Living on savings

fatbeetle
fatbeetle Posts: 567 Forumite
First Anniversary First Post I've been Money Tipped!
edited 20 September 2017 at 9:20AM in Pensions, annuities & retirement planning
In order to retire early, me and SWMBO will be living on a lump sum I am due.

From Jan 2018 until sometime in 2024, we will live on a pot which currently stands at roughly £274,000

Has anyone else lived on a savings pot for a period?

Any tips or advice?


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“If you trust in yourself, and believe in your dreams, and follow your star. . . you'll still get beaten by people who spent their time working hard and learning things and who weren't so lazy.”
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Comments

  • chiefie
    chiefie Posts: 406 Forumite
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    Yes to advice - enjoy it ��
  • ukdw
    ukdw Posts: 281 Forumite
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    edited 12 September 2017 at 7:12AM
    Not having an income does confuse some financial organisations - so I would suggest applying for new credit cards etc before leaving work. Other things like motor insurance may get slightly more expensive too.

    Also depending on your pension situation it may be worth making full use of your income in your last year of working to maximise pension contributions.
  • Apodemus
    Apodemus Posts: 3,384 Forumite
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    Any advice would really need to take account of what happens in 2024! If the lump sum can be spent down to zero over the six years, then enjoy! If it is needed to contribute to further income after 2024, then you need to be more careful what you do with it!
  • tacpot12
    tacpot12 Posts: 7,943 Forumite
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    Budget carefully in the first couple of years to check that you can cover all your expenses and expenditure plans.

    You can declare your occupation as retired if you are not doing any work and have no intention to work in your area of experience again. This may reduce insurance premiums.

    Enjoy it.
    The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.
  • NotSkint
    NotSkint Posts: 74 Forumite
    Apodemus wrote: »
    Any advice would really need to take account of what happens in 2024! If the lump sum can be spent down to zero over the six years, then enjoy! If it is needed to contribute to further income after 2024, then you need to be more careful what you do with it!

    Yes, as Apodemus says, it depends on whether this is money to spend or whether you need it after 2024.
    If the former, then mentally split it into yearly/monthly amounts, maybe incorporating an inflation assumption (say 2% per annum) and enjoy it.
    If the latter, then too little info to go on.
  • marlot
    marlot Posts: 4,933 Forumite
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    fatbeetle wrote: »
    In order to retire early, me and SWMBO will be living on a lump sum I am due.

    From Jan 2018 until sometime in 2024, we will live on a pot which currently stands at roughly £274,000...
    I'll be doing something similar.

    I've prepared by downloading three years of bank statements so I can see typical spend. I've removed a few large one-off things, but replaced them with an allowance for car/house repairs.

    I'm still working (for now), but am able to track month-by-month spending to see if it remains in line with my forecasts.
  • BLB53
    BLB53 Posts: 1,583 Forumite
    From Jan 2018 until sometime in 2024, we will live on a pot which currently stands at roughly £274,000

    Has anyone else lived on a savings pot for a period?
    A lot will depend on the returns you can generate from your lump sum. I have been living off savings/investments for the past 10 years which have returned 7% p.a and this means the original amount is more or less the same as when I retired early.

    If I had the money just in savings getting 1% or 2% it would now be a lot less.

    If you invest the lump sum wisely, you should be able to get a return of ~5% so that would be £13,700 p.a.
  • westv
    westv Posts: 6,081 Forumite
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    fatbeetle wrote: »
    Has anyone else lived on a savings pot for a period?

    I'd expect everybody on this board will be doing that at some point.
  • fatbeetle
    fatbeetle Posts: 567 Forumite
    First Anniversary First Post I've been Money Tipped!
    Many thanks all.

    To Clarify; the pot can be spend down to zero, as at that point we will switch to living on my wife's superannuation, and my pensions. These combined will give us an embarrassingly good income, well above what we would need.
    “If you trust in yourself, and believe in your dreams, and follow your star. . . you'll still get beaten by people who spent their time working hard and learning things and who weren't so lazy.”
  • crv1963
    crv1963 Posts: 1,372 Forumite
    First Anniversary Name Dropper First Post
    Our plans are similar- use a DB Pension and a savings pot to make the bridge from ceasing work and SPs starting so that we can go earlier into retirement, we're getting our sums together and it seems doable!


    Good luck and enjoy!
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
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