The Senior Wonder Years!

Clowance

" how much do we really need. As much as we need for the lifestyle we want."!
Sadly my income is way below all the holidays I want! Oh well.

Organgrinder

Clowance said:

" how much do we really need. As much as we need for the lifestyle we want."!
Sadly my income is way below all the holidays I want! Oh well.

I know, I didn't word that very well. 

helensbiggestfan

Clowance said:

" how much do we really need. As much as we need for the lifestyle we want."!
Sadly my income is way below all the holidays I want! Oh well.

There's the rub. 😂.  

Organgrinder said:

Clowance said:

" how much do we really need. As much as we need for the lifestyle we want."!
Sadly my income is way below all the holidays I want! Oh well.

I know, I didn't word that very well. 

It's fine, no worries. 

I see nothing wrong with being aspirational and having some wants as well as needs.  A life spent living on just the "bare necessities" would be pretty grim,  fine for a Disney movie but not much fun in real life.  It's good to find ways of making a bit extra to fund those wants, especially if it's something as painless as bank switching/stoozing or in my case dabbling in vintage.  

I come from a modest background, living on a council estate and grew up always wanting "more".  My father often had three jobs on the go to take care of his family and my mum was frugal and creative.   They taught me well and the lessons have stood me in good stead.  Throw in my Aunt who was a serial entrepreneur and who took it upon herself to be my mentor and I think I was blessed to have such excellent teachers and role models. 

I learned from them that you can live a champagne lifestyle on a lemonade budget, it's all about mindset and finding workarounds. And maybe taking the odd calculated risk, like I did when I first struck out on my own and bought my first house.  

On paper I couldn't really afford it, in fact it looked like financial suicide.  It was a wreck, I couldn't afford to pay contractors and didn't have any real DIY skills.  I didn't let such minor details stop me.  I got stuck in living in what was a building site for a year.  My friends in their comfortable rented flats thought I was bonkers.   

It was tough at times, I even had to sell my car to keep going.  And that house was definitely a want rather than a need.  I could have taken it easy and rented a flat or even had a cushy life living with my parents.  But I wanted a house so I pulled out all the stops and got one.  

Best financial decision I ever made because I sold it three years later for more than double what I had paid for it.   

Since then I've never really looked back. For sure there have been lean times, especially when we were first married and the children were small.  Now, although I don't have a huge income, I am comfortable. After the traumas of my husbands long illness and early death I am happy to live a simple stress free life. 

As my dad used to say "Enough is an elegant sufficiency".  

TallGirl

[Deleted User] said:

Following on from my previous post…..

At the moment shared monthly household and my personal monthly bills amount to £769. This amount includes all food, laundry, charity payments, window cleaner as well as all the utility bills.

I also allocate £400 a month to personal spends in a separate current account. The balance of the account is divided into pots. These include, birthdays, dentist, chiropodist, petrol, hair and beauty and general personal spends. 

I have an unallocated amount of about £70 a month to allow some flexibility and overspends 😳.

So quite a simple allocation of funds to spending and saving accounts.

Would be interested to read how others divide up their pension incomes.

Best Wishes.

This thread is always so interesting to read for someone who is about to step away from full time permanent work in a year or so you move back to my home country. I cannot retire at 55 but I am trying to work out what we need to live on so all this is ideal. 

I do keep things simple as well we both pay into a joint account which pays for the bills (£950) and a holiday/fun fund (£150 each a month). We then have our own budgets and money as I would never share money totally I prefer to have my "own money". 

My own bills are my phone bill (I paid for my phone outright), golf & gym membership, monthly savings into regular saver and Premium bond plus I have upped my work pension to take off 20% of my wages. Out of sight out of mind. I paid my mortgage off 9 years early (the original MFi3) but have found it hard to stay focussed since then. I wish I have just paid more into my pension in those intervening years but at least I have got back on track. 

Like you I have unallocated funds that I really do not track I know many love YNAB but that would not work for me at the moment. 

Enjoy the new car and the £0 balance on the loan. I am stoozing for the first time with an M&S credit card and the money is sat earning 4.5% but I am desperate to pay it off. 

Floss

helensbiggestfan said:

I see nothing wrong with being aspirational and having some wants as well as needs.  A life spent living on just the "bare necessities" would be pretty grim,  fine for a Disney movie but not much fun in real life.  It's good to find ways of making a bit extra to fund those wants....  

The way my retirement is looking it will be "grim". A second divorce in one's mid 50s is not recommended, and although I am now mortgage free on my shared ownership home (which was all I could afford) I will always have some rent to pay, along with the normal bills for a household. While I don't do Sky or sports channels, I do have the cheapest Netflix and my kids share their Disney+ and Amazon Prime with me.

I will have around 10 years of NHS pension with various other bits plus a small private pension. As I worked part-time until my youngest went to high school, it was very difficult to join a pension scheme as a p/t worker and as a result was reliant on the first ex-husband's pension. Divorcing before pension sharing in 2000 blew that out of the water!

I am making a conscious effort to do any costly renovation work whilst still working, so all the windows, flooring & boiler will be replaced before I retire. Exterior render has recently been renewed, the roof is in good shape after some expenditure and the plan is to fund replacing my car with part of my lump sum when needed. The garden has slowly been remodelled to be less demanding and any decorating will be done as needed (and not just on a whim).

I don't deal with sun & heat very well so beach holidays are not high priority, but I do quite like a week in bright daylight such as Madeira or Southern Spain during January, so that will be my luxury.

[Deleted User]

@Floss. Many thanks for your post. How far away are you from retirement? Have you an estimate for your pension income at various ages? Have you checked you are on course for a full new state pension.?
On the plus side your state pension and NHS pension will give you a useful safe core income.
The work you are doing on the house shows excellent planning and forethought.
You say you will always have some rent to pay. Doesn’t mean that the organisation who partly own your house are also responsible for some repairs and maintenance? I don’t know anything about shared ownership so may be wrong.
Your January trip plans sound great.

MarzipanCrumble

@Floss
As Baron_Dale says, important to check your State Pension forecast and that they have the number of years you contributed correct, including years looking after your children.
https://www.gov.uk/national-insurance-credits

Also check with NHS Pensions how much you are likely to get.

Have you considered working beyond pension age?  I did this in NHS (where you could work until 75!) and also deferred my SP.  This built up the income for both SP and NHS pension.

helensbiggestfan

Good Morning Everyone. 

Hi Floss. Nice to "see" you here.😁.   

Yes life has a habit of sending us curved balls doesn't it and most of them have financial repercussions. Divorce , death, illness, redundancy and so on can destroy even the best laid plans and can wreck our finances.  Rebuilding takes time and effort. You are doing all the right things, getting all those big ticket items done now rather than later.

Baron gives some excellent ideas for you to look at.  As someone who stared bankruptcy in the face at one point (due to my husbands devastating illness) the only extra pearls of wisdom I can offer is to try not to worry too much about the future. As Martin always teaches......prepare for the worst and hope for the best.  Worrying solves nothing, in fact it can make matters worse, making us anxious, robbing us of sleep, depleting our energy and damaging our ability to think straight and make wise decisions,   

I know I sound like a worn out record but I firmly believe that mindset is everything.  If you can think it, then you can do it.  

You have recovered from two divorces, that's no easy task. It takes courage to rebuild a life when a relationship ends - whether it's through divorce or the death of your loved one is largely irrelevant.  Picking up the pieces is a slow painstaking job. Starting afresh requires resilience, stamina and a leap of faith. So give yourself a well deserved  pat on the back for all you have achieved so far and enjoy that winter sunshine holiday. 

Madeira is lovely, one of my favourite places.  😎🌞

Floss

[Deleted User] said:

@Floss. Many thanks for your post. How far away are you from retirement? Have you an estimate for your pension income at various ages? Have you checked you are on course for a full new state pension.?
On the plus side your state pension and NHS pension will give you a useful safe core income.
The work you are doing on the house shows excellent planning and forethought.
You say you will always have some rent to pay. Doesn’t mean that the organisation who partly own your house are also responsible for some repairs and maintenance? I don’t know anything about shared ownership so may be wrong.
Your January trip plans sound great.

I turned 60 earlier this year, and have been checking my NHS pension projection every year, along with my state pension forecast (already achieved the full amount and cannot improve upon it). As I said, I will only have 10 years NHS pension for which the plan is to defer until 67 & to claim with my state pension.

Re: working beyond 67 - I had BC last year, and am currently awaiting rheumatology results about a potential autoimmune condition prompted by the cancer treatment so am not expecting to be well enough to work up to & beyond 67. Also my mum had to work til 65 for financial reasons and really struggled in the last 18m due to health problems, so don't want to put myself in that situation.

Shared ownership is generally on a "repairing lease" basis, so I am responsible for maintenance, hence the wish to do work before it is an urgent need.

mummytummy

Which part of the NHS pension were you in?

I ask because I was in the 1995 scheme, which was deferred when I left the NHS, and was told there was no extra benefit in me delaying claiming at 60, unlike the later schemes. 

I claimed mine at 60 and was so glad I did, I took the maximum tax free lump sum which came in very useful and receive a monthly sum which increases each year in line with the CPI.  I still work part time so pay tax but not NI.

I also came across this on a fb forum which might be helpful:

“The question of leaving the 95 pension without taking it at the normal pension age of 60 keeps coming up again and again.

95 Pension left beyond normal pension age, deferred pension, does not accumulate any “interest”. (Deferred 2008 and 2015 pensions get an annual uplift of consumer price index (CPI))

If continuing in 2015 scheme (without a break of more than 5 years) the final salary link is preserved. This means the pension will be higher than if taken at 60, but this has to be weighed against the pension not drawn from 60.

If salary increases by 15% in next 5 years (as it did in the last 5) the deferred 95 pension would increase by 15% - just over one sixth. (There would be no more years added to 95 pension as it closed in April 2022.) The extra lump sum would be about half a year’s pension. (3 x 15%). If the pension were drawn from the age of 60 in the 5 years you would receive 5 years of pension - which would increase by CPI every year. In fact the pension drawn for 5 years would by the 5th year end be about the same, or more likely more, than the higher pension linked to the final salary 5 years later.

The upshot of the above is for about half a year’s pension (the extra lump sum) you lose about 5 years’ pension. Even if the salary increase outstrips the pension increase it will take many years for the higher deferred pension to make up for the loss.

In summary it is better to start drawing the 95 pension at 60. The rules now allowing to continue to be in 2015 pension after drawing 95 pension give a bonus of additional pension from 2015 scheme”

You may already be aware of this but might be worth exploring and taking now and making things a little easier sooner rather than later?