What made you 'pull the trigger'?

Workerbee999

 Bumping this thread up as it is a great read. Saving hard till Sep 2025 and could do with some motivation as Monday morning looms

segovia1

This is a great thread.  I'm 47 and trying to target 55 (when my wife will be 54).  I'm lucky in that I have a high income so able to save and invest.

The one thing I worry about a bit is the mindset switch that will be required on retirement.  I'll have spent 35 years being cautious with money, being a saver not a spender and accumulating wealth.  The idea of decumulating with DC pensions and investments is scary even at this remove.  How will I cope with the idea of my wealth reducing over time??  Will I end up worrying in retirement?  This is almost unconnected to the amount of money I have at retirement - it's more of a philosophy or way of thinking that I just don't know how I'm going to be prepared for!

saucer

Workerbee999 said:

 Bumping this thread up as it is a great read. Saving hard till Sep 2025 and could do with some motivation as Monday morning looms

You and me both

Albermarle

segovia1 said:

This is a great thread.  I'm 47 and trying to target 55 (when my wife will be 54).  I'm lucky in that I have a high income so able to save and invest.

The one thing I worry about a bit is the mindset switch that will be required on retirement.  I'll have spent 35 years being cautious with money, being a saver not a spender and accumulating wealth.  The idea of decumulating with DC pensions and investments is scary even at this remove.  How will I cope with the idea of my wealth reducing over time??  Will I end up worrying in retirement?  This is almost unconnected to the amount of money I have at retirement - it's more of a philosophy or way of thinking that I just don't know how I'm going to be prepared for!

One way to help solve this conundrum, is to accumulate a big enough war chest.
Big enough that it could easily fund your planned retirement spending , with say a safety margin of 50%. In other words if you plan to spend £40K pa, make sure you have enough to spend £60K pa, if you wanted to. Hopefully then you might relax about it !
Bit of a blunt instrument, but might work. 

SouthCoastBoy

I have exactly the same issue of worrying if I have enough. 

To Albermarle's point I have built considerable saving, currently between 1.4 to 1.5m of which 50% is tax free, however this still doesn't free me from the worry if I have enough, because nobody really knows. What if inflation stays at 10%+ for 10 years or there is a stock market crash that last years, or govt change taxation, isa or sipp rules, my list of worries/anxiety just goes on and on... It is a big problem for me and one I don't seem to be able to overcome

Sea_Shell

Unless you really have deep pockets, I don't think that niggling worry ever really leaves you, especially in the early days, before any SP or DBs kick in.

You just have to trust the plan, and keep your fingers crossed 😎

barnstar2077

My philosophy has always been to keep my monthly outgoings low / reasonable.  I am hoping this will help me in retirement, as even if my portfolio dropped 50% overnight I would still have the means to pay my bills, with a bit left over so life isn't miserable.

I don't mean everyone should only ever spend x amount a month and save the rest, I just mean keeping the essentials, like electricity, water, food etc, in check means you can sleep at night knowing that those bills will always be paid.  That way you can decide every month where the extra money goes.  If someone has multiple cars, a £100 Sky and £50 mobile phone package, plus the top tier of every streaming service going etc, then they don't have the same flexibility.

If I was the kind of person who doesn't know where all the money goes every month then I would definitely be worried about the future for sure.  I do value my freedom from work more than anything though.

If someone doesn't want to risk having to cut back on spending at any point, then as Albermarle says, you would need some pretty serious assets to begin with!

barnstar2077

SouthCoastBoy said:

I have exactly the same issue of worrying if I have enough. 

To Albermarle's point I have built considerable saving, currently between 1.4 to 1.5m of which 50% is tax free, however this still doesn't free me from the worry if I have enough, because nobody really knows. What if inflation stays at 10%+ for 10 years or there is a stock market crash that last years, or govt change taxation, isa or sipp rules, my list of worries/anxiety just goes on and on... It is a big problem for me and one I don't seem to be able to overcome

Those are some considerable assets for sure.  I assume your house will be paid off before you pull the trigger? (If it isn't already.)  Even if it isn't and your portfolio halved overnight you would still have about seven times the average UK pension pot at retirement.

It is hard to switch off worrying though, I know. 

NedS

Albermarle said:

segovia1 said:

This is a great thread.  I'm 47 and trying to target 55 (when my wife will be 54).  I'm lucky in that I have a high income so able to save and invest.

The one thing I worry about a bit is the mindset switch that will be required on retirement.  I'll have spent 35 years being cautious with money, being a saver not a spender and accumulating wealth.  The idea of decumulating with DC pensions and investments is scary even at this remove.  How will I cope with the idea of my wealth reducing over time??  Will I end up worrying in retirement?  This is almost unconnected to the amount of money I have at retirement - it's more of a philosophy or way of thinking that I just don't know how I'm going to be prepared for!

One way to help solve this conundrum, is to accumulate a big enough war chest.
Big enough that it could easily fund your planned retirement spending , with say a safety margin of 50%. In other words if you plan to spend £40K pa, make sure you have enough to spend £60K pa, if you wanted to. Hopefully then you might relax about it !
Bit of a blunt instrument, but might work. 

I've tried to address this by constructing an income portfolio whereby we can live off the income alone between early retirement and state pension age, at which point we have sufficient guaranteed income from DB/SP to be fine.

Maybe look to split your portfolio into two buckets - one large enough to produce the income you require and the second invested for long term growth knowing your immediate income needs are covered.

pensionpawn

Albermarle said:

segovia1 said:

This is a great thread.  I'm 47 and trying to target 55 (when my wife will be 54).  I'm lucky in that I have a high income so able to save and invest.

The one thing I worry about a bit is the mindset switch that will be required on retirement.  I'll have spent 35 years being cautious with money, being a saver not a spender and accumulating wealth.  The idea of decumulating with DC pensions and investments is scary even at this remove.  How will I cope with the idea of my wealth reducing over time??  Will I end up worrying in retirement?  This is almost unconnected to the amount of money I have at retirement - it's more of a philosophy or way of thinking that I just don't know how I'm going to be prepared for!

One way to help solve this conundrum, is to accumulate a big enough war chest.
Big enough that it could easily fund your planned retirement spending , with say a safety margin of 50%. In other words if you plan to spend £40K pa, make sure you have enough to spend £60K pa, if you wanted to. Hopefully then you might relax about it !
Bit of a blunt instrument, but might work. 

Except that you might croke it earlier by working harder and longer to try and get that huge war chest. As well as continuing to contribute to the pot explore every way possible to minimise your outgoings at the point of retirement, without compromising your lifestyle. This will give you options earlier.... I've always targeted being able to retire on a minimum of 2 x pa, i.e. £25k tax free. This is now possible and I could hand in my notice in the morning, however I'm trying my hardest to carry on. It's a continual struggle between just not having enough time (and I've already reduced my hours) to do everything that I want to do against a job I can do in my sleep and the pay isn't bad (though isn't great). Tomorrow isn't promised and every new day I'm (we're) fractionally less capable than the day before. I feel like Dirty Harry when he makes that "make my day" speech, however in my case i'm waiting for my company to "make my day" lol...