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  • FIRST POST
    • Marine_life
    • By Marine_life 5th Nov 10, 10:46 AM
    • 815Posts
    • 1,460Thanks
    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 176
    • crv1963
    • By crv1963 6th Oct 17, 9:30 AM
    • 159 Posts
    • 420 Thanks
    crv1963
    This is what I like about this forum! The different perspectives everyone brings to the posts thank you bugslet, Apodemous and AnotherJoe.
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
    • bugslet
    • By bugslet 6th Oct 17, 10:40 AM
    • 5,760 Posts
    • 28,208 Thanks
    bugslet
    This is what I like about this forum! The different perspectives everyone brings to the posts thank you bugslet, Apodemous and AnotherJoe.
    Originally posted by crv1963
    Indeed, thank you all three!

    Apodemus, of the two managers, I know one wouldn't, maybe the other one would want to. It's something that's been at the very back of my mind, I might drag it forward a bit. I suspect that he might not be happy with that big a financial undertaking.

    I was approached last year by another company to sell, and upon (expected) renewal of contract next year, I will have a serious think about the implications - and if my main customer would let me.

    Another Joe, thank you. I don't earn a huge amount, I keep myself under the 40% bracket, so currently take home about 31k. I'd look at wanting around 25k a year. I have absolutely no idea if I want to travel - I haven't really had a holiday since 1991 and I honestly don't know how to factor that in.

    I suspect that if I don't sell next year and I don't think I will, it will be another two years of maximising the pension. I've thought 31.12.19 might be a good finishing date. I know I'd never get back to this position again.

    crv, purposeful , that is a good word. I know haulage has a bad rap, but at the end of the day by haulage standards, I know I'm a good boss and it brings me a great deal of pleasure to know that I've provided solid employment - some of my staff have 20+ years in. And if it wasn't for people like me, you wouldn't have your yogurts and your, well everything.

    I suspect that I would start a little business, it's my nature to be busy. I used to volunteer, though as it was transporting dogs to non kill shelters it wasn't exactly sociable.

    If I finish work, it will be finish and go. A sale would mean that I would be expected to be around to transition the company.

    Thank you all, it's all gets put into the mix and churned around.
    • michaels
    • By michaels 6th Oct 17, 12:04 PM
    • 19,930 Posts
    • 91,369 Thanks
    michaels
    Indeed, thank you all three!

    Apodemus, of the two managers, I know one wouldn't, maybe the other one would want to. It's something that's been at the very back of my mind, I might drag it forward a bit. I suspect that he might not be happy with that big a financial undertaking.

    I was approached last year by another company to sell, and upon (expected) renewal of contract next year, I will have a serious think about the implications - and if my main customer would let me.

    Another Joe, thank you. I don't earn a huge amount, I keep myself under the 40% bracket, so currently take home about 31k. I'd look at wanting around 25k a year. I have absolutely no idea if I want to travel - I haven't really had a holiday since 1991 and I honestly don't know how to factor that in.

    I suspect that if I don't sell next year and I don't think I will, it will be another two years of maximising the pension. I've thought 31.12.19 might be a good finishing date. I know I'd never get back to this position again.

    crv, purposeful , that is a good word. I know haulage has a bad rap, but at the end of the day by haulage standards, I know I'm a good boss and it brings me a great deal of pleasure to know that I've provided solid employment - some of my staff have 20+ years in. And if it wasn't for people like me, you wouldn't have your yogurts and your, well everything.

    I suspect that I would start a little business, it's my nature to be busy. I used to volunteer, though as it was transporting dogs to non kill shelters it wasn't exactly sociable.

    If I finish work, it will be finish and go. A sale would mean that I would be expected to be around to transition the company.

    Thank you all, it's all gets put into the mix and churned around.
    Originally posted by bugslet
    Bugs, you would be very welcome to adopt me and my kids if that would help with filling your time
    Cool heads and compromise
    • crv1963
    • By crv1963 6th Oct 17, 12:16 PM
    • 159 Posts
    • 420 Thanks
    crv1963
    Bugs, you would be very welcome to adopt me and my kids if that would help with filling your time
    Originally posted by michaels


    And the humour is not bad either!
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
    • bugslet
    • By bugslet 6th Oct 17, 12:28 PM
    • 5,760 Posts
    • 28,208 Thanks
    bugslet
    Bugs, you would be very welcome to adopt me and my kids if that would help with filling your time
    Originally posted by michaels
    And the humour is not bad either!
    Originally posted by crv1963
    Hmmm, interesting. Would your vast knowledge in money saving matters outweigh the costs of you and your children living in the house. Probably find a nectar card,Amex pointsback card and quidco spreadsheet on my fridge in double quick time!
    • michaels
    • By michaels 6th Oct 17, 3:27 PM
    • 19,930 Posts
    • 91,369 Thanks
    michaels
    Hmmm, interesting. Would your vast knowledge in money saving matters outweigh the costs of you and your children living in the house. Probably find a nectar card,Amex pointsback card and quidco spreadsheet on my fridge in double quick time!
    Originally posted by bugslet
    I was thinking if we used the trucking business to move the kids between their activities it would save me so many hours a week that you would have the best exercised dogs in Britain.
    Cool heads and compromise
    • bugslet
    • By bugslet 6th Oct 17, 4:36 PM
    • 5,760 Posts
    • 28,208 Thanks
    bugslet
    I was thinking if we used the trucking business to move the kids between their activities it would save me so many hours a week that you would have the best exercised dogs in Britain.
    Originally posted by michaels
    Or the kids walk the dogs to their activities, thereby getting exercise, saving money on fuel costs and keeping pesky lorries off the road. And after a couple of days of Lola, I promise you they will never ask for a dog of their own.
    • DancingBadger
    • By DancingBadger 6th Oct 17, 4:58 PM
    • 145 Posts
    • 118 Thanks
    DancingBadger
    And after a couple of days of Lola, I promise you they will never ask for a dog of their own.
    Originally posted by bugslet
    Lola? She sounds interesting.
    • AnotherJoe
    • By AnotherJoe 6th Oct 17, 6:28 PM
    • 7,672 Posts
    • 8,286 Thanks
    AnotherJoe
    Another Joe, thank you. I don't earn a huge amount, I keep myself under the 40% bracket, so currently take home about 31k. I'd look at wanting around 25k a year. I have absolutely no idea if I want to travel - I haven't really had a holiday since 1991 and I honestly don't know how to factor that in.

    I suspect that if I don't sell next year and I don't think I will, it will be another two years of maximising the pension. I've thought 31.12.19 might be a good finishing date. I know I'd never get back to this position again.

    .
    Originally posted by bugslet
    Since 3.5% of £600k gets you £21k and as well as being under your number, give you no room for safety even if you could drop down, that also says waita couples of years and re-evaluate.
    • bugslet
    • By bugslet 7th Oct 17, 6:50 AM
    • 5,760 Posts
    • 28,208 Thanks
    bugslet
    Lola? She sounds interesting.
    Originally posted by DancingBadger
    Since 3.5% of £600k gets you £21k and as well as being under your number, give you no room for safety even if you could drop down, that also says waita couples of years and re-evaluate.
    Originally posted by AnotherJoe
    That's probably what will happen. Unless I decide to sell in which case there would be a few more 100ks in the bank.
    • gallygirl
    • By gallygirl 7th Oct 17, 2:06 PM
    • 16,460 Posts
    • 107,864 Thanks
    gallygirl
    Seconded. We’re a bit further west of you - in Yosemite. Amazing place. We’re staying at Big Trees Lodge in Wawona; a step back in time - no TV, no radio, internet available only in the sunroom, and entertainment provided by the resident pianist. Fabulous! 👍
    Originally posted by DancingBadger
    We had a drink there last year- you're right, fabulous place

    Enjoy your holiday, Yosemite is beautiful.
    A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort
    Mortgage Balance = £0
    "Do what others won't early in life so you can do what others can't later in life"
    • justme111
    • By justme111 7th Oct 17, 2:22 PM
    • 2,878 Posts
    • 2,764 Thanks
    justme111
    Since 3.5% of £600k gets you £21k and as well as being under your number, give you no room for safety even if you could drop down, that also says waita couples of years and re-evaluate.
    Originally posted by AnotherJoe
    but that is if one does not want to touch the capital. why would she want to keep it ?
    bugslet, it looks like you live to work , not other way round. i do not see anything wrong with it per se , as long as one understands the real reasons for one's decisions. Knowing one does a geeat job , being appreciated both emotiinally and financially for it is a pillar of human life. It is up to you to decide whether you want to try to experience another life or you would be happy with this one being the only one you ever knew when the time to die comes.
    • bugslet
    • By bugslet 7th Oct 17, 2:50 PM
    • 5,760 Posts
    • 28,208 Thanks
    bugslet
    but that is if one does not want to touch the capital. why would she want to keep it ?
    bugslet, it looks like you live to work , not other way round. i do not see anything wrong with it per se , as long as one understands the real reasons for one's decisions. Knowing one does a geeat job , being appreciated both emotiinally and financially for it is a pillar of human life. It is up to you to decide whether you want to try to experience another life or you would be happy with this one being the only one you ever knew when the time to die comes.
    Originally posted by justme111

    Good point just me, and its true, I may as well eat into the capital. Only the dogs home will be happy with preserved capital.

    Not that it affects much, but I'm also going to get the enhanced state pension of £175.00. Something to do with being or not being in SERPS.

    Sorry dancing badger, meant to say Lola is a 15 month old schnauzer, she's quite bonkers!
    • AnotherJoe
    • By AnotherJoe 7th Oct 17, 4:34 PM
    • 7,672 Posts
    • 8,286 Thanks
    AnotherJoe
    but that is if one does not want to touch the capital. why would she want to keep it ?
    bugslet, it looks like you live to work , not other way round. i do not see anything wrong with it per se , as long as one understands the real reasons for one's decisions. Knowing one does a geeat job , being appreciated both emotiinally and financially for it is a pillar of human life. It is up to you to decide whether you want to try to experience another life or you would be happy with this one being the only one you ever knew when the time to die comes.
    Originally posted by justme111
    It's about safety. 3.5% is by no means guaranteed to keep the capital, it depends on stock market fluctuations. . If there was a say 30% decline the year after retirement, by no means out of the ordinary, OP would need to step up to 5% to stay at the £21k as they have no buffer. If there is flat to modest growth the next year, that will start cutting into capital more, creating a vicious circle from which possibly even good growrth later on would be insufficient.

    Of course, it might be enough, it probably will, but in retirement a bit of a buffer so there's no anxiety about money would seem to be prudent, since there's little you can do to recover without income from a job
    • Temrael
    • By Temrael 12th Oct 17, 10:41 AM
    • 330 Posts
    • 70 Thanks
    Temrael
    Hi all,

    My wife and I are in our early 40s and hoping to retire when we are about 50. We have no mortgage, live pretty modestly and are targeting an annual income of around £23k in retirement.

    We are on track in terms of pension contributions and savings. One thing I'm puzzling over is though is how to balance our cash pot/investments pot ready for the 8ish years between stopping working and pension access age. (At 58 we'll get access to our DC pots at which point we are fine).

    I'm torn between trying to achieve...

    a) About 9x annual outgoings in cash to entirely cover our outgoings for that period (with spare) in a fairly safe way (so long as it keeps pace with inflation fairly well).
    b) About 3x outgoings in cash but a large stocks and shares ISA pot (invested fairly cautiously by that point) with a view to drawing down lump sums as needed to keep the cash topped up (and perhaps a 2% yield).

    I'm just not sure how best to split our £1k per month savings at the moment.

    The first option is obviously safer but misses out on opportunities for growth. If there are several years of bad times then b) obviously risks me being forced to sell some units when markets are down.

    I guess I could work towards b) for now and as we get closer to retirement look to move things more to a)?

    I'd be really interested in people's thoughts, experiences.
    Temrael

    Don't use a long word when a diminutive one will suffice.
    • madeinireland
    • By madeinireland 12th Oct 17, 12:57 PM
    • 375 Posts
    • 119 Thanks
    madeinireland
    Hi all,

    My wife and I are in our early 40s and hoping to retire when we are about 50. We have no mortgage, live pretty modestly and are targeting an annual income of around £23k in retirement.

    We are on track in terms of pension contributions and savings. One thing I'm puzzling over is though is how to balance our cash pot/investments pot ready for the 8ish years between stopping working and pension access age. (At 58 we'll get access to our DC pots at which point we are fine).

    I'm torn between trying to achieve...

    a) About 9x annual outgoings in cash to entirely cover our outgoings for that period (with spare) in a fairly safe way (so long as it keeps pace with inflation fairly well).
    b) About 3x outgoings in cash but a large stocks and shares ISA pot (invested fairly cautiously by that point) with a view to drawing down lump sums as needed to keep the cash topped up (and perhaps a 2% yield).

    I'm just not sure how best to split our £1k per month savings at the moment.

    The first option is obviously safer but misses out on opportunities for growth. If there are several years of bad times then b) obviously risks me being forced to sell some units when markets are down.

    I guess I could work towards b) for now and as we get closer to retirement look to move things more to a)?

    I'd be really interested in people's thoughts, experiences.
    Originally posted by Temrael
    I recently retired and took option A. It's probably not the most efficient way of operating but it is risk free. Why take a risk if you don't need to? was my attitude.
    • Temrael
    • By Temrael 12th Oct 17, 1:17 PM
    • 330 Posts
    • 70 Thanks
    Temrael
    I recently retired and took option A. It's probably not the most efficient way of operating but it is risk free. Why take a risk if you don't need to? was my attitude.
    Originally posted by madeinireland
    Thanks for that, and congratulations!

    Yep that approach certainly has appeal, it would be pretty much a done deal and would remove a lot of uncertainty. I guess part of my concern is that the resultant cash pot ends up quite large (£207k). With tax on the savings (after the PSA or if it's removed) and limited bank account options that beat inflation, it increasingly becomes hard for that cash to hold its value.

    I guess we could either live with that small amount of drag or perhaps (in a smaller way) put a modest amount to work in investments that offsets it a little.
    Temrael

    Don't use a long word when a diminutive one will suffice.
    • Triumph13
    • By Triumph13 12th Oct 17, 1:29 PM
    • 1,117 Posts
    • 1,373 Thanks
    Triumph13
    Temrael, in your position I'd split the problem in two. a) How should you invest in now; and b) How should you change that at, or near, retirement. The key point is that, unless you are absolutely wedded to a particular retirement date, you can afford to take on more risk before you pull the plug as if the markets tank as your date approaches you can always work an extra year. Once you pull the plug, that option becomes much less feasible and so you need to think about a lower risk profile.
    I will be in a very similar position myself with a 10 year gap between when I plan to pull the plug and when various DB pensions and later SP start to come on line. As I have quite a bit of slack in my budget, the approach I'm intending to take is a mixture of fixed term cash deposits and global equity trackers. I've calculated an acceptable minimum spend (which is quite a bit lower than my budgeted income level) and will balance the cash vs equities such that if equities are down 40% in a particular year then taking the planned %age of the equity pot plus the planned amount of cash will still give me my minimum income. That lets me keep the possibility of plenty of upside, but manage the downside risk to a level I'm comfortable with. Once the DBs etc come on stream they take the place of the cash.
    • Terron
    • By Terron 12th Oct 17, 1:38 PM
    • 114 Posts
    • 118 Thanks
    Terron
    Hi all,

    My wife and I are in our early 40s and hoping to retire when we are about 50. We have no mortgage, live pretty modestly and are targeting an annual income of around £23k in retirement.

    We are on track in terms of pension contributions and savings. One thing I'm puzzling over is though is how to balance our cash pot/investments pot ready for the 8ish years between stopping working and pension access age. (At 58 we'll get access to our DC pots at which point we are fine).

    I'm torn between trying to achieve...

    a) About 9x annual outgoings in cash to entirely cover our outgoings for that period (with spare) in a fairly safe way (so long as it keeps pace with inflation fairly well).
    b) About 3x outgoings in cash but a large stocks and shares ISA pot (invested fairly cautiously by that point) with a view to drawing down lump sums as needed to keep the cash topped up (and perhaps a 2% yield).

    I'm just not sure how best to split our £1k per month savings at the moment.

    The first option is obviously safer but misses out on opportunities for growth. If there are several years of bad times then b) obviously risks me being forced to sell some units when markets are down.

    I guess I could work towards b) for now and as we get closer to retirement look to move things more to a)?

    I'd be really interested in people's thoughts, experiences.
    Originally posted by Temrael
    I lost my job rather than chosing to retire, but to cover the years before I draw my pensions (18 months to go) I went into property. It is working for me, but I had some advanatages. I grew up in an area where yields are high, and still had contacts there, particularly a builder who had been a neighbour of my parents for 20 years. I use an agent to manage my properties so they take very little of my time. I have enough properties so that even when one has a bad year it doesn't have too big an effect.
    • michaels
    • By michaels 12th Oct 17, 2:54 PM
    • 19,930 Posts
    • 91,369 Thanks
    michaels
    Thanks for that, and congratulations!

    Yep that approach certainly has appeal, it would be pretty much a done deal and would remove a lot of uncertainty. I guess part of my concern is that the resultant cash pot ends up quite large (£207k). With tax on the savings (after the PSA or if it's removed) and limited bank account options that beat inflation, it increasingly becomes hard for that cash to hold its value.

    I guess we could either live with that small amount of drag or perhaps (in a smaller way) put a modest amount to work in investments that offsets it a little.
    Originally posted by Temrael
    I would have thought you had plenty of time to make sure that all your non-pension savings were in ISAs so tax on interest should not be a problem. (Low returns on cash is not so easily solved)
    Cool heads and compromise
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