Actual Spending in Retirement against expectations

Marvinman

Thank you everyone for your replies so far.   I have started to review other threads (including the long Sea Shell thread) to gain insight, which is helpful.

To me (and it seems some others) this is a topic which, although subject to each person's own circumstance/desires, peaks an interest in how estimates (howsoever detailed) actually translate into reality in any given instance.  I accept nothing is 100%, unexpected things occur etc... .  To perhaps put this another way (and maybe this is already covered in another thread), if there are any particular areas of expense which came as a significant surprise to people (and fell outside projections). 

Barny1979

Albermarle said:

(As an aside, I'm struck by how many MSE'rs who are talking of FIRE in their 40s are childless; I've got two Experiments and am quite pleased to be aiming for retirement in my late 50s!)

I have often thought that a disproportionate number of posters ( including new , non regular ones ) on this board seem to be single ( often never married ) and/or have no children. I do not have any statistics to show the % is any different to the general population, but it just seems like that . Almost everybody I know at work or in personal life, seems to be married, or at least divorced , and have offspring.

Maybe we're more sensible or bitter, twisted loners who could never meet anyone haha

dwsjarcmcd

I have a much more simple approach to this than most.  When I (and my wife) got paid, we put a % into savings, investments and pensions, so we lived from the 'net' income.  This was more than enough to cover the basics and holidays, cars etc.

We got to a position where we thought we had enough in these pots to cover our net spend for the rest of our days (including inflationary increases) and this was checked and confirmed by our IFA, so we stopped working.

I do monitor our spend, and this is consistently below our net spend plan even before COVID but this has reduced further this year.  

barnstar2077

Albermarle said:

(As an aside, I'm struck by how many MSE'rs who are talking of FIRE in their 40s are childless; I've got two Experiments and am quite pleased to be aiming for retirement in my late 50s!)

I have often thought that a disproportionate number of posters ( including new , non regular ones ) on this board seem to be single ( often never married ) and/or have no children. I do not have any statistics to show the % is any different to the general population, but it just seems like that . Almost everybody I know at work or in personal life, seems to be married, or at least divorced , and have offspring.

In my defence I am not single by choice.  It's not my fault I hit every branch of the ugly tree on the way down :  )

ex-pat_scot

Albermarle said:

(As an aside, I'm struck by how many MSE'rs who are talking of FIRE in their 40s are childless; I've got two Experiments and am quite pleased to be aiming for retirement in my late 50s!)

I have often thought that a disproportionate number of posters ( including new , non regular ones ) on this board seem to be single ( often never married ) and/or have no children. I do not have any statistics to show the % is any different to the general population, but it just seems like that . Almost everybody I know at work or in personal life, seems to be married, or at least divorced , and have offspring.

Or, put another way, offspring are poison to the hope of FIRE!

It cuts on several levels.
The obvious one is financial - the sheer cost of them. There's some theoretical ceiling at age 16 when you are technically no longer financially responsible for them, but frankly that's a hilarious delusion.
Mine cost £500pm each whilst at university, in terms of formal support. The informal costs, when they are at home, is still huge. Mrs XPS still wants a large car for shuttling them all around, even though it's usually no more than 2 of the 4 at any one time now.  Food bills are frightening, as are heating / hot water.

School fees are theoretically optional...

There's also the emotional rhythm of the children's growth. Retirement, or at least changing plans, tends to align often to the phases of their growing up - whether it's when the youngest goes off to uni, or finishes uni etc.

I'd have a huge amount more money if no children - my wife would have not interrupted her teaching for 16 years, so we'd have had a huge amount more income; fewer costs and very different life choices (career, compromises, etc).  It's not a simple comparison - just a different set of choices

mark55man

@ex-pat_scot - but you wouldn't change it for the world, I'm sure.  we stopped at 4 so that we can hold every hand that needed it without doubling up or delegating

my debate is I could afford a frugal no-inheritance kind of retirement pretty much now, but I'm not quite 60 and at the peak of my earning, + I still have a bit of mortgage left, so doing 2 more years seems a good call just to give everything a bit more slack and comfort - not funding 2 years out the pot, 2 years more contributions and possibly growth.

More on OP's point, the thing that staggered me was how much of my salary goes on costs that won't exist when I'm retired, mortgage, pension and for a few more months CC repayments.  I'm not seeing a lot of variation in spend coming up to retirement, and I'm not seeing I would like to do a whole lot different. Most of the excess time will be spent remedying maintenance failures from the last decade and finally doing the garden - so pretty cheap (maybe) 

DT2001

Children do not help financial planning!
We have 4 and I planned on all going to Uni (plan for ‘worst’ case). 1st did apprenticeship, 2nd Uni in France (€170 p.a. Tuition fees) + accommodation swap for babysitting. So needed v little help. 3rd will probably end up doing masters etc.
Those with children also tend to look to help with deposits for houses and inheritance especially if lucky enough to have been given some themselves.

I look at funding retirement as being split into 2. Cover essentials (however you choose to define them) and then spend the rest as you want (just like when you are earning). Slightly different to this is what I want to do, I need this amount.

badmemory

I found it interesting that the way what you actually want to spend on changes.  I didn't allow for the fact that my petrol costs would increase significantly as I had walked to work most days.  I also found that the eat out/takeaway budget was way too high as I found that I really did prefer something I had cooked myself now I wasn't feeling too tired to do that.  Your tastes change.  I even make bread, something I'd have laughed at anyone suggesting I would be doing.  My stomach thanks me on a daily basis for these changes I have made mostly without realising at first that I was making them.

You only need to help with deposits if you can actually get them to move out, I have had a major fail with that!

kuratowski

badmemory said:

You only need to help with deposits if you can actually get them to move out, I have had a major fail with that!

Well, no wonder - if you're providing home cooked meals and baking your own bread

c'est_moi

I have written about my own experiences elsewhere on this board but this post has made me reflect again on the past 12 month.

I retired last summer. I was 51 and can't draw my reduced pension until I am 55. The plan is to live off OHs wages plus top up from our savings pot until then. I was by far the higher wage earner so me leaving work was not a decision we took lightly. In order for me to leave finances had to be in place, so the mortgage was paid off early and for the last couple of years almost all of my wages went into savings.

It is now one year one. As it happens we have been living entirely off OHs wages (under 2K per month) and have not had to draw a penny from the savings. This is in a large part due to covid. Although we have two really nice summer holidays in the UK booked and paid for we have spent about 4 - 5 K less than we usually do on holidays abroad. The cost of those would have come down anyway as we no longer need to go in expensive school holiday time.

The biggest saving is on petrol. As I no longer commute and OH is wfh for now this has saved us about £150 per month. At the start of retirement I went through all our regular bills and reduced most by switching providers/ phoning Sky for a better deal. I also embrace any money saving tips I can so small things like parking for free and walking a bit further, not having takeout coffees I really don't need, using money off coupons, looking for discount codes when buying online. This is no sacrifice and I actually enjoy the challenge!

What I do have is lots and lots of lovely time for myself. I have done some redecoration on the house and sorted out the garden. I might have paid someone to do those jobs if I was working but I am quite capable of doing them. The gardening is enjoyable, if hard work sometimes, but I can do it in shorter bursts more regularly now. I have very inexpensive hobbies - walking, reading, sewing, crafting. It has been a joy to spend time on all of them. I don't have to plan ahead - just do what I feel like doing that day and change my plans to suit the weather. I have been doing online survey type work which makes a very modest maybe £150 per month. This more than covers hobby costs, like buying a lovely second hand sewing machine and NT subscription.

So, in short, one year one finances are looking very good. We can indeed both live very happily off less than 24K per year. Luckily we have had no major unexpected bills other than a little roofing work, a new freezer and some car repairs, but there is money in the savings for than. In three years time my pension - about 14K per year will be available and my husband is probably going to go pt then.