Changes in your retirement expenditure

maxaxe

A smorgasbord question for those who planned retirement and have retired.

How well has your actual expenditure matched your modelling? Did you use your expenditure just prior to retirement to estimate your retirement expenses? I understand most research indicates that people spend a bit less, but similar than preretirement? Anyone who planned to spend more in retirement?

Did you have substantial unforseen expenses? Medical treatment or unexpected repairs?Perhaps an unexpected new hobby or caught the travel bug?

What is your outlook on affording to continue? Anyone forced back to employment and if so what are your thoughts on this?

Particularly interested in those who have retired (very) early.

TadleyBaggie

Never got the chance to do much planning, it happened very quickly. Post retirement I took up golf which can be an expensive pastime. Also been doing more holidays, cruises and short breaks, so expenditure has been higher then pre-retirement.

Linton

Our retirement planning was based on matching our pre-retirement income after paying into pensions and savings with 3% inflation and an investment return of 4%.

Over 20 years later, after early retirement in my mid 50s, we have about the same money in investments in £ terms as when we retired despite subsequently buying a couple of annuities. We take small ship cruise holidays every year and will continue to do so whilst health permits.

Our day to day standard of living is much the same as pre-retirement and there has never been a need to economise.

The one major unplanned expense was a move to a larger house in a better location financed by ER.

Ms_Chocaholic

For several years before retirement I did a spreadsheet of expenditure each month so I could actually see what we were spending. We don't budget but put everything on a credit card and pay that off fully at the end of each month so it wasn't really specific. That allowed us to actually see what our expenditure was, deduct the things that we wouldn't require in retirement and plan ahead.

Triumph13

We retired in our early 50s once we were confident that our assets would support spending higher than our actual spending in the preceding years. Good market returns and the impact of some un planned part time work mean we could afford to spend 50% more than that figure, even after adjusting for inflation. By dint of great effort we are managing to get the spend up to around 10% more :)

maxaxe

Thanks for the responses. I think the replies show that people planned very conservative withdrawals, so an increase in spending was easily absorbed. Probably the recent market performance has helped. Anyone that had a less conservative plan? I'm particularly interested to hear from people that felt obligated to unretire.

For context, I'm concerned about retiring early, then realising that something unforseen drastically increases my outgoings, then being too late to work any more (and too young to die 🤔). This tends not to happen on average as far as research goes (as far as I can tell), but am keen to hear from others' experiences.

It's also clear to me that I want to spend more than I currently do in retirement because I will have an extra 40 hours a week to fill.

tacpot12

https://forums.moneysavingexpert.com/discussion/comment/82157268#Comment_82157268

Well done you! 😁

tacpot12

I retired 9 years ago at 53. Actual expenditure has matched my modelling very closely, but I was tracking my expenditure closely before retirement. I had also been saving for all my foreseeable and unforeseable expenses for a good 10 years prior to retirement, so I had a good handle on what money I was likely to need.

I expected to spend a little less in some area; work clothes, food at work, and we also went down to one car. I expected to spend a little more in other areas, more holidays and a new hobby (I took up dinghy racing, which has proven to be very cheap for me. Now that I have bought my own boat, which cost £500, I only spend about £250 a year on this.)

Seeing the returns I have been able to make consistently from my personal pensions, and due to so good market returns on my stocks and share ISA, I have recently indulged my desire to buy and run a high-performance sports car. (Annual costs are c£2,500).

DRS1

(and too young to die 🤔)

Ah Good old Jethro Tull.

ali_bear

I think because of the way markets have ballooned in recent years you won't find many on here who've had to return to work through financial hardship.

The sample set here are more financially savvy than most, and understand that the above situation may not go on forever, so are tending to be prudent in how they approach retirement income and spending.

Brie

I would describe my planning as chaotic. I had a spreadsheet set up about a decade in advance to keep track of my potential pensions but didn't consider expenses as such. Despite my background in debt advice I've never been the sort that had a budget rather I just make sure all the bills are paid.

Strange things happened - redundancy, inheritance. And the odd one is my OH decided he wanted his own money so his pensions are being paid into an account that he manages all by himself. (don't worry - I have access). Net result is that I deal with the household finances and he pays for holidays (blinking expensive ones & lots too!!) and his clothing, cigars and fancy whisky.