How much to live on

Lummoxley

Lummoxley said:

I've been following this thread for a while and wanted to thank everyone who posted as you've pushed me to reassess my plans.

I'm 56 and have handed my notice in and will finish before xmas as I've realised I should have accumulated more than enough pension provision. I've gone over the numbers and realised I only actually need approx. £13-15k per annum. By my reckoning I can fund around £18k per annum between now and 67 from a mix of SIPP and DB. From 67 I'll be on £24k per annum so continuing with work will only provide more money than I can spend.

Happy days.

This was 18 months ago, I thought I would update if of interest.

I finished work just before xmas 2022, with last pay Jan 2023.

Although friends and family have been a increasingly non-plussed by my lack of desire to "fill" my days, I have found pottering entirely invigorating.

On the finance side, the devil makes financial planning for idle hands. Instead of delaying my 2 DB pensions I have put both into payment to smooth my income.

Consecutive good % increases in my public sector DB's means that my DB 2024/25 pre-tax income will be £15.6k per annum. The lump sums and lower drawdown leaves £75k in my sipp/savings. I'm "paying" myself £650 per month from that, so £23,400 pre tax per annum, and as part savings and £2880/£3600 not all income taxable.

Although inflation will have eaten into my income in the intervening 18 months, my perception is....happy days indeed.
 
This is the course of action that suited my circumstances, everyone's circumstances will be individual to them. It still amazes me that many of my peers in their late 50's have given no thought to not working. Instead they see their 67th birthday as the day they retire. 

Smudgeismydog

Thanks for providing an update, I’m so glad it’s all worked out for you.

I can’t wait to start my ‘pottering’ in July after my exit from work at the end of June.

KittyS

 I've got an update too - been working out my finances since my impending redundancy.   Redundancy agreed for end of April.  I have worked out that I usually spend anything from 1400 to 1800 a month and enjoying myself.  I am going to see if I can give up work at 55.  I have two pensions that take me up to 18,500 a year and also savings of over 160k.  I have no-one to leave my money too - so going to enjoy myself.  I might do a side hussle of something.  It feels good and those new budget figures are nuts xx

funkin

Lummoxley said:

This is the course of action that suited my circumstances, everyone's circumstances will be individual to them. It still amazes me that many of my peers in their late 50's have given no thought to not working. Instead they see their 67th birthday as the day they retire. 

When I first started proper "work" I just accepted (and knew nothing else) that I'd be working full time until state pension age.  Just didn't think about pensions at all.

Got to age 40 and work changes made me re-evaluate and start to think of my future.  Now a little over 50 years old, work for myself (not particularly busy at present), got a good chunk saved into a SIPP and happier to live on a smaller expenditure and no extravagant cars/holidays for a life of as you say, pottering.  Well done.

Albermarle

Lummoxley said:

Lummoxley said:

I've been following this thread for a while and wanted to thank everyone who posted as you've pushed me to reassess my plans.

I'm 56 and have handed my notice in and will finish before xmas as I've realised I should have accumulated more than enough pension provision. I've gone over the numbers and realised I only actually need approx. £13-15k per annum. By my reckoning I can fund around £18k per annum between now and 67 from a mix of SIPP and DB. From 67 I'll be on £24k per annum so continuing with work will only provide more money than I can spend.

Happy days.

This was 18 months ago, I thought I would update if of interest.

I finished work just before xmas 2022, with last pay Jan 2023.

Although friends and family have been a increasingly non-plussed by my lack of desire to "fill" my days, I have found pottering entirely invigorating.

On the finance side, the devil makes financial planning for idle hands. Instead of delaying my 2 DB pensions I have put both into payment to smooth my income.

Consecutive good % increases in my public sector DB's means that my DB 2024/25 pre-tax income will be £15.6k per annum. The lump sums and lower drawdown leaves £75k in my sipp/savings. I'm "paying" myself £650 per month from that, so £23,400 pre tax per annum, and as part savings and £2880/£3600 not all income taxable.

Although inflation will have eaten into my income in the intervening 18 months, my perception is....happy days indeed.
 
This is the course of action that suited my circumstances, everyone's circumstances will be individual to them. It still amazes me that many of my peers in their late 50's have given no thought to not working. Instead they see their 67th birthday as the day they retire. 

If you work in the public sector than basically your pension is sorted out for you. You could happily sail along without thinking about pensions or retirement, and then  find your self able to retire in your mid/late 50's with a nice steady inflation linked pension, if you are not a big spender.
Maybe some of your peers are not in this position and are relying on DC pensions/investments? In this case early retirement is usually only possible for high earners/frugal spenders/financially savvy types.
As the majority of people are none of those three, then they have to stick it out at work for longer.
Just one theory but you are also correct that some people just do not think about it/can not imagine not working.

helensbiggestfan

Il Dolce Far Niente.  

Italian saying which roughly translated means The sweetness of doing nothing. 

Or, as we Brits might say "pottering" - a lovely word which conjures up visions of gentle hobbies such as gardening, a bit of diy when the mood takes us, sitting in the sunshine with a good book, mooching round an art gallery or museum, a gentle stroll stopping off for coffee and cake, you get the picture.  

Not to be confused with laziness but more about adopting a new set of values, to savour each day and enjoy life, to do more of what you want to do without feeling guilty or having to listen to that nagging little voice which says I should be doing this or I ought to be doing that. In short a more Italian approach to living, as opposed to being a slave to the Protestant work ethic.  

Not that the Protestant work ethic is wrong.  I believe in a strong work ethic but not when taken to excess.  Ambition is good and work is good for us but you can have too much of a good thing.  It's all about balance.  

Retirement is what we make of it.  And it's not always dependent on how much money you have.  Of course we need "enough", after all there are bills to pay and we all aspire to a good standard of living.  

Having lost my husband my retirement is not what I had planned for but I have come to terms with widowhood (horrible word 😂).  I had to re-evaluate and change my way of thinking.  

"Life is what you make it" is a tired old cliche but like all old cliches it's rooted in a truism.  So rather than feeling sorry for myself as a somewhat impoverished widow I have reframed it to "I am a solo living a simple and rewarding life". 

"The best things in life are free" is another one of those old sayings meant to comfort us (and some might argue one designed to keep the working classes in their place😂, but that's another topic, ha ha).  I would take that one a stage further and suggest that the best things in life aren't actually things at all.  

For me adapting to a more Italian mindset and living Il Dolce Far Niente is easy.  Indulging in my love of art, design and wearing fabulous clothes, eating good food, drinking some wine, making the most of any sunshine which comes my way, being in nature. Best of all,  being able to hang out with family and friends and spend time with the people I love.  All the things I couldn't do when I was "Corporate Woman".  And for me that's the kicker.  Finally having time to just be the true me.  

When I worked I often felt like a prisoner, being trapped in a stuffy office on a glorious summers day was pure torture.  Having to wear either a uniform or conform to a dress code which made me feel dull, boring and frumpy whereas now I get to dress how I please.  Joy of joys, no more office politics and people pleasing.  And I certainly do not miss having to get up on a cold dark winters morning  to de-ice the car.....

To all those new to retirement and still finding you way welcome to your new fabulous life.  And to those who are contemplating taking the next steps, I would say go for it, as soon as you can.  You wont regret it.  

Life is a bit like a Three Act Play, with retirement being our Third Act.  In the theatre the Third Act is always the best, the exciting climax.  So it can be with our Third Act, when everything we have worked for and striven for finally pays off and we get to reap the rewards of all our endeavours.  

The sooner you start your Third Act the longer you get to enjoy it.  You get to enjoy being as free as a bird and living that La Dolce Vita (the sweet life) you have worked so hard for and dreamt about.   

TallGirl

I think that is very true not a lot of people think about these things until it is upon them. There is also the factor of couples being different ages so one might want to retire earlier and one has to carry on as they are the younger person. Public sector pensions are great I was in one but after just over 7 years I got offered a job in the private sector. It moved my career on and I now earn more than I would have done had I stayed (there was no career progression). However my peer who has stayed can now look forward to an amazing retirement of a solid income but at what cost to person development she is basically in the same job I left 18 years ago. 

Everyone is different and has different needs and wants. Career is important to some and they cannot think of themselves giving up when in effect they are at the top of the peak. I want to retire to Denmark ( I am from Denmark) but the taxes are very high and you even pay tax on any increases in your SIPP. There are also no ISA's no Premium Bonds etc. I could afford to retire over here but sometimes family is more important and luckily property is so much more affordable there I can in effect downsize but get a bigger bungalow and more land than I have here. 

I really enjoy reading this thread and people's thoughts it is really interesting and not something you can really discuss with most friends.  

[Deleted User]

@TallGirl, interesting post. Perhaps though not everyone wants to 'developed' as you put it. Career isn't everything, depends on one's priorities and other ambitions.

blue.peter

helensbiggestfan said:

Life is a bit like a Three Act Play, with retirement being our Third Act.

I don't disagree, but I can think of one playwright who suggested otherwise:

All the world’s a stage,

And all the men and women merely players;

They have their exits and their entrances;

And one man in his time plays many parts,

His acts being seven ages. At first the infant,

Mewling and puking in the nurse’s arms;

And then the whining school-boy, with his satchel

And shining morning face, creeping like snail

Unwillingly to school. And then the lover,

Sighing like furnace, with a woeful ballad

Made to his mistress’ eyebrow. Then a soldier,

Full of strange oaths, and bearded like the pard,

Jealous in honour, sudden and quick in quarrel,

Seeking the bubble reputation

Even in the cannon’s mouth. And then the justice,

In fair round belly with good capon lin’d,

With eyes severe and beard of formal cut,

Full of wise saws and modern instances;

And so he plays his part. The sixth age shifts

Into the lean and slipper’d pantaloon,

With spectacles on nose and pouch on side;

His youthful hose, well sav’d, a world too wide

For his shrunk shank; and his big manly voice,

Turning again toward childish treble, pipes

And whistles in his sound. Last scene of all,

That ends this strange eventful history,

Is second childishness and mere oblivion;

Sans teeth, sans eyes, sans taste, sans everything.

Sorry. I know that it was fifty years ago, but we studied the play for O-Level. Even though I hated it, that speech is still stuck in my head.

Brambling

Useful comments  Helen thank you

I made the decision to retire at the end of May when I will receive a 25 year DB pension on my 60th and can take a small top up DC pension as well from my current employment.  I have been planning for this since my redundancy 11 years ago when I selected pension at 60 as part of my redundancy package and I have always been a saver so I just ramped that up. 

At first the numbers were a little frightening especially after a large pay rise last August offered (I believe to stop me retiring early) TBH it did make me pause when my pension details were sent as did the offer of whatever part time hours I wanted but decided I don't love my job that much to carry on with it. I know what I currently save each month means I can afford to have less coming in, although after 50 years of saving it will be a difference mindset to stop saving and start spending. I recently read something which said as pensioners we need to remember if we have been saving for a retirement when we reach retirement to start spending it!

I have gotten annoyed with the continuous questions on what I plan to do with my time I now just say 'not work' and when pushed by 'well meaning' people tell them I didn't know I was expected to provide a itinerary for the next 20 years, I not sure if you are part of a couple you get asked the same questions? I do get really ticked off by being asked if I have checked I can afford not to work.

I have no children to leave any money to and my nephews have been told not to expect  much as I plan to spend what I have, if I don't need care in my later life they can have the house unless I've downsized to a 1 bedroom and spend the equity.