# early retirement questions



## Sprinta (Sep 15, 2010)

I've got it in my head that I'd like to pack in work and retire 5 years early and I'd like your input to either help me go for it, or to hold on a while longer. Just recently several friends and associates around my age have not managed to reach retirement age, and I'd like to cut loose while I still have a chance, then mosey around in the MH on an extended holiday (I'll need to sell that to er indoors yet :serious

Am I right in thinking that my future state pension entitlement is determined by how many years I've been paying my National Insurance, and that to leave early and not continue to pay in would reduce the value? If so, is it possible to continue to pay in monthly despite not working?

I've done my calculations as to my normal monthly outgoings are likely to be, Gas, Lecky, Water, Council Tax , TV, Food, Car, MH, tax, insurance, fuel, servicing etc. etc. so I've a good idea how much I will spend of my existing personal pension from a previous employment, and then an idea of how much to use of my savings. We have recently overhauled the house, doors, windows, kitchen, carpets, and have no intention of selling, letting or moving.

Please let me know what I'm not considering, pitfalls, other concerns. What have I missed?

thanks


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## cabby (May 14, 2005)

Your standard of living is the best way to calculate this.

Will you be able to afford to live to the same standard on the private and state income you will collect if you retire early.The bills do not get any less.

If you think that stopping working will mean cheaper living then think again, how will you spend your time while not working, what will that cost compared to working costs.

Then again, If you work for another 5 years what improvement will that make to your retirement income in 2021.

You should make the assumption that you will have to consider downsizing at some time in the future. dont leave it so late that it is a problem.

cabby


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## dghr272 (Jun 14, 2012)

NI contributions is one factor, another is the impact of being contracted out to company schemes, more details here....

https://www.gov.uk/new-state-pension/how-its-calculated

Terry

Beta online calculator here.....

https://www.tax.service.gov.uk/checkmystatepension


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## Stanner (Aug 17, 2006)

As I understand it once you have the minimum required years of contributions any further contributions don't get you any more pension.

I retired at 50 with 30+ years of contributions and was offered the chance to make "voluntary" contributions to buy added years "I needed" to get a full pension. 

I decided not to bother and in the intervening years before I qualified for my pension the number of years "I needed" was reduced to less than I already had in hand, so if I had paid for extra years it would have just been wasted.

And it isn't your current standard of living that matters, it's the standard of living you would be content with.


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## HarleyDave (Jul 1, 2007)

Spot on Stanner

There can be a major reduction in living expenses once you stop going to work

No more dry cleaning of business suits and buying work clothes/shoes etc in general

No fuel to drive to work (or Train Fares - I was paying >£4k pa)

No Work lunches to buy

No having to eat out because you are knackered when you get home and can't be bothered cooking...

Then you find you have time to tackle the standing costs of services that you "just paid" when working

Phone/Elec/Gas/Sky/AA can all be negotiated down if you have the time to hang on the phone and deal with the slick customer retention types

Before I retired, I created a spreadsheet detailing all my outgoings and all my potential sources of income

I was fortunate to have an Army pension in payment (not huge though...) and a frozen final salary company pension as well as some AVCs that could be taken early with minimal impact

I had been able to put some redundancy money into the company pension (rather than taking a world cruise) so it turned out better than anticipated

We had some rent coming in from my mum's flat (that we basically bought for her off the council for £14k at 60% discount back in the day)

And we had some savings (again, not a lot - but we had some)

Mortgage was paid off - we owed nothing to anyone and I had kept on the mortgage endowments that would have fallen short had I not paid off the mortgage early - so when they matured that was cash in the bank

So I was able to pull together the 25% cash drawdown from the various pension funds and that was (just) enough to buy another flat (in wife's name) to ensure another rent coming in.

Result - Financial independence (although I still do some Traffic Surveys to fund the flights to Aus to see the family there)

And, priceless to me - I don't have to get out of bed until 10 if I like (which I do) - and that costs nothing

Do the homework - work it out and you will be amazed what you actually have available

Enjoy it while you can - we are all a long time dead

Cheers

Dave


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## mgdavid (Nov 27, 2014)

Not quite spot on Stanner; one very important point that was missed is that if the OP has been in an employer's Contracted Out pension scheme and has some years of NI at the Contracted out rate, the State Pension under new rules will be somewhat less than the headline figure of £155.65 per week.
If you are short of the 35 years at full NI rate, yes you can buy extra years, either Class 3 contributions, or the special scheme announced a couple of budgets back, the detail of which we don't yet have but will be some time before 2019 I believe.
If you want to do this properly, get yourself across to the MSE forum
http://forums.moneysavingexpert.com/
and put your case on the Pensions and Retirement Planning section. Lots of good advice there from people who seem to live and breathe pensions finance.....


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## Stanner (Aug 17, 2006)

mgdavid said:


> Not quite spot on Stanner; one very important point that was missed is that if the OP has been in an employer's Contracted Out pension scheme and has some years of NI at the Contracted out rate, the State Pension under new rules will be somewhat less than the headline figure of £155.65 per week.
> If you are short of the 35 years at full NI rate, yes you can buy extra years, either Class 3 contributions, or the special scheme announced a couple of budgets back, the detail of which we don't yet have but will be some time before 2019 I believe.
> If you want to do this properly, get yourself across to the MSE forum
> http://forums.moneysavingexpert.com/
> and put your case on the Pensions and Retirement Planning section. Lots of good advice there from people who seem to live and breathe pensions finance.....


I retired 16 years ago and qualified for my (state) pension last year, so I have no idea of the current position in respect of years needed to get what - I would venture to suggest that the way things are going no one has any idea what they will get or what they will need to have to have paid in to get it more than a couple of years ahead.

The pension appears to be the contract one side can re-write anytime they want to and the other side can't do a thing about it.

Luckily in my case they re-wrote it in my favour before re-writing it back again a couple of years later.


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## powerplus (Oct 6, 2014)

hi sprinta

at age 59 i just decided i had had enough partly through health issues and also having friends that took the plunge early

w have no pension till age 66 but do have savings and a little coming in from else were

the house is looked at regularly by my son and in fact they may be moving in for a while while they look for a new house to buy

we are on our second 6 month stint in portugal and feel so much better for it

i would say if you have enough put by go for it and give it a try as they say you only live once and i have seen people the last couple of years that wish they started earlier

you could try it for a year and if funds are getting low then there is allways the option of doing a little work in the summer at home to top up savings a little

over here it seems that you can live well on a little or as some do go out for meals every day when we go out the meals with drink costs about euro 10 each so it is a nice treat


hope something works out for you

barry


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## Sprinta (Sep 15, 2010)

powerplus said:


> hi sprinta
> 
> at age 59 i just decided i had had enough partly through health issues and also having friends that took the plunge early
> 
> ...


Barry, that sounds good to me. Health issues are a pain, no pun intended, we have savings to work with and a small pension coming in already. Costings I threw together last night seem to make it very workable (barring unforeseen calamity) for a good number of years - that may outlast me :frown2:. Fortunately we don't cost a lot to run, don't drink or smoke (she does a little:frown2, and we have no food fads either. Having said that I'm off on the motorbike for 2 weeks to Austria soon - maybe time to phase that out as it's a very expensive pastime:crying:
I hadn't thought about Portugal as an option, but have seen some nice spots on another site, it's sparked more interest. We're off to France for 3 weeks again in September so I'll make some notes as to where to spend more time, for some reason Spain has never seemed to appeal to me, perhaps because I only speak French and German a little.


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## Robell (Mar 13, 2013)

Watching this thread with interest as I'm in the same position as the OP, except it will only be 4 years early that I'm considering retiring. Have been doing the sums for a while now and just getting to the final stages with the financial adviser. Hopefully in a month or so it'll all be sorted :greenjumpers:


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## MEES (Apr 20, 2006)

Spain is a great deal cheaper to live in than France '


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## Penquin (Oct 15, 2007)

I took early retirement from teaching - yes, with the final salary scheme pension.....

I am just about to receive my UK State pension after 5 years retirement in a much happier place than when I was teaching - although I LOVED teaching and really enjoyed working with children (can't say LOVED as that might get misinterpreted....) but detested the way that the teaching and ancillary staff were being treated...... :surprise:

The new State pension scheme comes into effect if your due date for retirement is after 1st April 2016 i.e. you will reach retirement age after that date, I didn't by one month and got conflicting advice from the DWP Helpline....... :crying:

Initially I was told that if I delayed taking my state pension by more than one month that I would receive the new pension of £155 odd c/w the existing £118 odd.... WRONG :frown2:

Later advice confirmed that was untrue. 

So check carefully and use different resources to make sure that the advice you have been given is verified from other places..... :grin2:

Retirement is great, there are changes and you end up so busy that you wonder how on earth you ever had tme for work - but that is what it's all about IMO..... :smile2:

Dave 
(Hoping that our life-style can and will continue - but of course that depends on you lot voting and the other EU Governments - particularly France, facing reality and not being unpleasant IF the choice is Brexit :frown2: :serious: )


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## pippin (Nov 15, 2007)

_*Carpe Diem!*_

I retired at 65 and five years later (last year) lost virtually a whole year of life due to bowel cancer op and chemo.

Boy - am I making up for that lost year!

There is an Old Dutch saying which roughly translates as:

_*"The concert of life does not come with a programme"*_

How true - so go for it if you can.


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## powerplus (Oct 6, 2014)

hi sprinta / robell

language is not so much a problem on sites now as most campers seem to speak fairly good english now

sprinta i speak fairly good german and have had a german couple parked next to uss for the last 4 months

se we can practice speaking me german and he english

sites in portugal work out at around 10 euro a night off season with electric especially if you stay a while some even less

we are working on poodeling back home slowly in may and hoping to take 2 to 4 weeks to get home but we are waiting for the weather to get warmer in france before setting off


barry


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## Mrplodd (Mar 4, 2008)

Very good advice has already been given.

The only thing I would add is to get yourself a "pension forecast" (available from the DWP website, it takes a while to come but it will tell you what you can expect to get when the time comes)

Other than that.....

I packed in at the end of August last year aged 61. I am fortunate to have my Police pension (before anyone starts it cost me 11.5% of my salary for 30 years so NOT free) and a small amount from my 7 years with the Local Authority, so I am not in the workhouse. We have needed to make a few adjustments to our life but nothing too drastic (downsized house to something more manageable and easier to clean/heat etc) 

The one great factor is that we can do what WE want when WE want to like shop whenever we like (and avoid the screaming offspring of others) and, more importantly, get away whenever the mood takes us (which is fairly often) We tend to use campsites Monday - Friday (because we can) as many of the more popular ones (Baltic Wharf, Rowntree Park etc etc) are booked up at weekends. 

The one thing I keep saying to Mrs P (and anyone else listening) is that I simply cannot remember when I last felt this well !!! I feel AT LEAST 20 years younger than I did when working.

So my advice would be. Do the sums (carefully) and, if you think its viable, go for it, I would not consider going back to work now, I have plenty to occupy my time without spending a fortune, but, and its a BIG but, make sure you have a hobby !!!

Andy

PS. If you have paid NI for 35 years you qualify for a (full) state pension. If you keep working you keep paying BUT GET NO MORE !!!


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## philoaks (Sep 2, 2008)

Wife and I both packed in 3 years ago aged 58. Both of us had been in final salary pension schemes and although we both took a hit for finishing early it still left us both with a reasonable amount. We sat for ages (along with our IFA) and did the sums and decided we should be ok with just a bit of topping up from our savings.

In reality we have coped well and have only had to raid the savings on a few occasions (like changing my motorbike 2 years ago  ). We don't live a particularly lavish lifestyle but get away in the van as often as we can and have had a number of 1 month+ holidays away in the van. 

If the goalposts don't move then we should both get our state pension at 66. We both applied for a pension forecast from DWP but (as our IFA said) it was about as much use as a chocolate teapot. Whether the forecasts are better now that the new scheme has started, I don't know. We were both in pension schemes that were contracted out so will be on the lower figure, whatever that may be!

As others have mentioned, make sure you have a hobby or at least a plan of how you want to spend your time. I've absolutely no regrets and sometimes still feel there aren't enough hours to fit in everything I want to get done. I have spoken to others who I used to work with and they've regretted taking retirement saying they get bored!! Chance would be a fine thing


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## JIMY (Feb 24, 2011)

I retired one year ago ,we are 60 and 61 and have let our property in uk and bought a cheap one in France. We will rely on our rental income and savings till pensions kick in at 66. I made a spreadsheet cashflow which shows us ok until eighty so I will update you in 2035 if I have enough left for the sub! Just loving it so far. Oh ,of course I may not still be alive and that is the whole point.
Jim


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## aldra (Jul 2, 2009)

We retired at 63 ish 

We have plenty to live on

But cancer ( melanoma ) reared its ugly head
With all that entails 

So go for what you can afford

Life holds no promises

Hoping it holds some time for us
Aldra


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## HermanHymer (Dec 5, 2008)

I too was retired early, at age 57. I already had plans for a "little retirement job" so no stress there. My private pensions do attract an inflation linked increase, which have added up pleasantly in 12 years. 

One point to consider the 'last 5 years' can be very stressful, you end up spending the weekends trying to recover from the exhaustion of a week's worth of early starts and long days. That's not good for health - cancer being just one of the outcomes. 

You can only do some realistic calculations, and be prepared to cut your coat according to your cloth.


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## mgdavid (Nov 27, 2014)

Mrplodd said:


> ...............
> 
> PS. If you have paid NI for 35 years you qualify for a (full) state pension. If you keep working you keep paying BUT GET NO MORE !!!


Sorry Andy but this may well be extremely misleading!
Please see my post #6 .


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## patp (Apr 30, 2007)

Do your calculations carefully. I found it very frustrating to have loads of time to go places and spend money but not be able to afford to do so.
I went back to work and did some maternity leave cover. This, I realised, made me feel part of a team again which I had missed. The second time I retired, we discussed it on here and someone gave me the good advice of "don't think - is this it?, think - This Is It!". I now quote this to myself often. It has helped me come to terms with doing things more slowly and I try to copy Mr P and do the things I want to do rather than still being in the mind set of making sure everything that *needs* doing is done first. Very hard for me but I am getting there .
When we were young there were all sorts of free pass times for the retired. Learn a language, needlework etc. All of these are quite expensive now, if you can find them at all.
We walk a lot and meet up with other dog walkers most days. I have joined a daytime choir and take the dog to agility classes.
You have to remember that it is not a holiday, it stretches out in front of you and can be quite daunting.


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## Pudsey_Bear (Sep 25, 2008)

Not sure if this helps, but I got made redundant at age 59, in 2009, wen't on the dole, no work found by the time I reached 60, so they said take pension credit, so I did, due to none payment of stamps when my self employed earnings were very low, I am a little short so will always be on Pension Credit, but there are some pros and cons to this, one pro is I don't pay for dental care and never will even though I and now coming up to 66, a con is WE cannot have more than £10k in the bank etc or the knock it off the pension credit portion of our income, but it's not normally a problem, but when selling MoHos, it has to be cash only, also my PPI cheque had to be swiftly paid in and drawn out, assets are not taken into account fortunately.


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## mgdavid (Nov 27, 2014)

patp said:


> ...............
> When we were young there were all sorts of free pass times for the retired. Learn a language, needlework etc. All of these are quite expensive now, if you can find them at all.............


Have you looked at U3A?
http://www.u3a.org.uk/


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## Pudsey_Bear (Sep 25, 2008)

Nice one, not heard of that


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## pippin (Nov 15, 2007)

I am getting too close to the U4A for comfort!

Probably find that getting a degree from there is dead easy!


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## nicholsong (May 26, 2009)

Can they sort out backs - so that I can get on my frigging bike?


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## homenaway (Jul 27, 2005)

mgdavid said:


> Have you looked at U3A?
> http://www.u3a.org.uk/


I agree it's an excellent organisation obviously depending on how active the local group is :smile2:


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## patp (Apr 30, 2007)

I did go to a meeting run by the U3A. Not one person spoke to me the whole time I was there  I have to say it coloured my perception of, what seems like, a good organisation. As has been said above it depends on the people I suppose.
It was a while ago now so I might take another look at a different branch perhaps.


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## mgdavid (Nov 27, 2014)

patp said:


> I did go to a meeting run by the U3A. Not one person spoke to me the whole time I was there  I have to say it coloured my perception of, what seems like, a good organisation. As has been said above it depends on the people I suppose.
> It was a while ago now so I might take another look at a different branch perhaps.


round here the group leaders all publish their phone numbers; I think the idea is you call them beforehand then meet on the night and get them to introduce you to people if you're a bit shy.
Or you just make your own introductions - 'don't speak until spoken to' only applies to children, and that went out the window decades ago it seems :wink2:


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## Pudsey_Bear (Sep 25, 2008)

I think I might be in the Groucho camp on this one


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## GMJ (Jun 24, 2014)

I am retiring next year at 50 :grin2:...if I can last that long:frown2:

We downsized once 4 years ago and invested a lump sum then for a tax free return after 5 years if required plus we save regularly in an ISA each. We are fortunate that Mrs GMJ has a pension from her late first husband; my company one can cut in from 55 onwards; and my teaching one from 112...sorry...68 I think>

We plan to downsize again next year and take 6 figures out of the house to supplement our income until pensions cut in.

We plan to spend 4 months away at least, in winter in the south east of Spain (much better climate for Sarah with her MS) and use sites in Blighty during the week rather than weekends (and adults only ones during school holidays).

I have a list of hobbies/pastimes/interests that I intend to pick up on which I cant wait to start :smile2:

Graham :smile2:


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## aldra (Jul 2, 2009)

patp said:


> Do your calculations carefully. I found it very frustrating to have loads of time to go places and spend money but not be able to afford to do so.
> I went back to work and did some maternity leave cover. This, I realised, made me feel part of a team again which I had missed. The second time I retired, we discussed it on here and someone gave me the good advice of "don't think - is this it?, think - This Is It!". I now quote this to myself often. It has helped me come to terms with doing things more slowly and I try to copy Mr P and do the things I want to do rather than still being in the mind set of making sure everything that *needs* doing is done first. Very hard for me but I am getting there .
> When we were young there were all sorts of free pass times for the retired. Learn a language, needlework etc. All of these are quite expensive now, if you can find them at all.
> We walk a lot and meet up with other dog walkers most days. I have joined a daytime choir and take the dog to agility classes.
> You have to remember that it is not a holiday, it stretches out in front of you and can be quite daunting.


Know exactly where you are coming from

I retired at 63 to care for an ailing relative

Discovered my identity was woven into my work

Now 10 years later it still is to some extent 
Except I couldn't meet the requirements

I really missed my colleagues

Didn't need to really

Should have kept in touch, they tried

But I backed off
Today wiser I would not have

When the relative died

I needed to rebuild my life

Well I never really never have

Aldra


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## homenaway (Jul 27, 2005)

mgdavid said:


> round here the group leaders all publish their phone numbers; I think the idea is you call them beforehand then meet on the night and get them to introduce you to people if you're a bit shy.
> Or you just make your own introductions - 'don't speak until spoken to' only applies to children, and that went out the window decades ago it seems :wink2:


Hi,
To follow up to be a member of a local U3A you have to be not in fulltime employment and virtually all interest groups meet during the daytime, and weekly, fortnightly or monthly depending on the group. Most local groups have a monthly general meeting, ours has a speaker alternate months and coffee/ social. The who;le ethos is learning together (not paid tutors so at minimal cost)

University in the title can put people off but for instance our small town group which started two years ago has about 250 members and has walking, computing, dancing, discussion, trips and theatre visits among the thirty or so interest groups and vary from just a few members to around twenty in each group.

It is certainly given us new interests and we have met lots of people. It's a pity that you were ignored at a meeting. We try to identify and talk to any new and prospective members at our meetings.

Steve


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## aldra (Jul 2, 2009)

Depends where you live

We joined
Everything was full

We were on the waiting list

Gave up eventually 

£40 poorer 

Aldra


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## coppo (May 27, 2009)

I am trying to retire now I have just turned 50.


Another £2 on the lottery tomorrow.


That will be the only way, was thinking of eventually renting the house out, which is mortgage free, and going off.


You need an income, that is the important thing, I have no pension and it will be 70 before this lot give me owt.


But I am fit and healthy, that counts for so much.


Paul.


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## Pudsey_Bear (Sep 25, 2008)

Happy birthday Paul, shame we no longer get reminders


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## GMJ (Jun 24, 2014)

Nice one Coppo :smile2:

We are doing it simply because life is too short. I have watched my wife's health degrade over the last 10 years due to her MS so we have brought all our plans forward so we can enjoy quality time now whilst we are fit enough to do it. We bought our MH at least 5 years ahead of our original plan because of this and have not looked back.

Hopefully I have done the sums right so we should be fine. Instrumental in this is also some tight financial management of the domestic economics as well: we switched bank account earlier this year; I am just switching our energy again for the second time this year for a much better deal; I split the food shopping between Aldi and Tesco now...that kind of thing. :smile2:

It all helps and saves/makes us in excess of a £1000 a year I calculate.

If Aldi started doing their cheap bitter again locally, that would save £500 a year for us (me) alone >

Graham :smile2:


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## Pudsey_Bear (Sep 25, 2008)

GMJ said:


> Nice one Coppo :smile2:
> 
> We are doing it simply because life is too short. I have watched my wife's health degrade over the last 10 years due to her MS so we have brought all our plans forward so we can enjoy quality time now whilst we are fit enough to do it. We bought our MH at least 5 years ahead of our original plan because of this and have not looked back.
> 
> ...


So stop drinking  save a further £500, and less trips to empty the loo, save on shoe repair/replacement too.

Ok sorry, just a brain fart


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## GMJ (Jun 24, 2014)

Kev_n_Liz said:


> So stop drinking


:surprise:

You need to get your bloody coat Kev :eeeeek:

Graham >


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## Pudsey_Bear (Sep 25, 2008)

GMJ said:


> :surprise:
> 
> You need to get your bloody coat Kev :eeeeek:
> 
> Graham >


We both stopped pretty much altogether about 8 years ago, pocket felt better immediately, we still have a drink if we're near one, but to go out for a drink, no, or even buy it in, no, just no longer feel the need, if they banned it, I'd be fine with that > >


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## GMJ (Jun 24, 2014)

Kev_n_Liz said:


> ...if they banned it, I'd be fine with that...




Graham


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## Sevenup (Jun 29, 2015)

We retired about 2.5 years ago. Initially we were looking after 2 relatives. I'm now 62 and my wife is 58. She took a hit on her pension from the NHS but we worked out we could afford it. I go with the advice that you need something to do (I do at least). I have just 'rescued' an 2004 MG TF from a scrapyard, stripping and rebuilding it. Cheap motoring with wind in my hair while I still have hair. I walk our dogs most days and read a lot. I'm fairly occupied and I watch tv about twice a week and limit my wine intake unless someone else is buying or I am in a wine region. &#55357;&#56860;&#55357;&#56834;. My wife is busy too with knitting groups, gardening, dog walking and WI stuff. We can afford to do the things we want if we are not too extravagant. Carry out curry rather than sit in restaurant. We use walking clothes that we usually buy at Rohan or berghaus outlet in the sales. The side effect of this is that we do very little ironing because the clothes tend to drip dry quite quickly and don't weigh too much in the van. It means that we are well equipped to stay warm and dry when out with the dogs in any weather.

We have both done free online courses through Futurelearn. Worth a look. I started one on Empire but I've been busy. The course lets me go back at my own pace. I am due to start Italian in the next few days.

We bought the van last year and try to use it as often as possible tho we still need to support 1 relative. We are off for 6 weeks in the summer to France and Spain (Rioja country). So far this year we have had a week around Poolewe and Applecross and Glenelg in glorious sunshine and 18c and 4 days in Mull. I've taken the van to the Lakes and the Motorhome show with Aviemore coming up next. 

Try not to be too busy that you can't get away. I'm busy enough but not too busy to do the things I like. Good luck. We're a long time dead.


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