How to plan it, my plan (and viewpoint) on retirement.
I hated school. Almost everything about it. That’s another post, but it’s main message was you get a job for so many year then retire and live off the money you have saved up and then do the things you want to do.
I don’t mind a 9 to 5. I think it’s suits some people. They don’t want to worry themselves with owning a business or taking large risk, when, truthfully you don’t need to. A 9 to 5 is stable.
I get it. I’m not clowning on it. Quite the contrary. What I have learnt, after my first year of investing…
School taught me nothing about money. They told me, I needed to make money and to do that you need to go to Uni. Most of the time by choosing majors or college degree or get a BTEC certificate.
There’s nothing on taxes. That the paycheck your given isn’t the full amount. There was very little on the pay of different jobs.
Like one of my favorite rappers says.
$1m ‘deal’ isn’t 1m. It’s more like 350,000 after you pay the tax man, and everybody else involved in the signing of that deal (managers producers etc).
There’s nothing about a budget and how important and useful they can be.
When I was in school it was less about how much you got paid and what job you wanted. That is fine. Chase what job you want but you should know how much your spending each month (or want to/need to), and if your job can’t subside that… you might need to be introduced to a side hustle or go for something else or try to reduce your overall spending so you can do what you want.
School takes so much time about ‘the future’ while not really teaching you about any of it. They rather make you find the square root of x than teach you what percentage of your income goes to taxes.
I could go on about this but your here about retirement.
The premise of retirement is you quit work… forever?
So you can do some gardening or knitting? Sit in your chair watching tv? I’ve already done that too much. Hours wasted…
Yes, I am looking for financial independence and to be able to live off passive income (which we talk about a fair amount). But I don’t want to have to wait till I am 65 (the lowest is 55) to do so.
Yes I am concerned about retirement and being comfortable in my old age. I think everybody should have it in the back of their minds. You don’t want to ‘start the grind’ at 55. Right?
I want to live now… and later.
Is skydiving really going to be better when I’m 65 rather than 25? Is building a hobby I enjoy going to better and easier at 55 than 30?
A retirement plan is good and I do have one but as a lot of investors like to speak on diversification… Don’t put all your eggs in one basket. Most of my money goes into investments rather than pension plan. Yes there important! Especially if your job as one set up where they match your contribution, which a good few American (and I think UK) do. I would take full advantage of that.
So, I guess, for me, it’s how you define retirement. Are you working a job you hate just so you can ‘live free’ later. Than good luck but I want no part in that.
Is it working in a job you like. Free medical (or whatever your job offers like a pension plan or what not) and doing something you enjoy than moving onto the next thing but your technically retired because you want a pension…
Does retirement look lonely to you? I found a whole article on mentally preparing for retirement. Yes, I am glad it’s out their, and I am sorry if your going through these things, but retirement shouldn’t be an end to your life.
It should be a new beginning.
Plan? What do you mean?
My first question to you is…
Do you have any money saved at all?
If not your going to need to start. A study conducted by which states;
Households spent a shade under £2,220 a month, or around £27,000 a year, on average when we carried out research in 2019.
You’d need £42,000 a year if you include luxuries such as long-haul trips and a new car every five years.
To be safe (if you haven’t paid off mortgage or planning on spending a little more on grand kids, if you have them) I would increase that to £50,000 a year. If there’s any emergency medical bills…. etc. (But you should already have an emergency fund if you read or listen to Inv3st (:
That’s a lot of money. (check a retirement calculator or just search google for one). For an average person that’s going to take a while to save up for. Not only that but you have to be paid that every year until you die.
Inflation is a bitch. By the time your reading this (or in 1–2 years) those numbers might be completely different. Especially with the money that being printed at the moment.
I’m not trying to scare you here. I just want you to know that it’s not going to look after itself. You are going to have to do something.
What does it (retiring) mean to you?
Do you want to volunteer? Could or would you find a part time job as you get your pension. Your pension benefits would be lower but what is that what you see yourself doing?
Are you on a beach somewhere enjoying a cold cocktail… in a hammock after failing to surf throughout the day… (I haven’t given this much thought at all…)
Is it being around your grandkids and helping with baby sitting etc…
The possibilities are endless.
That great but bad at the same time. A think I say a lot is to calculate your monthly expenses. Than your yearly. Will/ are you making/ saving enough by the time you wish to retire?
If thats it can you do that before 55? Can you do it within a couple years? If you wish to read more into this I would suggest researching FIRE (I will be creating a blog post this later.
We think everything is just going to work itself out. A quote I used a lot was
“Future me can worry about it.”
I laugh now but this is a very, self destructive mindset.
I’m not saying you need to know every detail. I don’t. I hardly know what I’m doing tomorrow let alone when I’m 50/55/65… You need to have some kind of outlined plan, even if that plan changes…