The Retirement Newsletter: Happy Birthday! The Retirement Newsletter is 2!

Issue Number: -30 — What have I learnt over the last 104 issues?

Nick

Jun 25, 2023

A birthday cake with a number 2 candle — Photo by Kelly Sikkema on Unsplash

Welcome

Welcome to issue -30 — only 30 weeks until I retire.

This week, the Retirement Newsletter is two years old. It doesn’t seem possible.

The Past Two Years

Over the last two years, I have written 104 newsletters containing 62,441 words, and it would take a person with an average reading speed, 4 hours and 20 minutes to read all the past newsletters.

This works out to about 600 words per newsletter, with an average read time of 2 minutes and 30 seconds. (Please excuse all the stats, I can’t help it, it’s my scientific training.)

So, what have I learnt across the last 104 newsletters?

What have I learnt?

Well, looking back through the archive, there is one reoccurring theme, and that is Money. And when isn’t it?

Money — types of retirement

Way back in issue -127 (How much do I need to retire?), I introduced the three standard types of retirement:

Essential — what is the least amount you need to survive? To live? To get by? Admittedly, not the most comfortable way to be retired, but you can at least be retired and have some freedom, albeit limited by money. Being retired at this level can be challenging, and you might have to top up your pension with a part-time job.
Moderate — a comfortable retirement. A retirement where you are not overly limited by money. A retirement where you can travel and do things you want to do.
Luxury — a retirement where money isn't a serious concern. You can't go mad, but you can afford some nice holidays and have a very comfortable lifestyle.

And I looked at how much you would need to retire at these different levels (see Issue -119: How much do you need to retire?):

The estimated costs for different levels of comfort in retirement (note, these are figures from October 2021, so add about 15%)

So, this works out:

Essential — Gross, single: £13,800; Gross, married: £21,100
Moderate — Gross, single: £22,600; Gross, married: £32,900
Luxury — Gross, single: £40,200; Gross, married: £55,000

(Note: the Luxury £55,000 is a little tricky to work out as it involves another tax bracket.)

Of course, with the current inflation rates, the figures in the above table are probably out by about 15%.

Money — investments (pensions)

Another area of concern about money, and this comes up again and again in my quarterly reviews, are my pension investments, see:

End of quarter 1 in 2023: Issue -42: Quarterly review
End of quarter 4 in 2022: Issue: -55: Quarterly review
End of quarter 3 in 2022: Issue -68: Quarterly review
End of quarter 2 in 2022: Issue -81: Quarterly review
End of quarter 1 in 2022: Issue -94: Time for another review
End of quarter 4 in 2021: Issue -106: How is my retirement plan going?
End of quarter 3 in 2021: Issue -120: Time for a quarterly review

As I have previously commented, most of my pension investments are controlled by a pension company, so I have little input into how the money is invested. However, I have control over one of my ’stocks and shares’ Individual Savings Accounts (ISAs), and learning about and ‘playing’ the market has been fun.

Famous last words from an investor — I have had some success with my ISAbut haven’t written about it in the newsletters as I am not a financial expert, and I would hate for anyone to lose money by following my advice.

Money — tax (UK)

In writing the newsletters, one thing I have become increasingly concerned about, which I realise I don’t know enough about, is tax.

In the UK, we have three main forms of personal taxation (I have excluded inheritance (IHT) and capital gains (CGT)):

Income Tax
National Insurance
Value-Added Tax (VAT)

Income Tax you start paying at 20% on income above a tax-free allowance. Once your income increases above a certain amount, you pay more tax on the extra income.

National Insurance is like Income Tax in that you pay once you cross a certain amount of income.

And, VAT, you pay 20% on most goods you buy.

You cannot avoid VAT in the UK. Still, you can manage your Income Tax liabilities by making sure you make the best of any tax-free allowances when taking money out of pension pots and keeping a close eye on different levels of taxation on income.

National Insurance, as far as I can tell, you don’t pay income from pensions. But, you need to keep an eye on it and make sure you have enough ‘pension credits’ to get the UK Government State pension.

Anyway, I know from writing these newsletters for the last two years that I don’t understand the UK tax system.

Money — side-hustles

From all my writing about money and retirement, I have concluded that the income from my pension and my savings will not be enough to support the type of retirement I would like. Therefore, I need some extra income, which is where side-hustles come in.

I have written fourteen newsletters about potential side-hustles I could do when I retire:

Reading — see Issue -92 of the newsletter where I looked at Reading as a side-hustle.
Exercise — see Issue -89 on Exercise as a side-hustle.
Writing — Writing as a side-hustle was discussed in issue -86.
YouTube and Photos — I first explored this in issue -84 — YouTube and Photos as a side-hustle.
Online Courses — see Issue -80: Online courses.
"Knitting" (without wool) — in Issue -76 — ”Knitting" (without wool) — I considered turning any hobby or pastime into a side-hustle.
Relaxing — Issue -73 looked at Relaxing as a side-hustle.
Gardening — gardening as a side-hustle was covered in Issue -67 — Gardening.
Walking — Walking as a side-hustle was looked at in Issue -60.
Being a couch potato — Issue -58 looked at Being a couch potato as a side-hustle.
Travel — turning a love of travel into a side-hustle was looked at in issue -47, Travel.
Do it yourself (DIY) — in Issue -44, I asked if turning Do it yourself (DIY) skills into a side-hustle could bring in some extra income.
Photography — in Issue -39, I revisited Photography as a side-hustle.
Paid Newsletter — setting up a Paid Newsletter to bring in some money was explored in Issue -38.

From these, I have concluded (Issue Number: -36 — What side-hustles should I try once I am retired?) that the following are the most likely side-hustles I will look at in retirement:

Online Courses
YouTube
Travel

And that I would like to explore setting up a paid newsletter, but I need an idea.

What have I learnt — conclusion

So, I have learnt and covered a lot in the past two years. And as I approach my retirement in 30 weeks, I look forward to continuing this newsletter.

I wonder what I will be writing about in the next 104 issues?

Travel — Nostalgia corner

Worried about staining the seat of your rented car? — a story about the worst stain I have ever seen on the seat of a rental car.
Three things to do in Bozeman, Montana — two good and one not so good — a pub, a spring, and a museum — which was the bad one?
Two things you must do in Livingstone, Montana — a pub and a chop house.
Farewell Montana, it has been fun! — The end of my Yellowstone adventure
Yellowstone National Park in the Winter — a summary. Was it the trip of a lifetime?

Next week, I will reminisce about the June 2022 Jubilee celebrations in the UK and share stories of a trip to Sibu, Malaysia.

Useful links

UK Government Website:

Next week

Next week, in issue -29, I will be doing a quarterly review of my retirement plan.

Thanks

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If you want to say 'thanks' for the newsletter, why not buy me a cup of tea?

Until next time,