Saving for retirement is something that I haven’t been great at so far in life. I’ve had other priorities such as trying to pay off 15 years worth of debt. However, now that I’m fast approaching 35 years old, I’ve finally been to see a financial advisor and am in the process of setting up a private pension, as is my husband.
At the moment, I’m prepared to contribute £150 ($235) into a pension each month. That will be a noticeable amount of my income. As it stands, by the time I reach retirement age and depending on how my investment pans out, this may accumulate to a pension pot worth £200k ($312k).
I know, I know… nearly 35 years old and only just sorting out a pension?! Especially when this was on my “to do” list for January 2014, for those of you who’ve been reading my blog since then? And anyway, £200k is unlikely to get me through the golden years in style, right?
To achieve a pension pot that would ensure a comfortable retirement, at my age, I should be putting in at least £300 per month to make up for lost time, if not more. But I’m not going to be doing that just yet I’m afraid… and that’s because I want to have enough money to help me with my other priorities right NOW in the present day.
Don’t get me wrong, I hardly ever splurge on random purchases these days. On the contrary, I’m pretty much dedicated to saving money… for a house deposit. As we’ve just come out of a debt management plan, this is no mean feat as we need a huge deposit to have a chance of getting on the property ladder again.
For me, getting a house of our own in the next few years will make me feel more secure and happier overall than doubling my pension contributions and having to wait another 10 years to buy a home. So in my view, this is a good thing to be saving up for.
Since we’ve been debt free however, we both do spend a little money more freely on the odd meal or drink out and we don’t see anything wrong with that, because at long last we can afford to do this. Not all the time of course, but now and then. Even with a little more freedom on spending, we usually manage to save 40% of our combined income for our house savings.
However, there is one big area of expenditure that I’m considering and that’s laser eye surgery. Yes – a cosmetic procedure, but with a short-sightedness prescription like mine of -8.50 in one eye and -9.50 in the other, having my vision corrected would be totally life-changing for me.
It’s a big purchase when we’re supposed to be saving and we don’t have much by way of a pension – it’ll possibly cost around £2000 ($3100), if I’m a suitable candidate for this procedure.
But not having to fish around for my glasses or contact lenses every morning and being able to reduce the amount of headaches I get from wearing contact lenses too much… it’s a price I’m willing to pay. But I don’t want to wait until I have enough money for my retirement to sort this out, as by then I’ll need my cataracts doing instead!
With that said, I know plenty of people want to put as much of their disposable income away as possible for retirement – particularly those that want to retire early – and I get that. It makes sense. I understand why people worry that they won’t have enough money to live on and they want to ensure they can enjoy their retirement without struggling! I worry about this too!
Here’s the thing though. We can’t possibly know how long we’ll live for and therefore exactly how much we’ll need to live on during retirement.
What I do know is that life is unexpected…
Not all retirement plans work out
My wonderful mum retired at age 67. She had worked hard all her life, scrimping and saving to make ends meet and helping my dad to put food on the table for our family. My mum and dad worried about money like most people do. Anyway, my mum was looking forward to years of pottering around in the garden, enjoying travelling around a bit more and basically doing more of the things she enjoyed doing, that she didn’t have time to do whilst working.
At age 69 last year, my mum had to have her leg amputated above the knee after nearly a year of being in pain with her foot. She was diagnosed with diabetes and is now in a wheelchair. Above the knee amputations mean that using a prosthetic limb is very difficult, particularly for someone who is elderly, because the “good” leg has to take all the weight of the person’s body. Just a few weeks ago, my mum experienced a problem with her “good” leg and is booked in for surgery to help the problem during August.
My dad has had to become her full-time carer and to be honest, his health has taken a fair whack too. They are both living in sheltered accommodation now, where healthcare support is on hand, should they need it.
This wasn’t what they envisaged for their retirement.
Seeing their experience of retirement first hand has made me determined to enjoy life now if I can afford to. I know my mum wishes she’d spent a little more money here and there on a few treats for herself and the rest of us, her family.
Sure, my parents can afford the odd treat now they are retired. In fact they love to spoil my daughter and I don’t mind, because it makes them happy (and my little girl happy too). They have their pensions coming in every month and they’re able to buy what they need and support themselves. They even get to save money through free prescriptions, free bus passes and other money saving discounts older people can take advantage of here in the UK.
They are coping ok financially. But I know how much my mum wishes she’d enjoyed herself a bit more whilst she was able-bodied. As positive a person as she is, she often jokes that she never imagined she’d be spending her retirement visiting the doctors surgery twice per week and the hospital once per month.
Life is about living
And I don’t mean that in a YOLO kind of way because saving for retirement and keeping finances in good shape is undoubtedly important. The YOLO mindset doesn’t work for me these days. But what I’m saying is that life is also short and unexpected. Even the best laid plans don’t always work out.
My husband and I would have been in a better position finanacially if we had contributed early into a pension and didn’t have any debt to worry about. That would have meant we wouldn’t need to put aside much money now or worry too much in the future.
But we’ve made mistakes and we need to move forward – at least we are mostly saving now instead of getting into debt and hopefully we will be able to increase our pension contributions in the future. We’re in the situation we’re in and we just have to do the best we can – but we intend to make life count in the meantime.
With that said, I know plenty of people want to put as much of their disposable income away as possible for retirement – particularly those that want to retire early – and I get that. It makes sense. I understand why people worry that they won’t have enough money to live on and they want to ensure they can enjoy their retirement without struggling! I worry about this too! Here’s a resource from United Medicare Advisors about the truth of Medicare, which I highly recommend you should check out.
What’s your view on retirement planning? Are you making life count?
photo credit: via photopin (license)
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21 Comments
We contribute to our 401(k) right now, but only because our employer matches a certain percent. It’s money left on the table if we don’t participate. Other than that, we are in full-on debt payoff mode. On the flip side, we are trying hard to really enjoy life, though it may take creativity to get us there. We want to travel with the girls and let them experience the world. Thankfully, they are still young, so it’s not a goal RIGHT NOW.
Life is such a balance and I think it’s important to find the balance that makes you comfortable. Otherwise, you won’t stick with it!
Kirsten recently posted…Cost of Living Research: The Good, The Bad, and The Ugly
I think it’s definitely a balance. You do have to enjoy life now because you are not guaranteed tomorrow, but at the same time plan for your future. Only each individual/family knows what that balance is for them. I would hate to only let “the good times roll” when I’m 65, or more likely 80 at this point by the time I save for retirement. lol!
Tonya@Budget and the Beach recently posted…Real Money Stories: Running an Airbnb
It’s important to find a balance in life. You could easily scrape & save your way through 10 years of work and then get sick. Or you can go all out spending during your working years, and then live healthy until 90 with no money to be able to enjoy those years.
I think the important part is that you are aware of the situation, and that’s a lot better than most people. You are contributing to your retirement fund, but focusing on other priorities at the moment. I think that’s just fine since you are fully aware of your decision.
Debt Hater recently posted…Student Loan Progress – July 2015
I’m sorry to hear about your Mom’s health problems. It is always hard to see your parents health start to fail. I know it was so difficult to watch my Dad go from a vibrant person to someone who couldn’t always remember me. You definitely should enjoy life every step of the journey because you don’t know how long it will last and there is definitely a balance to strike. A YOLO attitude isn’t right (and I know one you will avoid) but one shouldn’t also wait until retirement or some goal achievement to be happy and enjoy life. I do hear it all the time … when I get this, I’ll be happy. We should aim to be happy now. Also, I had laser surgery and it has made a huge difference. I know it’s not cheap but at the same time, think about how much eye exams, glasses and contacts cost too. In the end, I think price-wise it really evens out.
Shannon @ The Heavy Purse recently posted…6 Habits of the Wealthy
This post really resonates with me and expresses many thoughts that I have about living a financially balanced lifestyle. It’s difficult not to let your long-term goals overshadow your happiness today. In the end, it’s about finding that balance in your life.
Dane Hinson recently posted…The Difficult Balance of Financial Wellness
My husband gets on me about this all the time. We got a late start because of low income, high medical bills and… life in general. At this point, it’s always one thing or another. And my husband doesn’t want to wait indefinitely for us to be able to do things.
So I agreed to start a vacation fund. That way, there is a set amount of money that we can use to go somewhere — even just Las Vegas — without me worrying about the bank balance.
My husband and I are a good balance for each other. I help him build a safe future, and he helps me live more in the present.
Abigail @ipickuppennies recently posted…Why you? Why not?
You guys sounds exactly like me and my husband with the balance thing!
This was a great post. I can’t profess to know how pensions work in the UK, but it sounds like you are going in eyes wide open. It does seem silly to wait until you’re old to enjoy any part of your life, though that’s what we’re told to do a lot if we’re to be responsible. It’s all about balance. I’m so sorry about your mom. I can’t even imagine how difficult that must be for them to go through.
Femme recently posted…The Ultimate Frugal Pittsburgh Tourist Guide
You are so right that life and personal finances are all about finding the right balance for you. I agree that saving for later to the complete exclusion of living today, can be a dangerous strategy.
I have horrendous vision! Being able to open my eyes in the morning and actually SEE, would be life-changing!! (I’m not a surgery candidate, though.)
Amy @ DebtGal recently posted…Summer Goals Check-In #2
I always take the view that balance is the key to everything. It’s important to plan for the future but I don’t think that we should deprive ourselves completely. As you say, you never know what’s around the corner. So it’s important to make the most of our lives now as long as we’re not completely neglecting the future.
Abi@Bunnyonabudget recently posted…Save Money by Making Your Own Clothes
I’ve been using my blog to keep track of bigger expenses and using that to make choices. It helps to outline your own justifications for spending and prioritizing.
middle class recently posted…Hard Choices Part 5
I think balance is the key. Since you are planning for retirement, why not also enjoy life? After all, I don’t think life should be put on hold until some magical golden age.
Sorry to hear about your mom’s health problems! I hope everything works out well for her.
Alexandra @ Real Simple Finances recently posted…You Need Financial Focus
Good for you, fingers crossed you are a good candidate for laser eye surgery. I’m not even debt free yet and working to finance it from my HSA. My near sighted prescription is -6.00 and I’ve worn glasses since I was 6/7 I can’t imagine what it would be like to wake up in the morning and just be able to see. It would truly be life changing and I’m really excited for you! 🙂
Liz recently posted…Friday Night Shenanigans #15
I know exactly the situation you are in! I delayed paying into my pension while we were in debt because we had so little to live on we wouldn’t have been able to eat with that expense (and the dreaded student loan!) hubby now gets a pension contribution from his work paid in each month (without him having to contribute) and I plan on starting a pension now we are debt free.
You have to live for the moment, and I am so sorry your mum is unwell and hope her good leg is ok when she goes to have it looked at. Moderation and being sensible is key! And you have that in abundance! 🙂
Natalya x
Natalya @Cottage Retreatist recently posted…Debt free dilemma: a follow-up
Any contribution to your retirement is better than nothing. We started saving late for our retirement and are behind where we “should” be for our age, but we are building a little nest egg. Paying off debt is more of a priority.
I’m sorry to hear about your mom. My mom had a similar health issue, but fortunately was able to walk with her prosthetic. It really limited what she was able to do in retirement.
Tre recently posted…Sunshine Blogger Award
I have the worst vision too, but I’m terrified of the laser eye surgery. I do wonder about long term cost savings though – it’s several thousand for the procedure, but I’m sending about $500 on my eyes every year anyway.
Mel recently posted…Financially Savvy Saturdays #101
I’m glad you guys are putting your money aside now. Maybe you can increase the amount later.
No matter how much you save there will still be a budget. Of course it could be tight. I always think of the money we could have saved over the years and wished we had sometimes been a little wiser. It’s a fine line.
Vickie@vickieskitchenandgarden recently posted…My Menu this Past Week 8/1/15
I’m in my mid-50’s, my husband in his late 50’s. We have an 11 year old child, a college student and a 23 year old son with autism, who will likely never leave home. We watch the big expenses and try not to overdo the little ones. It is hard trying to decide what to do now, vs what to save for later, especially when you realize that you will probably need to support a child for his entire life. Still, I don’t want to live too frugally now, just to have too much money later. One thing to remember is that your earnings will likely increase in the next 15 years and that what is hard to save today will be easier down the road. We save more now than I made at my first job.
I haven’t fully taken care of my retirement funds. I don’t even realized or computed how much I would probably get when I retire with the contribution I make each month. I think it’s time to be aware and work on this investment so that I would have great retirement years.
Jayson @ Monster Piggy Bank recently posted…Amazon FBA Part 9 â Shipping / Freight
Finding balance is hard (for me anyway.) Today vs. tomorrow. Right now, clamping down hard to see if we can sprint to an early retirement but I do worry about getting there and dying the next day. Sorry to hear about the troubles your parents are having – not the retirement they dreamed of I bet. I have the opposite issue – I am watching my parents have the time of their lives and I want it too. I am happy for them though. I don’t think there are any rules – just what works for each person.
May recently posted…Net Worth Update August 2015
Boy have I missed you Hayley 🙂
This is an extremely powerful post and one that should be heeded to by all those who read it!
“What I do know is that life is unexpected…” – This is so true and while we all know that…it seems like we don’t “bother” with it. Rather we just keep on doing what we do until something bad happens, and then we think about how precious life is…and then we slowly go back to our routines and life continues on.
At 54 I have no money saved for retirement but I am not going to let that worry me. Things could change in an instant and then what!? Actually, with what little self-employed pension I will get from the government, plus my old age security when I get there…I’ll be making more money than I do now.
So…I’ll just go on living and enjoying my life and when – or if – the time comes to consider some form of retirement scheme, I’ll worry about it then.
Thanks for the post Hayley and take care. My best to all.
Lyle
lyle @ the Joy of Simple recently posted…Voluntary Simplicity, Affluenza And Life Choices!
I’m sorry about your mother’s experience. I hope all goes well with her upcoming procedure. Wow! That is a stark reminder that life can change at a moment’s notice. Tomorrow is not promised and I agree life is for living. I think you can balance enjoying the moment with being fiscally responsible and planning for the future as best we can.
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