Retiring with €1 million

Cap_Scarlet

I am beginning to firm up plans which are likely to involve retiring at 50 (I am just approaching my 46th Birthday).

If all things go according to plan we will have around €1 million in cash (i.e. without any liabilities including property etc.)

In addition to that cash fund I will have around another €0.5 million that will be available to me when I am 60 (i.e. 10 years later), two small company pension schemes that will begin paying around €20-25,000 per annum when I am 62 plus of course the state pension.

My basic retirement plan is an income of €50,000 per annum which I will draw down on the lump sum. I have assumed this will inflate by around 2% per annum.

I have assumed investment returns on the €1 million of 4% per annum.

The inflation number may be a bit higher but i would assume that if it is I will get higher investment returns and hopefully a differential of around 2% should be achievable.

If I run those assumptions through then I would theoretically run out of money when I am in my mid 90's.

Any thoughts or observations?

bendix

Cap_Scarlet wrote: »

Any thoughts or observations?

Yeah, I have one.

Well done. You've got it made.

Oh . and another. Make sure you die around 94.

lamb1102

You will still have the company pension payments.
Also, why would you aim to spend all the money anyway?
I think youre havin a laff.;)

darkblue_2

You have absolutely bewilldered me. You stated in your very first post that:

I am a UK citizen but have not lived in then UK since 1999. I am currently 45 years old but with no great retirement provision. I am quite lucky in that I have a decent salary (last year in excess of €500,000 gross).

I have some money in the bank but that largely offsets the mortgage on my house so net net I probably would have only about €200,000.

No great pension savings . what is the best way forward?

Then:

I contribute a percentage of my gross earnings to the scheme (currently 6%, rising to 8%). The total contribution is multiplied by a "factor" which gradually reduces over time. This factor more than doubles the contribution.

The scheme pays out over 5 years starting on my 60th birthday. The payout is 7% for the first four years with the balance payable on the 5th anniversary.

And then contradicted that with:

Rate of contribution: Nothing
Expected return: % infinity
Date of Joining: 2001
Sector -
Benefit approximately £15k per annum if I stay in employment for another 10 years

???

Hermanmunster_2

Cap_Scarlet wrote: »

I am beginning to firm up plans which are likely to involve retiring at 50 (I am just approaching my 46th Birthday).

If all things go according to plan we will have around €1 million in cash (i.e. without any liabilities including property etc.)

In addition to that cash fund I will have around another €0.5 million that will be available to me when I am 60 (i.e. 10 years later), two small company pension schemes that will begin paying around €20-25,000 per annum when I am 62 plus of course the state pension.

My basic retirement plan is an income of €50,000 per annum which I will draw down on the lump sum. I have assumed this will inflate by around 2% per annum.

I have assumed investment returns on the €1 million of 4% per annum.

The inflation number may be a bit higher but i would assume that if it is I will get higher investment returns and hopefully a differential of around 2% should be achievable.

If I run those assumptions through then I would theoretically run out of money when I am in my mid 90's.

Any thoughts or observations?

Yes you have got it made luck thing –only worry on the future is inflation that after all the quantitative easing may turn nasty and even into hyperinflation then money will have little worth and could destroy all our plans! I live in hopes it will not though!

peterg1965

Cap_scarlet = Walter Mitty

Cap_Scarlet

darkblue wrote: »

You have absolutely bewilldered me. You stated in your very first post that:


Then:



And then contradicted that with:


???

You are right - it might seem contradictory but the key things are:

1. I currently have a decent sized mortgage - I won't have that in 5 years and will not live in that house i.e. I will have significantly more net cash.

2. One of the schemes is an early retirement scheme (the 6% increasing to 8%) as opposed to a pension.

3. The third scheme (the one with zero contributions) I was not even thinking about.

So sorry that my first post didn't contain all the facts in absolutely the correct order, but this is something I have only recently begun thinking about in detail (and getting my sums right).

Hopefully you are now less bewildered.

Cook_County

Cap_Scarlet wrote: »

You are right - it might seem contradictory but the key things are:

1. I currently have a decent sized mortgage - I won't have that in 5 years and will not live in that house i.e. I will have significantly more net cash.

2. One of the schemes is an early retirement scheme (the 6% increasing to 8%) as opposed to a pension.

3. The third scheme (the one with zero contributions) I was not even thinking about.

So sorry that my first post didn't contain all the facts in absolutely the correct order, but this is something I have only recently begun thinking about in detail (and getting my sums right).

Hopefully you are now less bewildered.

Interesting. You hve said in previous posts that you live in Germany but are choosing to evade German tax by failing to declare worldwide income.

Are you factoring German tax and social costs in any of your numbers or are planning on ignoring these obligations too?

Cap_Scarlet

Cook_County wrote: »

Interesting. You hve said in previous posts that you live in Germany but are choosing to evade German tax by failing to declare worldwide income.

Are you factoring German tax and social costs in any of your numbers or are planning on ignoring these obligations too?

At what point did I mention evading tax?

Are you interested in offering helpful advice or pre-judging a situation that you do not fully understand?

If the latter then please keep your thoughts to yourself

jamesd

4% seems very cautious for a million invested. 5-6% from a mixture of cash and investments should be readily achievable without excessive risk levels.

ferox666

Are you an MEP?