We've been out in the garden this morning, then I came in for a long lazy phone chat with a good friend. There's lot to talk about. Dearly Beloved and I are retirement planning which is now less than ten years away. We're under five years from being mortgage free. It's good to talk things over with someone else. DB and really believe in well thought out long term financial planning which means we have to adjust how we live now.
We're in a very privileged position to make plans but recognise that we are at the mercy of change and employment, retirement and financial plans have to adapt as the economy waxes and wanes. At the moment, we're planning to retire at 60, but who knows what the future holds. There may or may not be an NHS, we may or may not have the pension we think we're going to get. Already, we're facing less pension than we originally thought as our public sector pensions have been reduced. They may well be reduced further. Who knows.
The only thing we can do is to save and make sure our home is suitable for our retirement. That means well maintained, insulated with affordable heating. Like many people, we're waiting for the cost of PV to drop further, we're waiting to see what new technologies will be available to make our home cheaper to run. We also want to balance out living our life now and not putting everything on hold. We made sure we've budgeted for three weeks in France this summer and are already budgeting for the same next year.
On reflection, we are really fortunate, I won't say lucky as I don't trust anything to luck and proactively do everything we can to make our future better. We worked our way out of debt, we worked our way out of a big house, we worked our way to downsizing and now are actively working towards a better future. We know we can't 'future proof' and have to resilient to effectively manage what ever life brings us. One thing that we're currently working on is ourselves and aim to get healthier, more active, weigh less and more mindful.
We've loved this weekend and even today's contemplation and planning have added to the relaxation.
Over to you Dear Reader, we can't future proof but what advice would you give to me to prepare for our retirement in ten years?
Until tomorrow,
Love Froogs xxxxxx
You might want to consider possible sources/streams of additional income should they be wanted or needed.
ReplyDeleteYou could sell quilts, bags, and other items you've sewn, in addition to tutoring, exam marking, substitute teaching (the latter if available in the UK). I'm sure you could come up with other ideas. I'm not sure what DB could try his hand at.
Pensions are something I need to give thought to this year, the big 65 is due in less than a year. My private pension which promised so much but looks set to deliver so little. I refused to contribute any more into it when the economics stopped adding up, there hasn't been any bonus added for years. Big change after April next year when we're allowed to take it all as a lump sum, my birthday's in May. Be interesting to see what I get offered. I intend to take whatever they offer, annuity rates are abysmal and die with me, so I think I'd rather have something I can spend. Also the new state pension is due to start in April, but there's no definite figures known yet.
ReplyDeleteSo impossible to plan anything with certainty.
We were lucky enough to retire at 56, could have worked longer and had a larger pension, but the time was more important to us than the money. We enjoy every day of our retirement and have no regrets. It took quite a bit of planning and saving and a cross country move (California to Georgia), but it was worth it.
ReplyDeleteSounds like you are doing everything you can to plan and prepare. Not too many people think so far ahead.
ReplyDeleteI retired at 53, DH at 55. His pension is not too bad, but I don't get a penny of mine until I turn 60 when I will get a decent lump sum and my full occupational pension. At the moment, I'm drawing from a savings account which I opened in 1975, and paid into every month, no matter what. We'll be a lot better off once my private pension starts, but we're managing nicely as it is.
ReplyDeleteMy biggest bugbear is the state pension qualifying age changing from 60 for women to 66, I have many more than the qualifying contributions, but have to wait six years longer to claim my state pension than women who are just seven years older than me. This effectively means that the government has deprived me of approximately £36,000 so I'm not happy! It was a labour government which brought in the rule, but the tories haven't changed it!
However, even with less cash to spare, our lives have changed so much for the better since we stopped working, we sleep better, have time to pursue our hobbies, spend time in the fresh air, just generally have a much enriched life.
My advice, if you can possibly afford it, is to get out at the first opportunity!
I did have full contributions (30 years) but now the pension age has been upped to 66, I now have to decide on paying in another 5 years worth from savings or not. I am so mad as I retired once full contributions were paid in!
DeleteI would say retire as early as you can afford to as you never know what's round the corner.
ReplyDeleteI retired last October on reaching age 50. I have a small (tiny!!) NHS monthly pension and used part of my lump sum to pay our mortgage off (we've lived in the same house for 24 years so didn't owe too much). We cleared some debts and now live on my pension, hubby's wages and I do a bit of on-line transcription work from home as and when on a self-employed basis. It's been liberating for us. We struggled financially when the children were small even with us both working (especially when the mortgage rates were 15%) but battled through somehow. We now live quite frugally but I don't feel I'm missing out on my previous salary as I've gained much more in other ways.
I retired early to save my health and my sanity and I'm so glad that I did. No, I don't have the full pension or the state pension and DH has neither so we have a limited income yet I couldn't be happier. I'm frugal because I had and have to be. DH saved and saved so we are mortgage free. We search out bargains and 'do it ourselves'. We both follow our own interests and both look after the house and garden. Keep doing what you are doing and as soon as you can live on a pension or savings, I would say go for it. I'm sure you will be able to occupy every moment of the day and you'll wonder how you ever found the time to work.
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I'm in a similar stage of planning. My pension age has been increased to 67 now and the way it's going I doubt we'd even get it as the government downunder is really cutting back, the worry is if they change the rules around accessing my retirement savings before I make it to 58 ( 6 yrs away). I think being already downsized is a great advantage, the more self sufficient you can be the better and creating more options you have for some additional income or bartering goods and services could help.
ReplyDeleteOh wow...mortgage free is such a huge accomplishment! Congratulations
ReplyDeleteI don't think it's realistic for anyone to keep expecting a pension in future. I'm also in Australia where the retirement age has increased for me, but I can understand why. When pensions were brought in the average life expectancy was much lower - no government can possibly afford to keep funding people's lives ad infinitum.
ReplyDeleteI expect I will probably work part-time until I'm quite old, and plan to have my home set up with water tanks, solar panels etc...by then. I've already planted a little orchard and established a vegetable garden and chook run. I expect my semi-retirement to be a wonderful time where I have a balance between being out in the world earning money and having plenty of time to pursue things that interest me at home.
In an ideal world I would be partnered and thus able to work 3 - 4 days a week now - I imagine if you are not overworked and have time to pursue things that are important to you there's not the desperate need to 'escape' paid work. Although I'd like more time and energy to do things at home, I'm incredibly grateful to always have had plenty of good work - so many cannot say the same thing.
Jane, your planning and discipline are as always an inspiration, but I would keep an open mind about what the future holds. You are an amazingly skilled women and I imagine there will always be a market for your many skills should you need some part-time work.
Madeleine.x
I have been retired now for almost 13 years, my husband for 10. Here is my biggest area of concern: medical bills. I have excellent insurance and pay only $50 deductible per person per year, plus 20% of outpatient bills. I am covered by Medicare (the government insurance) and by my former employer. Medicare pays their allowance, the insurance pays 80 % of the remainder, leaving me a very small amount to pay out of pocket. No problems. However, what is not covered at all are dental bills, eyeglasses, or hearing aids. The medical exam part is covered for glasses and hearing aids, but not the glasses and hearing aids themselves, No dental care is covered. In the past decade, we have had much higher medical bills from the non-covered items than expected. My husband's teeth this year to date and the work that is planned in the next month come to about $5,000. Mine has been in the neighborhood of $2500. I had new lenses and frames both for glasses this year. Hearing aids cost about $1600 each--he has two--but so far this year, only batteries. ($1 a week or a bit less.) These are HUGE chunks out of savings accounts and we are very careful to take care of our teeth, have always had regular checkups, etc.
ReplyDeleteSo my best advice is save and invest as much as you possibly can. In the years between our children finishing their educations and our retirement, we saved quite large amounts of money every payday, taking advantage of all the "retirement" savings types of accounts that save on taxes as we possibly could. We NEVER spent our whole income. The only things we spent much money on at all were travel and vacations. Always took some kind of vacation with the kids from about age 5 until adulthood, and we still take a couple domestic trips a year. We did international travel when my husband spent 8 years in the military, so we have little interest in doing much more of that. Driving vacations have been our preference as long as we're able to drive---it's already getting more tiring and more nerve-wracking since we've past 70. Congested downtowns and expressways try our patience much more than they used to. Travel IMMEDIATELY after retirement, and wind down a little at a time as you get older. The body doesn't hold up forever, even when you keep in shape and keep fit. We're fairly healthy but we are a lot more tired than we used to be after a much shorter touring day. Driving time per day is shorter than it used to be as well.
Those are the things that came as the biggest surprises to us. We have always been very active, do it yourself folks, and it just isn't possible to do as much as we were able to even 5 years ago. Our savings and investments are doing well. We have been able to help with grand-daughter's college expenses, which we had planned to do to some extent. She is now working a little more than full time but not making much salary for a 4-year degree. We will help as long as possible but not forever. (She's 23 and one year out of college.) She's still involved in her "field of study" although not working in it exactly--is developing a project with another person in the same situation that they hope to turn into a film festival. Hard field to enter, but possible from here, being close to New York and Toronto. (Her parents are both disabled but help her with some expenses also.) We are focused on getting some of her student loans paid while she is not earning as much as we hope she will be in future--she is not overwhelmed with debt--less than average, but enough.
We were sort of pushed into retirement, hubby got laid off and my job took a dive at the same time the big recession hit. Hubby had his 30 years in and was eligible so we just did it. Our house was a wash at the time made nothing on it, but we took the 401K and a small inheritance and paid cash for a fixer upper and we have not regretted a bit of it. Things take longer to do, need an emergency fun etc. But you know all that. The best thing you can do for retirement and smaller income streams is to be out of debt! You are absolutely correct in this, we can survive on less than we ever thought but we would be in such difficulty if we had not been debt free and if we still had a mortgage! We retired at 55 and 53 and we are happier than we were with more money and less time, we have more fun with each other, our stress levels are so much lower. We take trips to see the kids, go to the mountains and day trip around our area. Frugal life may seem hard, but it is just work and the results are amazing! Keep up your good work for yourselves and for all the people you help by demonstrating that it can be done!
ReplyDeleteI think you are more than prepared for whatever the future holds. I don't see you as lucky or privileged as I think you worked extremely hard for everything and deserve all you have achieved. We are just entering our retirment at 56 and 48. We have reviewed all our investments just prior that and made a plan to make all the big purchases and upgrades such bathroom ready for when we are less agile, streamlined kitchen, a new car to see us through the next 20 years. My only advice to anybody would be to retire as soon as you can and enjoy your family and friends, only last year we have been to 5 funerals, all friends and aquintances of our age who were very well off, very successful but never got the time to enjoy it as they were too busy working.
ReplyDeleteInteresting to read the other comments. I can see the temptation of retiring fully as early as possible, as some others propose, but I think it might pay to be cautious. Maybe aim to leave full time work and move to 2 or 3 days a week, part time. Keep a foot in the world of work, keep those useful social connections and importantly keep earning. A modest amount, but enough to pay some of the utility bills, insurance, etc. I can see the value of giving up paid work entirely, but just don't trust the government (of whatever colour) when it comes to pensions provision. While your health's good, why not keep the money ticking over and still have enough days in the week for doing what makes life pleasurable.
ReplyDeleteI agree with Valerie. Retiring from work as soon as you can afford to presumes that the only thing you get from your work is an income. From what I have read in your various posts, Jane, you derive a lot more from your profession than money. I too love the work I do, it keeps me mentally active, keeps me fully engaged with people of all ages, as I work for a charity I can see the benefit of what I do in the community etc, etc. My goal for myself is to work full time until I am in my late 50s then to scale it back to say 2 or 3 days per week giving me lots of free time to help out with grandchildren (assuming I have some!), garden, travel, read, craft, while still building a pension or superannuation income stream into the future. If you are fortunate enough to love what you do keep on keeping on but in a more limited capacity I say.
ReplyDeleteValerie, I agree. There's certainly a temptation to retire early if it's financially possible, but keep in mind what your genes show you, by which I mean longevity in your own family. My husband and I each had grandparents who lived into their 90s, and one of his grandmothers lived to 100! No, it doesn't guarantee you'll live that long yourself, but you could. And if you do, you're looking at three or four DECADES living on retirement/pension, which (by the way) does not adjust to normal cost of living increases. Prices for basics like food and fuel always go up. Always have. Same with prescriptions, and it's likely you'll need more of those as you enter your 80s or 90s. Most people only tend to look at how they'll live in the 10-20 years after retiring. Even with a paid off house and home improvements in place, count on needing a new roof or other major maintenance costs beyond 20 years. Count on food, fuel and medicine costs doubling or more in that time. And what if you eventually need nursing care or assisted living? That's why it's good to work part time if possible for as long as you can. It means you're generating a bit of income and can leave much of the nest egg for 85, 90 and beyond.
ReplyDeleteI'm sure luck has little to do with it. By the sounds of it your childhood was full of love but tough. Your parents worked hard to provide for you, and you followed their legacy by taking responsibility and working hard. I think it's commendable. I am sure you know, that you are blessed with overall good health, sustainable employment (not easy though), a relatively safe country, the NHS. Credit where it's due, you've worked hard and received rewards for that effort, as it should be.
ReplyDeleteI think you are sensibly very prepared for the future, whatever it may decide to throw at you. We try to do the same and have planned for a number of years here, self sufficiently working the smallholding together, bringing in a limited income and enjoying time just living, and then we plan to sell up and use the money invested in this place to completely 'retire' when the day comes we are unable to carry on this lifestyle.
ReplyDeleteHi my wife and I retired about fifteen years ago I was 59 she was 51 it was the best thing we ever did. We have gone round the world, round Australia, traveled round Europe in our camper van, and at the end of last year we spent three months walking from Canterbury to Rome. We are not rich but we have saved hard and have no debts. You can live this life if your house is paid for, you are debt free and have a small pension to supplement the state old age pension. We have cooked pasta on the camping gas in hotel rooms as eating out every night is beyond your budget but we have never gone hungry and we are seeing the world. It is an attitude of mind our day belongs to us not an employer and the money keeps coming in. We lack lunch and set off with the bus pass sometimes not even knowing where we are going a free day out that a tour company would charge a fortune for. It is all a matters of planning. Enjoy your later years they are some of the best.
ReplyDeleteI don`t think I`m in a position to give any advice to you. You are resourceful and have made good plans already for the future.
ReplyDeleteDB had worked all his life (over 30 years), then was made redundant and gets no financial help apart from a little off the amount of council tax and rent we must pay. I had previously been a carer for a disabled hubby and a housewife, bringing up 3 kids, before I even met DB, so I had only entered the world of outside work since 2006. I have therefore no idea what the future will now hold for us. I might well need to work longer than anticipated as I work just 3 days a week at present. As DB`s health has now suffered after redundancy he might well be forced to retire early. How this will effect us in the long run and what kind of pension I might be able to expect for my limited years in work is only guess work. Who knows what`s around the corner for us both. As long as I`m healthy enough to work I will work as this is all that holds us above water for now. Can`t even contemplate how our pension years will pan out. - My parents had worked all their lives. My mum has bad health now, so their advice to me and my sister has always been to make the most of every day. Enjoy holidays as long as possible and do your travelling whilst you can as you just never know what will be around the corner for you health wise. Make the most of what you have whilst it lasts. That`s my motto. Nobody can predict what the future holds, so I worry about it when it happens.
I'm 46. Under current rules, I won't qualify for the American pension (called social security) until I'm 67. At one time I saved more for retirement than I currently contribute to the tax free (when you withdraw you pay the taxes) retirement account. I just upped my contribution from 1% to 5%. As I will have a good chunk of debt paid off by January (when we can change contributions again), I will up it to 10% then. My current debt consists of $7800 on my sole credit card and about $15,000 on my car loan. I actually have a bit of savings now. I only have myself to depend on as I'm single without a partner and no children.
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