Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Marine_life
    • By Marine_life 5th Nov 10, 10:46 AM
    • 815Posts
    • 1,461Thanks
    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 179
    • Terron
    • By Terron 2nd Dec 17, 6:07 PM
    • 114 Posts
    • 122 Thanks
    Terron
    Something I can't quite decide on when sticking numbers on spreadsheets is would I have a cash pot purely for emergencies/big spend items or would I have a cash pot which both contributes to income(the usual 4% or whatever) and is available for the former?
    Originally posted by westv
    I wouldn't have a large cash pot.
    I keep a few hundred in the bank, but my main In Case of Emergency fund is my credit card.. I pay it off in full every month. If it is larger than nrmal I move money in from a backup fund which takes a few days but makes money when not being used. I save regularly into that.
    • gfplux
    • By gfplux 3rd Dec 17, 8:23 AM
    • 3,523 Posts
    • 3,274 Thanks
    gfplux
    Fitness and health!

    I retired when I was 52, that was 21 years ago so at 73 I have some insight into fitness and health.
    While working I had no time in every way to think about fitness and health.
    In fact if you have good fortune to be healthy in your early 50's it does not and did not get very high on my agenda.
    Luckily when I retired I did a lot about it. Of course my lifestyle changed dramatically no longer on a plane 2/3 times a week, eating and drinking too much. High stress levels and terrible sleeping patterns.
    I began to live a normal (retired) life and focused more on my body.
    You can not avoid fate but If I had not retired when I did (because I could) I could have left it too late to look after ME!
    Time takes it toll and my advise to anyone wanting to retire early or otherwise is not forget your body.

    In all the budgeting and spread sheets there should be a line that says HEALTH. Some people are naturally keeping fit and looking after themselves. Many don't give it any thought.
    Spend money on health for both you and your partner. That may be simply gym membership but it can include Dental work, blood tests, regular visits to the Doctor for check ups. Etc, etc.
    This post is not a lecture, just advise from an old geezer.
    "Brexit Blight of Uncertainty" sums it all up. Although "Brexit Crisis", "The Curse of Brexit" or "Brexit Disaster" come close. I am a Remainder. Brexit will make Britain poor (again)
    • gadgetmind
    • By gadgetmind 3rd Dec 17, 9:40 AM
    • 10,657 Posts
    • 8,471 Thanks
    gadgetmind
    However, what I did was to cut down my hours at work for a year before going, my income on reduced hours was nearly the same as my pension would be.
    Originally posted by melanzana
    That's also been my approach, though a recent bonus has seen my income rise but my pension to suffer a little as HMRC will be removing £20k from it in additional taxes.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
    • gadgetmind
    • By gadgetmind 3rd Dec 17, 9:45 AM
    • 10,657 Posts
    • 8,471 Thanks
    gadgetmind
    I wouldn't have a large cash pot.
    Originally posted by Terron
    We're about 10% in cash currently, with the bulk of this is 4x NS&I linkers and the rest offsetting a small mortgage we took out to lend to daughter for a house. Yes, it's too much, but I don't want to let go of the linkers right now as they are irreplaceable.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
    • Terron
    • By Terron 3rd Dec 17, 2:18 PM
    • 114 Posts
    • 122 Thanks
    Terron
    We're about 10% in cash currently, with the bulk of this is 4x NS&I linkers and the rest offsetting a small mortgage we took out to lend to daughter for a house. Yes, it's too much, but I don't want to let go of the linkers right now as they are irreplaceable.
    Originally posted by gadgetmind
    What does the cash do for you?
    1. Earn an insignificant amoutn of interest
    2. Provide for monthly expenses
    3. provide for an emergency
    4. Anything else?
    2 is why I have a small cash balance .
    If I had a sudden large bill (like for my car's last MOT) I would pay by credit card. anyway, so my credit card limit is myimmediate emergency fund,
    I keep money invested in a S&S ISA. I can with draw from that in a few days over the phone, easily fast enough to be ready to pay a large credit card bill. In the mean time it has been earning on average for the past 9 years about 7%pa.
    • westv
    • By westv 3rd Dec 17, 2:53 PM
    • 4,373 Posts
    • 1,994 Thanks
    westv
    But if you pay sudden large bills by cc that will still need to be paid off pretty soon after I would have thought so I don't really see the benefit of using them rather than directly from a cash float.
    • justme111
    • By justme111 3rd Dec 17, 5:34 PM
    • 2,878 Posts
    • 2,764 Thanks
    justme111
    because you would have to have that cash reserve not earning you money in the meantime.
    • k6chris
    • By k6chris 3rd Dec 17, 5:52 PM
    • 151 Posts
    • 232 Thanks
    k6chris
    Anything else?
    Originally posted by Terron
    Yes, potentially as an opportunity to buy more shares at a lower entry cost when the inevitable 'significant pull back' comes. Not the primary reason but possibly a useful secondary reason (??)
    EatingSoup
    • westv
    • By westv 3rd Dec 17, 5:55 PM
    • 4,373 Posts
    • 1,994 Thanks
    westv
    because you would have to have that cash reserve not earning you money in the meantime.
    Originally posted by justme111
    If the cash isn't already easily accessible don't you risk having to sell more volatile assets at completely the wrong time if a major expense comes along? Yes, you can defer slightly with a credit card but not for that long.
    • gadgetmind
    • By gadgetmind 3rd Dec 17, 6:18 PM
    • 10,657 Posts
    • 8,471 Thanks
    gadgetmind
    What does the cash do for you?
    Originally posted by Terron
    We always use full pension and S&S ISA allowances every year, and it's only recently that you can dip into a S&S ISA and then pay it back during the year. Until recently, we'd been paying into ISAs (nee PEPs) since late 80s and had never withdrawn a penny. We pulled down this year to help out relatives but it'll be back in before April 5th. (Fingers crossed, big time!)

    What does it do for us? Well, it was there to avoid us needing to sell any assets at a low when close to retirement. It was also banged into the NS&I linkers when markets were dicey though we did put 2x as much into unwrapped equities. The linkers were a way of showing my wife that I'm not totally "all on black", particularly given that ISAs and pensions were (but aren't now) 90% in equities.

    Um OK, what does it do for us now? Hard to justify and I need to sit down and write a full justification for my records some time, but not right now.

    I plan to retire mid 2018 and am not doing anything hasty until relatives pay us back, S&S ISAs are refilled, and my 35+ year retirement plan is in place. Once I have pension PCLS, and am drawing down on pension, we certainly won't need as much cash on hand, that's for sure.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
    • fatbeetle
    • By fatbeetle 4th Dec 17, 12:12 AM
    • 360 Posts
    • 615 Thanks
    fatbeetle
    Fitness and health!

    .
    In all the budgeting and spread sheets there should be a line that says HEALTH. Some people are naturally keeping fit and looking after themselves. Many don't give it any thought.
    Spend money on health for both you and your partner. That may be simply gym membership but it can include Dental work, blood tests, regular visits to the Doctor for check ups. Etc, etc.
    This post is not a lecture, just advise from an old geezer.
    Originally posted by gfplux
    Amen to that!! I retired two days ago, at age 58, and I'm just back from my gym, going to be gradually building up the amount of exercise and self-maintenance I do.

    Off to walk the dogs now!!
    “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.”
    • jamesperrett
    • By jamesperrett 4th Dec 17, 12:31 AM
    • 699 Posts
    • 354 Thanks
    jamesperrett
    Time takes it toll and my advise to anyone wanting to retire early or otherwise is not forget your body.
    Originally posted by gfplux
    It isn't something I've particularly worried about although work paid for a seagoing medical every couple of years which hopefully would have picked up anything major.

    However, since I retired early about 3 months ago, our 6 year old son has decided he likes cycling - not just around the local park but anything up to 14 miles at a time (on a level track)! This means that I either get to cycle with him or chase him on foot through the countryside which seems a good way to exercise.
    • justme111
    • By justme111 4th Dec 17, 5:49 PM
    • 2,878 Posts
    • 2,764 Thanks
    justme111
    If the cash isn't already easily accessible don't you risk having to sell more volatile assets at completely the wrong time if a major expense comes along? Yes, you can defer slightly with a credit card but not for that long.
    Originally posted by westv
    we are not talking about the whole year expenses where if taken in downturn it could geopardise the total; we are talking anout a bill every now and again which is bigger than everyday stuff. I myself do not do it either way because I am not retired yet. I think both ways are valid and have pros and cons.
    • gallygirl
    • By gallygirl 4th Dec 17, 8:31 PM
    • 16,460 Posts
    • 107,864 Thanks
    gallygirl
    No more Sunday night angst is one of the major advantages!
    Originally posted by melanzana
    The benefits of that cannot be overstated!!!!!!!!
    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"
    • Anonymous101
    • By Anonymous101 5th Dec 17, 7:51 AM
    • 1,022 Posts
    • 384 Thanks
    Anonymous101
    I've been working on my Financial Independence plan recently. I'm forecasting about 10-12 years until I'm FI. Which would put me in my late 40's and Mrs Anon. in her early 40's.

    Its amazing that immediately having got a plan in place that we both feel a little better about getting up in the dark mornings again. I enjoy my job to a point but detest being tied to something I feel I HAVE to do. 10 years doesn't feel too long to have to do that though especially if you consider the potential benefits of not being tied to a job.
    • OldMusicGuy
    • By OldMusicGuy 5th Dec 17, 10:54 AM
    • 204 Posts
    • 372 Thanks
    OldMusicGuy
    Fitness and health!

    I retired when I was 52, that was 21 years ago so at 73 I have some insight into fitness and health.
    While working I had no time in every way to think about fitness and health.
    In fact if you have good fortune to be healthy in your early 50's it does not and did not get very high on my agenda.
    Luckily when I retired I did a lot about it. Of course my lifestyle changed dramatically no longer on a plane 2/3 times a week, eating and drinking too much. High stress levels and terrible sleeping patterns.
    Originally posted by gfplux
    I agree with this 100% and health has been a main factor in deciding to retire now at 60 rather than carry on for another 2 to 4 years (during which time I would have been able to save significant amounts). I am in good health generally but my health suffered once I reached 55. My body just couldn't keep up with the demands of a stressful job, 10 to 12 hour days, late nights, early mornings and lots of travel. My blood pressure was getting high, my weight was creeping up and I wasn't getting any exercise.

    So a drastic change in lifestyle was called for and part of that was to set an earlier retirement date than planned. I am already doing more exercise, eating better and now I am 12 weeks away from retirement, my stress levels have gone down considerably. I can sleep at nights now. I didn't just get Sunday night angst, I had it every night of the week!

    I saw a comment on another thread recently, along the lines of "I don't want to run out of life before I run out of money". Although it's a difficult balancing act, it's all too easy to keep chasing money and "security" at the expense of health and longevity.
    • Terron
    • By Terron 5th Dec 17, 1:44 PM
    • 114 Posts
    • 122 Thanks
    Terron
    If the cash isn't already easily accessible don't you risk having to sell more volatile assets at completely the wrong time if a major expense comes along? Yes, you can defer slightly with a credit card but not for that long.
    Originally posted by westv
    OK there is a small chance of selling at a bad time, but then there is the certainty that cash is not keeping up with inflation. The former seems better to me,

    If your emergency fund is sized for the worse case then normally when you do need to draw on it the amount would only be a fraction of the fund anyway,. I have drawn on it once this year, when I was faced with a £1500 repair bill for my car..My fund is several times bigger than that,
    • hugheskevi
    • By hugheskevi 5th Dec 17, 5:26 PM
    • 1,924 Posts
    • 2,334 Thanks
    hugheskevi
    Its amazing that immediately having got a plan in place that we both feel a little better about getting up in the dark mornings again. I enjoy my job to a point but detest being tied to something I feel I HAVE to do. 10 years doesn't feel too long to have to do that though especially if you consider the potential benefits of not being tied to a job.
    Originally posted by Anonymous101
    One of my favourite parts of the plan is having a range of points ranging from the earliest possible date of retirement assuming every reasonable positive financial shock, the central estimate assuming everything goes as expected, and a backstop date, which assumes that a few bad things happen so is a worst-case scenario.

    For me, that produces a window of retirement of around 4 years, ranging from April 2020 through to mid 2024, with a central (but cautious) estimate of mid 2023. It is very nice to know that in about 2 and a half years retirement will be viable
    • atush
    • By atush 5th Dec 17, 9:26 PM
    • 16,384 Posts
    • 10,139 Thanks
    atush
    But if you pay sudden large bills by cc that will still need to be paid off pretty soon after I would have thought so I don't really see the benefit of using them rather than directly from a cash float.
    Originally posted by westv
    Now, i have 12 months outgoing in cash.

    At retirement, it will be 2 or even 3 years.

    I have at least 5 CCs and enough credit to pay for a years outgoings if not more. but I am not willing to pay the interest.

    I am also not willing to sell equities when markets are down.

    So if they are down I will stop taking income, and possibly switch some dividends/income units to accumualtion to buy more units during a recovery, I would expect this to be a min of a one year cycle if not more- hence my cash for that scenario.

    Right now, 1 year does me as we have income, cash for emergencies and CCs for 30 day borrowing.
    • westv
    • By westv 5th Dec 17, 10:43 PM
    • 4,373 Posts
    • 1,994 Thanks
    westv
    Now, i have 12 months outgoing in cash.

    At retirement, it will be 2 or even 3 years.

    I
    g.
    Originally posted by atush
    I was referring to cash in retirement.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

2,540Posts Today

6,643Users online

Martin's Twitter