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Do you worry about how you will cope financially when you retire?
Although I won't be retiring for about 8 years and hubby in 7 (if 60 or 12 if 65), he attended a retirement seminar this week and to be honest it scares me that we may not have enough income.
I'm fortunate to have a final salary in my present job but the projection for the years of service is only around a third of my income. Hubby is likely to be around a quarter.
Should we start planning to cope with less? Would it be a good idea to work part time in the last couple of years to get used to a lower income?
asked in Pensions, pension planning



CGA answers:

You have just hit the nail right on the head. I retire in just over 3 years and this is my biggest worry and preoccupation. In terms of pension income I should be a bit better off (not much) than many because I was able to contribute to a private pension when times were good. My big problem is having somewhere to live and the cost of that. I won't bore you with the details but I have made a series of unfortunate decisions (including having my capital in property at the moment) which has just about wiped out all my savings. They say that it is not a problem when property gets cheaper because you buy in the same market as you sell. That is not true because a 20% drop will wipe out 100% of your 20% equity.
All I can do is batten down the hatches and keep working as long as I am able, hoping the situation will improve.
When I do retire we have already decided that we will need to be near public transport because a car will be a too costly luxury.
Even if I can afford to live in retirement year + 1, the way prices increase, it is likely to get harder.
It worries me greatly.


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rasputin1309 answers:

We are all going to have to get used to working longer - that way we may end up with a decent pension - it is the only way to provide for yourself because the State which seems to have so much money for other things seems to forget about pensioners - other than 1 off fuel payments when an election is due. I took out a stakeholder pension for my son wen he was 18 months old and I intend to pay into it until I die. When I visited the financial adviser to look into it he took me through some projections based on levels of contribution over different numbers of years. The secret is to start contributing early, (not much use to those nearing retirement now I know), it was a massive difference in the final pension pot contributing from when he was 18 months compared to 18 years compared to 30 years - far more than you would ever believe.


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goth-girl1 answers:

no to be honest i did not worry about it
well that was till i lost money thanks high when my bank got brought out this morning now i feel i have to start looking what to do about my future


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imfeduptoo answers:

We've already retired and although our income is lower there isn't such a difference as we thought there would be.
Our outgoings are not so high; we both used to travel seperately to work, 16 gallons of petrol per week each.
I use the washing machine and iron far less as I don't have loads of shirts to wash.
We have more time to cook so can make tasty meals far more cheaply.
We no longer have to spend about £4 a day each on staff restaurant meals.
And we don't have to keep dipping into out pockets half a dozen times a week to contribute every time someone has a birthday/leaves/has a baby/gets married, as you do at work.
so although your income will be lower I don't think it will be as bad as you think it might.
I wouldn't advise working part-time for the last two years - earn all you can, while you can - you could instead limit yourselves to spending less in that time so you can get used to it. And presumably you will receive state pensions to boost your income.


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siasl74 answers:

Not yet :-)

Currently I'm in a final salary pension - although I don't expect that to last (either the job will go or the pension scheme will probably stop accepting contributions).

We expect to have fully paid for a reasonably large house by the time we retire, so at the worst we can just downsize it (after all, kids will hopefully have been able to move out by then) to free up some capital to live on. We may consider going abroad - one of the criteria will probably be cheaper property, so again that will free up capital.

The other thing we'll try and do is to squirrel away some cash somewhere outside of pensions (my wife has no pension). I will not be counting on the govmt handouts as they will no doubt have stopped (or reduced to near-enough zero) by that time.


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Maygs answers:

I worry about if I'll be financially safe next week let alone in 40 years. May be delusional but I have the ethos that "Everything always works out in the end" and I think that if you plan and organise then you'll be fine.


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high1971 answers:

at this moment in time no i am not worried as i have years left to go and i know things can change
but having said that if i was close to retirement at the moment then i think i would be concerned yes


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