Death in the office

by Doug Brodie

 

/1. Death in the office: not a terribly good idea.

Being on a salary of (say) £90k per year means you have around £5,000 per month to pay for your living costs, to save, to add to your pension. If you retire and don’t do that year’s worth of work, that decision has cost you roughly £60,000 net – your savings are lower than they would have been had you worked another year, and for many people the extra savings/pension is a material part of the final pot. It can be a very key part of your finances in the early years of retirement. 

There are a good few folk who come to us to find out if they can retire (or downsize their work) right now, this month, this year. If you’re in a deeply uncomfortable work situation then paying for that release from ‘work hell’ by having a little lower pension income at outset is usually well worth doing. The planning work we do helps you find and anchor in your mind where the bottom line is, what it looks like and how it’s paid for; once confirmed, then confidence in making the big change is fairly robust and reassuring.

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/2. The Five Boxes to tick to know you’re facing the right decisions.

a.  Using bank statements, work out how much you spend per month: from that figure calculate if you are banking more or less than that each month – if you are, you need to amend your outgoings, a pay rise for retiring is not normal. This is COSTS.

b.  Work out all the income you will have from state and final salary pensions, rental and other income. This is INCOME.

c.  Add all your pension and savings capital – deduct 6 months spending from ‘a’ above as your safety net. The balance of the CAPITAL (pensions, ISAs, cash, equities, everything) is the driver for the shortfall – that is INCOME minus COSTS from above. That shortfall should be divided by CAPITAL, and shown as a percentage (shortfall / capital = X%). If the percentage is above 5% you need to be careful; if it is 7% or higher then you need to amend either COSTS or CAPITAL.

d.  If you’re lost in calculating any of the above then you need to seek qualified advice: if you are unhappy with the maths above then you are unlikely to be able to see through and evaluate what are reading in DIY ‘guides’ or adverts online.

e.  Know what INCOME you need – only focus on the income, only look for the income. If you’ve found ‘asset allocation’ then you’ve been reading the wrong map and will end up in the wrong place. Everything you see, hear, read, meet, measure must be referenced only against your INCOME figure. 

That’s how you end up with the right income at the right time, year after year after year.

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/3. Buffett challenged hedge funds to a $1m bet – this is the outcome.

In 2007 Warren Buffett responded to a hedge fund investor by challenging him and his industry to a simple bet – they put $1m into a pot and the bet was that hedge funds would not beat the simple S&P500 over ten years because of their exorbitant fees charged by the managers. He won, they lost, this is the year by year table – there were 5 funds of hedge of funds, handpicked by the challenger:

Hedge funds at the time charged on average 2% annually and then 20% of the profits as well. Mr Buffett was correct, and we still see many hedge funds talking up huge complexity about how they are investing, whereas what they are actually doing is spinning a yarn to get hold of investor money.

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/4. Why more investment choices make you unhappy and dissatisfied.

If you have 50 investments in front of you, you have 50 different reference points to calculate and consider.

You have an escalation of expectations because with a wide range of options in front of you our brains think there is a better chance of the ‘perfect one’ being there, so anything less than perfect will feel like a let-down.

You have a fear of missing out (FOMO) so restricting the choice feels like you are deliberately limiting the ability to have the ‘best’ solution.

There are around 5,000 different funds and trusts that are available to the retail market – that ranges from brand spanking new leveraged debt funds, to the world’s oldest retail mutual fund that is over 157 years old.

Those funds are grouped into types and sectors, styles and geographies, income and accumulation. Before you start driving away, first check the route (mentally, map or satnav) – if you’re going to Exeter from London then seeing a signpost to Suffolk is an irrelevance.

Suffolk may well be lovely and inspiring but it will not get you to Exeter. Investing is the same – first check where you want to go with the investment, what you want it to do for you, and ignore everything else.

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/5. Claire-ly Speaking’s second part of pension-thinking for Gen-X’ers

Before I write any more, I must apologise to my mother, who did not find my last article amusing and called to tell me that, actually, life was very hard. The reality is that life is generally hard for everyone. But for GenX, teasing Boomers is a sport, so Mum, you should probably stop reading about now!

And if Gen X’ers reaching 60 doesn't scream “time to plan for retirement,” we don’t know what does.

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Let’s take a moment to sit with that truth, and to be perfectly honest, this might be easier for me than it is for you as I sit at the Millennial end of Gen X (yes, I’m showing off!):

The oldest members of Gen X have just turned 60.
That's right — the generation that brought you cassette mixtapes, dial-up internet, and a suspicious amount of Sun-In is officially… retirement-adjacent.

And while your Spotify playlist still slaps, your pension pot might not be keeping up.

(Note for Boomers: Spotify is a place where all the records from all the music artists have been recorded and can be accessed through an app on your mobile phone and the word ‘slaps’ is GenZ for ‘really good’! – you’re welcome!)

We are the sandwich generation — not in a cheese-and-pickle way, but in a stuck-between-our-kids-and-our-parents way.

  • You’re helping your teen get through uni, or out of your spare room, or both

  • You’re supporting parents through rising care costs, even if it is just emotionally

  • And if you’ve tried insuring a 17-year-old’s car lately, you’ll know it costs more than your first house deposit.

No wonder retirement planning feels like a mythical luxury — somewhere between getting eight hours of sleep and remembering to take your magnesium/collagen/vitamin D3!

But Here’s the Deal...

As a recent This Is Money article puts it - I’ll Be Working Till I’m 70, we’re just not on track — and most of us know it. And yet we’re still winging it, because life has been throwing us curveballs since Mr Blobby was considered peak entertainment and Ant and Dec were PJ and Duncan.

A Dunstan Thomas report didn’t sugar-coat it either. Most Gen Xers:

  • Have pension pots that look more like petty cash tins

  • Are juggling three to five small, forgotten schemes

  • Are planning to work longer, retire later, or downsize everything (including their shattered dreams)

 So here’s the twist:

  • We still have time.

  • We’ve still got fight.

  • And we’ve definitely still got Wi-Fi and spreadsheets.

And before you spiral into a Google search titled “Can I retire in Portugal with £6 and a Greggs loyalty card?”, take a breath.

This next chapter is about clarity, action, and maybe even optimism (with a side of sarcasm, naturally).

You don’t have to do it all today. But it’s time to start asking the right questions — and we’re here to help you do it.

We really can retire without selling that kidney!

(Or at least not have it as Plan A, B or C!)

Step 1: Do a very simple budget

Forget the fantasy retirement with year-round sunshine and daily brunch, start with just the basics first. Let’s look at some realistic figures from the Pensions and Lifetime Savings Association (PLSA):

  • Lifestyle Single Person Couple

Minimum – basic needs covered £14,400/year £22,400/year

Moderate – some holidays, eating out £31,300/year £43,100/year

Comfortable – regular holidays, new car £43,100/year £59,000/year

every five years

Source: PLSA Retirement Living Standards, 2024

That “moderate” level for a single person — £31.300/year — is what a lot of people aim for. But even the State Pension only gives you about £11,500/year, so either you need to make up the difference somehow, or adjust your lifestyle to match what you will have.


Step 2: Add Up What You’ve Got So Far

Add up:

• Your State Pension forecast (check it via the Government Gateway site) – then the capital sums:

  • All your workplace and personal pensions

  • Any savings, property, investments, or side hustles (don’t include the feet pictures for now!)

  • Anything else you plan to live off (e.g. selling the campervan, well maybe most of us don’t have camper vans, perhaps selling the second car, ok ok, there’s probably nothing to sell!) [Google: ‘is there a market for old Just 17 magazines’. I googled it, there is actually a market – who knew!]

Total it up, and then just take 4-5% per annum of that sum as income

Step 3: Reality Check — Is That Enough?

If the answer is:

  • “Actually, I’m on track” — go you! Have a biscuit.

  • “I might just scrape by” — still okay, now you know.

  • “Not a chance” — deep breath. You are not alone.

Now we make a plan.

Step 4: Boosting Your Retirement Income (Without Selling Organs)

So, you’ve totalled up your pension pots and let out a tiny scream.
You’re not alone — and the good news is: there are things you can do. Even in your 40s, 50s or early 60s, you still have time to make an impact.


Work a Few More Years
Retiring at 67 instead of 63 might sound brutal, but it gives your pot more time to grow and shortens the number of years you’ll need to stretch it across. Working with retirees, we hear all the time that retiring too early is often not all its cracked up to be (unless you hate your work/company/profession/colleagues).

Maybe we can start a hashtag?

#67isTheNew30

 

Okay, it doesn’t exactly roll off the tongue — but let’s focus on the fact that keeping your brain and body active into later life is great for your health and your bank balance. Early retirees might be rich, but are they happy?!?! (probably,…….. moving on………..)

Pay Into Your Pension (even just a bit)
Even small contributions can make a big difference, especially when:

  • Tax relief turns £80 into £100 in your pot

  • Employers often match or add extra – free money, basically

  • Even £25/month adds up over time 

This is the pension version of compound interest meets adulting. 

Claim Missing NI Years
If you took time out to raise kids, care for someone, or had periods of low income, you might have gaps in your National Insurance record – which can reduce your State Pension later on.

Check if:

  • You received Child Benefit (especially before 2013)

  • You can buy back missing years – around £824 per year (2024 rates), which could add £300+ per year to your pension income for life

Claire’s Tip:
One of the best-value investments you can make is topping up your State Pension.
I’ve just done it myself — and I won’t lie, the Government Gateway system is straight out of the Stone Age. It crashes, the computer says ‘no’ a lot, the helpdesk has 40-minute waits, and the hold music is an actual crime.
But do ‘future-you’ a favour and persevere. It’s worth it. Promise.

Get Creative
It’s not just about cutting back — you might have more options than you think:

  • Got a spare room? Consider renting it out (check the tax free Rent-a-Room scheme)

  • Got a side hustle? Use your skills to bring in a bit of extra cash

  • Can you trim outgoings and build a mini nest egg? Even £50/month helps

You don’t need to become a crypto queen — just make a few tweaks that work for you.

What Not to Do
Let’s save future-you from panic mode.

  • Don’t take your pension too early without a plan – you’ll pay more tax and could run out of money too soon, unless you are super rich, even older Gen X’ers probably shouldn’t be looking to retire for another 10 years.

  • Don’t ignore it and hope for the best – even knowing you’re £10k short gives you power to plan.

  • Don’t assume your kids will look after you – they can’t even find the laundry basket with the lights on, let alone manage your care plan, my son messaged me at 3 in the afternoon yesterday asking where I was as he noticed I wasn’t in the house, (I was at work), I’m not sure he’d notice if I ‘had a fall’, unless we’d run out of loo roll of course!

The Gen X Takeaway

Your retirement might not look like your parents’ — but that doesn’t mean it can’t be secure, joyful, and fully funded by your own brilliance.
We might not have final salary pensions, but we’ve got grit, Spotify, sarcasm, and at least 10+ years to turn things around.
You don’t need to fix everything today.

You just need to start.

To-Do Checklist

  • Check your State Pension forecast

  • Add up all your pensions and savings

  • Use the Money Helper calculator or spreadsheet

  • Consider topping up your NI record

  • Explore working longer or part-time

  • Adjust your expectations — and own it

  • Celebrate not selling a kidney or feet pics!

Now if you’ll excuse me, I’m off to see if my mates fancy building a retirement commune in a field somewhere. We’ve got spreadsheets — well, thoughts of spreadsheets — Prosecco, and questionable life skills. What could possibly go wrong?

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INVESTING SHORTS, CHANCERY BRAINdoug brodie