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

cfw1994

Albermarle said:

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.....

It is very much a mindset thing, I feel.

SCB: on your point about “ Too much money has been printed. I think we are heading for a very messy 5 to 10 years. ”
You may be right….but equally, in 10 years I will be almost 70, & the go-go years may well be coming to an end….my personal view is that IF you are keen to retire AND your sums look like things are close enough THEN step away from the day job 👍

Nobody has a crystal ball (not even IFAs!), but the one thing we do know is that we all leave this place the same way….live your best life: there is truth in the go-go, slow-go, no-go future we all face 👀

As a side comment, FA/IFAs really cannot afford for their clients to suddenly run out of money, and will therefore inevitably have to err on the side of caution, which (also inevitably) means keeping you working longer.  I am NOT suggesting to not use an advisor - many are not confident with finances, just be aware of the realities involved 🤷‍♂️

MEM62

I am totally in this mindset at the moment, having decided to pull the trigger next year when I will be 62.  The anxiety, albeit modest, kicked in a soon as I committed myself to the decision.  There are days when I second guess whether I will have enough and there are days when I tell myself to stop worrying.  Having a good IFA helps to offer some assurance. 

My position is that, with interest rates where they are at the moment, my first five years of income will come from cash.  So that is fixed and not reliant on the markets.  (Leaving circa £300K in my DC port at the point of retirement)  This will cover all essential expenditure with excess cash for fun.  We are mortgage and debt-free.  On top of that I intend to work a couple of days a week as I don't want to go from having a full-time high pressured job to not working at all.  Apart from work being healthy the extra money will pay for additional travelling and fun stuff.  

When the five year period is up I will re-assess.  By that time I will have a DB pension paying out £4K pa, my  state pension (Currently £10,600) in payment and whatever my DC will be sitting at in five or six years time.  

My OH is five years younger than I and she will retire two years after me as she needs an exit plan from her business.  Her circumstances are similar to mine albeit that her DC pot is a little smaller. 

I really need to stop over thinking the finances and just embrace what is coming.     

michaels

Cash has lost 10%plus in real terms in the last 2 years, being in cash rather than index linked bonds sounds extremely risky to me.

sgx2000

I recently added an inflation sheet to my retirement spreadsheets

I was startled to find out that at 7% inflation, the real world value of your cash is halved in 10 years...

Obviously interest on the cash would help,  BUT......

Linton

sgx2000 said:

I recently added an inflation sheet to my retirement spreadsheets

I was startled to find out that at 7% inflation, the real world value of your cash is halved in 10 years...

Obviously interest on the cash would help,  BUT......

BUT over the long term equity prices can reasonably be expected to exceed inflation. So don’t keep your long term money in cash.

By keeping your investment allocations in line with the timescale and quantity of your needs you should be able to weather most storms. But ultimately you must accept that in an economic end of the world scenario you will be queueing at the soup kitchens alongside  all your unemployed neighbours.

Pat38493

MEM62 said:

I am totally in this mindset at the moment, having decided to pull the trigger next year when I will be 62.  The anxiety, albeit modest, kicked in a soon as I committed myself to the decision.  There are days when I second guess whether I will have enough and there are days when I tell myself to stop worrying.  Having a good IFA helps to offer some assurance. 

My position is that, with interest rates where they are at the moment, my first five years of income will come from cash.  So that is fixed and not reliant on the markets.  (Leaving circa £300K in my DC port at the point of retirement)  This will cover all essential expenditure with excess cash for fun.  We are mortgage and debt-free.  On top of that I intend to work a couple of days a week as I don't want to go from having a full-time high pressured job to not working at all.  Apart from work being healthy the extra money will pay for additional travelling and fun stuff.  

When the five year period is up I will re-assess.  By that time I will have a DB pension paying out £4K pa, my  state pension (Currently £10,600) in payment and whatever my DC will be sitting at in five or six years time.  

My OH is five years younger than I and she will retire two years after me as she needs an exit plan from her business.  Her circumstances are similar to mine albeit that her DC pot is a little smaller. 

I really need to stop over thinking the finances and just embrace what is coming.     

Based on what inflation rate?  If you want to keep 5 years in Cash, you can either assume that you can find savings accounts that keep up with inflation (unlikely over 5 years) or you have to save up enough to cover 5 years of anticipated inflation as well.

sgx2000

Pat38493 said:

Based on what inflation rate?  If you want to keep 5 years in Cash, you can either assume that you can find savings accounts that keep up with inflation (unlikely over 5 years) or you have to save up enough to cover 5 years of anticipated inflation as well.

As I said just an arbitrary example of 7%
Just an example....
Not looking at investment returns etc etc
Just an example of what inflation is doing to un-invested cash

sgx2000

Linton said:

"But ultimately you must accept that in an economic end of the world scenario you will be queueing at the soup kitchens alongside  all your unemployed neighbours."

 LOL.... Funny

MarzipanCrumble

I am financed by DB pensions in my own right and also widow DB from my deceased husband.  

TBH I rather buried my head in the sand but I did know I wanted a (very, if poss) comfortable retiremnet income so that I would NOT stress about income meeting my requirements.  So I decided to deferr my SP, to which I was entitled at about 62, and gained 10.5% interest.  I worked until 68 ish.

Yes, I know, opportunity costs of taking SP when due and deferring it -  I don't care because the cushion is great for alleviating stress and meaning I can afford in the future hep around the house and not worry at all about shopping.

And yes, about 5 years before widowed, ploughed savings into a SIPP - so well-insulated, me.  BUT I also have a big problem about spending on myself, hence I am a habitual saver.  Only spend if 'justified' so now I have a gardener......

This just sums up that everyone is different in financial requirements and what they think important and need to take their differences seriously and cater for them, if at all possible.

NlghtOwl

The unrealistic goal is for pre-retirement excel calculations to predict the future but not likely. My view is that if it the spreadsheet stacks up then if there are any financial hiccups there will always be discretionary spending I can adjust for a short period of time.