Are we mad?

doingitanyway

The OP wouldn't 'run out of money' there would one, or two state pensions (if both survived) to live on...

Skibunny40

Thrugelmir - I understand now & completely agree that we'll aim to do as much as possible whilst we're still earning. Might even reduce the desire to retire early?!!

german-keeper - thanks for sharing your story & I'm sure you'll treasure the time you've been able to spend with your mum. The option of part-time /temp work is something definitely worth considering and is always handy to have up one's sleeve.

Also wondering about taking an annuity for part of our money to even out the risk?

And/ or - as a back of a fag packet calculation, if we said an annual spend of £30k, rather than £36k, that would be an extra £132k in the pot (£6k x 22 years, between 58 and 80) which would mean an extra £13k a year from age 80-90 in addition to state pension

Skibunny40

SouthCoastBoy - a crash in the stock market is probably what worries me most. I know logically that the market always recovers but the world feels less secure now (yes "this time it's different!") 

The whole concept of planning for life 30-40 years from now seems ridiculous, but I also know none of this is set in stone and all the more reason to do as much now before things go really wrong!

Notepad_Phil

Skibunny40 said:

...

And/ or - as a back of a fag packet calculation, if we said an annual spend of £30k, rather than £36k, that would be an extra £132k in the pot (£6k x 22 years, between 58 and 80) which would mean an extra £13k a year from age 80-90 in addition to state pension

Personally I'd look into doing this rather than going cold turkey at 80 with just the state pensions (and possibly just one of them as well).

Skibunny40 said:

The whole concept of planning for life 30-40 years from now seems ridiculous, but I also know none of this is set in stone and all the more reason to do as much now before things go really wrong!

This is the position I'm in - early retired a few years ago and planning for Mrs Notepad and myself to still be around for 40+ years.

With such a length of time you can't make a plan that is set in stone, but you can make the best plan given the circumstances you have now and then revisit that plan as the future passes by.

Just make sure that you don't just take a rosy view of the future; consider what will happen if things are not so good - e.g. what will you do if markets fall and don't recover for 5 years or possibly even more.

Scrudgy

Looking at my in-laws, who are both now in mid eighties. They started retirement enjoying it immensely, two to three holidays per year, lots of time with family and grandkids.

However, since they hit 80 they lost a lot of interest in travel, and now rarely want to leave the local area, even though they are still both healthy. 

They literally spend almost nothing now, the biggest expenditure by a long way is their council tax. Followed by food and utilities. Spending money on meals out or a trip away from home has not happened for a long time. They are perfectly happy and active.

So perhaps your strategy is sound enough.

Nebulous2

I think you need to firm up your post-retirement budget. The number thread on here will give you some ideas of where other people are coming from, and what they consider their needs to be.  Yours will be individual though. You may find that a lot of costs; commuting, work clothes, national insurance etc are no longer necessary in a post-work era. 

There have been a few threads on here recently about the psychological aspects of spending when you are no longer earning. That is more difficult than many people expected. Where there has been a habit of deferring gratification for the future, switching that off and spending it instead can be difficult. 

There is a broad range of possibilities, rather than a clear glidepath, in what you can draw from your savings / investments before they run out. A plan for 80, can easily end up at 75 or 85 depending on market conditions. 


You may discover that 'joy' comes from other places than spending money.  We had a plan to spend all winter touring abroad in a caravan. We could do that quite easily on 1500 euros a month, considering that as additional money, and recognising that food is already budgeted for. 

 Coronavirus, additional visa requirements, increased paperwork for dogs and elderly parents have all conspired to make that less appealing. We may well go for 4-5 weeks at a time, but the previous plan for beginning of October to end of March seems no longer viable. 

Thrugelmir

Mickey666 said:

Thrugelmir said:

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. 

While I agree that much is in the mind, age alas can become a physical barrier, hence my comment about becoming decrepit.  If I could not be physically active as well as mentally active then it would be game over for me.

My late mother trained as a keep fit instructor in 1965. Retired at 86 still taking classes for the over 65's. Then only because she had an issue with one her feet.

jamesd

Skibunny40 said:

Also wondering about taking an annuity for part of our money to even out the risk?

Better to look into state pension deferral. Much more income per Pound.

AnotherJoe

Skibunny40 said:

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.

In that case I say go for it ! Its just that some people seem to spend their income almost as if its a rule, eg "hmm I;ve got £50 left over at teh end of the week so i shoudl spend it"

I suspect, with a lifetime of saving behind you, you wont be going mad anyway.

 

AnotherJoe

Nebulous2 said:

I think you need to firm up your post-retirement budget. The number thread on here will give you some ideas of where other people are coming from, and what they consider their needs to be.  Yours will be individual though. You may find that a lot of costs; commuting, work clothes, national insurance etc are no longer necessary in a post-work era. 

There have been a few threads on here recently about the psychological aspects of spending when you are no longer earning. That is more difficult than many people expected. Where there has been a habit of deferring gratification for the future, switching that off and spending it instead can be difficult. 

There is a broad range of possibilities, rather than a clear glidepath, in what you can draw from your savings / investments before they run out. A plan for 80, can easily end up at 75 or 85 depending on market conditions. 


You may discover that 'joy' comes from other places than spending money.  We had a plan to spend all winter touring abroad in a caravan. We could do that quite easily on 1500 euros a month, considering that as additional money, and recognising that food is already budgeted for. 

 Coronavirus, additional visa requirements, increased paperwork for dogs and elderly parents have all conspired to make that less appealing. We may well go for 4-5 weeks at a time, but the previous plan for beginning of October to end of March seems no longer viable. 

I can understand that but for me its the opposite, its easier since I have an easy glidepath without worries about running out. I am though spending a fair bit on the kids and grandkids rather than me, I'd rather see them enjoying it now that imagine them enjoying it when i've exited stage left pursued by a bear  

If youve had a lifetime of saving and being careful. you dont just go out and buy junk for the sake of it though anyway