Renting in retirement

RetSol

Retireinten said:

Personally I can see the benefit of renting whilst you're still working but once you do retire I'd be looking to spend a portion of your £450k on a property to eliminate the rent cost and give you long term security that renting just doesn't give you.

Aim to spend no more than half that amount, and yes it might be a big property downsize - can you live with that? I'd also consider moving further away to get more for your money but aim for somewhere that's relatively easy to commute to, to see family once retired. 

This would be my approach but I have never rented and I just don't like the thought of not owning the roof over my head. I also put great value in feeling secure.  A (downsized) property + £450k in savings/pensions + a DB pension + state pension would = more security than no property + higher running costs + £650k in savings/pensions etc etc..... for me anyway!

Your last sentence is a no-brainer, as far as I am concerned, @Retireinten. 
650k is not a vast sum when set in the context of an early retirement and a fairly modest pension income, particularly if only c. 200k is in a benign tax environment at present.  There is a limited amount which the OP can do about the tax situation and Rishi might make it more challenging for him (and for all of us) before too long.
A further consideration is: how good with money is the OP?  One benefit of buying a property is that you can't spend the capital on anything else! 

[Deleted User]

“  I also put great value in feeling secure.  A (downsized) property + £450k in savings/pensions + a DB pension + state pension would = more security than no property + higher running costs + £650k in savings/pensions etc etc..... for me anyway!”

Right. Psychological. False feeling of “security “. 

The “higher running costs” assumption is not accurate.  You need to account for the cost of maintaining your house. And for the cost of lost opportunity - the money would otherwise be invested. Buying is more expensive than renting. Fine if you can afford the costs and the risk. 

FYI - I own my property. Its around 30% of my net worth which is fine given my age. Its a lifestyle choice - we have 33 acres, bees, etc. 

mat1964

So it was an interesting day.   The estate agent told me last night to expect an increase on the rather low original offer.  Not only did that not materialise, but the buyers gave me until 5pm to accept their original offer or they would withdraw it.
After talking to family and friends and also work colleagues on the potential job losses, I decided not to accept.  I will stay where I am for the moment.  It's a bit of a risk, as work is uncertain and if my job does go, I might have to take a lower offer.  However, I would get 3-6 months pay which would give me some breathing space.  No decisions are due on work until January.
This has been a really interesting discussion and thank you to everyone who made suggestions.  At the moment I need to live nearish to my 84 year old mother, as she is on her own and I don't have any siblings.  So I don't rule out going down the renting route if I do need to sell - but in the long term when I don't need to be near London, maybe buying something much cheaper further out.  

mark55man

good for you - sounds like a good plan, and sounds like you have a good sense of the options, so I am sure you will be fine - although I always find the perspectives on here give me something new to think about 

mat1964

So things took an unexpected change today.  The 'final' offer for my house was increased a bit - I accepted it, and have made an offer on a very nice 2 bed flat (not accepted yet).  If it goes to plan, I will have downsized to a smaller place, paid off the mortgage and all other debts and still have around £30k left.  In the end, a better solution I think than renting.  I'm still a long way from where I want to be pension wise, but I will have much more disposable income to save as long as the job lasts.

barnstar2077

mat1964 said:

So things took an unexpected change today.  The 'final' offer for my house was increased a bit - I accepted it, and have made an offer on a very nice 2 bed flat (not accepted yet).  If it goes to plan, I will have downsized to a smaller place, paid off the mortgage and all other debts and still have around £30k left.  In the end, a better solution I think than renting.  I'm still a long way from where I want to be pension wise, but I will have much more disposable income to save as long as the job lasts.

This sounds like a great solution.  I hope it all works out for you.

RetSol

mat1964 said:

So things took an unexpected change today.  The 'final' offer for my house was increased a bit - I accepted it, and have made an offer on a very nice 2 bed flat (not accepted yet).  If it goes to plan, I will have downsized to a smaller place, paid off the mortgage and all other debts and still have around £30k left.  In the end, a better solution I think than renting.  I'm still a long way from where I want to be pension wise, but I will have much more disposable income to save as long as the job lasts.

So pleased to learn that things are moving in the right direction for you.  Fingers crossed for your move and thanks for letting us know! 

mat1964

another twist. My buyers buyer pulled out, so chain collapsed and now back to square one.  Not very happy but these things happen.