Retired -Yippee!

[PhilJ W]

Congratulations. Always nice to hear about someone having that great feeling. I'm looking forward to it. 7 years and counting

By strange coincidence I've been retired for seven years, it seems only yesterday that I retired.

[Focalplane]

I waited too long to retire, but then I worked in a cyclical business (think oil prices) and job security was minimal, particularly for the last thirty years when I chose to be self employed. Now retired I too find it hard to believe I had time for work. Thankfully my US self managed retirement account allowed me to avoid paying all those wealthy fund managers and actually grow my pension fund.

 

I wouldn't say I am wealthy in monetary terms but I have never felt more relaxed about money. And I can even afford to fund my passion.

[Two_sugars]

Passion????? . . .I can't afford passion!!!!! 

[pointstaken]

Being offered voluntary redundancy on generous terms 15 years ago, I took it and never regretted it. We were and are comfortable, but you still need to have a consuming interest to keep yourself busy, and to give yourself something to get up for every day. Watching TV All day is NOT a consuming interest. I qualified as a network engineer, did some OU courses, and took up model engineering. Now need to go back to work so I get some leisure time.

 

Dennis

[Horsetan]

From the generation that cannot afford to retire, I wish you the health to enjoy it.

[Phil Bullock]

Congrats Colin

 

Enjoy - but please leave some pension for the rest of us!

 

Phil

[The Stationmaster]

I've retired twice - once from the big railway and later from the consultancy business.  The big advantage is two pensions (plus the state pension)  , the disadvantage is missing some of the things work offers so I would suggest you really need to think about how you will use your time, try to maintain any skills you might have, and - most important of all I think - is the matter of keeping your brain active.  Yes physical activity is important but I think mental activity is even more important if you really want to continue to enjoy life.

[Phil Bullock]

Sure you are right with that Mike

 

And for those who have already retired I would ask how enthusiasm for hobbies continues when it becomes a primary occupation rather than an attractive deviation from the daily grind - although I think I know the answer from many of the contributions on here.

 

Phil

[Trofimow]

I've pretty much decided to retire next birthday - that's this time next year.

 

21 weeks of night shifts and counting.

 

Looking forward immensely to having the time to do all those things that I don't have time for at the moment - not least making some progress on the layout and the garden railway. The one thing I will not have is a shortage of things to fill my time.

 

The down side is that I'm terrified at the prospect of the massive drop in income - so you RTR manufacturers have a year to deliver on all those pre-orders while I can still afford to pay for them!

 

Alan

[jamie92208]

Sure you are right with that Mike

 

And for those who have already retired I would ask how enthusiasm for hobbies continues when it becomes a primary occupation rather than an attractive deviation from the daily grind - although I think I know the answer from many of the contributions on here.

 

Phil

It's difficult to answer that but I would say that you have the time to acquire new skills to support the hobby as well as going into areas of it that that you didn't have the time to do.  I spent a lot of time doing research for a new model and after finding a lot of info ended up teaching myself CAD from YouTube to allow me to produce my own etches from that info.  This has now grown into a little sideline.   That' just one example of how the hobby time leads into other areas.

 

Jamie

[2mmMark]

From the generation that cannot afford to retire, I wish you the health to enjoy it.

 

Sobering words. With my impending departure from work in December, I've been taking a strong interest in pensions matters. I worry how younger generations are going to provide for their retirement, or even if the concept of retirement will continue to exist.

 

Mark

[PhilJ W]

From the generation that cannot afford to retire, I wish you the health to enjoy it.

I calculated that I would actually be slightly better off when I retired and so it turned out. Being on about 45% of my working income meant that I did not have to pay 20% tax on the other 55%, no pension contributions (6%) and no NI contributions (IIRC about 4%). So the maths worked out paying 11% less tax and 10% less pension and NI comes to a total of 45 + 11 + 10 = 66% of my pre-retirement income. The lump sum cleared such things as mortgages, traveling costs to and from work and credit cards accounted for were 35-40% of where my net income went. The only fly in the ointment was that shortly after I retired in 2008 the financial crisis hit and although my pension was protected and in some ways I was cushioned from the effects of the crisis I did feel some of the effects. Fortunately I was in a position to take advantage of equity release which I did. When I compared my end of year bank statement to the previous years I was pleased to find that I was actually slightly better off by a small amount.

[Metr0Land]

Sure you are right with that Mike

 

And for those who have already retired I would ask how enthusiasm for hobbies continues when it becomes a primary occupation rather than an attractive deviation from the daily grind - although I think I know the answer from many of the contributions on here.

 

Phil

 

It took about 5 years for it to become a 'primary occupation' due to all the other jobs.  I moved house a year ago and have had to start again, and had to wait nearly a year before my man-cave space was clear.  At the moment I do have to 'book days' when I'm def going to work on eg track-laying or practising skills with the airbrush etc as it's the only way to get serious modelling time. 

 

Fortunately in west Wales there are far fewer Sainsburys/Waitrose/Tesco/Homebase etc etc and they are some distance.  The Head of Household doesn't drive so she has to book days with me to get to such places.  It more or less works out ok for both of us.

[Arthur]

- but please leave some pension for the rest of us!Phil

You'll be lucky Phil, with the current rate of RTR releases and price rises we Silver Foxes are burning the grey pound at both ends!!

 

 

 

  

Sure you are right with that MikeAnd for those who have already retired I would ask how enthusiasm for hobbies continues when it becomes a primary occupation rather than an attractive deviation from the daily grind - although I think I know the answer from many of the contributions on here.Phil

As MetrOland has said, and others alluded to, I think you'll still find other things eating into your time and you'll need to allocate time to modelling. We have quite a big house and a very large garden which take up quite a lot of time and since retiring I tend to do it all myself. There are always other draws on your time.

 

Hopefully you'll have more modelling time when retired, but probably not enough for it to become it's own daily grind.

[BoD]

I'm sure Colin will have enough on his plate thinking up content for the Forum Jokes Thread

[The Stationmaster]

Phil is absolutely right.  The first thing you need to consider is your whole income rather than the headline numbers of pay rate compared with pension so you take into account tax plus travel costs and so on.  Plus also you might have a pension lump sum to consider so how that is used has to be taken into account as well.

 

Undoubtedly the best situation, if you can manage it, is to be made redundant at an age when you are able to draw some sort of pension because you could then also have the redundancy money available to work for you although the best thing of all is to be in a decent pension scheme but, alas, that is increasingly becoming something of a lottery - with forever worsening odds.

 

I've had a rather mixed situation over it all - going way back I was at one time paying 12% of my salary into the pension fund although for many years it was only 7% - what people don't seem to realise is that you can only get it once, it's either pay or pension and that can often mean 'going without' (some things) at one end or the other.  In addition I paid into what amounted to an AVC (it had a different name but worked in the same way).  Everything was  gradually set up so that I would be able to retire at 56 with a full pension and a healthy lump sum - but then 'life' intervened and i was made redundant at 52, with what would have been a drastically reduced pension until a large chunk of my redundancy money was paid into the fund.  I was able to take out as my tax free lump sum more than enough to clear the mortgage and that's where we started from financially.

 

So mortgage cleared = outgoings reduced, no travel costs saved in my case, but no longer partially taxed at 40%.  My pension income amounted to roughly 60% of my salary at retirement because of the extra I had put in (from the lump sum and the important fact that my fund had what it calls a Level Pension.  Effectively what the latter does is adjust your pension so that it reduces at age 65 when the state pension starts - the idea being that you get a roughly level income.  It works by front loading your pension payments with money which you would otherwise have received after 65.  Nett result after looking across income and outgoings was that I was c.£10 per week worse off than when I had been working.

 

Then I got a bit of occasional consultancy work - I had some specialist skills to sell and someone wanted to buy them.  I was in any case medically restricted by my GP as to how much work I could do so that was something which worked out well.  The firm I worked for was taken over by a much bigger company and I had to join their pension fund - another final salary fund as it was at that time.

 

Next stage is second retirement so no income except pension - and this is where you also need to think because until the big financial crunch pension fund increases were not keeping pace with pay increases.  You don't just get less to start with - you don't get as much when there is an increase.

 

Next stage is arrive at age 65 - with some trepidation on my part as I wasn't really sure how the Level Pension would change and would I be worse off.  The situation I discovered was that the adjustment was based on actuarial calculations made when I had started the pension and in fact the reduction in that pension was less than my newly paid state pension - a small plus.  In addition I started my second final salary pension - which currently pays me £10 per week, which I wouldn't have otherwise.

 

Sounds good - well it's probably better than many but don't forget I paid in for it, a substantial chunk of what was at times a not exactly wonderful pre-tax salary.  Simple message is that you can't get it twice and at one end or the other you may well find yourself having to go without.  But read the important message - it;s not just what is coming in but also what happened to it in terms of tax and 'work expenses' and it only really makes sense when you look at it against what is going out.  And many people find they are in fact better off when they become pensioners.

[ROSSPOP]

Well all I can say Colin is make sure you become totally BIGOTED.....

 

Build In Gauge O Till Eventual Demise........

[Focalplane]

When I turned 50 I was living and working in the USA.  I received a mailing from the American Association for Retired Persons (AARP) inviting me to join for ten years at a very reasonable rate.  I received monthly newsletters and magazines as well as discounts at many motel chains, etc.  The advice contained in their mail outs was probably the best introduction to the concept of retirement that I could have received from anyone.

 

Develop interests to replace the time you spent working.

 

Keep your mind active by doing crosswords, puzzles, etc.

 

Keep fit physically.

 

Pass on what you know from your life experience to others, particularly your grandchildren.

 

I imagine most of us on RMWeb have managed the first piece of advice!

[PhilJ W]

I was lucky in that when I calculated my work vs. retirement income I had all the necessary data at my fingertips. I spent most of my career working in payroll so I was able to calculate it almost to the nearest penny. Another tip is plan for your retirement even if it is not even on the horizon yet, I was about 50  when I started planning mine.

[Horsetan]

Sobering words. With my impending departure from work in December, I've been taking a strong interest in pensions matters. I worry how younger generations are going to provide for their retirement, or even if the concept of retirement will continue to exist.

I used to have a private pension fund, but most of that was lost in InEquitable Life.

[Metr0Land]

I used to have a private pension fund, but most of that was lost in InEquitable Life.

 

Sounds like you need a good solicitor...... 

[Horsetan]

Sounds like you need a good solicitor...... 

 

*fit of coughing*

[Focalplane]

I used to have a private pension fund, but most of that was lost in InEquitable Life.

I have a few friends who suffered the same way.  It spurred me on to be master of my own destiny and pay attention.  Not always enjoyable, sometimes very disappointing.  One thing I have learned though, is that it can pay to think differently when it comes to balanced portfolios - it always seemed to me that the good performers compensated for the other investments that failed.  The key may be to single out the good performers and stick with them, but that is too easy to say, very difficult to do.

 

The private US tax-deferred retirement accounts have an interesting tax rule.  The IRS considers that a male will live, on average, 26 years after reaching the age of 70-1/2.  So, on reaching 70-1/2 a retiree MUST take out 1/26 minimum and pay tax on it.  The next year the minimum take is 1/25 and so on until the 96-1/2 age is reached.  Then there will be nothing left.  It is possible to accelerate the withdrawals should they be necessary and it is also possible to put money aside should longevity really kick in!

[Arthur]

 

On a more general retirement note, and linking in the suggestions about using your brain, perhaps a mention of the U3A is worthwhile. The University of the Third Age, sounds a bit new age hippy dippy but it's not, it's a national organisation devoted to ongoing education for retired and semi retired people. There's no, to my knowledge, age limits but members range from mid 50's upwards, most probably over 65.

 

Essentially, run at local level, each branch offers a range of a activities dependent on what members are willing to provide. Any member can set up a group as convenor and run it, my wife runs the creative writing group here in Chepstow. We have a particularly active branch, over sixty groups I believe, languages, IT, web design, Bridge, various art groups and three levels of walking groups are examples.

 

The annual membership fee here is £10:00 and individual activities are mean't to cover their own costs, my wifes group pay £5:00 per monthly session just to cover the room hire.

 

I'm a member of the Activities group, once a month something is organised, gliding, white water rafting, indoor rock climbing, Segway, Zip Wire, Archery, kayaking on the Wye, are all thing's we've done recently. For those, you pay the cost for a group visit.

 

Worth looking at your local group, they may offer something of interest.

 

Oh, yeah, join young. I'm one of the youngest whenever I attend something and that's a rare feeling these days.

[Metr0Land]

With regard to forward financial planning my wife and I did it ouserselves to some extent and to some extent it was enforced.

 

Our last major house move whilst working was 1989 when we were just turned 40.  I was in a good company pension at BA but her company pension was small.  I was a middle manager by then but could see very few managers were over 55 (unless you got to GM and above).

 

With all kinds of financial products looking like smoke and mirrors (and never then suspecting things like Equitable life) it seemed sensible to us to try and throw money at the mortgage and reduce our liabilities if nothing else.  Circumstance then intervened in a funny way when the mortgage rate shot up to 15pct and hovered at 12pct or more for quite some time.  Obv this was quite a drain on resources but when the rate finally started to fall we were able to keep up payments.

 

Although the banks etc use a complicated formula for calculating interest, in fact you can construct a fairly simple spreadsheet which gives quite a close result and we could see the effect of keeping up/down payments and how it would spread through the coming years.  When we got the yearly statements of how much capital was still owed, it was never more than £300 different from my calcs and usually within £100-£150 range.

 

We started with a £60k mortgage in 1989 at 8pct and added another £8k over a couple of small addnl ones for eg building work.  By 2000 when I got an early retirement/redundancy offer, the mortgage was down to £12k after barely 11 years of a 25 year term, and my redundo paid off Barclaycard etc so since then we've always paid off credit cards and have no liabilities as such.

 

I could cry when I see current interest rates though appreciate youngsters now have to borrow so much more..... or can't get a mortgage due to the new stress testing.

 

One thing I should have mentioned earlier.....  after just 6 months in that house my wife got what was quite a good pay rise for the time.  To formally change the term from 25 years to 20 years at that stage cost very little extra so that's another way to approach reducing the liability quickly.  Note we always had straight forwards repayment mortgages, no fancy fixed terms with strings, no endowments etc.  That way you can keep in control.

 

Warning - your membership of rmweb is at risk if you construe or imply any financial advice from anything I say....

 

 

Edit for typo/grammar