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  • FIRST POST
    • Marine_life
    • By Marine_life 5th Nov 10, 10:46 AM
    • 801Posts
    • 1,411Thanks
    Marine_life
    Early-retirement wannabe
    • #1
    • 5th Nov 10, 10:46 AM
    Early-retirement wannabe 5th Nov 10 at 10:46 AM
    I would like to create a topic (don't see it at the moment - other than the NUMBER thread).

    Who is aiming for early retirement (or who has retired early already)?
    When did you begin planning and what drove the decision?
    What is the strategy for getting there?
    How much of a relative decline in income are you prepared to take / did you take?
    What are your main concerns?
    For those already in early retirement - how is it progressing? What have been the good and bad surprises (financial and otherwise)?

    I will post my strategy but wanted to get some thoughts
Page 170
    • ukdw
    • By ukdw 13th Jul 17, 8:19 AM
    • 41 Posts
    • 33 Thanks
    ukdw
    Yes, I w as thinking that, there is going to be a pretty big tax bill therefore reducing this tidy sum.
    Originally posted by atush
    Agreed. At present assuming no protection the above LTA amount is about £400k - so the minimum tax liability at 25% would if I have understood how LTA tax works be about £100k which is about 7% of the pot.

    If the OP makes real terms growth of say 3.5% for the next 20 years then the £1.4m could have grown to £2.4m in real terms.

    If we assume that the LTA penalty tax rate stays at 25%, and the LTA level increases only in line with inflation, the above LTA amount in 20 years time could be as much as £1.8m with a minimum penalty tax liability of £450k - which would be then be about 16% of the pot.
    • Marine_life
    • By Marine_life 13th Jul 17, 8:24 AM
    • 801 Posts
    • 1,411 Thanks
    Marine_life
    Interesting, think i'll try may or june so as to have less in the way of crowds.
    Originally posted by atush
    Yes, and also possibly less heat. I don't tolerate heat well so anything over 30 is too warm for me.
    Something witty goes here
    • ex-pat scot
    • By ex-pat scot 13th Jul 17, 8:48 AM
    • 205 Posts
    • 224 Thanks
    ex-pat scot
    Agreed. At present assuming no protection the above LTA amount is about £400k - so the minimum tax liability at 25% would if I have understood how LTA tax works be about £100k which is about 7% of the pot.

    If the OP makes real terms growth of say 3.5% for the next 20 years then the £1.4m could have grown to £2.4m in real terms.

    If we assume that the LTA penalty tax rate stays at 25%, and the LTA level increases only in line with inflation, the above LTA amount in 20 years time could be as much as £1.8m with a minimum penalty tax liability of £450k - which would be then be about 16% of the pot.
    Originally posted by ukdw
    I'm pretty darn certain that the LTA will not be recognisable when you get to access your pot.


    The rational approach would be for it to be removed, as the AA is sufficient.
    The political approach is to either increase (not in this political climate it won't!) or decrease again. There may be Fixed Protection on offer.


    Basically - I think it's too uncertain to plan for. Therefore I am continuing and will then adjust plans if and when the rules shift.
    • Marine_life
    • By Marine_life 15th Jul 17, 12:14 PM
    • 801 Posts
    • 1,411 Thanks
    Marine_life
    Some thoughts on the channel 4 program - How to retire at 40 in the blog:

    http://earlyretirefree.com/so-can-you-retire-at-40-the-not-so-simple-math-of-early-retirement/
    Something witty goes here
    • chiefie
    • By chiefie 15th Jul 17, 2:19 PM
    • 301 Posts
    • 313 Thanks
    chiefie
    Some thoughts on the channel 4 program - How to retire at 40 in the blog:

    http://earlyretirefree.com/so-can-you-retire-at-40-the-not-so-simple-math-of-early-retirement/
    Originally posted by Marine_life
    Great blog thanks for sharing.

    One of the elements I am worried about is factoring in state pension to my income when I retire. I plan to take some pension early and then stop as the state pension kicks in and the sipp runs out. If this starts to get means tested or NI taken from I then it b@ggers up the result.

    And of course my spa at the mo is 67 and it could well go up again twice before I take it ! So am starting to think there is a need to save even more or get better returns or spend less or take in some paid employment. 😙😙
    • Monie
    • By Monie 15th Jul 17, 5:42 PM
    • 68 Posts
    • 115 Thanks
    Monie
    Hi all, just reading from the start in 2017 on page 6 at the moment. I'm currently 25 and have been paying into a pension since I started working (not necessarily huge amounts) but everything has currently stopped due to OH not working. We are on the property ladder and I enjoy the mortgage free wannabe threads too.

    I'm not a dummy when it comes to pensions and investments however I am a bit bamboozled about a comprehensive way to track and plan for retirement. I'm sorry if this question has been asked but can anyone recommend a good but simple website or spreadsheet to start properly tracking for retirement?

    Thanks everyone
    Target roughly 75% LTV before Feb/March 2021 (20% LTV = £40,999) - OP'd so far 763.51 out of 5 yr goal - £40,235.49 to go!





    • bigadaj
    • By bigadaj 15th Jul 17, 6:21 PM
    • 9,899 Posts
    • 6,317 Thanks
    bigadaj
    Hi all, just reading from the start in 2017 on page 6 at the moment. I'm currently 25 and have been paying into a pension since I started working (not necessarily huge amounts) but everything has currently stopped due to OH not working. We are on the property ladder and I enjoy the mortgage free wannabe threads too.

    I'm not a dummy when it comes to pensions and investments however I am a bit bamboozled about a comprehensive way to track and plan for retirement. I'm sorry if this question has been asked but can anyone recommend a good but simple website or spreadsheet to start properly tracking for retirement?

    Thanks everyone
    Originally posted by Monie
    Well from your footer first advice is probably to stop overpaying your mortgage and divert that into investments.
    • Marine_life
    • By Marine_life 15th Jul 17, 6:30 PM
    • 801 Posts
    • 1,411 Thanks
    Marine_life

    One of the elements I am worried about is factoring in state pension to my income when I retire.
    Originally posted by chiefie
    It is a dilemma.

    However, I suspect that anything as fundamental as a significant change to pensions (e.g. means testing) would have to have a relatively long lead time so the closer you get to retirement the more comfort you would have.

    Its also a fact that the UK is below the OECD average in terms of the generosity of pension payments so a further reduction would be politically difficult.

    Nevertheless I still think its one of the factors to consider when thinking about the buffer you might need.
    Something witty goes here
    • Marine_life
    • By Marine_life 15th Jul 17, 6:35 PM
    • 801 Posts
    • 1,411 Thanks
    Marine_life
    I'm not a dummy when it comes to pensions and investments however I am a bit bamboozled about a comprehensive way to track and plan for retirement. I'm sorry if this question has been asked but can anyone recommend a good but simple website or spreadsheet to start properly tracking for retirement?

    Thanks everyone
    Originally posted by Monie
    I am not an expert on UK pensions but you could do worse than start here:

    https://www.gov.uk/plan-retirement-income

    Once you understand the basics it would make sense to get some impartial advice to get you started.
    Something witty goes here
    • AlanP
    • By AlanP 15th Jul 17, 9:07 PM
    • 884 Posts
    • 602 Thanks
    AlanP
    Hi all, just reading from the start in 2017 on page 6 at the moment. I'm currently 25 and have been paying into a pension since I started working (not necessarily huge amounts) but everything has currently stopped due to OH not working. We are on the property ladder and I enjoy the mortgage free wannabe threads too.

    I'm not a dummy when it comes to pensions and investments however I am a bit bamboozled about a comprehensive way to track and plan for retirement. I'm sorry if this question has been asked but can anyone recommend a good but simple website or spreadsheet to start properly tracking for retirement?

    Thanks everyone
    Originally posted by Monie
    Take a look at retireeasy.com as that might help you to track & plan although you will have to make a lot of estimates as you are looking a long way out.
    • michaels
    • By michaels 15th Jul 17, 11:47 PM
    • 19,207 Posts
    • 88,123 Thanks
    michaels
    Well from your footer first advice is probably to stop overpaying your mortgage and divert that into investments.
    Originally posted by bigadaj
    Except that is too simplistic because improving the loan to value brings access to lower rates....
    Cool heads and compromise
  • jamesd
    Getting to 75% LTV is good because it allows getting a lower ongoing mortgage rate on the remaining amount borrowed. The gain from that normally beats the improvement from investment returns on the extra twenty percent or so of equity needed. Be sure to factor in property price changes that can help you to get there.

    But overpaying isn't the best way to get there. I expect more than ten percent a year of P2P lending interest after allowing for bad debt. That'll be way more than your mortgage interest rate so you can get to the target faster by investing instead of overpaying. Then use the invested money to get to the LTV when remortgaging.

    Looking longer term than that, mortgage overpaying is very harmful to both long term wealth accumulation and early retirement planning. The loss of long term investment growth on the difference between investment returns and mortgage interest rates is very costly.

    For early retirement you want either interest only or the longest term you can get, so you pay as little capital as possible and can invest the difference.

    For bigger payments a pension is a good tool because you get tax relief on the way in but can take out a quarter tax free from age 55. Effectively getting tax relief on your mortgage capital payment.
    • Reue
    • By Reue 17th Jul 17, 6:16 PM
    • 478 Posts
    • 374 Thanks
    Reue
    Some thoughts on the channel 4 program - How to retire at 40 in the blog:

    http://earlyretirefree.com/so-can-you-retire-at-40-the-not-so-simple-math-of-early-retirement/
    Originally posted by Marine_life
    What a terrible show that was, and has been suitably blasted by the online early retirement blogging circles. Such a shame that it portrayed those aiming for early retirement as having to resort to 'extreme measures' while also giving absolutely no real information on savings %s, investments and safe withdrawal amounts.
    • aldershot
    • By aldershot 21st Jul 17, 10:04 AM
    • 148 Posts
    • 148 Thanks
    aldershot
    I've kept of this thread for a while but I'm hoping it's only about another 6 weeks for me. I will report back!
    Originally posted by aldershot
    The !!!!!!!s have made me redundant

    Last day will be the 11th August (if I can be bothered to go in).

    Mrs Aldershot retired a year ago and now she's going to have me for company. She said she's fine with this as long as I'm out of the house between 9 and 6 We'll be 55 and 54 later in the year. I put some numbers on another thread last year so I won't repeat them here but I think we we'll be OK. I think it's going to take me a few months to get my head around this as I've been stressing about this for about a year and it's not gone away.

    How do others answer the endless number of people (friends, relatives and (soon to be ex) colleagues) who ask "what are you going to do, as if going to the office is the only function one can possible have?
    • justme111
    • By justme111 21st Jul 17, 10:26 AM
    • 2,788 Posts
    • 2,669 Thanks
    justme111
    Say what you are going to do - list all you wanted to do but never had time to !
    • ex-pat scot
    • By ex-pat scot 21st Jul 17, 12:10 PM
    • 205 Posts
    • 224 Thanks
    ex-pat scot
    The !!!!!!!s have made me redundant

    Last day will be the 11th August (if I can be bothered to go in).

    Mrs Aldershot retired a year ago and now she's going to have me for company. She said she's fine with this as long as I'm out of the house between 9 and 6 We'll be 55 and 54 later in the year. I put some numbers on another thread last year so I won't repeat them here but I think we we'll be OK. I think it's going to take me a few months to get my head around this as I've been stressing about this for about a year and it's not gone away.

    How do others answer the endless number of people (friends, relatives and (soon to be ex) colleagues) who ask "what are you going to do, as if going to the office is the only function one can possible have?
    Originally posted by aldershot
    WHat you are going to do is try very hard not to keep breaking spontaneously into song and dance routine, until 11/8.
    That will be tough!
    • AnotherJoe
    • By AnotherJoe 21st Jul 17, 1:11 PM
    • 7,218 Posts
    • 7,718 Thanks
    AnotherJoe
    The !!!!!!!s have made me redundant

    Last day will be the 11th August (if I can be bothered to go in).

    Mrs Aldershot retired a year ago and now she's going to have me for company. She said she's fine with this as long as I'm out of the house between 9 and 6


    @AJ - > nice one

    We'll be 55 and 54 later in the year. I put some numbers on another thread last year so I won't repeat them here but I think we we'll be OK. I think it's going to take me a few months to get my head around this as I've been stressing about this for about a year and it's not gone away.

    How do others answer the endless number of people (friends, relatives and (soon to be ex) colleagues) who ask "what are you going to do, as if going to the office is the only function one can possible have?
    Originally posted by aldershot
    First of all, congratulations !!! That was my plan but it didn't happen and became obvious wasn't going to happen, at least in a timescale i could live with, so i left anyway. This is the end of week 3 of freedom for me

    As to that Q, yep that was pretty much the first and often only Q I was asked.

    In the end i boiled my answer down to "whatever the **** I want whenever i want"

    EDIT: Which has now turned out to be "whatever the **** I want whenever i want - as long as it doesn't interfere with any of the many chores Mrs AJ has decided I now have time to do"

    " **** " being variable depending who I was speaking to
    Last edited by AnotherJoe; 21-07-2017 at 1:17 PM.
    • coyrls
    • By coyrls 21st Jul 17, 1:27 PM
    • 848 Posts
    • 855 Thanks
    coyrls
    First of all, congratulations !!! That was my plan but it didn't happen and became obvious wasn't going to happen, at least in a timescale i could live with, so i left anyway. This is the end of week 3 of freedom for me

    As to that Q, yep that was pretty much the first and often only Q I was asked.

    In the end i boiled my answer down to "whatever the **** I want whenever i want"

    EDIT: Which has now turned out to be "whatever the **** I want whenever i want - as long as it doesn't interfere with any of the many chores Mrs AJ has decided I now have time to do"

    " **** " being variable depending who I was speaking to
    Originally posted by AnotherJoe
    Now into my third year and it's still often the first and only question I get asked. I have sometimes given a detailed account of how I spend my days but it doesn't seem to satisfy; I think they expect me to be saving the world in some way, so I think your answer is the best one.
    • madeinireland
    • By madeinireland 21st Jul 17, 5:53 PM
    • 367 Posts
    • 113 Thanks
    madeinireland
    Well I figure I'm going to be asked that question myself quite a lot very soon.

    I posted on here about 3 years ago and through some great advice my position has improved from a very good position to an excellent position. I was told by my boss the other day that I would soon be getting a voluntary redundancy offer from the company and I'm expecting it to be good enough for me to finally retire at the age of 56.

    I expect to be free within the next couple of months. My wife (who is younger than me) will continue to work for a few more years.

    I'd just like to thank everyone for their wonderful advice over the last few years. It has helped immensely.

    Just one other question. Is there anything else that people would recommend that I should be doing as a last minute thing to prepare?

    Thanks...
    • ex-pat scot
    • By ex-pat scot 21st Jul 17, 6:01 PM
    • 205 Posts
    • 224 Thanks
    ex-pat scot
    Well I figure I'm going to be asked that question myself quite a lot very soon.

    I posted on here about 3 years ago and through some great advice my position has improved from a very good position to an excellent position. I was told by my boss the other day that I would soon be getting a voluntary redundancy offer from the company and I'm expecting it to be good enough for me to finally retire at the age of 56.

    I expect to be free within the next couple of months. My wife (who is younger than me) will continue to work for a few more years.

    I'd just like to thank everyone for their wonderful advice over the last few years. It has helped immensely.

    Just one other question. Is there anything else that people would recommend that I should be doing as a last minute thing to prepare?

    Thanks...
    Originally posted by madeinireland
    Sugest anything income -related should be sorted out before you leave.
    These things might include:


    - car loans or indeed any loans
    - remortgaging
    - whack the absolute max into your pension, so that you can access shortly after you retire (eg immediate withdrawal of 25% TFLS)
    - I don't know whether being retired gives you better insurance rates. If so (easy to check), then consider cancelling existing policies then apply afresh as a pensioner. Otherwise if much more expensive, then consider ensuring you renew before retirement.
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