The Retirement Newsletter: Quarterly review — end of quarter 1 2023

Issue Number: -42 — How is it going?

Nick

Apr 02, 2023

Lots of bank notes - when I was a millionaire — well, I was in the local currency — Photo by Author — when I was a millionaire — well, I was in the local currency

Welcome

Welcome to issue -42, the end of quarter one of 2023. I can't believe we are at the end of the first quarter.

As the first quarter of 2023 ends, it's time for a quarterly review of how my retirement plans are progressing.

End of quarter review

My last review was at the end of quarter four, 2022. And If you read that review, you will know things weren't looking great.

Looking back to the end of quarter 4 of 2022

My last review was in Issue Number: -55: Quarterly review at the end of quarter 4 of 2022. With my previous reviews in:

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

I have four sections in each review: Money, Job, Health and Life.

At the end of the last quarter, I felt that:

”A summary of the situation would be as follows:

Job — I am moving into my ‘final’ phase of doing things, and I am confident I can last the next 55 weeks.
Health — my post-COVID health issues have improved, and I have lost a little weight.
Life — I must keep working on this aspect of my plan.
Money — my private pension is doing better than OK, but my savings and investments are a bit of a car crash.”

So, what do I think now?

The end of quarter one — 2023

Where do my retirement plans stand at the end of quarter one in 2023? As with the end of quarter 4, my big worry is money, but first, my job, health, and life.

Job

I am still facing job-related issues. Work appears to be crazy. Stress levels and workload are out of control.

Over the last quarter, I have been on strike for 12 days. The strike has been about pay, pension, the gender pay gap, workload and casualisation. Being on strike was an interesting experience; weirdly, I enjoyed it. I didn’t like losing the pay and not teaching the students, but I did enjoy the time off, as it was different to annual leave. With annual leave, I always need to dash around doing things as I am ‘burning’ valuable annual leave. I found the strike days to be more relaxed and relaxing. There was no urge to dash around. Is that what it’s like to be retired?

Anyway, work has been crazy, and I have had a term dominated by marking with minimal teaching. Not fun.

I have decided to stick things out. I can last 42 weeks.

Health

It’s been a bad winter of colds, and feeling grotty and tired. Plus, I have developed some odd niggles that need to be examined. For more on health, see Issue Number: -43 — Spring is here, and my thoughts turn to my health and my pension pots.

The weight I lost last quarter I have put back on thanks to Christmas and the stress eating caused by my job.

Life

As with last quarter, no fundamental changes, and things still need working on. I think I have said this for the previous three quarters. I need to do something about it.

Money

I am not a financial advisor. I am writing about what I have read over the years about money and preparing to retire. This is not financial advice.

In January, I read an article in the Times newspaper that said you need about £520k for a ‘moderate’ retirement (see, You need about £520k for a ‘moderate’ retirement. Gulp — Holly Mead). And that got me wondering, where do I stand?

The £520k seemed high, but Holly had based it on Pensions & Lifetime Savings Association (PLSA) data. The PLSA suggests you need £20,800 per year for a moderately comfortable retirement of what Holly describes as “a used car every ten years and a fortnight in Europe once a year”. Holly plans a 25-year retirement, so 25 x £20,800 = £520k. And that is about 50% of the current Life Time Allowance (LTA) of £1,073,100 in a pension pot. (Don’t forget, the LTA is being scrapped in April 2024 — see Issue -43 — Spring is here, and my thoughts turn to my health and my pension pots.)

The amount — £520k — still seems a lot.

So, where do I stand?

If you have ‘mixed pension pots’ as I do, the maths (as with all pensions) seems unnecessarily complicated.

I have some money in my pension in a ‘final salary’ scheme and some in ‘savings’. And, to work out how big my pot is, I need to take my ‘final salary’ pension, multiply the annual pension by 20, and add the money from ‘savings’. In reality, it is a little more complicated than that, as it depends on the type of pot that is holding your savings. And, despite the improvement in share prices, my savings pension pots have not recovered from the hammering they took in 2022.

Anyway, when I run the maths, my ‘pension pot’ still does not hit the magic £520k; if I retire early, and as I plan to retire early, that is a problem.

Problems, problems.

On the plus side, I do have the benefit of the ‘final salary’ part of my pension, and even if my savings run out, by the time they do, the UK State Pension should have kicked in and can take up the slack of the lost income from my savings.

And that leads me to one final thing.

The UK government is thinking of raising the state retirement age from 67 to 68 (and the French are getting upset that the pension age is being increased from 62 to 64 — France pension protests: Crowd clashes with police over government reform by decree — although to be fair, they seem to be more upset that it was pushed through without a vote). It now appears the UK government has shelved their plans to review the retirement age until 2026 — State pension age rise to 68 will not be brought forward yet.

So, at least that is some good news, although even if they did raise the retirement age, it would unlikely affect me as I am close to the current retirement age.

Please note I am not a financial advisor. I am writing about what I have read over the years about money and preparing to retire. This is not financial advice.

Summary

Things are not great, but they could be worse.

A summary of the situation would be as follows:

Job — I’m sticking with it, there are problems, but I will ride them out.
Health — some niggles, and they are being looked at. Hopefully, nothing serious.
Life — as I said last quarter, I must keep working on this aspect of my plan.
Money — things will be tight if I retire next year, but it is still within reach

So, there you have it. Things are not looking great, but it could be a lot worse.

Let’s see what this next quarter brings.

Useful links

UK Government Website:

Next week

Next week, in issue -41, I will be thinking about Easter Eggs.

Thanks

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Until next time,