The Problems of the Rich: Do I Have Enough Money to Retire?

I am increasingly worried about getting older. More specifically how I will finance my retirement. I’m almost at an age where if I tripped and fell, I would have “fell.” I’ve even caught myself making an “ahhh” sound when I sit down in a comfy chair and an “ooof” when I step out again.

This past weekend I left the garage door wide open with the lights on for hours after ferrying a few chairs to my car. I probably got distracted. I’m sure I need to change a fuse somewhere. So, having cooked up the most delicious roast lunch (I caved in and fired up the Aga for the weekend), I let the gravy simmer all afternoon.

Signs of a failing mind? I’m sure I left my marbles somewhere. I hope they are in a safe place.

These incidents raise a question. How much should I save for a comfortable retirement?

I’m not the only one concerned by this conundrum. Three-quarters of savers (77 per cent to be exact) don’t know how much income they will need and only 20 per cent are sure they are saving enough, according to research by Hargreaves Lansdown. Even though 76 percent of all statistics are made up, I’m 100 percent sure I’m not in the 20 percent.

According to research, 40% of the UK population is on track for a ‘moderate’ retirement. The Pensions and Lifetime Savings Association defines £20,800 as a ‘moderate’ income for a single person and for a ‘comfortable’ pension, including three weeks’ holiday in Europe, you’ll need £33,600. Or £49,700 for a couple.

I wonder if this is a new definition for the word “comfortable” that I wasn’t aware of before? For me a comfortable three week European holiday would involve a stay at La Réserve de Beaulieu. And this is your broken annual budget.

It’s clearly time to create a cost of living spreadsheet. For this exercise, I’d suggest pouring a large gin and slimline tonic (I’m still scouring) to deal with the inevitable bad news. Council taxes, housing and health insurance are the better part of £20,000 a year. Club memberships, overseas property service charges and beach hut sink a further £10,000. The machines throw away £15,000 and I still haven’t eaten.

There are trips abroad, gifts, outings, takeaways, season tickets and unexpected expenses for things that wear out, need maintenance or replacement. Next up is the cost of energy – cringe! – Home maintenance and projects like a walk-in closet and enlarged kitchen-dining room, adding to the budget for unnecessary frippery, shopping and clothes.

The garden needs tending (I do the glory things only after the beds have been dug and the lawn mowed) and the house needs cleaning. Preferably not from me. And I forgot the dogs. That’s another £6,000 a year with vets fees included.

After all this analysis, I get distracted. I’ve never been that old. Worse yet, I will never be that young again. It doesn’t matter how many pairs of Moncler sneakers I buy or how many times I listen to Harry Styles’ “Harry’s House”. The gray hair and new signature photo prove it.

The only reason we feel millennials, generation Y or Z or whatever they are now, is because we are jealous. Jealous of a full head of hair that grows where it should, as opposed to ears and a nose. And the older I get, health problems start to buzz. Is it worth the brainache to do this analysis? Will I physically be able to do all the things I want when I retire anyway?

The dire economic situation puts extra pressure on your personal finances. Inflation forces you to save more for the same outcome, while rising taxes and frozen benefits eat up what you can save. Rising interest rates have added to your mortgage costs, and falling markets are leaving your retirement fund depleted. He’s back to the spreadsheet, wearing a couple of reading specs.

With retirement planning, there are some rules of thumb. First, you should be saving at least 12% of your earnings each year. Until I went freelance 15 years ago, I was pretty good in that department. Since? Not so much. Telling yourself to make such sacrifices falls into the same category as cutting down on alcohol, never smoking, and eating less salt. Generally, in a vacuum, until it’s almost too late.

The big unknown is how long I will live. If I bought an annuity, turning a lump sum into an annuity, how much would I get? At current rates, that’s £5,000 a year for every £100,000 for a 55-year-old. At 52, I’m almost there. That’s a lot of lump sums to save.

Maybe that triple-block pension everyone keeps talking about will help? I have to wait 15 years before collecting my state pension. Albeit at around £10,000 a year, it will only fund my heavy bubbly habit, an annual ski trip and a few pairs of underpants.

In my fantastic retirement I would go to the Caribbean for the winter months. It would save on heating bills. Antigua would be my pick, but you’d be better off spending £15,000-20,000 a month to rent a decent apartment. More if you want a home. You will still have to buy food, rent a car and the inevitable costs of social life.

However, all this fantasizing about retirement options won’t work if the money isn’t there. Perhaps the best option is to befriend someone who owns a house or a huge yacht. After all, what’s the point of having wealthy friends if they don’t invite you to stay? Surely they will be bored without you?

The simple conclusion is that I haven’t saved enough. Pension calculators tell me that I have about 67% of what I need set aside to live the lifestyle I want to maintain.

I’d better face the facts. I will never be able to retire. Maybe I’ll reinvent this column so I can write forever. The problems of the elderly. It has sound.

James Max is a television and radio journalist and real estate expert. The opinions expressed are personal. Chirping: @thejamesmax

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