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Retirement planning: A tale of the unexpected

As I approached my 50th year, I thought all my retirement plans were in place. All I had to do was last out the next 15 years and I’d be living the life of Riley.

No more throwing the alarm clock across the room when it went off with a 6.30am call to get up, get washed, get dressed and get out of the house.

After all, I had in place the type of pension plan that was the envy of the world – a final salary pension, that golden fleece of retirement planning which meant I did not have to do much else in organising my retirement pot.

All I had to do was hang fire, enjoy the final third of my working life and then I could draw my pension, which had been so beautifully presented in my pension illustrations over the years.

No messing about with annuities, no researching the best plan to suit my lifestyle. The clear message was: This is what you WILL get when you reach your retirement date in 2021.

Queue the obstacles that came my way…

Obstacle 1: State Pension age change

This I could deal with, it didn’t really worry me: What did it matter if I had to wait an extra 12 months for my State Pension when the government kindly moved the goalposts from age 65 to 66 (the same for my wife)?

That’s just the way of the world and - I thought - easily overcome, so there was no need to really stress about it. It just meant living a little more frugally that first year – or I could carry on working a further 12 months, couldn’t I, as part of my retirement planning?

Obstacle 2: Closing of final salary scheme

This obstacle came shortly after, but again, I reasoned that the effect was not insurmountable. The company announced it was closing the final salary scheme but was introducing a money purchase scheme in its place.

The little blue line on my new pension forecast now showed a slight lowering of the amount I would receive at 65. But still, I thought I was lucky in terms of my retirement planning - lucky to have been in the final salary pension scheme far longer than some of my colleagues, with all the benefits that brought.

Obstacle 3: Jumping ship

This obstacle was one of my own making, and it was something I had never considered during my whole working lifetime. After 38 years, work had become stale, more difficult, more challenging and more stressful. I wasn’t happy anymore.

As a result I did something I never dreamed I would have to do – I took voluntary redundancy. It was a time when my own sanity and personal health took preference over my financial health.

After all, what’s the point of having a good pension if you’re not around to enjoy it?

I never thought I’d be in this position – but at the age of 56 I left the office for the final time after telling the company I was ready to leave.

What had I done?

It was only then that the full horror of what had happened hit me. From starting my company pension aged 18 and realising even then how key this was to my future, now, almost 40 years later, I realised that I’d put my own - and my family’s - future in peril.

So there it was – from seeing a clear path to retirement and financial stability six years previously, I was left stranded with the prospect of a much-reduced pension, and jobless with no prospect of employment.

With a determination to stop feeling sorry for myself and get back in the game, my time over the next three months was spent filling out job applications - 30 went out, two replies came back!

But the questions started coming:

  • In taking redundancy, had I made the wrong decision?
  • At my age would it be so easy to get another job?
  • How long would I now have to try and work after retirement to build up my pension?
  • How would I earn enough money for my retirement?

My first interview for almost 40 years answered a few of those questions. I got the job! It was time to get my retirement plan back on track.

Financial planning for my future

Today I’m fixed on putting as much as possible of my new salary into a company pension scheme. It’s not the security of the final salary pension but, in reality, I now realise I was one of the lucky ones. At least I’ve been given the opportunity to pay towards a new pension, supplemented by contributions from the company.

It’s been a roller-coaster ride over the last couple of years and one I thought I’d never have to take. And the lessons learned? Well, the best laid plans and all that...

People’s circumstances change, sometimes through no fault of their own, sometimes their own making. It also taught me that you really can never tell what’s around the corner but with some luck and determination you can get through it.

I’d encourage everyone to start early enough with your retirement planning and you may then just be able to hurdle whatever obstacles you come up against.

Have you had a similar experience to Roy? We’d love to hear your story and any nuggets of wisdom you have for others in this position. It’d be great if you’d share your comments below…

This article has been commissioned by retiresavvy and any opinions voiced are the author's own.

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