Our financial plans for our retirement

When we made our plans for our retirement, we hadn’t really thought much about how we were going to get there.

To be honest, now we are on our journey, we are planning so we know how we are going to reach that goal. Of course, this is always changing as our situation changes and life changes. We just adapt our journey to reflect where we are in our lives.

I know for many, thinking ahead to retirement is not something they think about. We are not wishing our lives away in doing this, but we are planning to make sure we can enjoy every minute of it.

For those who may be thinking they would like to retire early or wondering if they could do it, here are our plans:

Pensions –

As it stands, we both have pensions and are still contributing to these. In our younger days, only one of us had a pension and unfortunately due to the poor business of the company we worked for, this is now only worth about £1000. We couldn’t really afford to contribute to a pension over the years and this is something that always annoys me. Looking back I wish we had contributed a little, even if it was only a small % of our salary.

Fast forward to now and we are contributing 6.5% of our pensions, with this being matched by our employer. I’m hoping that as it is a local authority pension this will be a bit more secure, but you just never know. We’ve only been paying in for a few years, so I am unsure how much we will have in this by the end of our working years but it is something!

Savings –

Right now these are pretty non-existent as all our spare cash in being thrown at our debts. Going forward though, any spare cash we have as we become debt-free will be going into a pot to pay for our early retirement. In the current climate, interest is not really something we will be gaining on this and there may be a better way to earn more money on our savings but we will look at this when we are in a position to worry about it.

Premium bonds –

Last year I started to buy £25 of premium bonds every month, now ideally I would love to win the 1 million pound jackpot but that is just not going to happen! We will just withdraw our money when we retire, plus any winnings.

Our house –

This is the biggest asset in our plans to retire. Where we live house prices are increasing yearly, simply due to how close we live to London and how easy it is to travel to London. Now although I feel for those trying to get onto the property ladder around here, I am hoping it continues. By the time we are ready to sell up and downsize, the equity we will have in this house or even hopefully us being mortgage-free is our ticket to early retirement.

We don’t live in a big house but we plan to downsize the value of our home somewhere with a little more open space. Our retirement will not be where we live, we want to get out of the urban rat race and into the country. I am always reading Money Saving Expert for advice on how to clear our mortgage early and save money, it is my go-to for advice.

The reality for both of us is we have 32 years before we are legally classed as retirement age, however, I have no plans to wait that long. Far too many people we know have not been able to enjoy their retirement due to health or finance issues. I don’t want that to be us, we have both been working for the last 22 years already. We are ready to enjoy our lives and our retirement early!