How much to live on

Pat38493

Organgrinder said:

Nebulous2 said:

I've posted upstream, that after an expensive year last year, I intend to try to live on my income this financial year, or £4800 less than my income, as I will be contributing £6000 gross to a SIPP. 

That may or may not be a stretch, we are still in the first month, but as my pension and wages are almost completely fixed, the only way I can add more to my expenditure is some side income. I'm more interested in stretching a bit more out than I've been for some years. 

This will be a trial run for giving up my part-time job and funding the gap to state pension age. 

So for me the two things are inextricably linked. Two sides of the same coin, if you like. 

Nobody else needs to participate. It took me a long time to move bank, then I wished I had done it sooner, but I can quite understand it isn't for everyone. 

Equally for people who think they aren't quite over the line to retire, the confidence that there are money making opportunities there if you find yourself short of where you want to be, may help the decision to pull the trigger. 

Very much so. I would not be comfortable pulling the trigger at 60 had I not made a few extra thousand recently and indeed therefore know how to add to my retirement income if need be. My plans include carrying on exam marking. Should that dry up I need other sources of income and I'm grateful to all those who post how they do it.

It's also very helpful for me so understand how people manage their finances, how their total income allows them to live the lifestyle they want even though on the face of it, it may not look like it's affordable.

I have a simple rule about any posts. If they don't interest me,  I don't respond. It why I only contribute to a few threads.

These kind of opportunities for side income streams really interest me as I have been recently mulling over the idea of quitting my job.  There's a pretty high chance I wouldn't need to work again unless I wanted to, but, I also noted in my modelling that earning a small amount (say £10K) for a few years after taking a couple of years off, would make it pretty much certain that I would be fine in the long term.

louby40

I found the stoozing topic very interesting and I would certainly investigate more now I know more about it. But if the posters hadn't mentioned it on here I wouldn't have known what it was (& how it can contribute to 'how much extra you can live on).

I like the diverse discussions on here, if I'm not interested in a topic I skim and move on. 

Pensions, stoozing, investments etc etc all support our budgets, incomes and lifestyles. 

cbsexec

It’s a shame the “how much to live on” thread has become the same as the rest of the pensions board.  It is of more interest to those with plenty of money and pensions rather than those with just a small pension plus state pension.   

Suzycoll

Yes I agree

Organgrinder

cbsexec said:

It’s a shame the “how much to live on” thread has become the same as the rest of the pensions board.  It is of more interest to those with plenty of money and pensions rather than those with just a small pension plus state pension.   

I'm curious as how you define "plenty of money". 

From memory on here we have couples like my own with predicted pensions of about £50k or so at SPA, single retirees on pensions of £35k, people with more, people with less, etc etc.

We have people who try to maximise everything. We have people who are happy with what they have, we have people who struggle with that they have etc etc.

Stoozing and bank switching for example are accessible to many people, not just those with "plenty of money" should you wish to do so. Yes the stoozing returns are greater if you spend more but nonetheless the potential is there if you can get interest free borrowing.

My FIL is retired. He gets the old state pension. His wife a pittance of a pension. And they have a small annuity which just puts them out of claiming winter fuel allowance.

His bank switching makes mine look amateurish. He doesn't stooze, but only because he doesn't want his wife to have to deal with it should be pass on. He switches utility and phone providers regularly. He negotiates with great success too.

Why does he do all this? Because he has to, otherwise his savings would be long gone and so he can manage on "how much he has to live on". His words. Not mine.

This is a great community where people from all walks learn from each other. Long may that continue.

LL_USS

It is a fair comment regarding the negative impact from the feeling that the forum seems to be more and more of interest for people with lots of money only (if that's a fact, it's sad).

I used to think "how come people have so much pension income" and did say once or twice in the forum that I was quite jealous :-). Mine is projected to be at 25K/year if I work till 65, it's about 12K/year at this point in time before early retirement factor, and I feel it is already a good amount for myself. At the end of the day, how much is enough, and how much is good - it is personal; we have established that here. The general guidance of basic, medium and comfortable pension income in pension literature only serves as a statistic for an average scenario.

Also the spare money could be temporary only. For example, how to invest a sum that a person wants to put aside for their children. 

A lot of tips we want to explore are used in the same way by people having £50k/year pension and people having just half of that, or less, or much less. I don't have big spendings often - I spend almost none in the last decade on new clothes and assessories but I can put the university hall rent I am going to pay on my son's behalf (the next instalment is again in thousands) on a 0% interest credit card whilst I can put the student loan he's going to receive after the date of my payment on a high interest saving account in the hope to compensate a bit for the shortfall of the student loan. So do I care if the people sharing how to stooze earn so much more than me? My answer is no (I am still jealous :-) but I am thankful for the lesson. Any tips for me to work my money harder will help better planning and preparation for my living now and in retirement.

Having said that, we could do being mindful that people on the forum indeed come from all walks of life. It's just a general etiquette of an online community, not a suggestion because we've done well or not well on that so far.

helensbiggestfan

Just a quick hello and update.  

I have now moved into my new house.  And, contrary to all retirement advice, I have upsized rather than downsized.  (But then again I have always been contrary and danced to the beat of my own drum)

My epitaph will definitely have to be "I did it my way". 

In my defence I did try to downsize.  For a while, whilst I was between properties, I rented a l.5 bedroom bungalow.  One single, one double,  I am so glad I rented rather than diving in and buying another  property immediately.  It gave me an opportunity to "try before I buy".  It gave me thinking time and it saved me from making a big mistake by committing to a property which would have been wholly unsuited to both my needs and my preferred lifestyle.  

As time went on I became acutely aware of the bungalow's shortcomings, it was definitely too small. It felt cramped and claustrophobic. And I began to develop the dreaded "bungalow legs". I definitely feel that I have lost some muscle strength in my legs. I have been in my new home for 5 days and I am having to get used to stairs again.  I feel this is a good thing, a case of use it or lose it.  I want to preserve my mobility and remain independent for as long as possible. I can always get a lift of some sort if necessary.  

Being a newish build, there is level access entry, wider doorframes and a double shower in the ensuite so hopefully the house can be adapted fairly easily should the need arise.  And domestic lifts have come a long way in recent years.  

As in everything in life there are pros and cons.  A larger house so of course a higher council tax band, however the energy rating is B whereas the last property I owned was F. So what I spend extra on council tax should be offset by a reduction in heating costs.  And I will certainly feel warmer and more comfortable..........better for my old bones!!!!  And of course, I gain more living space, bigger kitchen,  a much bigger master bedroom with an ensuite bathroom, plus two reasonable sized spare bedrooms, and a downstairs cloakroom.  There's an integral garage which I can convert into an extra downstairs room if required. A smaller garden which is easier to maintain so I will no longer have to pay a gardener. So I shall be making savings there too.  

I haven't been able to do a definitive budget yet, but I'm pretty certain it will be a case of swings and roundabouts.  Savings in some areas and increased costs in other areas.   However, for me it's not just about the finances, although of course they are an important consideration, it's also about my quality of life.   

After years spent working in the property industry I have certain requirements which are sacrosanct, location being of paramount importance. I want a safe, well kept neighbourhood with (hopefully) considerate people who take good care of their properties and look after their local environment.  I have already met my immediate neighbours and they seem delightful, helpful but not intrusive or overbearing,  

Like most of my generation I started out small, buying a property I could add value to so I could sell it a profit, slowly but surely working my way up the property ladder.  I have a preference for period properties, however now that I'm in my 70s I have decided it is time to be realistic about the ongoing maintenance and heating costs involved in older houses. So this time I have gone for a 6 year old property so no immediate expensive restoration or refurbishment required.  That should save me a shedload of money. 

This will probably be my final house purchase (at least for the foreseeable future) so I don't have to worry about resale value and making a profit. This time I can choose to decorate and style it exactly how I please. . I can let me creative juices run wild.....no more bland neutral decor designed to appeal to the greatest number of potential buyers.  I can just be me at last. 

Anyway.....new house, new life.  Let the adventure begin.  

scottish_lassy

Hello everyone.  OP here. Been MIA for a while but really pleased to see you are all still here, with a few new additions. I have not caught up with all the posts but do hope this I'm still with the 'ordinary' people and not the potentially rich retirees - no hope of that for me.  I am still working but coming round to the idea of a 'phased' retirement leading up to pension age (should keep the old brain cells ticking over too!).  This is because I have worked for so long that I may not cope (mentally) with a severe cut-off. 

I work for LA so they allow a 50% reduction for up to 3 years - I am currently contemplating going at 66 and doing 2 years phased.  This would mean taking my works pension plus half my wage, which would add up to virtually my full time wage.  The only downside is that my works pension would be slightly lower for the rest of my days but maybe it should be quality rather than quality.  Being a single income household, I just cannot contemplate going earlier and can say, I actually enjoy my job.  Happy planning folks.

helensbiggestfan

The recent discussions on here regarding raising extra income in retirement have been very interesting.  

Let me say at the outset I am all for making extra money.  If it's legal and ethical I'm up for it.🤪.  Even at almost 74 I am always open to new business ventures and ideas and even just "working" as long as it's enjoyable.  The ideal retirement scenario is to have sufficient income but then work or not for extra if, as, and when we please.  The very definition of freedom!!! That's why I enjoy my little sideline hustles, freedom to operate how I see fit and no boss breathing down my neck.  

LL_USS

You discussed an interesting concept namely, that of "jealousy" - that you were quite jealous of other peoples income.  

For a long while I never really understood the subtle difference between "envy" and "jealousy" until I looked into the two concepts more closely.  They are very similar but they are not the same and they are not interchangeable.  

Envy is when you want something someone else has, jealousy is when you are worried that someone is trying to take what you have away from you.  For example if you want your neighbours convertible you feel envy.  If she takes your husband for a ride, you (might) feel jealous.  

The difference is subtle but important I think because of how we can respond.  How we can make an emotion such as envy work in our favour, whilst, if we let it, true jealousy can destroy us.  

Evolutionary psychology tells us that envy may not be as negative an emotion as jealousy because it can be used as a motivator, spurring us on to improve our lot in life. Apparently envy appears along the same spectrum as admiration.  

It has certainly been the case in my life. 

 I come from a modest background where money as always tight.  I never had the nice clothes or fancy lifestyle that many of my peers enjoyed.  I had had the good fortune to gain a scholarship to a prestigious all girls school but of course it had its downside.  For quite a while I felt like a fish out of water and looking back I suffered from what I thought at the time was jealousy.  I felt quite miserable. 

Many of the "gels" came from backgrounds that were wealthy. Their comfortable lifestyles were an eye opener. Fortunately my "jealousy" was not personal, I still liked my friends and they certainly weren't taking anything away from me.  Far from it, they were extremely generous, allowing me to visit their homes and  share their luxurious lifestyle even to the extent of riding their ponies. 

The truth was I just wanted what they had, so in reality what I felt was envy and not true jealousy.   In that way my envy became my driving force and my motivation to improve my station in life.  

I think there is nothing wrong with a little envy provided we put it to good use.  This is where I find NLP (neuro linguistic programming) so helpful.  Early on I banned the phrase "I can't afford it" from my vocabulary.  It made me sound like such a party pooper, a drudge and a skinflint. I had always disliked hearing people moan and complain about having no money and yet not seeming to try and do better.  I didn't want to be that girl. I wanted to be the fun one so instead I would ask myself "how can I afford it". 

A simple phrase and a change of mindset worked like magic. I became adept at creative thinking and looking for solutions.  When I was a teenager I wanted fashionable clothes but couldn't afford them.  No problem I taught myself to sew and became the local equivalent of Mary Quant, designing and making my own trendy fashions.  When I bought my first house I could only afford a wreck.  Not only that but I couldn't afford to pay contractors. No problem I rolled up my sleeves and got stuck in. 

So.....LL. My advice is not to be ashamed of your feelings of envy (I won't accuse you of jealousy lol). Instead use that emotion to motivate you and steer you towards achieving what you want.   

I don't think we should ever be ashamed of wanting "more". More money, more fun, more good times.  Money is just a tool, nothing more, nothing less, it's how we use that tool that matters most.  

Like the old saying "money is made round (as in coins) to go round". It's not about being a miser and stacking up money purely to watch the numbers grow.  It's about being savvy.  

LL_USS

@helensbiggestfan you are such a motivational writer :-). I've always enjoyed your posts (in addition to your good advice for me personally too, of course).

Regarding jealousy and envy - subtle and interesting difference. I do understand the word envy, reading on Festinger's social comparision theory, people bench-marking their relative standing - success, income, intelligence etc. with others. I just used the other word thinking it's more common language.

Indeed the right word I should have used is "envious" :-).

Regarding emotion, envy can be unpleasant, brooding, and can cause resentment, even when the outcome could be positive as the person then turns that envy into a motivation to do better.

Don't worry, I only had a "benign" comparision and I said I was jealous (*envious) with a smile - always. So when I said that, it was more like a compliment to people who could do well, especially because it's their fruit of labour, like "I am happy for you"!

And no I am definitely not ashamed of the feeling of envy, because I am not envious for real. Well, I do not have a high-flying career, or have high salary or projected pension.... but I am very happy I've done well for what matters to me and my family (I think you and I have talked about that elsewhere). I don't wear flashy clothes going to a party (because I want to save money not buying new things I don't need) but I am proud and do not wish to gain respect just from the props :-).

Does this mean this is the actual meaning of financial well-being - when we know what we are doing, making informed financial decisions for now and for retirement - and financial well-being is NOT about the absolute amount of money we make?