Planning for Retirement & the Fickleness of Government Policy

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Short of winning the lottery or earning a pile of cash, it is going to take a fair few years to think through, plan for and accomplish early retirement.  During that time you need to be on your toes as Government policy can change at the flick of a ballot paper and then change again while you have your head in a spreadsheet and the clouds.  Every Government whim can affect your financial situation both positively and negatively.

I started work back in the dark ages of the 1970s when I was just 16 years old.  At that time, as a woman, I thought I would get my state pension when I was 60.  This seemed an eternity away but this pension age had been the same since the 1940s and I didn’t imagine it would change.  I worked in a small business with no occupational pension, I didn’t earn very much and naturally lived frugally and had nothing spare to save.  I didn’t even consider that I might need any more money than the state would give me.

Apart from a brief period as a local authority employee I didn’t really find employment in a workplace that had an occupational pension until I got my first job in the NHS when I was in my late 30s.  By that time being 60 seemed much nearer and in a more secure position with my partner and a child, I willingly began paying into the NHS Pension Scheme.  I worked part-time and still expected my state pension to make up most of my income in retirement.

My working life has been varied [25 jobs] and I have moved in and out of the NHS Pension Scheme but having first enrolled in the 1990s I have always been in the old final salary scheme that begins to pay when I am 60 years old.  This is generally considered the best scheme as most people earn the highest amount at the end of their career.  There has been little that is normal in my working life and while my NHS pension was worth about £4,000/year back in 2004 when I was a Public Health Manager, after a few years working as an administrator it had reduced to £2,300/year, thanks to pay disparity and despite working more years.  If I had my time over I would have frozen my NHS pension but unfortunately I couldn’t see into the future.  After travelling full-time I returned to the NHS expecting to be there until I could afford to retire [at the time I thought this would be over ten years].  Little did I know that the first whim of history to confound my plans was about to appear.  Andrew Lansley, the Health Secretary, was waiting in the wings with his back-of-a-fag-packet NHS reform that spit me out of my wonderful health service job and into a small charity.

In 1995 the government announced they were increasing the state pension age of women to 65.  I knew this and I could see it was fair and was prepared for it.  In 2007 they announced a further increase to 66 but I was unaffected by this change and my planning for early retirement continued.  It wasn’t until 2011, when my planning was well underway, that this timetable was hastened and suddenly my state pension age was going to arrive one year later.  The Government had taken a year’s worth of pension away from me and the spreadsheet had to be revised yet again and more money saved to provide enough to live on.  The WASPI campaign is fighting for justice for all women, born in the 1950s, affected by the changes to the State Pension Age.

On the positive side, we will both benefit slightly from the new state pension introduced in 2016.  This will be paid according to the years we have contributed.

Hopefully the state pension age will not change again for me, but who knows!  My financial story will only really end when I die but for the moment I am happy that I did manage to retire when I was 57 years old.  My experience does demonstrate how difficult it is to plan so far into the future when so much is out of our control and demonstrates how important a contingency fund is; if I had managed to take early retirement before 2011 my plans would have gone particularly awry.

As Governments come and go and policy changes, planning with certainty for more than a few years ahead is tough.  I [and perhaps everyone saving for early retirement] move into the future hopefully rather than with certainty!

 

 

2,019 km in 2019 six month report

 

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It is now six months since I decided to try and walk 2,019 km in 2019.  How is this plan going?

I am on target [hooray].  I added up my kilometres at the end of June and I was relieved to see I have walked a total of 1,070 km in the first half of the year.  I am really pleased to get beyond half-way towards my target at this mid-point but it is only just over the target.  There is certainly no opportunity to let up on the walking and slob around.

Some thoughts:

  • In the 181 days from 1 January to the end of June I have averaged almost 6 km a day.
  • The longest walk on any day was at Henley-on-Thames in February when we clocked up 20 km.
  • The hardest day was 17 km up [and down] Ben Nevis.
  • Mountain walking isn’t great for clocking up the distance.  I was somewhat deflated when I realised that one very steep Scottish mountain we walked up at Easter was only 4 km up and down and yet was an exhausting day out.
  • My rule for counting the kilometres is that they only count if I have deliberately gone out for a walk.  It can just be a walk to the supermarket, the important thing is that I have chosen to walk rather than cycle or drive.  I don’t count the couple of kilometres walk to our tai chi class and back, as this is primarily about tai chi, not walking and I don’t count the short distances to the local post office or other local shops.
  • I have learnt there are a lot of days when I don’t go for a walk at all – a terrifying 30 of the 181 days or almost 17%!  Some of those days we might have cycled or practised tai chi and so not been completely lazy but others were because we were driving or just staying in.
  • I have only cycled 227 km in the last six months.  This is less than I would normally cycle as with this target I am generally choosing to go for a walk!
  • In the two months we were away in Scotland from April to June, I walked 425 km, a slightly higher average than the rest of the time.
  • I am pleased I set the target and enjoying keeping an eye on my progress but I’m not sure if I will do it again.  It is a hassle having to remember to note down where we have been every day and keep a record through the year.

 

 

 

 

 

 

What do retirees do all day?

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Two years into retirement, what do we do with our days? The paid travel writing I do to one side, here is a selection of things we get up to. There isn’t anything on the list that will blow your socks of, this is stuff that everyone does. The difference is that working people have to fit these activities into evenings and weekends. We enjoy having a lot more time!

What do retired people do all day? The list:

Daily or more than weekly

  • Blog writing
  • Listening to the radio or music
  • Reading novels [so much writing meant that last year I only read 47 books compared to 69 in 2017]
  • Keeping up-to-date with current affairs
  • Watching TV programmes and films
  • Learning languages
  • Getting out for a walk either locally or further afield – I am aiming to walk 2,019 kms in 2019!
  • Puzzles and quizzes
  • Completing surveys for small financial remuneration [with You Gov, Research Opinions and others]
  • Practising tai chi [we attend a weekly class when we are at home]
  • Going to our on-site gym
  • Social media
  • Cooking [and eating]
  • Talking to each other about our plans and ideas or politics and the news
  • Cleaning and laundry
  • Supermarket shopping – we tend to do this on foot or bicycles and shop at least a couple of times a week
  • Managing our finances

More than once a month

  • Researching and planning trips in our campervan
  • Supporting a local charity as a volunteer
  • Supporting the company that manages our flats as volunteers
  • Going camping
  • Cleaning, fixing or making things in our campervan

Monthly or occasionally

  • Meeting up with friends
  • Helping friends and neighbours
  • Attending our book group
  • Litter picking [although I’ve not done this as much as I hoped]
  • Going to music gigs, the cinema or theatre or football matches
  • Visiting local museums and galleries
  • Jigsaws
  • DIY in the flat

How to Apply Marginal Thinking to Financial Independence and Frugality

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A Portuguese cat looking down on us

Maybe in 2018 I took my eye off our financial ball.  Maybe I thought I had got the hang of being frugal, I was complacent and we ended up with a higher spending year than our budget allowed.  I thought we were in the frugal groove, I relaxed and wasn’t frugal 100% of the time.  Some people suggest you can’t take time out and that it is better to be frugal every minute of every day, staying in control and never allowing any marginal spending that will be the start of the path to profligacy!

Clayton Christensen tells his readers:

“It’s easier to hold your principles 100 percent of the time than it is to hold them 98 percent of the time.” 

He argues that if you follow your rules 98% of the time and make the assumption that doing something ‘just this once’ is a marginal action and negligible in the bigger picture, in the long run you will pay a higher cost.

An example … There are times when – in some particular extenuating circumstances – you might think of breaking the law with a small-time low-level crime that doesn’t hurt anyone.  Analysing your action based on the marginal cost, you figure the chances of being caught and going to jail are low.  But then small lies or wrong-doings can lead to further covering up and more lies, quickly snowballing and very soon the price doesn’t seem so low.  Hold your moral boundaries 100% of the time and you can be happy with who you are.

It is only human to use this marginal-cost analysis.  I am certainly guilty of occasionally buying just this one thing on the spur of the moment, rather than following our think-about-it-for-a-month policy.  Is this a slippery slope?  Will that one purchase snowball and lead to extravagance?

I am not totally convinced with this argument and think I might be happy with achieving frugality 98% of the time; however, I recognise that being aware of what is happening is a useful first step in considering your action, acknowledging it and finding strategies to avoid it in the future.

And yet … If I do buy something on the spur of the moment it is something I do with a full picture of our finances.  Everything we spend is noted, a manual process I find gives me time to thoroughly examine our outgoings.  It gives me the opportunity to question if any spur-of-the-moment purchase, however marginal, really did bring contentment or meet a need.  The process also means I will spot trends early enough to make changes.  A small just-because purchase doesn’t necessarily throw everything out of kilter.

I don’t think I did take my eye off the ball in 2018, my own way through a frugal life continues.  In 2018 one of the main reasons we over-spent was because of maintenance and repairs on our campervan.  These were in no way marginal costs, they weren’t negotiable and I don’t see them as an extravagant trend.

We all have our own ways of being frugal, some people continue to enjoy restaurant meals, others still want to spend money on looking good or have expensive holidays.  Everyone works it out for themselves.  Being frugal 100% of the time, avoiding unnecessary purchases and avoiding any marginal spending might be an ideal … but then again I am only human!

 

Walking 2,019 km in 2019

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Walking in the woods near Henley-on-Thames

It all started with a conversation with a friend towards the end of 2018.  We were on a walk together and he was keen to take the long way round to the pub because, it turned out, he sets himself a target for miles walked every year and he was worried he wouldn’t make the distance before 31 December.  This conversation made me realise two things; firstly, although I consider myself a keen walker I have no idea how many miles I walk each year and secondly I have a bit of a competitive streak.  We get out for a walk most days now we are retired as this is a free activity that we enjoy.  These walks might just be a circuit around Salford Quays for a mile or two, or to the local park or cemetery or it might be a utilitarian trip to the supermarket.  On top of these daily trips around Salford we take longer and what you might consider ‘proper walks’ in the countryside in Scotland, the Lake District and wherever else we might be visiting.

Although this is not a competition, my small competitive streak wanted to find out just how the distance I walked each year compared with my friend and so I decided to set my own target for walking in 2019.  My own rules are that I can count any distance that I walk, even if it is just to the supermarket, as I have chosen to walk there rather than take the bus, cycle or drive, although I don’t count distances under one kilometre such as to the corner shop or our tai chi class.

Someone I follow on Twitter is aiming to do 2,019 miles in 2019 in aid of the Trussell Trust.   You can combine cycling, swimming, running and walking for this challenge but it is still quite a challenging target and I am in awe.  I don’t intend to put my own target out there for fund raising for a charity but I did begin thinking I could try and walk 2,019 miles throughout the year.  I quickly calculated that this needed an average of around 5.5 miles a day and that this was perhaps too much of a stretch.  Thank goodness for kilometres!  I always walk and cycle in kilometres, they are so much easier to get through and sound more impressive and so it was only natural that I would come up with my own target of 2,019 km in the year, around 5.5 km a day – much more achievable.

A spread sheet was set up and the counting began.   After two and a half months I am feeling the target is achievable [unless, of course, I break a leg during the year] but not easy and I certainly don’t feel I can let up for a few days.  If I have a couple of days when I don’t walk anywhere I know I have to make up those kilometres with a long walk.

Up to the time of writing this post I have walked 486 km (301 miles) this year, which is an impressive [I think] average of just over 6 km a day.

A couple of things I have learnt from being target driven with my walking this year:

  • I am now keen to get out whatever the weather – not necessarily a bad thing.
  • I have to be organised and record how far I have walked every day before I forget.
  • I am more keen to walk than cycle when we are making the choice about how to travel somewhere so the bikes are feeling neglected [perhaps next year I’ll have a cycling target].
  • The added frugal bonus has been that we rarely take the tram into town these days as I prefer to clock up some kilometres.
  • The expensive downside could be that I wear out more pairs of shoes during the year!

 

Silver Cinema – a frugal thing to do in retirement in Greater Manchester

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I’ve chatted before about the fun of going to a cinema matinee now we are retired and the thrill of this simple pleasure that feels almost illicit hasn’t worn off despite it being two years since we last went out to work!  But an 11.00 showing at the cinema, that felt like a whole different experience.  We had never been to the cinema so early before, would this feel even more sinful than watching daytime TV?  Would the people of Salford and Manchester judge us harshly?  It turns out it doesn’t really matter what time of day I go to the cinema, once those house lights are down I am immersed in the world of the film with no distractions and the hour is pretty irrelevant.

The Odeon Cinema in Manchester has a Silver Cinema deal on a Tuesday morning.  For just £3 you get to see a film, get a free cup of tea or coffee and a couple of custard creams!  What’s not to like.  The only hurdle is that you have to be there at 11.00.  On their website the Odeon note that these showings are for over 55s and we were somewhat disappointed when no one checked our ID!  I reckon anyone in their 50s could sneak in and enjoy an affordable cinema trip.

It was a wet and blustery Tuesday morning when we turned up to see Bohemian Rhapsody.  We had intended to see this film anyway but hadn’t got round to it and spotting that we could get to see it for £3 each was a real frugal bonus.  It turns out we aren’t the only retired people in Greater Manchester that can get their act together by 11.00 in the morning and there were a few of us shaking the rain off our raincoats and queuing up for the drinks and biscuits as the staff members woke up the cinema for another day.

Of course, we knew this film was never going to have a happy ending but a few hours later we emerged red-eyed from so much weeping into lunchtime Manchester.  The movie was occasionally uplifting and funny but ultimately sad and, of course, is packed with good songs.

 

 

Extreme de-cluttering & minimalism? Throwing away those teenage diaries

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Who didn’t start keeping a diary as a teenager?  I started writing a journal when I was 13-years old and continued pretty much daily into my mid-twenties.  Each diary was a hardback note book and was sometimes super-neat and at other times I filled it with pages of large angry scrawl.  Unlike many people I no longer have these diaries.  Some of you will be horrified that I have thrown away something so personal, but these notebooks were ditched in an early quest for a minimalist life, in fact before it was even a thing.  My teenage diaries went into the bin in my late twenties and it felt good.  I realised I had no regrets and after keeping the later diaries for a while longer, eventually I could no longer justify the space they took up and these hit the bin too.  How did I find the strength to throw away the inner ramblings of my younger self?

I was an unhappy teenager, lacking in self-confidence and I poured my heart out to these diaries.  Every day I wrote about the self-obsessed life of a miserable and often lonely young woman.  Living in a village I was isolated from my school friends; many living in even more remote locations miles away.  My evenings, weekends and school holidays were often spent in solitude with music, books and the radio and writing my diary.  My best friend didn’t even have a home phone!  Instead I wrote to an imaginary best friend in these diaries.

My diaries were the only place I recorded my unhappiness and overwhelming longing for someone who would care for me and I wrote at length about the ups and downs of unsuitable and ultimately dismal relationships.  My diary kept many secrets, including the night of my unsuccessful suicide attempt and surprise when I woke up the next morning feeling dreadful and light-headed.  My diaries helped me deal with the death of my best friend at the age of 14 and were where I slowly learnt to be thankful for every day I am alive.

There were good times in these diaries too.  My love of school and learning was recorded and I had fun with friends but it was my imaginary friend in my diaries that I was closest to.

After a painful year in my early twenties when I survived my first marriage ending, my parents separating and my much-loved grandma dying, I discovered how resilient I was.  Living alone and still isolated in my country cottage, often with no human contact through the evenings and weekends I matured and became less self-obsessed.  I found strength and self-containment and started to figure out the person I could be and my diaries were where I explored some of my ideas.  In my mid-twenties the love of Mr BOTRA helped me turn my life around and I started to become the person I am today.  The very large pile of around 30 notebooks was a weighty symbol of the person I had been and I carried them to and from the first two houses we lived in together.  I found I had less need to revisit that intense period of teenage navel gazing; that person wasn’t someone I wanted to see again.  For me, throwing out those earlier diaries was an important and meaningful first step that helped me realise I didn’t need to hang on to the past.  This made the second and final de-cluttering episode easier.

This extreme de-cluttering might be harder if your diaries record happier times but I grew to know that the diaries remembered a life I had no need to hang on to.  I can’t undo that past and it has made me who I am but I didn’t want anyone to read those diaries and judge me for being the person I was.  Getting rid of those diaries was liberating and I felt re-born and buoyant as I dumped them in the bin.  It was time to move on, as they say these days!