A Paupers Pension Tale (Not many nuts to dig up)
Will try and make this as short as possible and is mainly aimed for people like me who are thinking of or have retired early with only a small pension pot. I have read through many posts on here and there is not much out there for people like myself so I thought I would start this thread and update it as I go along then other people can hopefully learn from any mistakes I make and help them along the way.
Right I am 50 years old and just took voluntary redundancy after 26 years (worked 34 years in total), not a great package but I was fed up of the 8 to 5 routine and always wanted to retire by 55 so thought I might as well bite the bullet. Being furloughed in March helped a great deal as was always worried what I would do with my time but found it very easy to fill my days up. I have an understanding wife five years younger who is more than happy to carry on working and let me look after the house and dogs, again she does not earn a great amount but will cover the costs of running the house and give her money to spend on herself (mortgage paid off).
Right here is where all the financial people out there shake their heads and go you will never make it lol, maybe so but I am going to give it a try. I have a pension pot of £110k which I can access at 55, also a works related pension at around 15k and a sipp 10k. All these I am still learning about and will be making changes to them in the next few months. My redundancy and savings amount to 30k which is mostly in premium bonds which is all easy access to. My wife’s pension stands at 15k but hoping to increase that over the next few years. As the saying goes money may run out but it is guaranteed that quality time will run out.
I have read the recommended Diy Pensions book by John Edwards and starting to understand more and more what I need to achieve. I will hopefully be able to pay £2880 into a sipp for the next 5 years knowing I can access the money if needed by then and already transferred marriage tax allowance over for this new tax year.
So here’s the plan so far, live off the wife’s wages for as long as possible, obviously the longer the better but I am sure eventually she will be wanting to retire as well (6 years short sp), then if needed start taking money from my pension pots tax free. Part time work an option if things get to tight in between times as I also am one year short for full state pension so that will need sorting out at some stage. Inflation is an obvious concern and so is the the 17 year gap to sp, once we both claim sp we will be more than comfortable, bereavement is again a concern if we only have sp in the later years.
Positives so far are that the last 12 months have been probably the best of my life now the stress of working has gone, my wife loves the fact she does not have to lift a finger around the house anymore and our relationship has never been better. We live a simple life and I have always been good with money , I have run a spread sheet for the past 12 months (and can account for every penny I have spent since I first bought a house back in 1992) to make sure we can do it and works out good so far. We have done all the house improvements more by luck than judgement in the past 5 years so only basic maintenance should be required.
I am always astounded when people post is a million enough to retire with etc, read earlier that someone was even quizzing sea_shell’s retirement pot which seems one of the best run retirement plans on here. A few people commented that they would like to read my story so hence here it is, I wrote this a few months ago and tweaked it slightly as know a little more now, nothing has really changed so far apart from that, in fact in anything things are better as I have a much greater understanding of everything thanks to all the very helpful people on here.
Already rambled on to much so will finish it with the negatives, health being the important one, more so for my wife than myself, and the one which throws a tiny bit of doubt in my mind is the major expense of one of the dogs falling ill or the roof caving in on the house or the car breaking down etc. Also been so easy to budget and save for the past 12 months so will be interesting to see how we get on once the pubs re open and we can go to gigs again.
I will continually update this post (I have the time on my hands J ) for anyone who might be interested and will add more details as we go along, I think I have thought of most things like hols, car, new appliances etc but always happy for feedback especially from anyone who is or has been in a similar position.