True money stories from smart people: Who really wants to retire anyway?

19 September 2017
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Would you like to retire at 40? It’s easy. Spend nothing, stay indoors, eat baked beans and save water by crying into the toilet cistern so you won’t need to flush. Do that for 10 years and you can keep yourself in Saga holidays and Stannah stairlifts for the rest of your life.

Easy. Why didn’t we all think of that? Well, one man on a recent Channel 4 programme, did – retire at 40 I mean, not cry into his toilet. He achieved this by investing 75% of his income every year. Bully for him, but you can’t help wondering if it’s really worth being a Billy-no-mates for a decade or so just to earn yourself the right to sit at home and watch Jeremy Kyle all day.

Still, at least it shows that it’s possible for ordinary people to retire like footballers, while you still have the energy to go wild in Magaluf. No waiting around for the state pension to kick in.

It’s certainly something I’m planning. I’m expecting a retirement full of hot toyboys and cruises round the Med. Incredibly, these are not catered for on the state pension. Who knew?

On BBC Breakfast News recently, I was explaining why the state pension age for 39- to 47-year-olds was being put back from 67 to 68. It’s because we’re selfishly living longer and drawing pensions for many more years than was originally expected. Short of putting something in everyone’s tea at age 75, the government has to take action now.

The howls of rage on Twitter and in my inbox were deafening. “Shame on you Jasmine,” said scouser Chris Tinsley describing national insurance as “an insurance policy for retirement”. He continued: “Raising the eligibility age should not be a financial option by people [ie, the government] who have mismanaged the fund. People like me who have paid into this scheme from our weekly wage in the belief this will support us as we get older should not have to work longer to access what we are rightly due.”

Eh? ‘Mismanagement’ of pension funds? What funds? Does he not know that the state pension is basically a Ponzi scheme where ‘investments’ made by today’s workers are handed straight over to current pensioners?

Fraudster Bernie Madoff would be impressed at how easily we have been made to believe – without it ever being said – that our money was being invested for us in a gold-plated fund that magically produces near 20% returns to turn our meagre monthly contributions into guaranteed, liveable income for the rest of our days.

Others took my side, though. One reader, Brian, commented: “When I looked at retiring, I got a print-out of my national insurance contributions (NICs). Over 39 years, I had only paid in just under £60,000 (does not count employer contributions), and for the past 10 years I had earned more than £50,000 a year.” Brian has enough NICs to qualify for the full state pension, worth £8,296 a year. But he says: “If I get at least £5,500 for 11 years, that would be more than I paid in… not counting the other benefits the money paid for.”

Exactly. Those who say that “we’ve paid in and should have what’s rightfully ours” have not calculated how much they have actually put in to see what (of other people’s money) they really get back. Many also conveniently forget the other benefits national insurance entitles us to, such as unemployment benefit, maternity allowance, bereavement support and more.

So it really is time that we took things into our own hands – whatever age we are – and put as much as possible into our own ‘cruises-round- the-Med’ fund (so much more better-sounding than a ‘retirement fund’).

We need to be more like MoneyMagpie stalwart Tira Shubart, who says she is putting off her state pension age by a year in order to get a higher payment, and who, at 61, has just started a new training business in Africa. “I calculate my age in Centigrade rather than Fahrenheit,” she explains, “which means I won’t actually retire for another 30 years. Go me!”

Jasmine Birtles is a financial journalist and founder of MoneyMagpie.com. Email her at columnists@moneywise.co.uk.

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