Retirement – what’s it really like?

I like my home. I find that after a few weeks that compared with home wherever I am is too hot, too wild, too uncivilised, too noisy, too whatever and I feel like going home, so I do. After a month of walking it’s time to give my body a break, same with cycling. Despite having all the time in the world I haven’t spent more than six weeks away from home in all these years.

This week: Monday was a day off physically (the swimming pool was shut for maintainance) so I started a couple of new songs, Sylvia by Focus should be very time consuming. Tuesday I went for a jog with Madame and did some housework. Wednesday I dealt with some things in town then we went horse riding and shopping. Thursday I did Pau-Lourdes and back on the Chemin Henri IV MTB with some mates. Friday we went for an 18 km walk in the local hills. Saturday we went out with the MTB club. Today we’re going horse riding and then maybe swimming as the pool is open again. Between times I’ve read, watched TV, browsed the net (often with a guitar in my hands), pottered in the garden, maintained stuff.

On the “how much is enough” question; a cornerstone of the Financial independence “movement” is based around the 4% rule. Whereby if you have 25x your annual expenditure invested, you can withdraw 4% of your pot each year, increasing with inflation and theoretically never run out of money again.

Doesn’t work in the era of low interest rates

I go in three months at 51, instant pensioner due to one of the old pension schemes. Few months off then probably teacher training. Do that for a couple of years and then either start going part time or give up and retire

Or get dragged back into the corporate 9-5 if the offer is good enough

Difficult for people who have invested all their identity into the job which is many people.

Doesn’t work in the era of low interest rates

currently should be possible with Stocks, for the last 10 years my pension has earned more than me, so taking 4% a year would have been very possible. Obs, no guarantee that will continue.

for the last 10 years

Conveniently chosen period. Now try March 2000 to today:

https://www.onvista.de/index/FTSE-Index-1918069

Then consider inflation and the fact that the FTSE kicks out the underperforming companies and replaces them with ones on the up.

I sold my stock portfolio in March 2000 and have since invested in stocks, bonds and boring fixed interest things. They’ve all done about the same and barely better than inflation, in fact worse than inflation if you take house prices as the reference.

Conveniently chosen period. Now try March 2000 to today:

Well Nasdaq has doubled in value in that period (which is where most of my shares are), add in dividends and the fact I pay in continually and its been very profitable.

I do have some FTSE trackers, worst performing funds in my portfolio, luckily I only have about 15% in UK stocks.

I’ll probably reduce my UK exposure even more before we crash out the EU at the end of the year.

And next month, or next year or when you hope to draw on these funds? There’s a long history of pension funds, banks and countries going bankrupt. :) I don’t have a crystal ball but I do think that with current p/e ratios, management fees, bond yields and risk levels it’s better to set yourself up for a low cost lifestyle than rely on high investment returns.

Controversial, but don’t work, get state benefits, a council house and if needing care, the state will pay for the lot.

You mean become a Peer? Risky strategy!

Birth, School, Work, Death.

Retirement is the third comma; don’t mess about!

Conveniently chosen period. Now try March 2000 to today:

https://www.onvista.de/index/FTSE-Index-1918069

you would have had all the dividends, which probably average to around 4% per annum. Down drawing 7% after that would mean your fund lasts 30ish years

This seems to have descended into a “how do I pay for my retirement” thread. All I’d say on that is that if you’ve paid off debts (including you mortgage) then retirement can be pretty cheap; a continual stream of cruises and foreign holidays isn’t compulsory. My biggest outflow of cash before I retired was pension payments and savings; once I wasn’t paying that the money seemed to be less of a problem!

I retired at 55, nearly 10 years ago – the company I was working for at the time made me an offer too good to refuse. Spent the first few years of retirement catching up on the skiing I hadn’t been able to do when work got in the way before I was too old and doing a lot of mountain biking outside the skiing season. Having more free time means I can go out on my bike when it suits me and the weather and conditions are good – no more death-slogs through the mud and rain because it’s the only free time I’ve got. Have started to learn the piano, was supposed to be doing some volunteering gardening in a NT property this year but Covid’s put paid to that, and still haven’t started that novel I’ve always said I’d write.

One thing I noticed before I retired was that a lot of people my sort of age knew retirement was beckoning but weren’t really ready for it as they’d done nothing but work since leaving education, had no real hobbies or outside interests, and in some cases because they’d been on various international placements didn’t even have a country they could call home. Some of these have drifted into work they don’t want or need to do simply because they don’t know what else to do, others seem to go into decline or hit the bottle. I find that rather sad. Hopefully most of the people on here can at least look forward to more time on their bikes.

you would have had all the dividends, which probably average to around 4% per annum.

3.42% between 95 and 2015 and then knock off the management fees of say 1.5%. Net return of 2% before tax.

I went for a swim this morning after hoovering, caught up on the local news and STW. It’s raining so I’ll play guitar this afternoon.

3.42% between 95 and 2015 and then knock off the management fees of say 1.5%. Net return of 2% before tax.

no-where near that level of fee – HSBC’s tracker (picked the first one) has fees of 0.18%.

so a net return of 3.24%. Other than income tax, which is applicable on any earnings, not sure what tax you’re referring to?

over the same period of time, inflation averaged 2.8%, so the post-inflation income was 0.44%, but over the same period the index rose 70%, or another 2.69% total return being 3.13%. downdrawing 4% over that time would mean your investment lasts 115 years. I probably won’t live that long in retirement.

7.5% to 12.8% tax on cash in “forfait libératoire”, I’m French you see (on most investment you cash in you can pay up to 30% tax in France between income tax and the tax you pay when you cash in the investment) . Madame has some HSBC funds, they’re actively managed rather than trackers but the management fees are indeed 1.5%.

On the bonds versus stocks thing:

https://www.financialsamurai.com/historical-bond-versus-stock-performance/

Spreading your investments spreads risk. The best return I’ve had in recent years has been a European mid-cap fund, the next best a fixed income savings account I opened about 20 years back. The worst is not a tracker but has a lot of CAC40 companies in it.

I went for a swim this morning after hoovering, caught up on the local news and STW. It’s raining so I’ll play guitar this afternoon

Sounds good to me.  I really like what I do but I’m just about done with working full time (or even part time like I do right now).  More guitars and bikes please.  House is paid off next year so time to reassess I reckon

Dont often post but had to – what a great thread this is! I’m 56 and been inspired by the the posts. Got a decent job but boy, is it getting harder… was planning on retiring at 60, to be “fairly comfortable. ” Realising money isn’t at all everything – life, family and friends certainly are. This has kicked me to do something. I’ve sent off for statements and planning to see a financial advisor. Cheers,

Many have rightly said no-one knows how long they have, so don’t put off retirement if you can possibly afford it. For me there’s more to it than that: I’m 63 and retired, fit and healthy (riding about 25 hilly miles off road most days, as I have for many years), but already I’m doubting my ability to do some of the things on my bucket list, like the off-road C2C. I’d defs say do it. Soon.

A lot of people get muddled up in life about what is the important constrained resource. Having a big focus on money blindsides many of us from the truth that time is our constraint.

Hope to retire at the end this year at 56. I won’t be rich in financial terms but will be much better off in terms of time to do what I want to do.

Just turned 53, and 32 yrs of pension contributions in the electricity supply industry.
My employer is restructuring and thousands of jobs are about to go in our business.
I have put my hand up to go (very early in the process, six months or so ago as was worried that they would declare that I am “mapped” and in) and have said they need to back-fill my role and keep someone in the organisation who would be more anxious about being made redundant in to the current covid job market.

Appreciate I’m lucky to have the option…can’t imagine them keeping me. It makes zero sense to me to keep working (as well as redundancy lump, my pension kicks-in in full, ie a lump sum and annual allowance). So much more free time beckons.

Only advice I can offer is start pension contributions as early as you possibly can. I am so so grateful to the lady in HR who ‘bullied’ me in to a pension contribution when I was 21, couldn’t really afford them at the time but jeez to have time with my missus and the kids is a priceless option. Just within touching distance, not, quite there yet.

I’ve been effectively retired for 6 months due to the ‘rona.

full salary, only occasionally giving an on-line lecture

go to the beach and ride my bike most days.

I’m really bored. turns out I like pottering at uni.

I’m French you see (on most investment you cash in you can pay up to 30% tax in France between income tax and the tax you pay when you cash in the investment) .

ISAa are completely tax free,
SIPPs are 25% tax free and then your income is taxed at your standard rate based on total earnings.

Madame has some HSBC funds, they’re actively managed rather than trackers but the management fees are indeed 1.5%

Insanely high fee, you should switch to one with sensible fees. Although if it was averaging say 10% pa growth, I’d probably accept it. However, if it just a closet tracer, you’re being completely ripped off.

I think it’s the only one that’s higher now than before Covid, though after yesterday I’d have to check that.

I’ll repeat that the main thing IMO is to have a lifestyle that doesn’t rely on a high income.

I retired end of March … just before I was 60. I was working fro a Japanese company, based out of Cologne.
Germany every three weeks, Russia twice a year, Span twice a years, Singapore twice a year , Spain, France, RSA, Poland, Italy as needed. USA every couple of years …
Then I realised that although I was blessed with huge amount of knowledge in my chosen field – that my Japanese bosses didn’t want to be global / international – they wanted to just be a bigger Japanese company. Hence, it did not matter what I did or what I said, things were decided in a meeting where, being non Japanese, I wasn’t invited to.
I was in a good position in that my FA asked me why I was still working ( my other half is older than I am, so it is a reasonable assumption that one of use will have died in the next 15 years.
So I told them to stuff it and left end of March.
Covid has meant that it has been a whimper than a great global tour – NZ/ Oz to see rellies was cancelled – and then months trying to get a not inconsiderable amount money back from Netflights.com (Hint people: don’t use them, they are shysters).
But it has been good a decompression time – I have got to do loads of cycling, I am fitter than I have probably ever been. Bought an old Triumph Speed Triple to do up. We now ( as of 5 days ago) have dog – a rescue pointer – and that brings some challenges.
Travel will be held off until next year – will do w/e away depending on local lockdowns etc.
I am not bored yet – just started doing voluntary Coastwatch Duties.
I have just agreed with myself that I m going to spend 2 hrs a day learning something new. Either actually physical stuff or mental stimulation.

My wife has decided that I am the untidiest person in the world ( hey, ho … it’s nothing new).

My have a hankering to have a “purpose’ in the future – but it certainly won’t be flying around the world sharing ideas for growing business to people who don’t want to listen.
I am am fortunate I can be fussy …
But I do find myself worrying about little things …

The 4% “rule” is not based on interest rates but on returns including dividends. These are not related to the BOE interest rate.

Agree with @footflaps in that I intend to stay invested and draw down on my SIPP which is almost all invested in companies outside the UK so growth (even this year) has been strong.

“Time invested” is almost always better than “timing investment” so as long as you are not buying into an annuity you should not have to crystallise losses

Just turned 53, and 32 yrs of pension contributions in the electricity supply industry.

The gold plated with diamond encrustation pension scheme……

As I understand it protected by statute!

For financial reasons my plan is to work until the end of 2022 but I’ve just been offered a deal that sees me go now, with a payoff that would be the equivalent of being paid until the end of 2021. In normal times I would risk taking the money and picking up some IT contract work, but the triple whammy of Covid/Brexit/IR35 means that option is high risk. Best case scenario is I pick up contract work which means I can retire say, at the end of 2021 having met my financial plan. Worst case scenario is I don’t pick up any contract work and fall short on my financial plan. Any suggestions?

For financial reasons my plan is to work until the end of 2022 but I’ve just been offered a deal that sees me go now, with a payoff that would be the equivalent of being paid until the end of 2021. In normal times I would risk taking the money and picking up some IT contract work, but the triple whammy of Covid/Brexit/IR35 means that option is high risk. Best case scenario is I pick up contract work which means I can retire say, at the end of 2021 having met my financial plan. Worst case scenario is I don’t pick up any contract work and fall short on my financial plan. Any suggestions?

Take the money. There will be jobs out there i’m sure. The world of IT is not going to collapse because of IR35 (just some peoples tax strategies). If you bank the money offered the pressure will be off and you can way up what you want to do and for how long.

^ agree

Worst case scenario is I don’t pick up any contract work and fall short on my financial plan. Any suggestions?

1/2 years out from retirement I’d have thought that any savings you’re making will have a negligible effect on your retirement (unless you only started saving for retirement a fews years back). After 30 years of saving I’m at the point now where my current pot out earns me, so any contributions I make are fairly insignificant….

As long as you keep mentally and physically active and can adjust to a more simple life style is absolutely fabulous.
I’m lucky enough to enjoy good health and a wide range of interest all of which are outdoor related.
It’s is always easy to find one more reason not to do something than to do it and most people just keep to what they know or are comfortable with.
Stay flexible and take on the odd part time job if it takes your fancy trying something different to your normal work and don’t try to turn a hobby into an income it kills it dead.
We only pass this way but once.
Enjoy

Had this afternoon off and the weather was fantastic, so walked up the river to the next town, sketched in the museum for an hour, and walked back in the sunshine #retirementpractice

This thread has been full of great information, experiences and good advice.

Since the pandemic I have been considering taking semi retirement (being self employed I can work when orders come in, which now are fewer).

I already have a fairly frugal lifestyle and can’t see how we could go further unless we downsize.
My own pensions from being self employed are tiny. One only pays out £1,000 per annum, the other 2 aren’t much better.

In this pandemic it will be harder to do things our parents have done. There won’t be as many holidays or places we can visit unless we can get this under control.

My own father retired at 65 and died aged 66. Maybe this will spur me on.

The key thing to remember is that in retirement your expenditure should be quite low eg you’ve hopefully paid off the mortgage and you won’t be paying into pensions / savings etc anymore.

You also get the state pension, which for many will be the bulk of their overall pension eg my parents in law have quite a nice lifestyle on a very modest income (about 2x state pension).

You also get the state pension,

Eventually. Maybe.

I can’t see the state pension going, for most people its their only / main income in retirement, so getting rid of it would just create a bigger problem.

State pension isn’t going anywhere for the foreseeable, I’d expect it will eventually be reduced to nothing as those who enter the workplace now reach retirement.

You also get the state pension

I do not get my state pension until 67. I am physically and mentally unable to continue working in my job until then. 7 more years – no way. I retire at 60 skint.

UK state pension is pennies as well.

UK state pension is pennies as well.

Its pretty significant for a lot of pensioners, probably all they have to live on!

UK state pension is pennies as well.

It’s 9 grand a year! If you’re mortgage free, I reckon that’s quite tidy TBH.

9K net, after rent/mortgage, is more than my average earnings as an adult. (hopefully not for too much longer, mind)….

copmare it to other european countries. Its a pittance. 20% of it gone immediately on council tax. 50% of people rent so thats another chunk. Most european countries you would get 2 or 3 times as much