent area.

    I don't know whether they felt they couldn't spend the money, perhaps they felt it wasn't theirs to spend (it was earned by their husband or it was to be left as an inheritance) but it was depressing to see people who could have been living comfortably feel they could barely scrape by.
  • Triumph13Triumph13 Forumite
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    DT2001 wrote: »
    If, as friends of ours, expect expenditure to reduce post 74 then maybe you can be more aggressive with your withdrawals in the 1st 15 years in the knowledge that you’re basics will be covered come what may from SPA. Does any 4%SWR or Guyton Klinger sc!nario deplete funds in 15 years?

    Make your bucket list and try to do it without stressing yourselves about money left thereafter.
    My thoughts having had 3 friends/relatives fighting cancer recently and all in their 50’s or younger (fit, healthy diets and no family history).
    With our current spending the only scenario that depletes all our funds over that timescale is asteroid strike ;-)
  • AudaxerAudaxer Forumite
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    DT2001 wrote: »
    If, as friends of ours, expect expenditure to reduce post 74 then maybe you can be more aggressive with your withdrawals in the 1st 15 years in the knowledge that you’re basics will be covered come what may from SPA. Does any 4%SWR or Guyton Klinger sc!nario deplete funds in 15 years?
    I don't think there has been any period where a 4% SWR has depleted funds in 15 years. However if you start retirement with a bear market for a few years, I wouldn't be aggressive with withdrawals at that time.
  • cfw1994cfw1994 Forumite
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    Brilley wrote: »
    I suppose the biggest fear is always "running out of money".

    Mmmm, yes, it feels like that.....but.....
    DT2001 wrote: »
    If, as friends of ours, expect expenditure to reduce post 74 then maybe you can be more aggressive with your withdrawals in the 1st 15 years in the knowledge that you’re basics will be covered come what may from SPA. Does any 4%SWR or Guyton Klinger sc!nario deplete funds in 15 years?

    Make your bucket list and try to do it without stressing yourselves about money left thereafter.
    My thoughts having had 3 friends/relatives fighting cancer recently and all in their 50’s or younger (fit, healthy diets and no family history).

    ....having been to 4 “too early” (including 2 good friends my age :()funerals in 2018, my biggest fear is not living long enough to enjoy those later years....hence a relentless focus on stopping “regular” daily work ASAP and an almost daily incursion to this and other forums ;)

    Yes, plenty of sums to do: for me, having flexibility in both spending and also perhaps optional part time earning feel key.
    Plan for tomorrow, enjoy today!
  • the_catthe_cat Forumite
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    cfw1994 wrote: »
    Mmmm, yes, it feels like that.....but.....



    ....having been to 4 “too early” (including 2 good friends my age :()funerals in 2018, my biggest fear is not living long enough to enjoy those later years....hence a relentless focus on stopping “regular” daily work ASAP and an almost daily incursion to this and other forums ;)

    Yes, plenty of sums to do: for me, having flexibility in both spending and also perhaps optional part time earning feel key.

    Yes it's far more scary to think of running out of health (or time:eek:) than money
    A useful thing for us all to remember! In fact, when looking at the alternative, sticking around long enough to run out of money could easily be viewed as a positive!
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