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?