Early Retirement - Starting A Little Late - Help and Advice please

Paying off your mortgage isn't bad. but isn't the best strategy.

Paying £1000 off a 3% mortgage saves you £30 per year
Paying £1000 into a pension gets you £250 in tax relief plus it is then likely to grow at 5% a year or more.

That only applies for income taxed at the basic rate, but half your wife's income would get that tax relief. Even without it it is still probably better to save into a pension.

Triumph13 wrote: »

Fixed that for you. As long as it's contributed to a private pension (rather than a work's pension arrangement where you contribute from pre tax income) she can put in 80% of her entire taxable earnings and have HMRC add the other 20%. Strange, but true.

Might also be worth checking if there is salary sacrifice at her work.
Mine saves my own 12% national insurance and also my employer passes on their 13.8% employers NI as well.

Your employer does have to pay you minimum wage by law though so would only apply to around £10K of her wages.

CeePeeBee wrote: »

A little background. I find life hard. That's not a statement to derive pity from the masses - I'm just stating it how it is. The everyday grind is difficult for me (whereas crisis situations are, strangely, more easily dealt with).

I share your pain. I could have written this. My suggestions:

- 13 years to your target is a long time when it's hard to get through the working week. I went down to 4 days a week and it was the best thing I ever did. Knowing that the week is shorter helps get through it and 3 day weekends with OH are fab.
- I know the above means less income so look at your spending. We are on a big minimalist push at the moment. This isn't about depriving ourselves but makng sure we get value and enjoyment for every hard earned £. Sure you've read this all before here - but we've been seriously challenging ourselves not to waste money and the idea gathers pace quckly once you focus - espcially when you look around your house and realise how much crap you've accumulated over the years and how much it cost you.
- We are also downsizng the house. Again we don't need the space and we don't need an extra bedroom for relatives that will stay 7 days a year. Just saying it's worth evaluating what you want and need from your house and where you live and make sure it is workng for you.
- Get yourself a spreadsheet to plot your way to retirement. It can be therapeutic and motivating as well as helping sense checking your assumptions on your spending in particular.
- Have you looked at coping strategies to help get through the workng day? E.G. Ways of reclaming work-life balance? Trusted people at work you can talk to or vent at? All these have helpd me.
- Do you make the most of your time outside of work? I found running and mentally that has really boosted me.
- Finally, is there something more radical you could do on the work front. I have to admit to soldiering on through 21 years of work stress (1 more to go hopefully). But is there a less well paid job you would be happy to do past the age of 50 in order to obtain that simple and peaceful existence you are searching for?

Hope that helps a bit.

I am late 30s and reduced to a 4 day working pattern last year. They are long 10 hour days but I am still paid full time and it means I can look after our young son while my wife is at work.

Because of my specialist knowledge and ability to apply myself I am identified as a key individual in a long term customer contract so my employer has an all reasonable endeavours obligation to retain my employment. In addition they both seem to like me anyway and give me a lot of freedom to manage my area of responsibility.

It has saved me a few hours in travel each week as I am now avoiding the peak traffic. My annual leave was reduced from 25 to 20 days but I was able to buy 5 extra days via salary reduction to compensate.

My take home pay is limited by the 40% tax and child benefit cap so I already make substantial pension contributions (and have probably already contributed enough for an ok retirement at 60ish assuming modest growth above inflation) so thought why not.

So far the working pattern has been great (although I do get tired towards the end of the working day especially if our son has been keeping us awake at night) and I am hoping to reduce my responsibilities and earnings over time but not sure how yet.

Alex