Learning to spend
Comments
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My model is to have our DB pots as our baseline pension (we work in academia and NHS so still both currently DB). We are building DC pots to bridge the gap between when we want to retire at 60 and when state pension kicks in at 67.I think having DB income to cover "the basics" and a DC pot for "the luxuries" is perhaps the ideal scenario.
Sadly my DB pots are teeny tiny, & annuity rates not really appealing enough to sway my view, but nonetheless, having some kind of split and control would be a GoodThing™, IMHO!!0 -
I suppose the biggest fear is always "running out of money". However (excluding potential long term care costs), my spouses pension which is index linked would pay for all our basic "essentials". When my state pension kicks in we will have a combined income of roughly what we had been spending prior to retiring. On top of that there will be spouses SP, + some old deferred private pensions (not index linked), + any income from savings and investments.
I have now modified our spreadsheet that we do monthly (recording income + expenditure), to include a column that also shows "underspend against budget"! I am hoping this will encourage us to spend more! We did buy a newer car but apart from that we are still struggling to spend what we should be and I just can't get my head around spending "for the sake of it"?0 -
[FONT="]It’s hard to draw the line between being realistically conservative about spending in retirement and being over cautious. I think I have a tendency to be over cautious but I am now facing a series of “one off” expenses, mainly house repairs and maintenance, that make me think that perhaps I was being realistically conservative after all.[/FONT]0
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If, as friends of ours, expect expenditure to reduce post 74 then maybe you can be more aggressive with your withdrawals in the 1st 15 years in the knowledge that you’re basics will be covered come what may from SPA. Does any 4%SWR or Guyton Klinger sc!nario deplete funds in 15 years?We will be in exactly that wonderful position by the time our SPs are in payment. A bit trickier for the intervening 15 years!
Make your bucket list and try to do it without stressing yourselves about money left thereafter.
My thoughts having had 3 friends/relatives fighting cancer recently and all in their 50’s or younger (fit, healthy diets and no family history).0 -
If, as friends of ours, expect expenditure to reduce post 74 then maybe you can be more aggressive with your withdrawals in the 1st 15 years in the knowledge that you’re basics will be covered come what may from SPA. Does any 4%SWR or Guyton Klinger sc!nario deplete funds in 15 years?
Make your bucket list and try to do it without stressing yourselves about money left thereafter.
My thoughts having had 3 friends/relatives fighting cancer recently and all in their 50’s or younger (fit, healthy diets and no family history).
That is the mentality we are using in that we want to do long haul holidays on our bucket list in the early years of our retirement while we are both fit and healthy. We were lucky in that DHs company pension offered a "smoothing pension" with an extra £3k per annum approx which will disappear on state pension age to give us more money in the early stages between age 58 and 66.I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.0 -
When I worked for Nationwide Building Society I met a number of elderly people (mostly widows) who would tell me how they were forced to live a grim existence surviving on beans on toast, heating just one room of their house due to rising costs and their meagre pensions. They'd present you with a savings book they'd like updating and almost invariably there would be a six, and not uncommonly high six-figure balance in these accounts. Note: The branch was in an affluent area.
I don't know whether they felt they couldn't spend the money, perhaps they felt it wasn't theirs to spend (it was earned by their husband or it was to be left as an inheritance) but it was depressing to see people who could have been living comfortably feel they could barely scrape by.0 -
With our current spending the only scenario that depletes all our funds over that timescale is asteroid strike ;-)If, as friends of ours, expect expenditure to reduce post 74 then maybe you can be more aggressive with your withdrawals in the 1st 15 years in the knowledge that you’re basics will be covered come what may from SPA. Does any 4%SWR or Guyton Klinger sc!nario deplete funds in 15 years?
Make your bucket list and try to do it without stressing yourselves about money left thereafter.
My thoughts having had 3 friends/relatives fighting cancer recently and all in their 50’s or younger (fit, healthy diets and no family history).0 -
I don't think there has been any period where a 4% SWR has depleted funds in 15 years. However if you start retirement with a bear market for a few years, I wouldn't be aggressive with withdrawals at that time.If, as friends of ours, expect expenditure to reduce post 74 then maybe you can be more aggressive with your withdrawals in the 1st 15 years in the knowledge that you’re basics will be covered come what may from SPA. Does any 4%SWR or Guyton Klinger sc!nario deplete funds in 15 years?0 -
I suppose the biggest fear is always "running out of money".
Mmmm, yes, it feels like that.....but.....If, as friends of ours, expect expenditure to reduce post 74 then maybe you can be more aggressive with your withdrawals in the 1st 15 years in the knowledge that you’re basics will be covered come what may from SPA. Does any 4%SWR or Guyton Klinger sc!nario deplete funds in 15 years?
Make your bucket list and try to do it without stressing yourselves about money left thereafter.
My thoughts having had 3 friends/relatives fighting cancer recently and all in their 50’s or younger (fit, healthy diets and no family history).
....having been to 4 “too early” (including 2 good friends my age
)funerals in 2018, my biggest fear is not living long enough to enjoy those later years....hence a relentless focus on stopping “regular” daily work ASAP and an almost daily incursion to this and other forums 
Yes, plenty of sums to do: for me, having flexibility in both spending and also perhaps optional part time earning feel key.Plan for tomorrow, enjoy today!0 -
Mmmm, yes, it feels like that.....but.....
....having been to 4 “too early” (including 2 good friends my age)funerals in 2018, my biggest fear is not living long enough to enjoy those later years....hence a relentless focus on stopping “regular” daily work ASAP and an almost daily incursion to this and other forums
Yes, plenty of sums to do: for me, having flexibility in both spending and also perhaps optional part time earning feel key.
Yes it's far more scary to think of running out of health (or time:eek:) than money
A useful thing for us all to remember! In fact, when looking at the alternative, sticking around long enough to run out of money could easily be viewed as a positive!0
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