The Cost Of Relative Freedom.

[Old_Geezer]

Hi.

I had intended writing a long “question” on this but think it might not be the most useful way to go. So keeping it (reasonably) simple (for me).

Those who have recently retired, or have a good enough memory for how it was for them years & years ago when they did. How the heck did you manage to cope with what seems to be a halving of one’s existing income ? Given most of us spend according to income, wasn’t the drop devastating and cause you real problems ? What were the coping strategies ?

Both my woman and myself are close to getting out and good advice would be very useful.

[Sipowicz]

1. Paid off mortgage.
2. Sold second car.
3. Paid off first car.
4. Make sure any interest in savings is tax free. (assuming you are a non tax payer)
I was able to do this with my lump sum, I am at the moment in receipt of one pension, I receive a second one in 2 years then the state pension 6 years after that.

[Old_Geezer]

Cheers. Much if that already the case, at least for myself. For sure I'll need to look at savings though. OVer the years public sell offs and employer share offers mean not all is in the building society.

[bhg481]

Both my wife and I decided to go part-time about 3 years before retirement, her first then me. I was also lucky in that I have two pensions; one kicked in at age 60, the other at retirement. I went part-time at age 60, so had a reduction in pay and an increase in free time. At 63 full retirement came as a much reduced culture-shock and the financial situation was another small reduction.
Rather than go from full-time working, full salary to no working time and approx halk salary in one fell swoop I can highly recooment the two-stage method IF your employer will allow it.
Incidentally, the financial shock isn't as great as you initially think it will be - no NI contributions and the income tax drops by more than half. Lots of "attractions" give reduced rate for pensioners and making good use of the bus-pass also saves a fortune.

[Old_Geezer]

Thanks. It may have been a possiblity for me, may still be, but one of the issues I'm coping with is that I'm recognising a growing inability to keep up with the young crowd. I lose concentration at meetings/etc., a fair few things are starting to go over my head. I'm hoping it is all just years of accumulated stress. But it means that getting out altogether sounds more attractive then it would otherwise be. I'm unsure at this stage how many "pensioner" reductions apply to myself. Something for me to consider though.

[heathfield]

On a visit to the US I saw an elderly gent wearing a T-shirt which said, "I'm a pensioner! Where's my f***ing discount?". Maybe you could find one somewhere, OG? :-)

[woofgang]

we found that a lot of our outgoing was actually work related. We both needed tidy clothes for work, we both used our cars to travel to work, there were purchased lunches and various other bits and pieces which you don't spend when retired. Paying off the mortgage also brought down our outgoings with a bump.

[ladybirder]

OG I know what you mean about losing concentration. Also I started to forget things that we had discussed in meetings and decided it was time to go before I was pushed.

[rockyracoon]

My mums worries about this at the moment, she just can't see how she'll survive on the pension she'll be getting. She'll end up working til she drops :(

[Jennykenny]

To Rocky, is your mum in the position to downsize her house or take in a lodger??

[ummmm]

That's our plan...sell the house.

[Old_Geezer]

Thanks for all replies so far.

The rough calculations I have done has been on what I expect to be the net income, and whilst it would be nice to think a lot is work related, I'm unsure about that in my case. I bought my home near my workplace so I have walked in for a few years now. Other travel expenses are a pain but I can't see them reducing early on.

I downloaded the budget spreadsheet from the Martin Lewis site. Very detailed. It looked bearable when I entered the obvious and easy to check stuff, but on a revisit to add figures I could only really guess at, for the unfilled cells, the final analysis became "overspend". And that was using what I'd get in a couple of years, so now is looking a pipe dream for me unless I can find an answer.

My woman is in a similar situation but more urgent, and she still has a mortgage that is not possible to pay off in the near future, barring some windfall. She is worried if she does retire the building society will notice she is no longer employed and cause problems :-( Another concern to worry about.

[Tilly2]

This sounds a bit trivial but I assure you it's not, to me at least.

When I worked full time and was not getting home until 6.00pm/6.30pm in the evening we would eat expensive but easily cooked food. I would buy chops, steak, salmon fillets etc because they were easy and quick to cook. I never did buy ready meals though.

Now I have finished work, I have time to make casseroles, roasts which last three days, bolognese sauces, curries etc.
Our food bill has been cut drastically since I finished work.

[Tilly2]

Another thing I do, OG is, having done the sums, I draw the same amount of money from the cashpoint every week and that is used for food shopping, bits and pieces, and odds and sods.

I do not go out flashing my debit card around. We make the cash we have, last for a week. If we can't afford something, we don't buy it.

[rockyracoon]

Jennykenny, not really, her house is quite a modest terraced one, the only downsizing would be to move to a 1 bedroom ex council flat, she'd rather starve than do that. I doubt very much if she'd fancy a lodger moving in but thanks for the interest.

I've had a few chats with her about it, especially (as Tilly mentioned) about the food bill being cut drastically, she does tend to buy dearer convenience products which she won't need to do if she's not working, she's also worried about aging, she thinks work keeps her brain active but a bit of charity work in the local hospice will solve that. I wish I could help her out with money as she's starting to look tired and I think it's time for her to step back a bit.

[rockyracoon]

Our house is our pension, we'd never afford the upkeep of it once there's no wage coming in so we'd have to downsize and invest the rest.

[Old_Geezer]

Ah sensible stuff, like I used to do when I was an underpaid youth. Yes, worth thinking about.

I was aware one had more time to shop and find baragins, but as I mentioned to a retired friend, I'm unsure I would give up work to do that all day instead. But yes, it may save a chunk once I have the freedom to look around.

I tend to lunch on tinned soup these days, (low cal meal) I would hope home made might be cheaper. Evening meals vary but it might be possible to achieve there also. I suspect the secret is to trim a lot of places than find a single large saving.

I withdraw cash these days and often not really sure where it all went. Car fuel & groceries mainly, I think.

[Tilly2]

If you are over sixty, OG, you will get pensioner concessions in lots of places.
(I have no idea how old you are)
You won't get a bus pass until you reach state pension retirement age though.

[Old_Geezer]

Well I try not to let on Till, but you know when I mentioned "that was using what I'd get in a couple of years" above, well that'd be the start of normal occupational pension not State ;-) Blooming actuaries are makng the decision which age I jump, rather awkward. But my partner is in a slighty different position so all suggestions are being useful.

[EdmundD]

This is topical for me. I am 63 and decided last month to resign from my job. Number of factors involved - hated what I was doing, fed up with hot desking, long commute, plus my wife and I have decided to move further out of London to care for her 91 year old father (his wife died recently). So far it feels good to be out of the rat race and I'm not missing anything about work, though I would like to work part time or on a contract basis if I can at some point.

We appreciate things will change but we are addressing things like food - as mentioned above casseroles and changes in food shopping, do we need Sky when Freeview will do etc. Luckily I have a property I can eventually rent.

[boxtops]

I agree with other people's suggestions above. I retired from full-time working last August (stayed part-time as they still needed some of my skills), but well before I left, I drew up a spreadsheet of what I regarded as obligatory outgoings (mortgage, heat and light, insurances, etc) and totted it up, to make sure that my pension income would cover this. I then cancelled anything I didn't consider necessary - some of the savings were from cancelling professional subscriptions which my work didn't reimburse. I now keep that spreadsheet going, with income and these expenses, each month, to make sure I stay within budget. With the lump sum from starting my works pension, I was able to pay off the mortgage, which made a huge difference. I was also due a lump sum option on my state pension as I'd deferred it as I was retiring later than retirement age.

The drop's not yet devastating, I still have a good pensionable income (partly due to deferring the state pension where you get an extra 10.4% for every year you defer), but I'm sure it will bite if unexpected costs come along (e.g. I had to get a new battery for the car last week).

Forward planning is absolutely vital, so you know what will be coming in, and how much you need to cover all your essential outgoings.