Are we mad?

Skibunny40

Another Joe - another great "prompt" question, thank you! In terms of "spending for fun" OH and I differ on that definition 

We both have a long list of places we'd like to visit, but happy to do those as 2 week holidays from work, and happy to travel seperately if the place only appeals to one of us. Other than that, OH would like the fancy car, gadgets, wining and dining which I'm not bothered about - but could be persuaded to join in the wining and dining, if forced. I suspecct (hope?) the novelty of that would wear off quite quickly.

Tortoise - we don't spend £36k at the moment ( well, we do but a lot of it on savings. also insurances) but picked that figure as one that would allow us lots of nice holidays/things as specified above.

SouthCoastBoy

I am at the age where many of my friends parents are now early to mid 80s. Most arent very active and have various issues. I think 80 is a cut off age where people do start to slow down, obviously not for everybody but alas not everyone makes 80 either. From a pension planning perspective I think there can be benefits in factoring such scenarios into calculations,.

Notepad_Phil

Skibunny40 said:

...

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)

...

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

Living off two state pensions whilst being mortgage free is quite possible if you are used to being a bit frugal - though I'm not sure how frugal you will be after living 30 years on quite a decent income of £36k.

As to whether it is a calculated risk, I would say that it definitely is not. Assuming you're in average health then there's an extremely good chance that one of you will live well beyond 80 (at 50 the average life expectancy is another 34 to 37 years).

A calculated risk would be to say that we'll retire now and run out when we get to 90, or retire now and live off £25k and run out at 90 - in our case given that Mrs Notepad's mother is currently in her late 90s, I'm assuming that Mrs Notepad is likely to reach and surpass that age so am doing the most I realistically can to make sure that she'll basically never run out of enough money to live comfortably (which is not going to come from just one state pension and a small DB pension).

SouthCoastBoy

If you have no db how have you calculated the money will run out when you reach 80? The risk is it could run out earlier, alternatively it could last longer. I think the key is to be flexible in your expenditure and maybe have a gradual reduction rather than a cliff face reduction 

Skibunny40

Notepad_Phil - I guess our personal experience skews our thinking as hardly any of our relatives made it to 80, so genetically it seems unlikely even though I agree the statistics are that one or both of us will live past 80.

Interesting point about it not being a calculated risk. As someone who is (ironically!) usually risk adverse, this does make me question our logic. Might work out the figures based on age 90, rather than 80...either saving more or reducing annual spend.

Again, thank you, this is all great food for thought

MaxiRobriguez

Personally I'd rather leave cash in the bank than risk having 20 years with nothing but state pension but each to their own.

Middle ground of 90 sounds more tenable if you really want to pursue it.

Thrugelmir

Skibunny40 said:

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

Over time your outlook on life will change. Do the things that are top of your list now while you are still earning. Make the most of every opportunity sooner rather than later. 

Dazza1902

Whatever pot u have left at state pension age could be drawn at a sustainable rate or at a less aggressive rate, to ensure you don't run out. Usually retirees spend less as they get older anyway.

Thrugelmir

Mickey666 said:

Skibunny40 said:

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

  We could debate the age 80 cut-off point but I agree with the basic principle.  My own feeling is that if I get to being a decrepit 90 year old then that would probably be the time to shoot myself rather than drag out a miserable existence in a care home

From the experience from one side of my family.  Much is in the mind. Age need not be a barrier. 

german_keeper

A couple of years ago I made an impulsive decision. My mum has very aggressive dementia and was and is going downhill fast. We have a great option at work called partial retirement but it's usually people over 60 who choose it due to the reduction to pension before 60. I was 54 and one Friday night fuelled by a good drop of the red stuff I got to thinking about it. I wanted to spend more time with my mum while she still knew who I was. Woke up Saturday morning and I wasn't hit by a hangover, more a sense of determination. I went into work Monday and signed up. Sometimes you just have to go for it.

Now here's the but. The downside was that I might end up working, albeit part time, past my original retirement date of 60 for a year or two. As it turns out we should be able to retire fully at about 58 or so. If the downside was running out of money at the age of 80 with potentially 20 years left for me, the missus or even both of us, I'm not sure I would be quite so cavalier. I suppose it's just about rolling the dice, if the worst thing happened you wouldn't starve.