Big long sums with lots of pencil sharpening - Day 12

 Hi everyone,

I thought I would carry on where I left off yesterday. I have been thinking of retirement and how I will afford it. I've also spent the day pondering why I hadn't done anything about it earlier! My years of at home mothering were about affording shoes, lighting, food and certainly not about fencing lessons when I'm elderly. I'll just have to forgive myself for what I didn't do before and congratulate myself for actually doing something to prepare for the future.

I'm 45, which means I've lived longer than I've got left to live. My parents are 72 and have recently become 'old'. Mum's knees are gone and she hobbles about, she's had surgery and then in true sod's law style, the other one has given up too! Dad can't hear a nuclear bomb going off unless he has his hearing aids in, they are getting forgetful and both of them are 'slowing down'. They both worked past 65 and I'm sure that's one of the reasons, or the biggest part of the reason that they are emotionally, physically and spiritually knackered. The grindstone literally wore them away. Mum still has to do some work, the joke being is that she cares for the elderly!

I do not want the future if it's going to be like that! I want it to be like the denture fixative advert, where the glamorous, but grey haired couple are smooching romantically at the water's edge munching on apples with their dentures going no where! I want to do yoga, be the loud one at the WI, show flowers at the local show and enjoy life. I'm going to have to retire early to do that and not wait until I'm too soddin' tired from working until I'm 65.  Due to my contemplative mood, I've had a day of numbers.

 I've been onto my pension provider website and have discovered that if I work for twenty years, then I will have a pension of approximately twelve thousand a year, and reading DB's pension statement and projections, he will have a similar pension. If we both get a state pension of five thousand pounds each a year, then we should, by today's standards, be OK. However, those are the financial projections that most would be retirees work under, but, we don't know what the future holds.

Then my day became about a whole variety of equations, probability and number sequences. I have a good amount of options that I can and must consider whilst I: have a job and I'm well enough to do it. I can stay where I am and after I have paid off debts, pay off a huge mortgage by snowballing my monthly debt payments into my mortgage. I would then pay off my mortgage in ten years (after debt repayments) and be mortgage free at 57 and able to retire slightly early. I would then have a 'pot' of money in a huge house that I could then sell and live off until I have my pension to live on at 65. We could have yet another financial collapse and my 'fund' could dwindle to the point of worthlessness. It might work but nothing is guaranteed.

I could also sell the big house, downsize to a much smaller house, pay off the much smaller mortgage and buy an extra two and a half thousand pounds of pension at £290 a month for ten years, which is beneficial if I live to be at least 85!!!  I then could live very creatively and frugally whilst I had the energy and 'youth' and find myself a part time job that would give me just enough to live on but time to really live.

Paying extra money to my pension is a fantastic return, if I live long enough to enjoy it. Effectively, I would put £34.8K in and get £50K out over a 20 year period from saving extra into the fund now. What ever we decide might work or might not. My dad's 'company pension' seemed a wonderful amount of money when he was younger and had it to look forward to, when he actually got it, it didn't seem all that much.

Parts of being older are cheaper. No need for commuting costs, work clothes, the mortgage is paid and you have more time to make or grow what you need. It's also becoming increasingly expensive. Hearing aids are over £1000 each, disability adaptations are expensive and personal care can eat almost all of your income. When we think of retirement, we imagine gardening, leisure time and freedom. I can see my parents needing care any day soon and they won't have enough money to pay for it and then the choices of where they live and who looks after them will not be of their deciding.

I said yesterday that you can't have money at both ends of your life. If you spend it whilst you are young, you can't have it when you are retired or the other way round. I'm not worried about my finances when I retire, I can't, it's not in my hands as I can't see into the future. I can do what I can to ensure I have a paid for home, that I don't have any debts and I'm as financially astute and prepared as I can be. One thing is for sure though, if we want to retire at all, then we have to be mindful of preparing for that now. Most of you who read my blog, are of a similar age to myself. You, like me, pay towards your pension every month, and think or as in my case, hope it will be enough. Now that I've learnt to budget carefully, to save judiciously for dental or car costs. I'm imploring anyone out there who's not yet convinced that you have to make a real change to your life. I'm not a nag by nature but I've said this before. It is no longer the time to be the frugal voyeur but to live carefully, sustainably and frugally as the future has to be paid for somehow.

I hope I haven't driven anyone away with my pondering today, I will as ever be back tomorrow. Oh, it's day 12 and I still haven't been shopping!

Until then,

Froogs xxxxxx