WEBVTT

00:00:09.869 --> 00:00:13.250
Hi, Eric from Time to Retire here. Now, we've

00:00:13.250 --> 00:00:15.830
all seen the headlines about the UK's government

00:00:15.830 --> 00:00:19.030
launching initiatives like that Keep Britain

00:00:19.030 --> 00:00:22.410
Working review. That's to keep us in the workforce

00:00:22.410 --> 00:00:25.929
for longer. But behind the policy, behind the

00:00:25.929 --> 00:00:28.910
buzzwords, there is a bit of a shift happening.

00:00:29.329 --> 00:00:32.689
I think the goalposts for our retirement are

00:00:32.689 --> 00:00:37.450
moving. Now, asking somebody to work longer.

00:00:37.820 --> 00:00:39.579
It's not like a small request. It's not like

00:00:39.579 --> 00:00:42.979
being asked to help the planet by splitting your

00:00:42.979 --> 00:00:46.060
recycling or using a paper straw at McDonald's.

00:00:46.359 --> 00:00:51.500
What's happening here is a deeply personal sacrifice.

00:00:51.880 --> 00:00:56.119
And it's a fact. A sacrifice of your most finite.

00:01:04.459 --> 00:01:08.000
To ensure we keep working, the government, as

00:01:08.000 --> 00:01:11.719
legislated two major hurdles and you have to

00:01:11.719 --> 00:01:14.400
cross these before you can touch your retirement

00:01:14.400 --> 00:01:17.299
money so we're currently in the middle of a transition

00:01:17.299 --> 00:01:21.780
where the state pension age is moving from 66

00:01:21.780 --> 00:01:26.939
to 67 and that's happening between April 26 just

00:01:26.939 --> 00:01:31.760
gone and April 2028 our plans are already on

00:01:31.760 --> 00:01:35.540
the books to push this to 68 by the mid -2040s

00:01:36.280 --> 00:01:38.500
with some ongoing reviews looking potentially

00:01:38.500 --> 00:01:41.540
at bringing that data even closer. And then there's

00:01:41.540 --> 00:01:44.400
the SIP and the private pension age. It's not

00:01:44.400 --> 00:01:46.579
just about the state's money that's being delayed.

00:01:46.920 --> 00:01:49.760
Now, the normal minimum pension age, or what

00:01:49.760 --> 00:01:54.599
you see, the NMPA on your statements, that's

00:01:54.599 --> 00:01:57.519
the earliest you can typically access private

00:01:57.519 --> 00:02:00.200
SIPs or workplace pensions. It's being hiked

00:02:00.200 --> 00:02:05.370
from 55 to 57 effectively. from 6th of april

00:02:05.370 --> 00:02:09.750
2028 now by raising these ages the government's

00:02:09.750 --> 00:02:13.349
effectively asking for a contribution of two

00:02:13.349 --> 00:02:16.930
more years of your physical peak and while the

00:02:16.930 --> 00:02:20.289
treasury sees this as a way to save roughly 10

00:02:20.289 --> 00:02:23.270
billion pound per year for us a bit of a different

00:02:23.270 --> 00:02:27.289
calculation now every extra year you spend behind

00:02:27.289 --> 00:02:31.990
a desk or on a factory floor is a year you aren't

00:02:31.990 --> 00:02:35.620
spending on your health your family or any of

00:02:35.620 --> 00:02:38.240
those bucket list items you've been planning

00:02:38.240 --> 00:02:42.939
for decades it's a trade -off where you're giving

00:02:42.939 --> 00:02:46.659
up physical vitality of your late 50s and early

00:02:46.659 --> 00:02:49.800
60s and you don't exchange that for an extra

00:02:49.800 --> 00:02:53.780
few bob in your 80s a time you may no longer

00:02:53.780 --> 00:03:03.460
have the health to actually use it So have we

00:03:03.460 --> 00:03:06.900
been tricked? We're told that retirement is a

00:03:06.900 --> 00:03:10.439
finish line where you finally get to relax but

00:03:10.439 --> 00:03:14.020
only once the pot of gold is big enough and your

00:03:14.020 --> 00:03:16.360
bank account can grow forever but your health

00:03:16.360 --> 00:03:27.759
and your time are disappearing fast. Now I asked

00:03:27.759 --> 00:03:31.750
our community if they'd retire tomorrow. on a

00:03:31.750 --> 00:03:34.710
tighter budget if they knew that they only had

00:03:34.710 --> 00:03:37.689
15 years of good health left. Well, the results

00:03:37.689 --> 00:03:42.349
were clear. 82 % of you guys said that time was

00:03:42.349 --> 00:03:45.710
more important than money. So let's discuss why

00:03:45.710 --> 00:03:49.530
this one more year might... So let's discuss

00:03:49.530 --> 00:03:52.590
why this one more year idea might be the biggest

00:03:52.590 --> 00:04:03.860
mistake any retiree ever makes. Now, we often

00:04:03.860 --> 00:04:08.319
talk about the age of 60 and 65 as just two different

00:04:08.319 --> 00:04:11.379
numbers on a retirement quote, but in the real

00:04:11.379 --> 00:04:14.759
world, in our world, those five years represent

00:04:14.759 --> 00:04:18.620
two very different versions of your life. Well,

00:04:18.639 --> 00:04:20.259
think about it. Say you're in the Lake District.

00:04:20.360 --> 00:04:24.160
If you retire at 60, doing the lakes means probably

00:04:24.160 --> 00:04:27.459
scrambling up capels or walking the perimeter

00:04:27.459 --> 00:04:31.420
of Buttermere or maybe having a few wainwrights

00:04:31.420 --> 00:04:34.319
in a lakeside boozer. Your recovery time is pretty

00:04:34.319 --> 00:04:36.420
fast. A couple of pints in the pub at the end

00:04:36.420 --> 00:04:38.519
of the day. You're ready to go again tomorrow.

00:04:54.040 --> 00:04:57.639
Now, fast forward just five years later to 65.

00:04:58.220 --> 00:05:00.699
And for many, doing the lake starts look a bit

00:05:00.699 --> 00:05:03.560
different. Maybe it's a gentle stroll around

00:05:03.560 --> 00:05:07.019
the water or a scenic drive to a viewpoint. There's

00:05:07.019 --> 00:05:10.420
absolutely nothing wrong with that. But the option

00:05:10.420 --> 00:05:13.839
to do the strenuous stuff is starting to slip

00:05:13.839 --> 00:05:17.779
away. At 65, your high -impact adventures are

00:05:17.779 --> 00:05:21.160
statistically, anyway, disappearing. I mean,

00:05:21.220 --> 00:05:24.480
at 60, you aren't just retiring from work. You're

00:05:24.480 --> 00:05:28.100
retiring into some of the peak activity years.

00:05:40.720 --> 00:05:44.019
Let's be honest about long -haul travel. At 60,

00:05:44.120 --> 00:05:47.500
you can usually handle a 14 -hour flight to Southeast

00:05:47.500 --> 00:05:50.500
Asia or New Zealand. You can deal with the jet

00:05:50.500 --> 00:05:53.160
lag, the cramped seats and the hustle of a foreign

00:05:53.160 --> 00:05:56.439
city. You have that resilience to be a traveller.

00:05:56.540 --> 00:06:01.079
But at 65 or 70, that same flight could become

00:06:01.079 --> 00:06:04.060
a bit of an endurance test. You start looking

00:06:04.060 --> 00:06:06.540
for extra comfort, which actually usually means

00:06:06.540 --> 00:06:09.629
spending. that extra pension money on a business

00:06:09.629 --> 00:06:12.509
class ticket just to arrive without a week in

00:06:12.509 --> 00:06:16.889
back pain. Now, if you're 65, to get that perfect

00:06:16.889 --> 00:06:24.269
pension pot, you might find you finally got the

00:06:24.269 --> 00:06:27.189
money to fly business class, but you no longer

00:06:27.189 --> 00:06:29.470
have the needs to explore the destination when

00:06:29.470 --> 00:06:37.060
you land. So the question we've got to ask ourselves

00:06:37.060 --> 00:06:41.439
isn't how much money will I have at 65? It's

00:06:41.439 --> 00:06:45.560
what can I do at 60 and what might I not be able

00:06:45.560 --> 00:06:49.800
to do at 65? But don't trade your best years

00:06:49.800 --> 00:07:03.399
for a slightly bigger pension net. I was lucky.

00:07:03.519 --> 00:07:07.879
I retired at 55, but I know I'm an outlier. So

00:07:07.879 --> 00:07:11.279
let's talk about this one more year trap at the

00:07:11.279 --> 00:07:14.620
age of 65. And you look at your pension rejection

00:07:14.620 --> 00:07:16.899
and think, well, if I stay just in the office

00:07:16.899 --> 00:07:20.319
for, tell them 66 instead of 65, that's an extra

00:07:20.319 --> 00:07:24.079
£200 a month for life. Now on paper, I might

00:07:24.079 --> 00:07:26.959
look like a win. In a spreadsheet, the maths

00:07:26.959 --> 00:07:30.360
adds up. It's undeniable, but spreadsheets don't

00:07:30.360 --> 00:07:32.970
have knees and spreadsheets. Don't get lower

00:07:32.970 --> 00:07:44.829
back pain. That extra £200 a month is roughly

00:07:44.829 --> 00:07:48.529
£50 a week. It's designed to buy you more comfort.

00:07:49.029 --> 00:07:51.910
Maybe it's a nicer hotel on your holiday or a

00:07:51.910 --> 00:07:55.290
higher spec car in the driveway. But here's the

00:07:55.290 --> 00:07:58.670
question. What are you selling to buy that comfort?

00:07:59.209 --> 00:08:04.540
Are you selling? 250 days of your remaining physical

00:08:04.540 --> 00:08:08.600
peak. In your early 60s you're in a bit of a

00:08:08.600 --> 00:08:11.000
race really against the biological clock. I mean

00:08:11.000 --> 00:08:14.379
in the UK the healthy life expectancy, the years

00:08:14.379 --> 00:08:18.399
you can expect to live without a limiting long

00:08:18.399 --> 00:08:21.920
-term illness is lower than you think. For many

00:08:21.920 --> 00:08:25.639
of us even in our kind of mid -60s this window

00:08:25.639 --> 00:08:30.860
is starting to close. Now if you trade a year

00:08:30.860 --> 00:08:35.000
of your 60s for an extra £200 a month in your

00:08:35.000 --> 00:08:38.480
80s. It's a bit of a lopsided deal, I think.

00:08:38.559 --> 00:08:42.000
You're trading a year where you can still climb

00:08:42.000 --> 00:08:45.120
a hill in the Peak District, carry your own luggage

00:08:45.120 --> 00:08:47.980
through an airport, or even play on the floor

00:08:47.980 --> 00:08:51.139
with your grandkids. Now, for that bit of an

00:08:51.139 --> 00:08:54.799
extra buffer at an age where your biggest expense

00:08:54.799 --> 00:08:58.000
might just be a more expensive brand of tea or

00:08:58.000 --> 00:09:03.279
coffee, Because actually you're too tired to

00:09:03.279 --> 00:09:10.720
leave the house. You can always find a way to

00:09:10.720 --> 00:09:14.740
live on £200 a month less. If you've got a good

00:09:14.740 --> 00:09:19.179
pension, you can downsize, you can budget. You

00:09:19.179 --> 00:09:22.100
can find joy in the simple things, but you can't

00:09:22.100 --> 00:09:25.159
under any circumstance go to the bank. and use

00:09:25.159 --> 00:09:27.940
that extra money to buy back the energy levels

00:09:27.940 --> 00:09:32.320
you had just 12 months ago. So really think about

00:09:32.320 --> 00:09:35.279
it. Do you want to spend your go -go years working

00:09:35.279 --> 00:09:39.059
to fund your no -go years? That £200 isn't a

00:09:39.059 --> 00:09:42.580
bonus. It's basically a refund on the life that

00:09:42.580 --> 00:09:45.980
you're too tired to lead. Ask yourself, is that

00:09:45.980 --> 00:09:52.919
extra cash worth the physical cost? Well, let's

00:09:52.919 --> 00:09:55.889
look at the numbers in... pounds and pence most

00:09:55.889 --> 00:09:58.710
uk retirees find that their spending actually

00:09:58.710 --> 00:10:02.330
drops the further into retirement they get and

00:10:02.330 --> 00:10:04.570
this is what they call the u -shaped spending

00:10:04.570 --> 00:10:13.590
curve so between 55 and 70 are our high spending

00:10:13.590 --> 00:10:16.809
times where we're having hobbies we're traveling

00:10:16.809 --> 00:10:19.090
a lot more then we got the slowing phase around

00:10:19.090 --> 00:10:23.679
70 to 80 where spending really does drop significantly

00:10:23.679 --> 00:10:27.779
and for some of us there's the care phase where

00:10:27.779 --> 00:10:30.639
spending actually may rise but this is quite

00:10:30.639 --> 00:10:35.120
often supported by sale of assets or state support

00:10:35.120 --> 00:10:40.899
now are you over saving for a 90 year old version

00:10:40.899 --> 00:10:46.159
of yourself where so are you over saving for

00:10:46.159 --> 00:10:48.980
a 90 year old version of yourself while starving

00:10:49.600 --> 00:10:51.639
The 60 -year -old version of these adventures.

00:10:53.080 --> 00:10:56.480
So what if you choose the tight budget option

00:10:56.480 --> 00:10:59.700
in my poll? What does this actually look like?

00:11:00.940 --> 00:11:04.559
Well, for some that could be downsizing the house.

00:11:04.659 --> 00:11:07.899
For others it might be moving to a lower cost

00:11:07.899 --> 00:11:11.299
of living area. For others it might be ditching

00:11:11.299 --> 00:11:14.820
the second car. It's also worth thinking about.

00:11:15.259 --> 00:11:18.840
the retiree discounts now traveling outside of

00:11:18.840 --> 00:11:23.720
school holidays midweek eating out deals avoiding

00:11:23.720 --> 00:11:26.779
that cost of work related things like commuting

00:11:26.779 --> 00:11:30.580
work clothes convenient food on the go you know

00:11:30.580 --> 00:11:34.059
research shows that after basic needs are met

00:11:34.059 --> 00:11:37.759
the more money actually has a diminishing impact

00:11:37.759 --> 00:11:46.850
on your daily enjoyment of life so do this for

00:11:46.850 --> 00:11:49.990
me today calculate your active years left now

00:11:49.990 --> 00:11:53.970
say you're 60 and your average health life expectancy

00:11:53.970 --> 00:12:00.129
in the uk is 77 then you're 17 summers left is

00:12:00.129 --> 00:12:04.450
another 10 000 pound in the bank worth one of

00:12:04.450 --> 00:12:10.309
those extra summers yeah retirement's not about

00:12:10.309 --> 00:12:14.269
being rich it's about being free if you're terrified

00:12:14.269 --> 00:12:17.669
of the tighter budget ask yourself if you're

00:12:17.669 --> 00:12:20.289
more terrified of actually waking up at 75 with

00:12:20.289 --> 00:12:22.830
a massive bank account in a body that won't let

00:12:22.830 --> 00:12:29.649
you spend it what is your number not your financial

00:12:29.649 --> 00:12:33.049
number but that aids that you refuse to work

00:12:33.049 --> 00:12:36.009
past no matter what let me know in the comments

00:12:36.009 --> 00:12:38.750
i'll see you on the next one cheers