The Costs of Retirement

I’ve been retired, or at least not earning a salary, for a year now. It’s a shock, when I think about it, what a massive swing in income and expenditure that has meant for me. So I tend not to try and think about it too much!

What I do think about though, is what the costs associated with “retirement’ can be. Where is my money going every month, and what am I spending it on? I’m certainly not spending any less on myself than I did when I was working – I allow myself the exact same “personal” spending money as I always did every month – but the way I spend it has brought about some noticeable changes.

Various 2010-37

Bannatynes coffee, and yes, I smuggled in the Twix

These days, I think a lot more about the value I’m getting out of what I’m spending. A lot of the time, my money is going on the same things that it always did, but the results coming from that expenditure are different. For example, my gym membership is still the same at forty pounds a month. When I was working, I used the gym maybe two or three times a week. Now I am there almost every day, so the value I’m getting from my membership versus previous has increased immensely. On the other hand, I do spend more cash at the gym because I tend to have a coffee and a read at the paper in the cafe after I’ve finished my ordeal in the pool or on the treadmill. It’s a small reward that I’ve time to indulge in – I’m generally not rushing off to do the next thing on my list. I reckon that’s costing me an additional tenner a week that I never used to spend, but in terms of pleasure and relaxation I’m pretty happy to pay it.

Talking of coffee, I now tend to meet up with my wife in town maybe twice a week after her work. Previously this was a weekend “treat” crammed into everything else we had on our agendas. We’ll head somewhere for a coffee and a cake in one of our favourite cafes and moan about how before, when I was working, we never used to spend this money. But what’s it worth to sit and chat, knowing that the mobile won’t ring, the e-mail won’t ping and our colleagues (and bosses) won’t wonder where we are? It’s such a totally different and more enjoyable experience now and feels like something we want to do when we feel so inclined, as opposed to “have to do” as part of a weekend routine.

On a similar subject, we do still eat out quite a lot, but not quite as much as we used to. Previously, we’d often impulsively jump into a restaurant to simply save the time and hassle of cooking. Or we’d grab a takeaway. When I think back to what I used to cram into a weekend I’m surprised I ever cooked at all.  Now, not only do I have the time to cook, I also have the inclination to do it. The same can be said for grocery shopping, which used to come late night via the Tesco website and delivery van. These days I grace Lidl or Aldi with a personal weekly presence.

Where else am I spending my cash? I do find I’m spending a bit more on socialising, because I actually enjoy going out more than I used to. The kind of job I had, the hours I put in and the enforced socialising I had to do that went along with it meant that come the weekend, I pretty much put seeing friends on the back burner. And, being away for three or four nights a week, I’d feel guilty about heading for a few pints on the fifth. It was just another area where although I had the money, I felt I didn’t have the time. These days I might be a bit more conscious about the cost when I’m handing over twenty quid for a round of drinks, but I’m definitely thinking it’s money well spent.

There’s quite a lot of other areas where my spending habits have changed – I don’t buy any Kindle books now, because I visit the library. I used to pay to have my work shirts laundered, but now I don’t need the shirts and (deep breath on this admission) I do my own ironing. What else? Buying convenience food has pretty much gone by the board. We probably save a tenner a week just on local parking charges because now we always walk into town.

Going forward, when it comes to holidays, the flexibility we have to take flights when we want to and at relatively short notice will be a big cost reduction for us, and I’ve been surprised at some of the savings you can make if you’re prepared to do the research (I could never be bothered with all that “work” in the past).

My goal for retirement was to ensure I had the same disposable income available for us as we had when I was working and, so far, I’m on track with that. But I am still  a lot more conscious about costs, which is probably an inevitable output when you have no monthly pay cheque coming in (believe me, taking your income from your investments is absolutely not the same thing!) But I think I am spending money much more thoughtfully than I used to, and getting more personal value from it. And that can only be a good thing.

20 thoughts on “The Costs of Retirement

  1. I really liked this post. Especially the bit about having a coffee with your wife a couple of times per week. Just reminds me of when my Dad retired, my parents actually had time for each other for the first time in about 40 years. It did wonders for their marriage.

    Also love that you’re really focussed on getting more value for money from things without being stingy; so often you see frugal people going too far and not actually enjoying anything in their lives, which is just sad. But you’re sounding pretty positive and happy here, what happened? Did you get some sunshine up North?


  2. A great post on how you are enjoying life. A year already!
    The fact that you are able to lead the same life (income-wise) and just tweak your spending in places, “less on this but more on that” is great. There is no point being retired if you don’t enjoy it and having that balance and more rewarding time with your wife. The new free time is the most important positive from this. The pleasures of not working are flooding into your life.


    • Thanks sparklbe, I’ve read quite a few posts on how much money you save in retirement versus work, but I actually spend a bit more. I often felt, while working, that I was earning a lot of money but it was seriously costing me my time. That was something that I just didn’t want to go on with.


  3. I retired on Xmas eve 2014 so am also coming up to the end of my first year. I am a bit younger than you, age 49. My main aim was just to get out of work. When I got to the situation when I didn’t need to work, I thought, why bother when I can be doing something that I want to do rather than what somebody else tells me to do. I had no great plans, and still don’t, so am finding your experiences very interesting. I am ok money wise although I am learning the difference between ‘want’ and ‘need’.
    Keep up the good work.


    • Sometimes I think I’m not “early retired” at 52 because 50 was a norm for retirement just over five years ago! Trouble is, fifty is the new forty, and feels like it. Not ready for the pension, the garden, the pipe and slippers, dozing in front of the TV, walking the dog, playing with grandchildren….we need to find something else.


  4. Great to read that you are enjoying life in early retirement and interesting to hear that you are actually spending a little more. And why not, when you are getting enjoyment out of it.

    As M says, some people take frugal too far and are not really happy – it’s possible that I’m being pretty frugal now while I’m still trying to accumulate my wealth but once I’m where you are, I might like to not be so frugal occasionally…just to do something different! At least I hope I’ll have the choice to do so!


    • The change from saving to spending is, psychologically, a massive step. Or it has been for me. It’s the one big area that’s changed in our expenditure because right now, I don’t invest a thing. After almost thirty years of “investing for my future”, to start spending the pot feels like a wrenching of the gears that’s bad for the engine!

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  5. I am a few years younger than you (Scott’s age) but still trying to make the leap. One thing I can’t really work out is how I decide what my ‘income’ should be – it’s so much easier psychologically to have an annual income you are simply trying to live within. I’ve done the sums every which way and it really should work out fine, but I need some kind of yardstick that gives me permission to spend what I can afford, but not more…do you have any working rules about withdrawal?
    When I get to 60 I’ll be back with a regular income from DB pension (albeit probably about half what I earn now) and it think that will be much easier to deal with.


    • Yeah, I might post about how I do it just to see what other approaches there are. Personally I have a monthly budget, including a “personal allowance” for myself and my DOH. That’s ours to spend. In my household budget I have a significant element of “savings” that covers for holidays and unforeseen expenses, like the new car tyre we needed yesterday (a bit like an emergency fund). So I end up with a fixed monthly sum that I need to withdraw from my investments.


  6. As for activities (not the focus for this post I know), I have quite a lot of plans – not necessarily cheap- I love studying for example, and have an idea for fairly significant volunteering and possibly even starting a business. Who knows. I do think part of the issue (for me) is generating a sense of purpose – although I am coming to think that the ‘purpose’ one feels at work is largely illusory (ie the feeling ‘important’) and that most of what work does is structure your time so that your busyness stops you from realising your purposeless…
    My real fear is feeling lonely. Although again I suspect that the social contact at work is largely an illusory substitute for more genuine relationships. We’re all too busy anyway so my main contact with people is pretty much restricted to meetings.
    I also still have kids at home and definitely don’t want to retire if all I am going to do is end up nagging and micromanaging their homework, chores, social lives etc…


    • The more work you can do on your non-financial, post-retirement plan the better! The amount of time you have, compared to when you were working, is incredible. It’s quite hard for me to get my head around. But I know what you mean about “purpose”, and I do struggle with this. I think a lot about starting my own business and have come very close to doing so. Still might do it.


  7. Hi. I think another jarring aspect that has to be faced & was unexpected [to me at least, but this may vary according to personality type] is simply ‘allowing yourself’ – it’s all a mental process – with myself it got better with time & was definitely step-by-step.

    So in the beginning for example, I allowed myself to sleep another hour in the morning if I felt cozy instead of jumping up with the first light, due to years of conditioning/habit. Then as you said, small treats which you know are wants rather than needs that you would have denied yourself in the earlier hoarding/discipline stage of life; all this still made me feel guilty in the beginning, but the extent dissipated with time.

    I’ve gotten to a better balance now, where my lifestyle is according to the Pareto principle, ”Is there anything I absolutely have to do today or it will cause me pain or cost more in the near term?” ….. like paying a bill before it increases due to penalty costs. If not, at ease soldier, stand down, permission given to indulge in recreation activities, you may be happy now 🙂

    But the biggest difference I found in quality of life was shutting off that voice in your head instilled from years of corporate life, a kind of mini-micro-manager, saying you should always be doing something worthy, with every single minute. LivingaFI has explained this beautifully on his blog. Once I stopped feeling guilty for not finding life hard in some way for most of the time, [& lets’ face it, often at work most of that is needless, manufactured drama to ‘massage’ the egos of senior management] it got a lot more peaceful generally. Feel like just reading all morning because there’s nothing essential to do today & the weather looks brutal outside? ….. go for it ! – what to do with the afternoon then?….. see how you feel after lunch, it’s Ok, I give you permission.

    I don’t know how they did it, but they managed to train us to torture ourselves – no wonder they obsessed about training all the time, it wasn’t to improve you, it was to improve their control over you without your even noticing – fascinating use of psychology, as seen from a neutral view point …..sad that it’s that easy though.


    • Firstly, can I just say thanks to Jim for starting this blog. I am really enjoying the discussions and thoughts on being retired early which are generating these interesting discussions.

      Secondly, I’m really interested in what you say here @Survivor. The balance between guilt/pressure/control/etc. is really fascinating. Whilst I believe it is great to keep training and improving yourself, the purpose for doing so is really important. As you pointed out, in the corporate world it can be a case of ‘just another way to keep the workers running on various types of treadmills’, whereas in the FI/retirement world we CHOOSE to get on a treadmill, or not, to develop ourselves for a specific purpose e.g. we WANT to go to the gym, so we do, because we know it is good for our own physical, and mental/emotional health.

      There are two great verses in the Bible (I studied divinity at uni) which really jumped to my attention when I read your comment: “Be sober-minded; be watchful. Your adversary the devil prowls around like a roaring lion, seeking someone to devour (1st Peter 5:8)”. How does he do this? He: “accuses us day and night (Revelation 12:10)”. That bloody little voice accusing us of not doing something worthy is a pain in the ass! I’m all up for getting rid of it as much as possible!

      It is time to live in freedom and without regrets and guilt trying to trip us up all the time!


  8. @ TV There’s Value, Absolutely. We’re born a sponge & soak up information & messages endlessly, so it makes a huge difference how wise & useful those messages from the total environment are – will they help you succeed or damage you? …..the whole is a spectrum.

    As with any form of corruption, where the best answer generally is truth through transparency, in the case of brainwashing, the best defense against the barrage of messaging we face, [more than ever in history due to technology today] is learning to think – question all – what is the evidence that it’s true?

    By luck/career drift, scientific analytical skills helped me, in that I learned to block out the noise & look only at the facts – it’s still not easy though, you have to consciously remind yourself to go through the steps to ensure you’re not falling victim to the hardwired cognitive biases in the primitive part of our brains

    Also, don’t get me wrong, I’m not against training/learning per se, it’s one of the main ways I derive happiness from life, I’m as curious as I was as a child, I am so, so, so grateful working life didn’t crush or bury that too. The point though is that the gain should be for your own health & happiness while not hurting others or destroying your surroundings.

    Happily, you can also bring back your creativity & imagination with time & effort, it’s not irreversible …..the more varied & rounded you can get your lifestyle to be, the more you can ensure balance.


  9. I’m a little further behind you in this particular journey, having only more recently pulled the trigger on leaving the career that got me to FI, but can relate to this post. Trying to recreate a healthy level of lasse faire attitude to spending, trusting that all the instincts that had gotten you to FI will keep you from anything too crazy, is tough. I ‘know’ that my spending level over the course of the year is a safe one and I shouldn’t over analyse the small peaks and troughs, but as you say – it feels different.

    That said, looking at my spending the result of this more thoughtful attitude is fairly similar to yours. Less spending on food in general, with an improvement in quality of food we eat. The energy to prepare more varied / interesting / healthier meals (and the shopping that entails) is suddenly there. Concur with the increased coffee expenditure, mid-week afternoon coffee and cake with the wife is priceless.

    Re Survivor; the ‘allowing yourself’ is the hardest adjustment and one I am still in the process of. There are times when not doing things constantly feels like self-harm, that by not achieving something you are damaging your future self. Up to now the message has always been work harder in order to earn more with scant regard for the what happens at the end of the story. Having somewhat fast forwarded to the end and financial independence, it is a blank canvas. Being in my low thirties that is both exciting and daunting. The nagging voice having allowed myself to sleep in or binge watch Netflix is still there and currently the therapy is to go for a long jog or try and improve my cooking. Trying to tell yourself that you are enjoying doing what you are doing and that you have earnt that freedom doesn’t yet sit right, I feel I am still stuck asking that fundamental question : what is it that I truly enjoy?

    Which begs the question that I think Jim alludes to a lot, should you retire until you can answer that question better? There are times when I think returning to some form of work would help. However I think it is only by going down this road that you can really get to the answer. No amount of sitting at work and thinking about what you will do with freedom can substitute the state of mind of an empty slate. Going back to work would simply defer having to find the answer and I’m not sure I’m ready to give up on it yet.


  10. @Survivor @M Thanks for the comments. I wish I could better articulate the feelings I have over not having to work but kind of wishing I still had work to go to. I’m going to keep chipping away at it though!
    @Jamtomorrow, good to see you’re also living the dream. Well, if we could work out what that dream actually is. I agree with you that trying to work that through, and having the time to do it, is a damn site better than sitting in an office. Mostly.


  11. @Jamtomorrow & Our gracious host, since these discomforting feelings have psychological roots, I think that it’s only by understanding the psycholocial mechanism that we can solve the problem – I’m not saying it’s easy necessarily, just that that’s a signpost as to where to even begin.

    My take [note I haven’t completely solved it yet either, but am working on it] is that you have to look at the underlying motivation, so if one discomfort derives from no longer feeling useful – which work was standing in for before – then you can substitute with another activity that does the same thing. Like I go & check on my parents regularly now vs before; but at least once a month do all the stuff they can’t cope with, be it dealing with bullying bureaucracy/salespeople for essential services or anything heavy duty for them, like mowing the lawns. This makes me feel that I am protecting & looking after them & therefore useful – at some level you know they’d have survived anyway of course, but you can reason that you do it better because you have their best interests at heart vs a stranger.

    I am also struggling to define enough things I enjoy & put that down to several factors – simple things are under-rated or unnoticed, because it seems too commonplace, so you feel reading/cooking/gardening doesn’t count for example because society mostly sees them as routine good housekeeping tasks, so not ‘interests’. As for improving things for your future self, maybe the thing to do is re-frame that mentally to ‘not necessarily monetary’, so you can still help/invest in your future self by improving your health or general knowledge. I rode shotgun in a plumber buddy’s van for a few weeks to learn the absolute basics, now if my toilet wont flush right or makes the wrong noises, I know what to do & save £100 on a callout for a 5 minute adjustment – even for the rest of the stuff which I still can’t handle, I now know what the job should look like, so nobody could con me.

    On the optimistic side, I think if we stop stressing that it’s not all falling into place immediately, it’ll come into focus all by itself – years on the working treadmill train us to have no patience – it’s drilled endlessly into you that efficiency is the ultimate & if things don’t happen NOW then you’re doing it wrong. But, many quality things in life need to happen slowly or very slowly even, like physio after injury, teaching small children, dealing with delicate materials – so I think we are still stuck in the habit of over-trying at this stage. I have seen things getting incrementally better for myself every year, so because of that, I suspect a lot of the answer might be just having enough time to mentally adjust to the change & allow yourself to be Ok with it.

    Counter-intuitively, the fact that you can get stuck into a pattern of overthinking why something is not happening, makes your thoughts churn endlessly, like a circular argument & then you get the emotions of discomfort & general unease from that. When you can let go & relax, the analysis paralysis can clear & you free up the energy to think of what you do want instead of what you are worried about – then it’s more likely to happen, because you can see each small step at a time that you need to take to get there. For example, instead of rushing back to work, [which I think would be an anti-climax in that you’d feel you failed at being free] look for the activity from that work that you’re missing & see what else could get you that anyway. I also totally agree that simply going back to work just kicks the decision down the road into the future, there’s no avoiding this process – which is actually learning about yourself – what makes you tick.

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  12. enjoyed the post as well as the discussion in the comments. One thing I’m curious about that hasn’t been picked up on yet is the travel savings you mention, would you have any advice for those of us in a position to do the same? My own abilities are limited to skyscanner for ideal times to go in terms of prices or travelzoo for big package holiday savings but I’m concerned the latter might not be as good as anticipated.


    • Hi Nick, what I was alluding to here was that, when working, I needed to get my “big” fortnight’s holiday in place quite far in advance. This was due to having to synchronise with my own and other teams’ plans – we couldn’t have five of the Board, say, all on holiday at once for two weeks (although in France, they can!) So I had to commit far in advance to the time, place and so on. So I was somewhat surprised to see that if I chose to fly to Miami on a Tuesday eight weeks from now, I could save over two hundred quid if I was trying to book for a specific date in September. (There might be other factors at play here, of course.) The fact is that I probably overpaid for holidays when I was working and I just kind of accepted it as a price I had to pay. I don’t have to do that now.


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