The Retirement Newsletter: Quarterly review
Issue Number: -81 — I’m worried about my finances
Welcome
Welcome to issue -81, and as it is the end of the quarter — time for another review of my retirement plans.
The review, this quarter, will be like my previous reviews:
That is, I will be breaking my plan to retire down into four key areas and reviewing how things are going. And the four key areas are:
Money
Job
Health
Life
End of the first quarter
At the end of the first quarter of 2022, in March, I concluded that:
Money — “the change in the National Insurance was good news if your pension was below £41,000 gross. The big problem was inflation, which could make a big dent in the level of lifestyle I will be able to afford.”
Job — “do I stay or go? This is the least worrying area, and I can ride out the remaining 94 weeks.”
Health — “time for a diet!”
Life — “the ‘Life’ list is the biggest problem, and it needed some work. Let’s see how the next three months go.”
At the end of 2021, I concluded:
Money — “So, I am still happy with how things are progressing with the 'Money List’”.
Job — “The job list is active again. I'm keeping an eye on the job listings and keeping a wary eye on what university management is doing.”
Health — “All OK. I need to drop a few pounds.”
Life — “Over the next few months, I need to focus more on the ‘Life’ list.”
So, overall, I was happy with things; I was making some progress. My job was an issue, I needed to drop a few pounds, but my biggest concern was what I call “life” — friends and family.
So, where are things now?
End of the second quarter of 2022
The last quarter has been challenging.
We had the death of a very close family friend, the equivalent of an uncle — COVID-19 related. That was the second death due to COVID-19 to hit the family. We lost an aunt in the first wave in 2020.
The death was difficult to handle, but it did get me thinking about getting my affairs in order (see Issue -87: Sorting things out before I am gone) and planning my funeral (see Issue -85: Planning my funeral).
So, where do my retirement plans stand?
Money
OK, first off, I want to say that 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 the last review, I looked at how changes to the taxes in the UK would impact my retirement and concluded it was good news. I commented that I was worried about inflation and how that could wreck my retirement plans — how little did I know.
As I said in March 2022:
“At the time of writing, the current rate of inflation in the UK is 6.2%, and the Bank of England is expecting inflation in the UK to be 8% in 2022. ” — March 2022.
According to the BBC — What is the UK's inflation rate and why is the cost of living going up? the inflation rate is 9.1%. The rate is likely to hit 11% by the end of the year. And there was me worrying about 8%.
However, I thought my situation wasn’t too bad. My stocks and shares ISA (an Individual Savings Account in the UK that is tax-free but with a capped investment of £20,000 per year) were doing well, as was my pension. And then the markets went into free fall. Not good.
The market fall worried me; I had less in my ISA pot at one point than I had invested. The good news is that I have recovered the money I have lost during the last couple of weeks — if I ignore inflation — and I am back to my initial investment.
My pension has also had a bit of a bumpy ride. But it could have been a lot worse. Luckily, I followed some advice on my pension and moved a lot of it into ‘low risk’ investments. This is standard advice in the UK for private pensions.
I still took a hit on my pension, but it was not as bad as in the last dip in the markets.
So, here I have a double worry. I have soaring inflation to worry about and poor performance of savings. I have concluded there is nothing I can do about either and will have to ride things out.
But, there is one alternative. Something so hideous and nasty that I don’t want to think about it — I could postpone my retirement?
At this time, I will take the advice of the late great Douglas Adams — Don’t Panic! — and stick with my plans.
Please note that 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.
Job
At the end of the last quarter, I said I was hunting for a job. I had re-activated the ‘job area’ of my plan. I haven’t seen any suitable positions.
If you have read Issue -82: The Great Academic Lie — why do I want to retire?, you will know why I want to retire and changing jobs to an academic position at another university will not fix those problems.
I now have 81 weeks to go until my planned retirement — I guess, like my finances, I will ride this one out. The danger is that if I do ride it out and I have to postpone my retirement because of financial issues, the job situation may become more of a problem.
Health
OK, OK — I know. For the last three quarters, I have been saying I need to shed a few pounds, and I have done nothing about it.
In fact, things have got worse; I have gained a few pounds. Although, I am putting that down to a new set of bathroom scales.
And before anyone suggests that I broke the last set because I hadn’t lost weight — I dropped them while cleaning and cracked the case.
Life
Now, out of the four key areas, this is the one area I have made some positive progress. Things are getting better.
The ‘family’ death in the last quarter helped bring people together, but there is still a long way to go. But at least there has been some progress.
It still needs some work.
Summary
Overall, there are now some concerns. All four areas are now active and a worry.
Money — this is a worry. Soaring inflation and poor performance of my investments might delay my retirement.
Job — I will ride out the time until I retire. I may regret this decision if I have to postpone my retirement.
Health — time for a diet! Which is what I said last quarter.
Life — there has been some progress, but I need to do more.
Useful links
UK Government Website:
Next week
Next week in issue -80, I will look at setting up online courses — side-hustle or hobby? And asking, could setting up online courses help me achieve my retirement goals?
Thanks
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Until next time,
Nick
PS, If you have something you would like to contribute to the newsletter — a story, advice, anything — please get in touch.
Please note: I am not a financial advisor. Writing about money and financial matters is based on things I have read over the years about money and preparing to retire. IT IS NOT FINANCIAL ADVICE.