Are we saving enough for retirement?


Hello Dear Reader,

Whilst we’re in the middle of our month long fiscal fast we take the time to re-evaluate our long term finances. As retirement in the UK is at 67 year, then our desires to retire at 60 are effectively hoping to take early retirement. We know we’ll have to revisit those desires nearer the time but our aim is to be financially able to put our feet up sooner than most working people. In the meantime, we carry on as if we might have to work until we’re 67 so we’re not disappointed if we can’t.

Currently, we have made the decision to live on a lot less so we are used to having to do with less money. I’m sure it must be a real shock if people lose their job, get made redundant or retire on a small income if they are not used to budgeting at best or in some cases being frugal to make a small income go a long way. We’ve lived this way since 2009 and always take the cheapest low cost route to what ever we hope to achieve so we can put aside as much as we can into savings and investments. We don’t take the ‘we’ve worked for it, so we deserve it’ attitude and keep reminding ourselves that we can have the money now or when we’ve retired but we can’t have both. Whilst we’re young and fit we can chop wood, dismantle pallets, make the physical time and effort to buy second hand or get what we need for free. We may not have the health for that in our seventies so are making the most of the masses of energy we have now.

So, we live with free TV (no Sky package), get the cheapest energy tariffs, reduce our water and energy consumption, only buy what we really need and then supplement that we freecycle, charity shops and gumtree. We mend everything and always shop in the cheapest supermarkets. Every month, we manage to over pay the mortgage, even if it’s only by £75 off the capital and aim most months to over pay another £100. We aim to pay off our mortgage as soon as we can so we can then direct the money we would have previously put into our mortgage into further topping up our pensions. We also add a proportion of our salaries into savings every month and budget judiciously for every penny we spend.

Pensions always look good at the time but as they are a fixed income well into the future, we know however much we’ll have put aside, it’s probably not going to be enough and we’ll have to spend the rest of our lives economising, making do and being as thrifty as possible. So, there’s no use us getting used to wall to wall central heating, deep hot baths and frequent new clothes as we’ll not be able to afford them when we’re retired.

Also, like a lot of people, we didn’t start paying into pensions early enough. Just the same as a lot of people, we didn’t have decent well paid jobs and there were no pensions attached to our jobs that we could pay in to. Now, all employers have to provide a pension service and everyone should pay in although we all know the reality isn’t that great for everyone. If I was going to give advice it would be, if you have spare money that you would choose to spend on a holiday or new car, then it might be better off going into a pension unless you can afford both a ‘treat based’ life style and a pension. It’s probably likely that most people need to make some tough financial decisions that they may not like if they don’t want to live hand to mouth as a pensioner.

If you can, start early at least earlier that I did at 38! The sooner you start then the sooner you can retire as you’ll have a private pension that you’ll have saved into. I’m not counting how long I have until I retire as I don’t want to wish away my days so I’ll take each one as it comes and just keep saving.

In case you’ve arrived here today for the first time, we are not all dull. We lost a very close relative and took some money we inherited (£25K) and bought a second home with it. We didn’t just put the lot into our mortgage as we wanted a life as well as saving. We also spend £1600 a year on ferries and as little as we can on renovating our second home in our holidays. We’ll then rent out our UK property when we retire and add that income towards our pensions. Frugal I can do, penury I can’t.

On balance, we have a bit of fun, spend a bit of money on ten weeks of holidays a year and balance that out with saving the rest and doing what we do as that ideal of retiring at 60 is still a real dream for us. It’s not all dull, I think we’d curl up with boredom if we saved every possible penny every single month and have trips away to look forward to. I know we’re lucky that we can make these decisions but we could choose to live it up every month, have new clothes every month, live in a bigger house, have the central heating on when ever and eat steak at the weekend but we choose to save for the long term instead of spending in the immediate.

Now over to you, share your retirement stories, your retirement plans. Is anyone living really frugally now in necessary preparation so you can afford to retire at all? We all work so hard in this busy modern world, we’ll all need a break sooner or later and there’s a tiny minority who don’t have to make financial sacrifices to afford that.

I always look forward to hearing from you.

Until tomorrow,

Love Froogs xxxx


29 thoughts on “Are we saving enough for retirement?

  1. Right now I am struggling with how many things there are to save for in life! Saving for retirement, saving for a down-payment on a new house, saving for a family ‘toy’ we want (RV), saving for my daughter’s college education, saving to pay off my own student loans… it is all so much!


  2. This last week my husband and I have been going through telephone conversations, lengthy discussions and numerous jottings and workings out. He is 65 in November and has applied for his state pension and is applying for his 3 small private pensions. It has been so complicated but we have reached our decisions and have decided to take 25% cash free sum from each private pension and take the annuity to give us a little from each to boost the state pension. We are so lucky to not have a mortgage and no debt and have reduced our utility bills, no tumble drier, no holidays but we live in Cornwall so one long holiday, husband has an allotment to entertain him.We will not have loads of money but we will be comfortable and hopefully happy! There will be money in the pot if we have to replace the car or replace appliances etc.We feel for our children as they will not be as fortunate as us due to the times we are living in and it is so hard to even cover everyday bills and put food on the table let alone save for retirement.


  3. Hi, my husband has just had his hours cut at work and for all he could go for another job what he will spend on travel it will not make any difference so as usual we cut our cloth accordingly, but what we save will be better than no saving at all good luck everyone.

    Liked by 1 person

  4. Over the last few months we took the huge decision to downsize our house….mostly due to my husbands health and wanting to relieve the financial and maintenance pressure for both of us. I am really aware how fortunate we have been to do this and have after 30 years….we have no mortgage. We held off for many years selling our house, worrying about the ‘what ifs, …until our 4 children were off doing there own thing. Our new house needs a little work, but who cares, we will budget, closely watching our bills, and do it bit by bit. In the meantime we are safe, warm and enjoying more time and freedom together and finally the chance to save some pennies .
    My husband has become an avid deal finder and between us we never pay full price for anything. I know for so many families it is really tough. There will be light at the end of the tunnel at some point …hang in there:)


  5. Please,please everyone check the “small print” on your pension. My husband worked for himself so had arranged a private pension with a bank. He died before he retired. He had paid in a considerable proportion of his money. Because he died before retirement the bank did not have to pay me a pension. Please look carefully to ensure you will be covered and not loose your pension. Pam


  6. Since I started my career at 23, I had put monies into my state pension, including the maximum supplemental amount permitted. Fast forward, and while my initial goal was to get vested into my retirement at 20 years in, my next one, per the state, was to hit 37 1/2 years in. Life and in particular, my health, had other plans and I took early retirement at 30 years in. Having been a saver and always living below my means, making do, etc., I retired, increased my income with a side gig which also afforded me the opportunity to get private medical insurance at a relatively decent cost for the USA, avoiding the pubic medical insurance, with would have cost me 3 times as much for much worse coverage. I am not eligible for governmental medical insurance until age 65, so the plan has been A) move to a new career, FT, for which I earned a certificate (health has prevented this), B) add another PT gig to increase my income to handle additional repairs to my home, pay off remodeling debt. Since I had lived frugally, this divorced, public school teacher was able to put 20% down towards a forever home in a geographically very expensive area of the county. My credit score seriously impressed the mortgage officer. He was flabbergasted that I had no car loans, no credit card debt, zero debt at the time. Fast forward, and yes, my credit score had taken a hit with the extensive remodeling/repairs done to my forever home. I do see the end in sight, however. Within a year, I will have a like new, efficient to run, energy conscious, modest home. I strongly believe in home maintenance, something that the former owner didn’t do at all. I have no service records either. My focus is to hunker down, continue to live cautiously, hopefully get more income (not a problem should that not happen as I am currently living on 65% of my income in early retirement, saving 35% and using it towards the aforementioned repairs and debt repayment). Like you, I aim to pay off my mortgage ASAP. I need a year, I estimate, to recover from this house project, then I can sit back and continue to do as I am, and stuff as much $$ as possible on that mortgage, ideally paying it off in full within 12 years.


  7. We are in our late 30s/early 40s with two young children. My drive right now is to pay off the mortgage then focus on saving. I try to find a balance of fun, healthy living and frugality for my family but sometimes I find this very demanding. I feel like I am always watching the pennies and this can be tiring. At the same time, I’m always wondering if there’s more I could be doing to reduce spending/improve income.

    Moaning over. We have a very happy healthy life which is also (hopefully) building for our future.


  8. We have always been savers. For the first 8 years, my husband was in the military and we saved to move to our next station. I had only finished 1.5 years of college when we got married, so I continued to go to school whenever I could afford to –nights, summers, whatever. I had payroll savings when I started working (the girls were 10, 12 then) so at first it was tuition money and when I finally graduated (they graduated high school in 1980 and 1981 and I finished university in 1982!) then the money in my payroll savings went into an IRA. We saved furiously after they finished as much school as they wanted–putting most of it into husband’s IRA because his company matched his contributions up to a point. Whenever we got a raise at work, half went into savings and half went into our paycheck–so we never got used to spending as much as we made. My last job was 20 years at our county Social Services office–the last nine years of which I was the Chief Supervisor of Public Assistance and sometimes food stamps also. When the kids left home I paid off the little bit of debt we had (new roof, siding for our old house) and started paying extra on the mortgage when everything else was paid off. We retired the mortgage nine years early. Then we owed nothing. We have always, except twice, bought good used cars, putting a good down payment on them and then paying off as soon as we could. I was eligible for retirement from my job at age 55. I kept working until 59 1/2–coincidentally, the age at which you can withdraw money from your IRAs without penalty if necessary. My job was seriously stressful and I have had high blood pressure since age 27. My doctor was happy to hear of my retirement plans. My husband continued to work until he was 62, and then retired. We both took our Social Security at 62, which is about a 30% penalty, but we felt we had enough saved to make up the difference, AND we were concerned for health issues if we continued–husband was not thrilled with his job either. We have been doing fine ever since. We are 74 and 75 now and beginning to have more health issues. At 70 1/2, you must take a certain % out of IRAs each year in the US. We have only twice taken out any moneys in addition to that from our savings –in 15 years. Most of that was to help DD or DGD with things they needed. I did inherit some money when my Mom passed, a fairly substantial amount, but we did not spend it on any splurges–it went into our savings. We did need to replace some appliances and furniture and spent some on those things, but nothing extravagant. Basic appliances and such. Our investments are doing well, and unless we BOTH need nursing homes eventually, I really have only minor worries about our money lasting as long as we do. I have a pension, and we both have Social Security. We knew husband would have no pension, which is another reason we saved most of our money in his IRA. (We only have one pot of money in this home, no matter whose name is on the account or whose pocket it is in!)
    I am a huge proponent of saving as much as you can as early as you can, but it’s almost impossible when you are raising children to save very much until they are out on their own. It has worked out ok for us, although we didn’t start saving seriously until around our 40’s.


  9. Hi,
    We managed to pay off our mortgage earlier this year. We received an inheritance like yourselves and had been making massive overpayments for about 5 years. We paid it off 9 years early and we are now saving for our pensions. Like you I’m a teacher and I know I will not be able to teach until 67. We have two young children and we don’t intend to move house. The thought of a new mortgage would scare the hell out of me. We are quite frugal in our ways and try to save as much as we can.


  10. My husband and I are also planning to retire early at 60 ( 2 yrs away). We are getting the really big maintenance and replacement jobs on the house done while we have the money and strength and our mortgage is already paid off. We are trying hard to boost savings and pensions and are rationalising our assets to reduce outgoings.We are stepping down from work by going part time and will get used to a smaller income before retiring fully so hopefully it shouldn’t be too much of a shock. I try to simplify and make frugal choices and next want to work on gaining some useful skills. Some people seem to think that retiring means doing nothing but we have plenty of plans for things to do which are low or no cost and which will keep our brains whirring and keep us healthy for as long as possible.
    I used your recipe for mincemeat slices today- thank you! Company coming tomorrow and we will have them at teatime.


  11. I am a bit older than my Hubby and he has just retired and will have a pension and I just started collecting Social Security payments (USA). He will hold off on Social Security until he is older. We moved across the country 6 months ago to be near our children and other family; downsized a bit in terms of space and cost of home (no mortgage; more expensive housing market). Our medical insurance costs will now be higher (got to love the USA) but some other costs lower. 2018 will tell us if we saved and planned correctly but like you we anticipate frugality not penury.


  12. We have managed to pay off our mortgage this year, four years early. Now the payments will be saved towards much needed house maintenance, and hopefully some home improvements too. We shall see.
    I have a pension which I have been paying into since 21, but as I only work part time these days it’s not going to pay out as much as it might of.
    With three children still at home it’s hard to economise as much as I would like but I have managed to save money this year by changing insurers and energy suppliers, shopping at budget supermarkets and meal planning. We don’t eat out but we did have a foreign holiday this year. That was done on a budget and was all saved for so we had no debt afterwards.
    I have also stopped my personal spending completely. No impulse purchases to cheer myself up. No new clothes for me so far this year either.
    This year is the first year I have really taken control of our finances and it feels great to not be going overdrawn, and not having any credit card debt. Life with three teenagers is expensive but by being frugal we can fund fun family times and projects, and still save for the future. I think we are lucky.


  13. Last year my husband had a heart attack which left him in a coma for 10 days and the end result is a brain injury that will not allow him to work any longer. I am thankful that we had paid off the mortgage years ago and have a paid for vacation share and we had been loading up the retirement fund for years. We are well set and will have more disposable income in a few years than we have ever had. All the kids are grown and through college and we are debt free so we are happy that we did without for so long and are able to go on without my husband having to worry.


      • He is fine as long as he does not have to multi task or being in groups of people for more than 2-3 hours at a time. Like our daughter said, he is himself and able to care for himself and no one cares that he cannot work. So, we are blessed and I get to have my best friend at home everyday for which I am thankful. Thanks for asking. 🙂


  14. our mortgage is paid. We have one car loan left that should be paid off by the end of this year. If I weren’t so frivilous an stupid with money in our earlier years we would be in a much better position. Having said that, we are doing better. I want to retired much earlier than the usual 65 here in the States.


  15. I am in the UK, and I *did* retire early from my stressful job at age 60. At this point I was lucky enough to be able to access my work pension (no state pension till 65) with the proviso that it would be reduced by 25%.

    I had a well paid job, but hadn’t been in the position to start saving for retirement, or indeed anything else, till I was in my early 40s, and even then went back to study for 4 years postgrad. So all in all, my pension is by no means huge. My husband, who was the lower earner, had already been (early) retired for 2 years prior to this, and again, was able to take his occupational pension, though no reduction for him. As he had earned considerably less than I did, his full pension is actually less than my reduced one. Could we manage? We had no mortgage or other debt, and had savings in the bank, and 3 years in, yes, we actually manage very well. In fact we are still saving, though obviously at a much lower rate than before. We live fairly frugally and I always look for the best deals, grow some of our vegetables in the garden, we always cook from scratch and don’t go on expensive holidays. But we run 2 vehicles (one of which is an old camper van – we do have holidays), good food, and within reason, what we want (though it is fair to say that we aren’t great ‘wanters’), on a joint circa 16k per annum. I make a bit of extra money by running a tiny business, and until recently, so did my husband. We have paid all taxes due and NI. My husband is now 65, and can take his state pension from the end of this month. So yes, it can be done, depending on the rules of your various pension schemes. I did worry a bit about the prospect of going from being a higher rate tax payer to a pensioner with an income of just over 8k, but it worked out ok. The one thing I would say is that we bought a less expensive house than we could afford, if that makes sense, and paid off the mortgage asap. As we didn’t buy till we were in our 50s for various reasons, this means that we live in a modest terrace in a small town, and not the country cottage of my dreams. But it is a trade off that we were willing to make.

    Liked by 1 person

  16. It’s hard to make some of the sacrifices necessary in order to begin saving up a lot for retirement – but it’s necessary. However, what many don’t realize is that there are small ways in order to save money across various outlets in life that can all be put towards retirement. For example, signing up for cost-effective health insurance or looking for ways to save on your taxes. Retirement planning is not a quick fix, it’s a mindful strategy.


  17. We paid off our mortgage right at the start of last year, only three years after taking it out, then we were really lucky to get a small early inheritance so we took the long term decision of buying another brand new property with a smaller mortgage raised against our house. The rent we receive for letting that out through an agent almost covers the new mortgage, which we are hopeful of paying off completely sometime during the next two years. Then the rent from property will be used to top up our savings along with Alan’s Royal Navy pension which he already gets and then eventually our state pensions. In the future when we are no longer able to manage this house and land we will move into our little rental property ourselves and the funds raised through selling our current home will then be our savings and hopefully enough to enjoy a well deserved and proper retirement together.

    Planning for the future is so important and cutting costs in how you live now as we do, does mean that things should be manageable in the future.

    Liked by 1 person

  18. I am also hoping & planning to retire at 60 instead of 67 which is when the pension starts in Australia. I used to think I’d just work forever as I love my work, but as age and health problems catch up with us I’ve made the decision to retire in five years. At the moment the focus in on getting our mortgage paid off and setting up our home so we can save money and stay here as long as possible. We also pay into our retirement funds and I’m looking at how I can cut back my spending even more. Its good reading other peoples experiences in a similar position.


  19. I’ve recently fixed my savings rate at 47% a month. I plan to increase it to 50% over the coming months. I’ve done this by including my employer’s pension contribution, my pension contribution as well as a DD into a S&S ISA. So I have to live on what’s left. Mortgage was paid off in 2009 and we have no depts and no kids.

    I’ve always been a natural saver rather than a spender but over the last year, after stumbling across the ‘retirement extreme’ blogs, I’ve cranked up my savings rate and eased myself into enjoyable frugality. Switched from Sainsbury’s to Lidl a few weeks ago as part of the program – saving £7 a week on average. I buy clothes and furniture pre-used as a first choice always.

    The next big step is to get a job in my home city to end my current 72 miles-a-day car commute.

    But we’re not living in penury. We have a lovely home, we had a holiday in Japan this year, we’re spending Christmas in Stockholm and we’re travelling around the US next year. We also eat out once a month or so. As another blogger says, “afford anything, not everything”.

    My plan is to retire at 55 which is achievable if I’m willing to live frugally for the rest of my days.


  20. Some pensions are index linked and therefore the amount paid increases when we have inflation. My Teacher’s Pension does this and so will yours. Unfortunately people starting pensions now probably don’t have this advantage.


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