The Economic Situation and us....

Harry_Powell

baileysbattlebus wrote: »

Yes we do lose quite a bit of OH's pension - we lost even more of mine as I took it at 50 -

Our outlook on it was - you don't know what's round the corner and that we would take the pension at the earliest feasible opportunity and have some time while we were relatively young to enjoy ourselves. Life is too short.

We married at 21 and started a family at 25 - so our younger years were spent on housing and children and very little else.

We lost my mother at 56, a BIL at 52, I have lost several friends to cancer in their mid to late 50's, our neighbour (a single parent) was buried last week, on Thursday, in his 50's and left 2 school age (teenage) children, he was ill for 3 months. These are the main reasons we want to retire early. I know life expectancy is getting longer but it's not guaranteed for everyone. I know I could be knocked over by a bus.

We don't have to sell the house - but it makes sense to sell it. The house has 5 bedrooms, study, utility, large lounge, large kitchen, large dining room - it is quite a large family house - we brought our family up in it. We will rattle around in it like peas on a drum.

We would like a smaller 3 bed house if we stay in the UK, we don't have to live abroad - it is an option that I have been mulling around for a little while. It probably won't happen - but who knows.

Although we will have under half of our current income - £40k a year is more than enough to allow us to live fairly comfortably. People bring up familes on less. Both pensions are index linked - there is no maximum rise per year - but there is a minimum of 3%, it is 3% or the rate of inflation which ever is greater. So inflation won't eat up the income.

OH also has a hobby that is a small money maker, he builds and flies model planes - piston engined and jet engined. He makes and sells fibre glass bits for some of his own plans (and sells the plans) and bits for other planes he has built. So it could be grown if he wanted it too, currently just a few thousand a year and he isn't trying - it's by word of mouth. So there is potential there and it is something he really enjoys doing.



The retirement aspect is something we've looked into carefully. Also we won't be paying NI - OH should fall out of the higher tax bracket too. And in 10 years there will be 2 full state pensions - if they are still around.

Sounds like you're pretty well sorted, which kinda makes the premis for this thread a little redundant. Just a final point on the state pensions, if you stop contributing at age 51, have you made sure that you will have reached the required 30 years contributions for yourself and your OH to get a full state pension? (a concern for ladies especially as they may have taken time out of work to raise children and so will already have reduced NI contributions).

baileysbattlebus

Harry_Powell wrote: »

Sounds like you're pretty well sorted, which kinda makes the premis for this thread a little redundant. Just a final point on the state pensions, if you stop contributing at age 51, have you made sure that you will have reached the required 30 years contributions for yourself and your OH to get a full state pension? (a concern for ladies especially as they may have taken time out of work to raise children and so will already have reduced NI contributions).

The finances are sorted (we think) but nothing else is really - that was reason for the thread - in our position what you do? Bearing in mind the economy, and some of the predictions for it. Tax rises, public spending cuts, Cameron saying we could default on our debt payments and go to the IMF and all that would entail. Would you stay or would you go?

I have got some things from the thread - 1, the possibility of a holiday home - something we had not really considered and 2, the possibility of spending 6 months of the year somewhere else, but somewhere different every year.

The lack of elderly care in a lot of countries, we have a lot here and other places appear not to.

Although we don't have health issues at present, we could in the future, as you get older warm weather is bound to be beneficial, especially in the winter.

The state pensions are ok - I did have 9 years out to have the kids, but fortunately I fall under the terms of the "if you've received child benefit you will be credited for those years, and OH has over 30 years. Ofcourse the rules might change and they might not be available to us - who knows? So we can't count on them.

Although I took my pension early - I have worked up until this year -

To be honest the thought of having to work until 65 if you don't have to can be a bit soul destroying. It's probably different if you have a job that you absolutely love. But if your job is a means to an end...... or circumstances at work change and the job becomes just a job instead a job you love (as has happened to OH) - why wait any longer than necessary.

mewbie_2

baileysbattlebus wrote: »

Our financial situation will be this, joint pension income of over £40k pa(most of it his), cash - probably between £400k & £500k) and both will have full state pensions in 10 years time.

How fortunate for you that I happened to be passing by. It is indeed your lucky day. I am currently drafting a proposal that I plan to send to you by private PM that will make you rich(er) beyond your wildest dreams. For a short term investment over a couple of years I can guarantee a return of something over 25% per annum. This will really help towards a comfortable retirement.

I will knock up some headed paper and send the mail shortly.

geoffky

Do what we do and spend the summer here and most of the winter away...i find it the best of both worlds..i would not make it permanent abroad as i see so many old people coming back due to health reasons and financial (sounds like you are protected) my parents are at this moment looking for a winter home but will not break the link with the uk because of family commitments (a grave to visit) and that has kept them in the uk for the last twenty years when they should of gone long ago. sad really

baileysbattlebus

geoffky wrote: »

Do what we do and spend the summer here and most of the winter away...i find it the best of both worlds..i would not make it permanent abroad as i see so many old people coming back due to health reasons and financial (sounds like you are protected) my parents are at this moment looking for a winter home but will not break the link with the uk because of family commitments (a grave to visit) and that has kept them in the uk for the last twenty years when they should of gone long ago. sad really

I think that is probably what we will do, spend best part of the winter away somewhere - it does seem to be the best of both worlds. The pensions are pretty well protected - though obviously not against any currency fluctuations - I would imagine expats in the Eurozone are feeling it at the moment.

It remains to be seen if we will buy somewhere, a holiday home was suggested or trying somewhere different every year. We will do our proper planning nearer the time. But I'm going to do some proper research over coming months.

OH really likes the US (Florida) and we could apply for a 6 month visa, but I'm not sure how we would get on with the likes of long term car hire. I would imagine most of Europe is too cold.

Harry_Powell

baileysbattlebus wrote: »

The finances are sorted (we think) but nothing else is really - that was reason for the thread - in our position what you do? Bearing in mind the economy, and some of the predictions for it. Tax rises, public spending cuts, Cameron saying we could default on our debt payments and go to the IMF and all that would entail. Would you stay or would you go?

I have got some things from the thread - 1, the possibility of a holiday home - something we had not really considered and 2, the possibility of spending 6 months of the year somewhere else, but somewhere different every year.

The lack of elderly care in a lot of countries, we have a lot here and other places appear not to.

Although we don't have health issues at present, we could in the future, as you get older warm weather is bound to be beneficial, especially in the winter.

The state pensions are ok - I did have 9 years out to have the kids, but fortunately I fall under the terms of the "if you've received child benefit you will be credited for those years, and OH has over 30 years. Ofcourse the rules might change and they might not be available to us - who knows? So we can't count on them.

Although I took my pension early - I have worked up until this year -

To be honest the thought of having to work until 65 if you don't have to can be a bit soul destroying. It's probably different if you have a job that you absolutely love. But if your job is a means to an end...... or circumstances at work change and the job becomes just a job instead a job you love (as has happened to OH) - why wait any longer than necessary.

I think you worry too much about the 'big picture' of UK finances. I can't imagine why you'd be concerned about the IMF and income tax rises, especially if you're retired. You don't really need to worry about your income being hit by unemployment, etc. and if you structure your finances correctly, you won't need to worry too much about income tax. In many ways, as a pensioner you're ina better position financially in a recession because you have guranteed income and things are so much cheaper. If you get a nice comfortable and well insulated home you won't need to worry too much about the cold or heating costs (certainly spending £10's or £100s of thousands on a holiday home and flights to/from and taxi fares to/from airport is going to be WAY more expensive than having the gas fire/central heating on longer).

baileysbattlebus

Harry_Powell wrote: »

I think you worry too much about the 'big picture' of UK finances. I can't imagine why you'd be concerned about the IMF and income tax rises, especially if you're retired. You don't really need to worry about your income being hit by unemployment, etc. and if you structure your finances correctly, you won't need to worry too much about income tax. In many ways, as a pensioner you're ina better position financially in a recession because you have guranteed income and things are so much cheaper. If you get a nice comfortable and well insulated home you won't need to worry too much about the cold or heating costs (certainly spending £10's or £100s of thousands on a holiday home and flights to/from and taxi fares to/from airport is going to be WAY more expensive than having the gas fire/central heating on longer).

I think your're probably right, regarding not worrying about the bigger picture. We should be ok - deep down I know that. And the security of income - it won't be affected by unemployment or inflation.

And you're right about the holiday home too - we couldn't afford to spend a lot of money on somewhere - and we will still have to buy somewhere here. And we want some money behind us - just incase.

We won't be living in the south east, where we currently are, (although it's been very good to us financially) the plan is a new or fairly new build 3 bed, for ease of maintenance and hopefully thermal efficiency too. The only thing that puts me off is the size of some of them.