How did your pre-retirement calculations compare to reality once you had retired ?

SouthCoastBoy

Kim1965 said:

If your sitting on an indexed db pension and have a handle on your finances, your fine. If your dependent on dc and fear of a financial apocalypse there will always be some doubt. A guess scb would agree lol

Yes totally agree, and unfortunately the pessimist I am I feel we have got a lot of pain to come, govt spending too high  taxes too high, inflation wil run for a lot longer yet. Too much money has been printed. I think we are heading for a very messy 5 to 10 years. 

michaels

bownyboy said:

'Retired' April 2022 aged 50. Had been running the numbers for years and things looked good. 

Then we spent 3 months travelling and having a blast; spending way more than forecast (we deserved it right?) Meanwhile the markets were tanking and I got nervous. 

Come October 2022 and a previous consultancy reached out and offered me a 4 month contract gig, so I took it and used that income to top up the cash pile. By March 2023 I couldn't wait to leave. Work was doing my head in and I didn't have the patience to keep dealing with clients. Also the markets were tanking again. 

So we went on another 3 month 'bucket list' holiday to Central America. Had an amazing time and well, spent more than we should but life is for living as well right? Markets went up, then down, then down again.

So we're at October 2023 and I'm getting nervous again and have again been offered another contract to March which I think I will take even though every fibre of my being is groaning and eye rolling at having to deal with clients again. 

I guess a learning for me is the number I thought was right, is perhaps less than I need to keep me from getting nervous about the markets and needing to keep taking a 4 month contract once a year. No plan survives contact with the enemy and all that!

Interestingly our investments are actually higher than they were back in March 2022, despite selling off a couple of tranches of ISAs to part fund this years expenses. So a large part is understanding your own psychological make up and how you deal with volatility.  

I think a key problem with SWR is the 'hold your nerve' situations - in some scenarios the pot falls to less than 10x annual spend during the first decade but then recovers (obviously, it in an SWR).  However for the individual, who is going to feel comfortable continuing to take the same real terms annual income from a pot where the coverage appears to be less than 10x the annual withdrawal with 20+ years to go?

Other thing we seem to see a lot of is money illusion - people who are in drawdown and see the nominal value of their pot staying the same/increasing rather than looking at the real value which given recent markets/inflation is often down 10% or more in the last 2 years.

Moonwolf

Phossy said:

Contemplating retiring at the end of 2024 (aged 59) and I seem to be in an obsessive mode about calculating all my options again and again and again. The numbers really don't change that much, I think I just keep doing it in the vain hope I have some form of epiphany, that an inner calm will settle on me and an inner voice tell me it will all be Ok. Breathe...

So, how did your pre-retirement number crunching match-up once you had retired? All good/ missed the mark/  missed something obvious/ realised you worried about it all too much..

(I really don't think it will bring me inner calm, but you never know)

I'm planning to go at 59 probably end of March 2025.  I'm doing the same re-processing.

A lot of my pension is DB, I have a DC which I plan to split roughly half as a bridge to 67 and the remainder as a top up to my DB.  I have two budgets a larger one with more holidays and luxuries; and a DB only budget which is still OK, this gives me a lot of comfort.  I hope to run out of DC top up between 85 and 90 but if there is a crash and I run out earlier I'll be OK.  

I'd try and build a model with a low risk basic lifestyle block and a higher risk more fun block although I acknowledge that this is harder on DC only.

Moonwolf

molerat

I retired in 2009 at 55 and the numbers worked, only thing I might have done differently would be to leave a small DB until 60 when I could have taken it unreduced and used savings to bridge the gap, it was only small and only a 5% hit so no big loss really.  One negative was the 2010 SP changes putting back the age and having to fill the gap but that eased a little with the 2011 amendment. The big plus was the 2016 SP change allowing me to top up making us a fair bit better off than originally planned.

This goes to show however good your plan is someone / something will throw it off course so you need to factor that in to any calculations.

sgx2000

Phossy said:

Contemplating retiring at the end of 2024 (aged 59) and I seem to be in an obsessive mode about calculating all my options again and again and again. The numbers really don't change that much, I think I just keep doing it in the vain hope I have some form of epiphany, that an inner calm will settle on me and an inner voice tell me it will all be Ok. Breathe...

So, how did your pre-retirement number crunching match-up once you had retired? All good/ missed the mark/  missed something obvious/ realised you worried about it all too much..

(I really don't think it will bring me inner calm, but you never know)

OMG....
63 Similar boat
Everyone pokes fun when I mention pensions....

I have found it really hard to find someone to work through the details with me.
I have been amazed how little interest/knowledge people seem to have...

This forum has been the light at the end of the tunnel....
So much information and so many helpful individuals....
Many many thanks to all the regular posters...

Albermarle

SouthCoastBoy said:

Interesting bownyboy, your experience confirms my fears, thinking you have enough but don't. 

I think going from past posts, you will never think you have enough.....

Albermarle

Phossy said:

Contemplating retiring at the end of 2024 (aged 59) and I seem to be in an obsessive mode about calculating all my options again and again and again. The numbers really don't change that much, I think I just keep doing it in the vain hope I have some form of epiphany, that an inner calm will settle on me and an inner voice tell me it will all be Ok. Breathe...

So, how did your pre-retirement number crunching match-up once you had retired? All good/ missed the mark/  missed something obvious/ realised you worried about it all too much..

(I really don't think it will bring me inner calm, but you never know)

I retired just over two years ago, age 62. I am not an obsessive number cruncher ( partly because I was pretty sure I had stashed more than enough/had enough fixed income back up) However of course I did have some figures for expenditure and it has worked out pretty spot on, apart from the current bout of high inflation pushing it up.
We have spent more than expected on Groceries, Energy, insurance, holidays and less on a dog that unfortunately died.

However to fuel the pessimists, I have to say that my overall pot of DC pensions, S&S ISA's and cash has dropped fractionally  in the intervening two years in nominal terms, but in real terms probably by more than 15%.

jim8888

I'm a similar obsessive over checking the sums and had many plans, scenarios and projections - and budgets - before I retired two years ago. The reality of going from a monthly income for paid employment to living off pensions and investments is a big adjustment, and I probably check the numbers even more these days in retirement. I reckon I spent a good six months on these boards trying to work out my best pension/investments withdrawal strategy and, as with sgx2000 above, I'd like to give many thanks to the people that have helped me on these boards.
To answer the question, my theoretical calculations have been quite close to my actuals so far, so my advice would be to run the numbers as often as you can when it comes to projecting spend versus income (and then give yourself a sleeve of +/- 20%!)

Sunnylifeover50plan

Your eyes open when you start to track actuals rather than estimates. I stopped working 5 years ago and can start accessing my pension at 55 next year.

MK62

I stopped full time work in 2018, and my original target spreadsheet worked on 3%pa CPI inflation, and 4% returns.......quite different to the actual average figures of around 4.2% and 5.7%.......of course, that's only 5.5 years worth of data, so in terms of a potential 30+ year retirement, still relatively early days, but I'm ahead of my original target....at least for now.

That said, given events over the last few years, I'm now very sceptical that CPI actually truly reflects inflation as seen by the average person, so I'm thinking about a rethink on that.......though as I'm still ahead, I'm in no rush.....for now at least!