It’s potentially quite a generalised and naive way to look at things, but I can imagine that retirement living is great fun.
Having worked for all my life, during retirement I can now take the time to do things I want, come and go as I please, and finally find time to do – well – anything, and more.
I mean, essentially, that is the way that retirement works.
I’d plan amazing trips, travelling the entire planet. I’d see things that I always wanted to see; like New York and Boston and LA in America and the Northern Lights. I’ll spoil my grandkids rotten and pay for their music lessons or buy them a treat every now and then.
I’d get that shiny BMW I always wanted; although it will be quite retro when I’m older, it doesn’t matter.
If I have any spare time (as I’m obviously so busy with my travelling), I may learn to fly a helicopter or even a lightweight aircraft. Then there’s ballroom dancing – that looks fun!
But when you finally have all the time to enjoy freedom in life, you need money to fund the lifestyle you want.
What will my retirement ACTUALLY look like?
I recently looked at the Aviva Shape my Future tool to see what my future retirement income will look like.
After working out what kind of weekly budget I’d have (pretty low!), I then started to choose options for what I wanted my lifestyle to be like.
Unfortunately, the wild ideas of travelling, coming and going as I want, and living life to the max won’t work on my future budget.
They calculated that I would be able to get a state pension of £156 per week.
Then, they worked out potential costs for housing food, travel, family costs and hobbies. My limited lifestyle would cost me £140 per week which doesn’t leave very much to play with.
The Aviva Shape my Future tool uses simple inputs to give a basic idea of retirement income. Details of assumptions are available at Aviva.co.uk
Have a go with the Aviva Shape my Future tool and see what your retirement might look like.
Limited retirement budget
With how I’m currently saving for my retirement, I am going to be very restrained as to what I can spend and what I can do.
But, what I wanted to see is whether what has been proposed for me it an achievable way to live when it comes to packing in work.
I decided to try to see what living on my new budget would be like for a week and see whether it’s actually possible.
Future housing costs
We currently rent a three-bed house. As it’s privately rented, we pay quite a bit. There is no way that I can afford the rent privately on my retirement budget so I’ll have to move.
I’d need to go on a waiting list with the council. The current wait for a property in my area is around two to three years, so I hope one of my kids will let me stay with them until something comes up.
The tool suggested that I would only have basic broadband and no-frills TV. We currently have Netflix so I stopped watching my favourite box sets for a week, which I found I really missed. There wasn’t much on “normal” TV so I didn’t really watch it.
What about the food budget
We have been very used to eating on a limited budget in the past. However, with more spare cash now, we look to spend more in the supermarket and allow ourselves treats from time to time.
My new budget for when I retired comes in at £28 per week. As a seasoned budgeter, I honestly don’t think this was a problem at all. We have managed to feed a family of four on that before; however, we didn’t get much variety and I knew it wouldn’t be forever.
I would need to look to plan out simple meals, eating nothing too extravagant. It actually feels quite depressing as I’d be eating with little variety for the rest of my life.
They also predicted that I would have enough money to go to the pub for something to eat twice a month.
Travel and getting about
In the future, I wouldn’t be able to afford a car. I would have £16 per week to put towards day to day travel and any trips for holidays.
My dream of travelling to America is gone as my budget will only stretch to a UK holiday. If I could find a high interest savings account perhaps my £16 a week could go there and I may stretch to a trip to France (if the cost of a passport renewal hasn’t gone up as much!)
My bus pass will come in handy though as I’ll need it to get to and from the shops for my food shopping – I’m sure it’s cheaper than having things delivered by drone! I just hope the government still give out free bus passes as this will really be my only way of getting around.
I think having a lack of any budget for hobbies will be one of the worst things.
While I can try to stretch my food out, using tricks I’ve learnt over the last few years, I think I’d really worry about getting bored.
I can tell straight away that I won’t be flying a helicopter. Maybe I’ll get to be a passenger if one of my kids gets me a Groupon?
My bills can’t stretch to having more than free TV and there isn’t anything on. The basic internet would be too slow to allow me to play any decent games online and Skype would just keep buffering if I tried to call my kids (they’re not in any way as they’re at work).
I could look to start up a new business and get a bit of extra income again. Maybe this is the only way I’d have to fund a more exciting lifestyle?
I’d be able to get back into reading. I just hope the government don’t cut back and shut my local library….I’m starting to feel like a grumpy old man…!
My future budget has to change!
While living on a tight budget today is something I have got quite used to, it’s knowing that things will change eventually that gives me hope. The cost of childcare goes down, our income can go up. Eventually, the kids leave home and our food, water and other utilities will go down, leaving more money in our pockets to do things.
With the way we are currently saving for retirement, I will have that set, limited budget every week for the rest of my life. Ideally, I’d want that to be a long time so I can enjoy watching my family grow up. However, it feels like I’d have a very limited life.
Is it possible to live on my retirement budget?
Whilst I think living on this budget is possible, it’s not something I’d want to do.
And I want to start changing that as soon as possible!
I am going to look into investing and saving for pension. Retirement will come around a lot quicker than I can image and I need to start saving some money sooner rather than later.
There is a possibility that I have had pensions set up when I was younger. However, I didn’t keep paperwork very well a few years back and have no evidence of anything. I am going to look to see if I have any pensions using the pension tracing service.
As a small business owner, I need to find out my options and see if I can do something as part of the business or look into a personal pension plan.
There are a lot of options open to me and I need to start making changes right now to make sure I have a better financial future.
The Aviva Shape my Future tool uses simple inputs to give a basic idea of retirement income. Details of assumptions are available at Aviva.co.uk.
Written in collaboration with Aviva
Ricky Willis is the original Skint Dad. A money-making enthusiast, father, and husband to Naomi. He is always looking for unique ways to earn a little extra.