It’s been over a year since my wife and I took early retirement, and I wanted to share some thoughts about how we’ve managed financially and what we’ve learned along the way. For those who don’t know, I retired at 56 from the RAF. Not a long career, but enough to get a pension and my wife also retired at the same time. She doesn’t have any pension, she simply decided to quit working at 54 too.
So the first thing everyone probably wants to know. How do we survive financially. Firstly, income. Well our income comes from a few sources. I have a small pension from my time in the RAF, in addition we earn some interest on our savings, we have a small income from repayment of a family loan and I receive a very small income from the odd YouTube video and book sales. Links below to my books by the way if you want one. All this combined comes to around £25,000 a year, which is roughly equivalent to the UK minimum wage for a single person.
What about outgoings? Our fixed household expenses are relatively low at £430 a month. This covers council tax, utilities, internet, heating oil and SIM only deals for mobile phones. We have no loans, no debts and nothing on credit card or finance. More importantly our three children are all adults who have their own lives, jobs and incomes; therefore, we don’t have any expenses related to them, nor anything like university fees to help with. We currently own two older cars and are experimenting with having just one; therefore, mine has been parked up for the last 3 months. Our insurance is inexpensive at around £150 a year fully comprehensive thanks to our age and no-claims discounts and I maintain the cars myself, so on the rare occasion a repair is required our only expense is the cost of the parts. Equally, I complete any jobs around the house and again any expense is limited to materials only. Our adult son currently lives with us and contributes half of the fixed household costs each month(£200) which helps. We feed him for free….! When we downsize to a smaller, modern home in town, we expect these costs to drop further, and the released capital will generate either additional interest income or provide funds to be draw down later.
In addition to our income our retirement plan involves drawing down some of our savings when needed. And we also plan to sell our big family house and downsize in the next year or two, which will free up additional capital.
So how have we faired? One surprising realization this past year has been how little it actually costs to live when you’re retired, don’t have a mortgage and are used to living within your means. We’ve needed to draw down far less from our savings than I anticipated, even with significant travel. It’s a reminder of the old adage: it costs you money to work.
Over the past year, we’ve largely managed to live within our £25,000 income. However, I did mention travel, and viewers of ouir YouTube channel will know we have been away a lot over the last year. So lets look at these costs. During longer trips, we have dipped into our savings to cover some costs. For instance, we spent two months backpacking the 500 mile Camino de Santiago pilgrimage last autumn, which cost about £2,000. We then spent five months in Asia which cost us around £4,000. The bulk of these costs were on flights and travel to and from various places. This coming January, we are heading to Sri Lanka for three months at a cost of around £3,000, again mostly for flights.
I should reiterate that once we are away we generally live within our means each month. Also I should point out that a large part of the travel expenses above were covered in our first year by tax refunds because we stopped working in the September, which was half way through the tax year and we had to wait until this Jun to get the extra tax back we’d paid.
What I’ve Learned About Early Retirement
1. Don’t worry that you don’t have enough money and keep going for “just one more year”. That one more year will come off the time you have to enjoy retirement and statistically it’ll also bring your overall life expectancy down too. Plus, just one more year often becomes just two or three more years. If you’re about 80% of the way there financially, you’ll make the other 20% work. Don’t let the fear of not being perfectly prepared hold you back. Remember, if for any reason you have got it horribly wrong and run out of money in the future, you can always earn more. But if you run out of time, that’s it—you can’t get the time back.
2. Don’t feel guilty about not working. Letting go of work-related guilt has been one of the hardest adjustments for me. At first, I struggled with feelings of guilt, wondering if I should be working, and even found myself browsing job sites occasionally. Thankfully, those feelings have well and truly passed. Now, I’ve fully embraced the fact that others make their own life choices, just as I’ve made mine. My decision to retire early doesn’t diminish the value of anyone else’s work. I’ve learned to let early retirement have the time and space it deserves. I retired for a reason and I’m not going to let old habits or fears undermine my decision.
3. It’s okay to draw down capital. It took me a while to get comfortable with this idea. At first, drawing down savings felt wrong, especially after years of saving. It was almost like I was doing something irresponsible. But I’ve come to accept that this is exactly why we saved in the first place, to enjoy this stage of our life.
4. Breaking free from a consumer-driven mindset. One of the biggest shifts early retirement has brought is a change in perspective. I no longer feel the pull of materialism. I really couldn’t give a monkeys what car I drive or others drive, nor what they wear or I wear. Instead, I’ve come to value experiences, relationships, and personal growth far more than possessions. With less stress and more time, I’ve managed to prioritize my health and well-being. I’m exercising more, enjoying shopping for great ingredients and cooking healthy meals and travelling.
5. The power of saying no. Without work obligations, I’ve gained the freedom to say no to things that don’t align with my values or priorities. I no longer feel pressured to take on commitments I don’t truly enjoy, and I can dedicate my time to what matters most to me. I have the freedom to design my day how I want it to be.
Conclusion
Reflecting on this first year of early retirement, I’ve come to realize that the transition is less about grand ideals and more about practical adjustments and mindset shifts. Financially, we’ve found that living on a modest income is not only doable but often less costly than expected, particularly when free from the demands of work-related expenses. By maintaining low fixed costs, drawing down savings strategically, and rethinking what we truly value, we’ve created a sustainable and enjoyable lifestyle.
The key takeaways? Don’t overthink the financial side—if you’re reasonably prepared, the rest will fall into place. Be ready to let go of old habits, whether it’s work guilt or a consumer-driven mindset. Most importantly, understand that retirement isn’t about extravagance; it’s about reclaiming your time and aligning it with what matters most to you. Early retirement is not a perfect science, but it’s a choice that, with the right planning and perspective, can work out far better than you might imagine.