Optimising Your Retirement

There are many, many retirement blogs out there. from early retirement ones earlyretirementextreme, Mr Money Mustache, Budgets are sexy, to people who are making the most of retirement, specifically in the  UK, John Brassey,  Simple living in Suffolk.

Doing the same search worldwide, identified so many blogs, that I couldn’t possibly list them. So is there a niche for another Retirement Blogger? Well, I don’t know, but I am going to give it a shot. Partly continuing education for me, it might turn out to make me some money, but in general I am hoping to find it interesting, and continue learning new skills.

Some people have just worked out how to be financially independent, and no longer ‘work’, by which I mean a full time salaried job Dale Rodgers, who has made blogging really work for him. Also Skint Dad, who has used blogging to get himself out of debt, and transformed his life.  And the term I love best F You Money 

So to go back to the title – Optimising Your Retirement. What do I mean by that?

There are a few things that help you optimise your retirement, some of them are best planned some years in advance

• Good Health – some of this is genetic, some pure luck, and some is good planning. At any age, try and keep your weight reasonable (not too thin, not too fat), take regular exercise (walking, swimming, lots of fresh air), don’t drink too much (Ok – failed that!). Take all the free checks you are offered (cancer checks, blood pressure, Keep Well etc)
• Enough Money – While you are working, pay into your pension. The days of relying on the state to keep you are long gone. The original general retirement age of 65 was based on an expected death of around 70. Now that is more likely to be 90. Save lots, and invest wisely. There are loads of blogs around FIRE (Financial Independence, Retire Early). Start reading them! (See the first paragraph). They have really opened my eyes. I wish I had read them years ago. Live within your means. Think before you spend. It’s good common sense. Enough is a subjective term. If you only spend £500 a month, then enough is £501 a month. If your needs are more, then you need to plan for it. So build a plan to get yourself the amount you need.
• Planning Ahead – How do you want to spend your retirement? Travel, hobbies etc. What are you going to do with your time? Put your ideas together in advance.
• Additional Income Streams – You retire and if you are lucky you have a pension. You have some investments which will fill the gap, but will it be enough for a 30 year retirement, consider any opportunities to establish additional income streams. It could be blog writing (I’ll keep you posted on that!), mystery shopper, writing that novel you have been dreaming about, selling stuff on ebay, renting out a room in your home
• Good investing – How and how much to invest is the subject of many blogs, financial consultancy etc. All I would say, is if you are investing, be comfortable with the level of risk, avoid anything that sounds too good to be true – it will likely be just that. Start small, get comfortable, invest for the long term. If you are likely to need to dip into the pot, because of short term financial challenges, consider keeping an emergency fund. It could be worth taking some advice, but you would be wiser paying for a few hours of specific advice, rather than frittering away many thousands in ongoing fees.

In my view Financially Independent just gives you choices. You might want to continue working until you’re 80, but if you are financially independent, you can change your mind at any stage. If you have to work until you’re 80, to feed yourself, that is an entirely different proposition.

So what about me? I retired 5 years ago, having just turned 56. One of the major considerations was being able to spend more time with my elderly mother. who was then 91. I was fortunate, I was able to help he make the most of the last 3 years of her life, until she had a fall…. Bless her, she didn’t manage to recover from that.

So what did I do to prepare for my retirement. Probably a subject for a whole blog post in its own right, but here goes

1. I did a lot of scenario planning. I worked out a few ‘What If’ options. If I went at 60, what would my income be?, If I went at 55, what would it be etc?
2. Some things happened by chance. About 18 months before I retired, I discovered an amazing new hobby – silversmithing. It became all-consuming, and while it has eased / altered over the past couple of years, it is very much part of me
3. I tried it out. I took a 6 month career break. That helped me understand that I wouldn’t get bored, we would have enough to live on and still do the things we wanted to do, particularly travel.
4. We upgraded our house, i.e. we did the big repairs that would be needed, slightly in advance, with a view to minimising our short term retirement expenses
5. My husband decided to retire. After a short time of having him at home, and having the freedom to come and visit me while I was working away from home (I was working in London 4 or 5 days a week, my husband would come down by train on the Tuesday, spend 3 days going round all the free museums etc, use my hotel room, and meet me for dinner. I left at 7:30am, and returned at 8pm, knackered and frazzled) It really was a no contest decision – I wanted his lifestyle!
6. I was finding work a hassle. I worked in IT, lots of changes at work, continual travel, the work environment was no longer as good fun as it had been. Future pension changes. legal changes on how much I could put into my pension each year.

So, just before I was 56, I pressed the button, and resigned. I took an 18% reduction on my pension to receive it early. I instantly felt 5 years younger. What a load off my mind. Then the first thing I did was to take 3 weeks in New Zealand, a week at home, 3 weeks in St Lucia, then it was Christmas. So by January, I had been retired 2 months, I had broken the ‘work’ connection, and every day felt just amazing.

As time has gone on, I realise that we need less than we thought. We continue to travel widely and regularly. In the 5 years since retirement we have been to New Zealand (3 times), St Lucia (3 times), Malaysia, Singapore, France, Spain, UK, Italy. Having read all these FIRE blogs, I realise we are in a great position. We regularly put away 50 -60% of our income, although we do need to worry about long term inflation.

I now volunteer 1-2 days a month, but I manage to flex it enough to travel. We spent 6 weeks in Barcelona in spring, and have January in New Zealand booked and paid for.

My husband decided he wanted to keep working after all. His old firm offered him part-time working in his own time, from home. He goes into work for half a day a month, he can work from wherever he is, as long as he has a laptop and an internet connection.

I still spend loads of time on my hobby, read widely, and continue to educate myself. I’m learning Spanish, and refreshing my French.

I would say we live simply, not frugally. We spend money when we need to, but we don’t waste it.