How much to live on

Nebulous2

Organgrinder said:

If it helps, I've been round and round my spreadsheet and guiide hundreds of times. Nerves are normal.

What it boils down to for me is quality of life. I enjoy my job but I'm finding it ever harder working full time, yet i'm fitter now than when I was 40.

I'm a teacher, but only started 15 years ago so no automatic lump sum for me. I have two other DB pensions from my previous career and a DC pot of about 30k.

If i took all my DB pensions now (56) I'd have approx £19k pensions and no debts but I don't have enough savings for what I would like, so for me a phased teaching retirement makes sense. I'm hoping to go to 3 days a week and continue this for 3-4 years.

I wouldn't be taking all my pension benefits but sufficient to boost my savings to cover the period to 67.

By the time I want to fully retire (60) my total savings should total £90k, my pensions to £21k pa and I'd also continue exam marking which boosts my income by up to £3k a year. This sees me through to SPA where I can hopefully enjoy a £31k pa retirement with a rainy day pot of about £50k still in the bank.

I've factored in everything I can think of. Holidays. Cars. Etc etc. I have three periods in mind. Phased retirement to 60. Early retirement to 67. State Pension Age at 67. At no time does my disposable income ever get lower than now whilst working full time. The one worry I have is something major like a new roof but that's the rainy day money I guess.

So far, noone i've spoken to who has done this has regretted it, and noone thinks it's a bad idea. If it doesn't look like it's working I may continue part time for longer. Ultimately though, if my plan provides me with more disposable income than I have now, I do wonder what the hell I'm worrying about.

I'd recommend phasing.  I didn't have a complicated and detailed plan, and didn't really intend retiring. I did my sums, decided I could, we had a single income household, handed in my notice and stopped. One advantage was that we got some bigger expenditure, a better caravan, a newish vehicle to tow it with and a new boiler for the house, out of the way and paid for before I stopped. I had just turned 59 when I stopped. 

I very quickly decided that I wasn't ready to retire and took a part-time job. I did a bit more the first year, but this second year I'm really only working one day a week. I found that although our finances were in order, mentally I hadn't made that leap. 

I tell people that retirement is like jumping off a cliff. Part-time is like climbing to a ledge half-way down to break your fall. 

Moneywise we haven't spent as much as we expected, and that's a common experience that people report. A life time habit of being careful with money doesn't disappear over night. We have a cushion and expected to spend some of it to top up my LGPS pension in the run up to the state pension, but we haven't needed to. We have more capital now than we had when I stopped two years ago. That includes having bought some expensive toys, like a new bike and a decent camera. 

I'd say go for it, part-time helps and money isn't as daunting as you think. Not having National Insurance on your pension helps and halving your gross income means quite a bit more than half net.

Another big plus with a public sector pension is full indexation, particularly with inflation as it is. Getting a 10.1% increase just now helps my pension keep up, where my ex-colleagues are likely to get a 3-4% payrise. 

 

Brighton01

Thanks everyone for your thoughts- lots to think about. 

Part-time work might be a good idea for me - so I can ease myself into retirement more gradually!

Nebulous2

Brighton01 said:

Thanks everyone for your thoughts- lots to think about. 

Part-time work might be a good idea for me - so I can ease myself into retirement more gradually!

An issue with part-time can be your management / company expectations. That means you can get sucked in and end up doing most of your old job, for half the money.

My previous manager went to 3 days, but then was asked to attend a weekly management meeting on one of her days off. 

People who have been used to having you available act as though you still are, and it's hard to resist.

I'm glad I stopped where I worked and took a job somewhere else with less responsibility, despite a drop in pay. 

luvchocolate

I will be 71 next month. 
My state pension was due at age 62 
I deferred for 2 years as the 10.4% uplift at that time was a good for me. 
I cut my working week from 5 days to 3

At 65 I moved back to my home town and was approached by a former employer to work 1 to 2 days a week flexible. 

That worked well but I now have 2 young Grandchildren who live an hour away and spend time with them.

I now work casual as and when needed 
Sickness holidays etc...if I'm free I'll help if busy then it's a no. 

This works really well for all of us..
It's an independent clothing shop..big on customer service and more social than physical work. 
I am happy I can help and my life is well balanced 

Kim1965

I would agree that working part time in your existing role can be a challenge. I am self employed and to reduce working hours has proved difficult. I emailed my entire customer base to tell them i was retiring. 
 I now only assist a couple of younger workmates with their larger jobs. I now get fewer phone calls, no longer do emergency call outs all of which is great. My problém is that i am still working 4 days a week... but its a step in the right direction. There is so much work for trades. 

Roger175

Kim1965 said:

I would agree that working part time in your existing role can be a challenge. I am self employed and to reduce working hours has proved difficult. I emailed my entire customer base to tell them i was retiring. 
 I now only assist a couple of younger workmates with their larger jobs. I now get fewer phone calls, no longer do emergency call outs all of which is great. My problém is that i am still working 4 days a week... but its a step in the right direction. There is so much work for trades. 

Kim1965, exactly the same here! I'm self employed and trying to gradually retire. I'm now only working for a select few and generally not taking on any new work, merely seeing out existing commitments. Yesterday a client sent me something which needs evaluating, probably a day and a half of work and I replied saying sorry, but I wouldn't be able to get on to it until next week. He's just emailed me saying no problem, but can I come and see you to run through it on Wednesday morning. No, sod off!!!

TywysogLloegr

Thank you for all the contributions to this thread. I have recently retired early at 59. The amount I take home is the same as when I was working (when I remove the costs of working). The costs of getting to work had hugely increased, but wages stayed the same. Now my pensions have gone up this year by 10% as I have all CPI linked DB pensions.

Similarly to others I tried working part time in my old role and it seemed that I did four days work for three days pay. 

I can see myself doing some other part time work. I will think about that once I have cleared the DIY jobs that I put off until retirement. 

Still settling into the new lifestyle with less pressure to get things done in a weekend, just carrying on the next day. 

daz378

I'm in care...got a 10% rise...even backdated to last  April...a good firm  but so short staffed...its just assumed you will take up the slack.  no acknowledgement...but something not done...you get  told off...2026   will have 25 years lgps... xmas no time off taken for granted....so even at 60 if I get 2/3  of monthly pay may pull trigger...and  part time to supplement income...will work when I want to....so tired

GunJack

After my company decided (after a short-ish consultation period) to replace our DB CARE scheme as of April 2024 with a (reasonably generous) DC scheme, I thought I'd better have a quick whip over my figures:-

All at today's values....

1. DB1 - Civil Service 20 years-worth - £12k pa full CPI-linked at 60
2. DB2 - current employer 17.5 yrs     - £9400pa with final year's service is added, will be preserved to 65 at CPI+1% (max 5%)
3. Full SP                                             - £10.6k now(?)

and around 7 years-worth of 23% of salary (9 me, 14 employer) to bridge between actual retirement (hoping at 62) and second DB becoming due. Both DBs come with lump sums (35 and 54k respectively) and Mrs.G-J will have full SP as well. We should be ok barring any major disasters!! 

 

Albermarle

daz378 said:

I'm in care...got a 10% rise...even backdated to last  April...a good firm  but so short staffed...its just assumed you will take up the slack.  no acknowledgement...but something not done...you get  told off...2026   will have 25 years lgps... xmas no time off taken for granted....so even at 60 if I get 2/3  of monthly pay may pull trigger...and  part time to supplement income...will work when I want to....so tired

Normally if you can generate 2/3 of monthly gross pay in retirement, you get more than 2/3 of net/take home pay. As you proportionately pay a bit less tax, no NI and no pension contributions.
Even 50% of gross pay can often provide 2/3 of take home pay.