Enjoying Retirement

[Welshbeef]

Jon39 said:

You should be able to save that £240 on logs.

Even poor old me has a wooded area in my parkland grounds. My butler/gardner goes to cut down some small trees, then puts them through the log splitter machine.

I spotted the post about two people eating £200 of food each month.
Just £25 grocery bill per person per week. I must be eating too much.
Should I be shopping at one of those Litdl shops?
Do they do home deliveries ?

Our kids have 5 punnets of strawberries a week + other fruit. In Tesco 5 packets total £20 alone.

£25pw for all grocery and cleaning and big roll is farcical.

Put bananas or citrus or pineapple or any sort of meat into that the £25pw. I’d get is smashed.

[Hol]

LeoSayer said:

This is a good rule of thumb for tax efficiency but it means you miss the opportunity to drawdown within the personal allowance (ie. tax free) in the early years of retirement. Once you start receiving state pension, that opportunity is largely gone.

For those with some of the high-spending plans being discussed here, a strategy that avoids paying 40% tax on drawdowns may well be the most prudent, unless inheritance is the absolute priority.

Pension lifetime allowance charges are also a consideration, especially not that it has been frozen for 5 years. Generally, drawing down early helps to mitigate that.

That’s what I intend to do… draw down the minimum amount on my DB and DC pensions each month up to the tax free allowance.

[ARHarh]

GT3Manthey said:

bulldong said:

It’s interesting that people are recommending tightening the belts when you retire. Things like “switch to a gifgaf phone and save £20 a month”. Why don’t you just live like that in the first place and retire earlier or with more money?

I guess when you retire you have more time to nail down the expenses more especially when you know you have a set income .

Maybe we’re lazy for now but point taken

I wouldn't class it as tightening your belt, more not spending what you don't have to.

[Shnozz]

bulldong said:

It’s interesting that people are recommending tightening the belts when you retire. Things like “switch to a gifgaf phone and save £20 a month”. Why don’t you just live like that in the first place and retire earlier or with more money?

I must say I thought the same! Call me a scrooge etc but I regularly review my outgoings, not least my direct debits. Phone contract has been a sim-only deal for as long as I can remember with GiffGaff and then Three. Might change again to another provider that doesn't charge roaming charges now these are being re-introduced by many following Brexit but will still shop for the cheapest deal. So long as you have coverage where you live, why on earth would you pay more than you need to for a mobile?!

Likewise, my gym membership is with The Gym at £20 a month, insurance gets checked on renewal on comparison sites etc etc. I run a very lean ship on that front. That said, I spend (too) freely on boozy nights and meals out. Easily spend £1k a month with abandon which could be far better spent on savings/pension but I enjoy my life and also subscribe to the view its all a balance between the future and enjoying now. Spending unnecessary sums on things like phones, TV subscriptions, gyms etc doesn't add enjoyment to my life now so I would rather keep that spending minimal. Plus I have a hatred of direct debits of anything and a hatred of subscription models where I am not really buying anything but just see money leaving my account to have the use of something for that 30 days. Irks me how life has all become a subscription model to be honest.

[Hol]

GT3Manthey said:

Shnozz said:

Years ago I met a couple from Scotland who were in the Canary Islands for a few months over winter. Admittedly it wasn't a five star hotel but they were retired and told me that what their two month cost them (all inclusive) was paid for by the saving in their winter heating bill, let alone the additional saving in food and drink for two months.

To a lesser extent, but myself and my partner spend as much winter as we can in my Spanish home and whilst there save a chunk of cash. Benefit from lower energy use in UK property and cost of living being far lower, plus we tend to go out far less oddly. Either way, tend to find we spend 50% of what we do when in the UK.

I know if a retired couple that have a flat in Frinton on sea ( north Essex coast) that they live in during our summer months & a flat in Tenerife where they spend the winter .
I can see the value in doing this especially now where UK fuel bills are set to rise dramatically

I intend to do a similar thing when I retire in 6 years, but my winter location will be Florida.

I have the additional cost of health insurance and car purchase/storage factored in. It will cost more than staying in the UK, but I’ll get all that extra expense back when I eventually sell the property after 10 years.

If I time the journeys right I can cross the Atlantic to/from Miami on one of the relocation cruises out of Southampton. It might take longer, but it costs about the same as a flight and you have the time to burn.

[Hol]

GT3Manthey said:

Shnozz said:

Years ago I met a couple from Scotland who were in the Canary Islands for a few months over winter. Admittedly it wasn't a five star hotel but they were retired and told me that what their two month cost them (all inclusive) was paid for by the saving in their winter heating bill, let alone the additional saving in food and drink for two months.

To a lesser extent, but myself and my partner spend as much winter as we can in my Spanish home and whilst there save a chunk of cash. Benefit from lower energy use in UK property and cost of living being far lower, plus we tend to go out far less oddly. Either way, tend to find we spend 50% of what we do when in the UK.

I know if a retired couple that have a flat in Frinton on sea ( north Essex coast) that they live in during our summer months & a flat in Tenerife where they spend the winter .
I can see the value in doing this especially now where UK fuel bills are set to rise dramatically

I intend to do a similar thing when I retire in 6 years, but my winter location will be Florida.

I have the additional cost of health insurance and car purchase/storage factored in. It will cost more than staying in the UK, but I’ll get all that extra expense back when I eventually sell the property after 10 years.

If I time the journeys right I can cross the Atlantic to/from Miami on one of the relocation cruises out of Southampton. It might take longer, but it costs about the same as a flight and you have the time to burn.

Edited by Hol on Thursday 20th January 09:19

[anonymous-user]

One way to approach the question is to look at your current budget and do a put & take. What savings will retirement bring but also what extra costs.

The savings side is easy. Before we retired we were renting in central west-end and eating out every night. Kicking those expenses into touch was a condition of being able to afford to retire. So we bought a house miles from London and saved a huge chunk on food and rent.

But the cost side can creep up on you if you are not realistic about it. Utility bills went up, council tax went up, all motoring related costs went up for example. Let’s say that you pop out for a flat white a couple of times a day because you have the time to kill….that’ll be £4k a year thank you sir. Think of retirement as a long vacation and you won’t be far of ime.

[ARHarh]

GT3Manthey said:

Jon39 said:

You should be able to save that £240 on logs.

Even poor old me has a wooded area in my parkland grounds. My butler/gardner goes to cut down some small trees, then puts them through the log splitter machine.

I spotted the post about two people eating £200 of food each month.
Just £25 grocery bill per person per week. I must be eating too much.
Should I be shopping at one of those Litdl shops?
Do they do home deliveries ?

We’ve allocated £900 a month for food & wine .
They’ll be 2/3 of us and I’d say that’s realistic but might be able to cut that down somewhat

Me and the wife only spend £200 a month on food. I don't struggle to eat. This morning for breakfast I had a duck egg on lightly toasted home made bread, tonight we have Stroganoff, and for lunch it will be a home made roll, with cheese and homemade chilli jam. This sort of thing is not unusual. We make all our own meals from locally sourced meat and veg etc. The biggest saving is not buying pre-made food or cakes etc. It really is easy just need to plan a bit. Oh and i do shop in Lidl

[GT3Manthey]

ARHarh said:

Me and the wife only spend £200 a month on food. I don't struggle to eat. This morning for breakfast I had a duck egg on lightly toasted home made bread, tonight we have Stroganoff, and for lunch it will be a home made roll, with cheese and homemade chilli jam. This sort of thing is not unusual. We make all our own meals from locally sourced meat and veg etc. The biggest saving is not buying pre-made food or cakes etc. It really is easy just need to plan a bit. Oh and i do shop in Lidl

More than happy to make sacrifices & be sensible when it comes to shopping etc .

What do you think you spend all in on a monthly basis ?

[plenty]

Don't forget to budget for private medical unless you're willing to forgo. I personally wouldnt want to rely on the NHS especially the way things are going.

[usn90]

Some of these projected funds scare the life out of me, especially when I look over at my pot and projected sums.

I’ve recently “moved up” to just below average wage, have the workplace pension with employer contributions, long term partner with nothing at all in her pot as she doesn’t earn enough to qualify for a workplace pension.

As long as my partner qualifies for the state pension, combined we will be ok I think, but I don’t think I’ll be able to work my role up till state pension age, nor would I want to, I’d like to retire at 60, so 28 years to go, but I just don’t see my current projection giving me the funds required.

[Shnozz]

usn90 said:

Some of these projected funds scare the life out of me, especially when I look over at my pot and projected sums.

I’ve recently “moved up” to just below average wage, have the workplace pension with employer contributions, long term partner with nothing at all in her pot as she doesn’t earn enough to qualify for a workplace pension.

As long as my partner qualifies for the state pension, combined we will be ok I think, but I don’t think I’ll be able to work my role up till state pension age, nor would I want to, I’d like to retire at 60 but just don’t see me current projection giving me the funds required.

Remember that PH isn't representative of society as a whole. There are many out there living off state pension alone and certainly over here in Spain, many pensioners living extremely well off that pension alone. Add in a private pension and you can live like a King (of a less wealthy nation).

[ARHarh]

GT3Manthey said:

ARHarh said:

Me and the wife only spend £200 a month on food. I don't struggle to eat. This morning for breakfast I had a duck egg on lightly toasted home made bread, tonight we have Stroganoff, and for lunch it will be a home made roll, with cheese and homemade chilli jam. This sort of thing is not unusual. We make all our own meals from locally sourced meat and veg etc. The biggest saving is not buying pre-made food or cakes etc. It really is easy just need to plan a bit. Oh and i do shop in Lidl

More than happy to make sacrifices & be sensible when it comes to shopping etc .

What do you think you spend all in on a monthly basis ?

Not sure as we both have our own money and pay into a joint account for all the household stuff and food. So we do the household budget for £700 a month, (recently up from £650 to cover extra cost of gas etc) all food, cleaning products, insurance and taxes, electric and gas, telephone internet and all the household repairs and decorating etc. My own personal spend is around £750 a month, the wifes is about the same maybe less as she doesn't spend as much on cars as me.

[Welshbeef]

usn90 said:

Some of these projected funds scare the life out of me, especially when I look over at my pot and projected sums.

I’ve recently “moved up” to just below average wage, have the workplace pension with employer contributions, long term partner with nothing at all in her pot as she doesn’t earn enough to qualify for a workplace pension.

As long as my partner qualifies for the state pension, combined we will be ok I think, but I don’t think I’ll be able to work my role up till state pension age, nor would I want to, I’d like to retire at 60, so 28 years to go, but I just don’t see my current projection giving me the funds required.

First and foremost you don’t need £ to be happy - but there is clearly a minimum level people need to live and not have to worry about everything all the time.

28 years to go and as you say in the same job - is that realistic?
Anyone can and should invest in themselves it’s the single biggest improvement you can make to your life outcomes.

You are relying on joint state pension and that will be enough. The problem is
1. The age you can draw it is totally out of your hands what if it moves to 75yo when you and your Mrs can draw it. You have a desire to retire at 60 yo how would you find 15 years of living costs?
2. Inflation may keep ahead of state pension meaning what you see as ample today may very well not be ample in the future.

[GT3Manthey]

Shnozz said:

Remember that PH isn't representative of society as a whole. There are many out there living off state pension alone and certainly over here in Spain, many pensioners living extremely well off that pension alone. Add in a private pension and you can live like a King (of a less wealthy nation).

Cheaper to live in Spain than in the UK do you think ?

[Shnozz]

GT3Manthey said:

Shnozz said:

Remember that PH isn't representative of society as a whole. There are many out there living off state pension alone and certainly over here in Spain, many pensioners living extremely well off that pension alone. Add in a private pension and you can live like a King (of a less wealthy nation).

Cheaper to live in Spain than in the UK do you think ?

Oh without a doubt. However, I do see a few living in the UK off a state pension that do ok - albeit have to count every penny. The point I was making is that you can elect to live somewhere else, whether cheaper parts of the UK or elsewhere, where your money goes further.

[omniflow]

bulldong said:

It’s interesting that people are recommending tightening the belts when you retire. Things like “switch to a gifgaf phone and save £20 a month”. Why don’t you just live like that in the first place and retire earlier or with more money?

The reason why I posted that is because if you're no longer working, you're probably not hammering 7 bells out of your monthly mobile phone contract and so can switch to a cheaper deal without any downside. It's not a case of tightening the belt, it's more a case of eliminating unnecessary expenditure.

[Jon39]

LeoSayer said:

For those with some of the high-spending plans being discussed here, a strategy that avoids paying 40% tax on drawdowns may well be the most prudent, unless inheritance is the absolute priority.

Pension lifetime allowance charges are also a consideration, especially not that it has been frozen for 5 years. Generally, drawing down early helps to mitigate that.

Considering Inheritance Tax - there is set amount allowable for gifting, but I think that can be increased, if the amount can be gifted as expenditure from normal income.

Are you able to comment on that point?
Would it be correct that if only half retirement income was needed to live normally, then half could be given to grandchildren without tax implications ?

[Bernie_78]

usn90 said:

Some of these projected funds scare the life out of me, especially when I look over at my pot and projected sums.

I’ve recently “moved up” to just below average wage, have the workplace pension with employer contributions, long term partner with nothing at all in her pot as she doesn’t earn enough to qualify for a workplace pension.

As long as my partner qualifies for the state pension, combined we will be ok I think, but I don’t think I’ll be able to work my role up till state pension age, nor would I want to, I’d like to retire at 60, so 28 years to go, but I just don’t see my current projection giving me the funds required.

Pistonheads is not at all representative of the nation as a whole - but I'd suggest using that fear to drive some action. I did (and I am 10years older than you for context) and found a local firm that actually offers a free consultation for the company I work for, how did I find out? by asking people who retired early at the same company I'm in. You're not late, or early, but I wish I'd started at 32 so you're "ahead" of me if that helps.

[Welshbeef]

Shnozz said:

GT3Manthey said:

Shnozz said:

Remember that PH isn't representative of society as a whole. There are many out there living off state pension alone and certainly over here in Spain, many pensioners living extremely well off that pension alone. Add in a private pension and you can live like a King (of a less wealthy nation).

Cheaper to live in Spain than in the UK do you think ?

Oh without a doubt. However, I do see a few living in the UK off a state pension that do ok - albeit have to count every penny. The point I was making is that you can elect to live somewhere else, whether cheaper parts of the UK or elsewhere, where your money goes further.

To live somewhere outside of the UK you need a visa/citizenship.