Are we mad?

Skibunny40

Briefly - has anyone arranged their finances that they "run out" of money, other than state pension, by the time they hit 80? That's what we're considering doing, but I'm not sure how risky it is in reality.

Neither of us have DB pensions, OH is 50, I'm 49. If we both retire around 58, we'll have enough (assuming no major !!!!!!-ups) to have an income of around £36k a year, including full state pension from 68 until the age of 80. Then we'd only have state pension and our house (worth around £200,000 at the moment, mortgage free)

This pandemic has taught us that we don't want to "postpone joy" as we just don't know what's round the corner. We live quite frugally at the moment and save lots towards pensions, but if we just stopped saving now and spent that money on fun, we should in theory, be okay until age 80 then we'll be on a very tight budget again! 

It's a risk - but is it a calculated one? Any and all opinions welcome!

NedS

Massive risk, I'd say. Perhaps the biggest risk arises from one of you dying at 80 and the other living to 100.

Can you live comfortably for potentially 20+ years on only £9k/year? How will you maintain your house and afford other essential maintenance costs?

SouthCoastBoy

Obviously all a personal choice, personally I would like a contingency but each to their own. As an fyi, my mum quite happily lived on a state pension throughout retirement from the age of 60 with no other income other than pension credit and she ran a car until about aged 79. By the time she was 80 she had significantly reduced her activities and therefore her expenditure.

Skibunny40

Tbh, if one of us dies, the other would probably sell up and go into sheltered housing (actually, that's what I'd do, don't know about my OH) So good question, thank you - food for discussion with OH. 

Thrugelmir

As one gets older. You learn to value other things than money. What you leave behind bequeath to something that will do good. Far more satisfying than p****** the money away. There's no shortage of people who'll happily take it off you for the privilege of the momentary experience. That soon will be forgotten. 

t0rt0ise

If you normally need 36,000 a year then no, you'd never manage on just the state pension at any age. Me on the other hand am managing quite well on 15,000. I've got plenty of savings but don't seem to need to use any of it. Everybody is different and nobody can tell you what you need or how you'll cope. It's interesting to see how the other half lives and I await the responses if others.

AnotherJoe

Skibunny40 said:

Briefly - has anyone arranged their finances that they "run out" of money, other than state pension, by the time they hit 80? That's what we're considering doing, but I'm not sure how risky it is in reality.

Neither of us have DB pensions, OH is 50, I'm 49. If we both retire around 58, we'll have enough (assuming no major !!!!!!-ups) to have an income of around £36k a year, including full state pension from 68 until the age of 80. Then we'd only have state pension and our house (worth around £200,000 at the moment, mortgage free)

This pandemic has taught us that we don't want to "postpone joy" as we just don't know what's round the corner. We live quite frugally at the moment and save lots towards pensions, but if we just stopped saving now and spent that money on fun, we should in theory, be okay until age 80 then we'll be on a very tight budget again! 

It's a risk - but is it a calculated one? Any and all opinions welcome!

Might work if the survivor would downsize into a smaller place, the money being released making up for the loss of a SP. And theres always equity release as well.

When you say "spend money on fun" is that just spending for the sake of it or are you being held back by pension spending on stuff you'd like to do now?

Skibunny40

Thrugelmir - not quite sure what you're saying? That we shouldn't have fun & should instead leave our money to someone/something else?!

I guess maybe after we've done all the things we really want to, we'll find the novelty wears off, but I'd like the chance to find out first!

Skibunny40

SouthCoastBoy - that's my thinking about hitting 80, if indeed either/both of us live that long. I feel I'd be quite happy to live a small life by then but I'm conscious that nursing home/care costs might become an issue.

SouthCoastBoy

Life is for living, not saving.i think there is an argument to enjoy it while you can. No point being the richest person in the grave yard.

Incidentally my mum ended up in a care    home at 81 as she had dementia, her house funded the care home costs, there were other residents who were funded by the govt.

gambleruk

A great question and I for one will say go for it, life really is to short and do you honestly think that at age 80 you will both look at each other and say damn wish we had worked for another 15 years instead of having all that fun we had whilst we were still young. It is basically what I have just started doing and not even sure I am going to get anyway near 80 before I just rely on sp, after saying that our living costs are much smaller than yours so helps.