Forum menu
For those that look the leap in the last few years with pots ranging up to 500k or so, how is it working out ? For you, for your partner if there is one ?
Well as you will know my plans did not exactly work out 🙂 I guess what I have ended up with is a wee bit more than the £500 000 mark as a now 64 yr old single man. I have a small work pension plus a couple of even smaller widowers pensions and a rental flat. The nominal value of the lot together is a bit more than that mark. I have an total income of around £1300 pcm which I can live on quite happily ( no mortgage). Some of the money is in cash which of course gives me a huge safety net and can be spent ie thats what funded my recent trip to Australia and NZ. I understand its a very privileged position to be in.
I have always lived a relatively frugal lifestyle indeed to the point I have issues spending money sometimes. A pound is a prisoner and all that 🙂
One of the key things for me is that I am time rich so that I can do things more cheaply as it doesn't matter if I spend a few days setting stuff up rather than paying someone to do it ie the trips I have done I have spent some time on those trips organising things like my bike in NZ and my car in Aus. When you have plenty of time it does not matter if you spend a few days sorting stuff out in a way that you couldn't if you only had two weeks. For example the car in Aus took a few days at each end of the trip to organise. I wouldn't have wanted to spend that time if I was time limited.
So my experience is that is perfectly possible to have a decent retirement on that sort of money so long as you do not have expensive tastes and as long as some of the money is easily accessible as cash. Without that accessible cash money the antipodean trip would not have been possible but everything else I have done would all just about fit in my monthly income.
If things had gone as planned then the main difference would have been that we would have needed to let the flat as a holiday let to replenish funds when on long trips as we would have had a slightly bigger income but much less cash on hand.
I have zero regrets about retiring on what to many would seem to think inadequate money. I just simply cut my cloth accordingly. I am aware tho that having cash on hand has created a huge safety net for me. I still need to be careful with money
So thats my experience of retiring.
I firmly believe that no one ever said on their deathbed "I wish I had worked more"
I also noted with sadness rereading the thread, that Tj's post shows in realtime that we really can't wait and need to get on with doing the things we want to do ASAP. Love that you've got up and got with achieving those plans Tj.
thats very kind and that is very much the lesson. Two of Julies family have retired early because of what happened to her and the realignment of their priorities that resulted
Final thought. I think the pattern of a "cliff edge" retirement is going to be less common ie working full time then stopping completely. I think it will become much more common to have a slide into retirement as Scotroutes and others have done or are intending to do ie going from full time high pressure work to part time lower pressure work for a transitional few years. I know several folk who are doing this
^^ tj, I think that is exactly what I may end up doing. I’ll be 60 in February.
I’d like to find the right part time lower pressure work for a start after the summer. Due to my circumstances in this tax year I’ll be donating the majority of anything earned from that work to the inland revenue, but I don’t think hanging off to save tax would be wise, or good for my head. Then come next April I can hopefully use what I earn in that role, with low taxation, to minimise any pension drawdown for a bit.
so I have a few months to identify and hopefully secure that job !
Care homes are always looking for staff.
I have a 92yr old mum with mild dementia, living on her own and with a home care package, who I spend a fair amount of time around (she lives 35 min drive away and I’m over a couple of times a week).
She will likely be in a care home later this year, no way am I going to be working in one !
Two of Julies family have retired early because of what happened to her and the realignment of their priorities that resulted
Our attitude to time vs money changed a bit after Mrs S had the Big C. An "unaffordable" trip to Australia for her suddenly didn't seem so expensive 😁
Whether it was just age or whether it was some lingering, post-cancer thing she also found she couldn't physically continue in her care role, reduced to half hours and then retired completely once I'd reached State Pension age. We're now a bit over that £36k pa figure mentioned above (jointly) and managing just fine.
Interesting to read scotroutes, appreciated, and also pleasantly surprised that the household lives well for a relatively ok amount, I think I was thinking that 40 odd k between us would be very tight, I need to do the maths, especially in relation to tax efficiency.
mrs ic is a bit younger and works 3 short days, earning a tax efficient just under 20k gross, with no plans to retire for a good few years.
As I was "contracted out" for many years, I don't get the full state pension. Early retirement meant my work pension pot was smaller than it would have been and has to last longer. With Mrs S now getting her early pension too, we manage ok and should hopefully be a wee bit better off in a few years when her State Pension kicks in too.
£40 000 for a couple is plenty if you do not have expensive tastes. Sure if you want month long all inclusive 5star holidays it is not but for a modest lifestyle its loads.
I’m not sure if the meaning here of 36k or 40k is gross or net ?
quite a big difference depending whether one person or 2 bringing it in and tax setup
I’m not sure if the meaning here of 36k or 40k is gross or net ?
quite a big difference depending whether one person or 2 bringing it in and tax setup
Both my wife and I have retired, me last year at 62. I have a few pensions from various jobs, I cashed one in, taking £25k lump sum, and the rest (about £120k) drawing down monthly to last until the state pension kicks in. My wife is doing roughly the same, so monthly income is about £3k. We also have savings for capital items if needed. (We're mortgage free.)
£36k is plenty for us, we don't do holidays and rarely go out to eat, neither of us drink. Always a good idea to track spending over a few years to be sure what you need.
My question is, do people sometimes end up restricting their life in retirement a bit, due to trying to pay as little tax as possible
Can you elaborate a bit? Not sure what you're referring to.
@thegeneralist its just that every video I watch regarding retirement focuses heavily on paying as little tax as possible, which I accept is sensible. I just wondered if some people are missing out on things by not having enough money each year just to avoid paying more tax.
Obviously I put this in the 'nice problems to have' category 🙂
I figure that if I have enough money coming in to have to pay tax, I probably should.
Likewise, if I die having failed to spend enough on bikes and there is IHT due on my estate, then it probably should be paid.
On the whole, I'm in favour of having the NHS, roads, railways, ambulances, fire engines, police, people to empty my bins, and all the other public goods. So I'm prepared to pay for them.
Mugboo,
Yeah I wonder. Most of the stuff I've seen/done to avoid paying more tax is around the pre retirement phase, and hence has the side effect of giving one more money in retirement than you would otherwise have had. Eg putting everything above the high rate tax band in the pension.
I suppose you could take less money from your pot in retirement if you really wanted to pay less tax, but since you'd then likely die with it unspent them it would seem a perverse thing to do. ( Unless you're planning to die in the next two years before the tax on pension inheritance comes in )
My question is, do people sometimes end up restricting their life in retirement a bit, due to trying to pay as little tax as possible
Can you elaborate a bit? Not sure what you're referring to.
My take on this is that if you have various sorts of income/savings/investment, and you can choose which element to use and when, it can make sense to reduce income in one tax year or defer an expense until the following tax year.
Eg, if you need funds to replace a car, if you pull out the money this tax year, you may pay more tax but if you can hang on a few weeks/months and pull out the funds in the next tax year, it may be beneficial. So, in that sense, you are imposing a restriction...
Whereas Elon Musk can just buy whatever he wants, whenever he wants and doesn't care about a minor tax inconvenience...
Well this week is a milestone for me. I was intending retiring in May at 55 but work were desperate to keep me so with effect 1st July my new contract requires me to work 200 hours a quarter, essentially equivalent to three days a week, but in blocks and days as I see fit. Salary is three/fifths, so a lot more than I was going to draw down. It was a no brainer to accept (for now), but I’m not counting my chickens too soon, as the risk is they want to see five part days, five days a week. Even if I stick this out only for a couple of years, the pot will grow.
So I need to plan something for Tuesday on my first “retirement” day off that will feel like I’m swinging the lead a bit! 🤣
I’m not sure if the meaning here of 36k or 40k is gross or net ?
I just did the sums for you. My pensions add up to £37k, net. That's from last November. Prior to that it was about £27k net. We're not £10k pa better off though as Mrs S has now stopped working.
If I was hazarding a guess, I'd say that our expenditure is less than yours (currently at least).
I'm no where near your level of savings.
However, I've an ill OH who has just retired due to ill health and on full disability , with a limited life span ahead. I'm also now independent of supporting my kids, in fact they are paying us rent now. 😎. I'm 51. I've seen a few friends die early, well before retirement.
I've just taken on a promotion, and if I'm honest I can't see myself going any higher than I now am. And can't see i will do this job forever. But it is well paid.
So my plan is to do this well paid job for 5 years, and use that time to create opportunities where I can work part time in future.
I've sat down with OH and discussed this the last few days. I/we can't afford to just stop now, but we're making plans so I don't work until 67. I'm aiming for 56/57 to slow down to part time and enjoy life.
In your position I would sit down, write a plan, bounce it off mates, and then crack on and go for more rides/walk the Munro's etc.
When you've got your nose to the grindstone, IME money becomes more of a focus, to distract you from all the cr@p and stress of life in a corporate world. You can justify dealing with the shit when you can at least buy yourself nice stuff and do fun things. 7 years later, having taken redundancy at 53 hopefully I have a different perspective - Mrs DB and I can get by on less than half the income we had previously - fortunately, no kids or mortgage either. I'm still working part-time and we have other savings and investments should we get an unexpected expense. My private pensions at 65 will provide a modest income and the state pension will be a bonus, but pretty good in comparison to some of the people I know who struggle week to week and have no savings. Having a cancer diagnosis earlier this year has made me think about things a bit more - fortunately it's relatively benign and a recent blood tests were encouraging and if it came to it, we have enough savings to pay for private treatment should I need it. My advise to anyone thinking about it, do a few sums and if it looks half-possible, go for it. The precious commodities here are time and health, not money.
Without wanting to get too controversial, I think it's important to remember that some folk posting (and reading) this thread won't have a high level of support from their partner. When I was surprisingly given the chance of early retirement I had a weekend to make up my mind. My wife told me to "go for it and we'll work it out later". The posting history of some forum members shows that they are struggling to maintain the lifestyle their partners would like to have 😂
That sounds really excellent and supportive.
Mine said the opposite.
Scotroutes - as a barber I hear this everyday, so many people still having to work too hard to pay for yet another new sofa or kitchen. Weekends devoted to shopping centres, etc. One big and very expensive holiday a year which has to be somewhere really hot with a beach to lay around on. 2 nice cars, both on leases and as soon as the kid passes their test a a blingy VW is a must. We are all different, I guess but I do wonder if they ever sit down and ask themselves if any of this stuff is worth all that stress.
I'm lucky, I found a partner that enjoys slumming, getting dirty and searching for a bargain 🙂
I'm lucky, I found a partner that enjoys slumming, getting dirty
Have they got a sister? Asking for a friend
Whereas Elon Musk can just buy whatever he wants, whenever he wants and doesn't care about a minor tax inconvenience...
I think you’d be surprised at how little (income) tax the very rich pay. https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax
I was intending retiring in May at 55 but work were desperate to keep me...
Equivalent to three days a week
Salary is three/fifths,
If they were desperate, couldn't you have rinsed them for an improved wage?
For those with a partner that enjoys shopping, I can highly recommend moving to a Scottish island - a 2 hour journey by road and ferry each way to go ‘shopping’ dulls any desire for retail therapy. Mrs DB was so traumatised by her one visit to IKEA that she’ll never darken their doors again 😳
https://pca.st/episode/5bc9980d-8c77-4110-a0f3-bc555433d882
And for those of us with kids and grandkids.
No, because they are fair with me and I’ll be fair back. What a concept. Not rinsing an employer.
That sounds really excellent and supportive.
Mine said the opposite.
I remember on another retirement thread you were advocating for working beyond the point where you can afford early retirement in order to give your kids a leg up on the housing ladder. It was a good post and it genuinely made me think about my own, possibly selfish, motivation for planning my escape at the earliest opportunity. Did your wife hack your account that day? 😉
I think you’d be surprised at how little (income) tax the very rich pay.
Thanks for that link. Having read it, I'm frustrated, rather than surprised!
I think you’d be surprised at how little (income) tax the very rich pay.
As much as I dislike the idea that the rich pay little tax, that's a pretty poor article & has nothing to do with income tax, just because someone's wealth due to share or property ownership has increased, unless & until that wealth is cashed in it's not actual income is it?
unless & until that wealth is cashed in it's not actual income is it?
Isn't the tight definition of "income" not the point?
The ultra-wealthy have seen their net worth balloon dramatically, yet don't "contribute" to the overall running costs of a country in anyway relative to that wealth (or the average citizen).
It's a thorny subject for sure (and I don't have an answer) but being able to leverage huge loans against their theoretical worth to "live off", and then then offsetting interest (!), [amongst many other techniques] is all legal but questionable from a moral point of view. And only possible because "corrupt" politicians either won't tackle the wealth inequality or actively create massive loopholes for exploitation...
Something in the water! So I was informed of my redundancy status last Monday after 19 years working for my current employer and 32 years in the oil and gas sector. I'm currently 52 and turn 53 just before I leave my job in October.
After running all my numbers and with the full support of my wife who will continue working for 3 years I plan to take early retirement.
I've not enjoyed work for the last few years, a 2017 cancer diagnosis and subsequent successful treatment thereof has turned this into an exciting opportunity which I look forward to immensely.
For me numbers wise I expect a personal income of 2.5k per month net to be more than adequate with no mortgage and topped up by the state pension once 67. We do still have a 13 year old daughter to fund schooling and university but have planned for that already.
Exciting times!
Isn't the tight definition of "income" not the point?
And then you go on about wealthy people using their wealth to extract money by other means - that's what might need to be tackled, not got a problem with a definition of income per se & again I'd say that article is disingenuous at best.
Did your wife hack your account that day? 😉
,😆
Nah, that was indeed my view/ plan. The problem is that hers goes far further! My sums budgeted about 50 per kid to get them through Uni, then perhaps another hundred each for housing etc, plus anything that might come from their Grandparents (ie whatever their grandparents give us gets directly redirected).
She also wanted to pay off their student loans and chuck various other things their way which TBH are best left untyped... From what I could understand it basically amounted to them being able to retire before they'd actually started work....🤣
All sounds totally reasonable, especially if you say the numbers really fast and miss off lots of zeroes.
I had to explain to one of ours today why she might not be able to afford a 600k house in London on 45k/year salary. I jokingingly signed off saying 'sorry I don't have a spare 250k for you'. She fired straight back 'what about 100?' - it wasn't in jest. If you don't ask...
As others have recently noted, I and my family are not quite on the same financial page.
They are keen for me to keep them in the manner in which they would like to remain, particularly the many mini-XPS's who are not quite yet off the payroll.
I'm also stuck in the "one more year" loop, where I am being offered ridiculous amounts to work part time, do consultancy etc.
I can earn in a day what mrs XPS earns in a month as a Teaching Assistant, so it seems a little churlish of me to put my feet up just yet.
We've not discussed house deposits (yet), but even their tertiary education choices and costs are pretty hefty, and they are not headed into corporate high-paying roles any time soon (/never).
My first day today as officially semi retired.
Got up at 10 on a “work” day. Felt great.
My plan pre pandemic was to retire at 55, my wife retired very early 8 years ago and my plan was to retire in 2022. But our savings and my pension, like everyone elses, was hammered by pandemic/war etc. As I was working at home full time anyway, I wasn't in such a rush to retire.
We decided to buy a new house last year, we'd been in our previous one 26 years and had got bored of it, house was lovely but we needed a change. So spent around £400k cash on a brand new house. As you can imagine this blew a big hole in our savings. So my plan changed and I intended to work another 3-5 years - I'm just about to turn 58 and work 4 days a week.
But we've just been told we need to be back in the office 4 days a week, 3 for me as I'm part time. This is a bit of a pain after 5 years at home and I'm now reconsidering my options.
My wifes pension nets her £2100 a month, I pay all the bills and we're starting to build up our savings again. I think I could manage another 2 years, then drawdown £1500 a month from my pension, that and my wifes income would give us £40k a year net. Sounds a lot but council tax is £348 a month, our caravan site fees are £3000 a year and we have 2 cars, one paid for the other electric on a lease and we would ideally like to change the 8 year old focus for an electric car too. But if I retired we would probably only need 1 car.
Decisions to make over the next 2 years and seeing that people can live comfortable on the amount we should have is reassuring.
Our boys, whilst still living at home at ages 19 and 22, are both working, have their own cars and are financially independent. We may think about starting to charge them nominal dig money though 🤪
Mrs ic supportive of me doing some form of part time something as long as it fulfils me, and she is continuing to work part time for the foreseeable.
I'm also stuck in the "one more year" loop, where I am being offered ridiculous amounts to work part time, do consultancy etc
Ahh just look at it as one less year of life you could have been pootling around enjoying life 🙂
Congrats @rockhopper!
Having kids sounds ***** terrible..... Greedy little ***.
I always think of Homer Simpson.....
Lisa: "Dad, do you remember what you promised us?"
Homer: "When you're system you're out the door!"
The precious commodities here are time and health, not money.
Very much this.
Greetings from my hammock in the foothills of the Piemontese Alps.