How much do you REALLY need to retire?

nearlyretired2004

Most I've considered - some I think I covered in my OP......

Your reply paragraph by paragraph...

Para 1 - Good point - Tick!

Para 2 I'm already much more retired than not, work max two hrs.day - sometimes not at all! so this is largely factored in to current numbers

Para 3 As I said in OP - net pension of circa £700 per month kicks in early next year - so that accounts for £8400 of the expenditure and is index linked. Interest rate and inflation obviously the big variables.
Again in OP have some exposure to the markets via my SIPP

Para 4 Yep - after you with the razorblade! Might as well just end it now!

Para 5 Long term care - My OP forecasts 'coping' with monthly expenditure without touching my capital - saved and invested properly that should help - plus theres always the house!

Para 6 .... already have the three week Caribbean holiday factored in !


THanks pOOhsticks ! Mortgage free - of course!


Any more ?

Linton

On your initial point that you believe your asset base is a lot less than some others (including me) have suggested is necessary - dont forget that an inflation adjusted pension of £700/month gross (I see your £700 is net) at 55 would cost about £350K if bought privately. Add that to your other assets and I think you will find your asset base is not so low for your projected expenditure.

I assume there is a Mrs nearlyretired and she may have some income even if it's only state pension, if there isnt that would change things.

Were I in your position I would be concerned on a number of factors...

1) You mention inflation for 10 years - what about 30?

2) Mortgage - what happens to your income if increasing rates force you to pay off your mortgage early?

3) Relying on profit from house after paying off mortgage to fund life abroad - will that be enough? What happens when/if ill health forces your return?

4) You are living off the income from your lump sum, but that means in real terms the value of the lump sum is falling by inflation.

5) Your annual expenditure seems rather low to me.

triplea35

Have you considered that you will have to repay the capital amount of the mortgage at some time? I have an offset mortgage at such a low rate that I have it maxed and invested making a net profit. I include the profit as current income but certainly do not include the capital amount as part of my savings.

majorzott

Here's my living cost breakdown to help you decide:


Description Detail Week Month Year

House Mortgage 0
House Groceries 100 5200
House Council Tax 1500
House Gas 600
House Water 700
House Repair 500
House Electric 500
House Insurance 250
House Phone/Internet 25 300
House TV 110
Car Petrol 25 1300
Car Insurance 400
Car Service/repairs 300
Car Tax 145
Me Personal 30 1560
Me Phone 10 120
Wife Personal 30 1560
Wife Phone 10 120


Total 15165


The best thing to do is to kick off a spreadsheet, then you can play around with the figures.


Good Luck

majorzott

Opps - sorry about formatting - it was a table when I posted!!

nearlyretired2004

I FULLY realise that not everyone has time to read my very lengthy and sometimes rambling posts ......

Triplea35 - I say in my original post about 4 paras from the end - the intention is to pay off the mortgage when we eventually sell up in the UK and downsize moving abroad ......using the balance to fund the new purchase

majorzott - I too already have a spreadsheet and included it in my post of 11:01 this morning - and I had trouble with table formatting as well as you'll see!!

The only thing your s/sheet has reminded me of that I miss on mine is House insurance at £23 per month.

As I explained in an earlier post I dont tend to budget for one-offs like holidays and that includes one-off car bills but rather fund them from the monthly surplus

Thanks again all!!

amcluesent

>eventually sell up in the UK and downsize moving abroad<

I understand you can live well on $10/day in Laos or Cambodia.

MiserlyMartin

Firstly congrats for being in a very good position.

A few things that come to mind:

1 £69 is an awful lot of money for Sky. Freeview Freesat HD gives you lots of channels for nothing or you can get a 'sky eye' instead of multi room if you really must have it.

2. Why have you got a mortgage when you have so much cash in the bank? The first rule of saving is to always pay off any debt. Pay that mortgage off. Don't wait until you sell up to leave the UK. Then look at what you have left and invest wisely.

3. ISA's are not likely to change, in fact governments are encouraging us to put more in them. But see if you can put some in fixed rate bonds or other investments paying more than the paltry 3.0% max that you get these days/

nearlyretired2004

MiserlyMartin

Thanks for the congrats!

1. As mentioned in previous posts - we dont go out hardly ever - Sky is our only real 'luxury' - expensive because we need multiroom - adult son watching his own TV and OH and myself sometimes preferring different programmes - tried the magic eye for a year but you need to be watching the same programmes.....

2. I dont necessarily agree. Whilst I do agree that when debt is very expensive it's USUALLY wise to pay it off first, as mentioned earlier, we are currently on a very low mortgage rate and the ACTUAL cost of the mortgage (i.e the difference between the money going out and the interest earned by leaving the £84,000 in the bank) is only about £12 per month - I think a small price to pay for the luxury of having the liquid cash. Should interest rates start to vary wildly we would obviously reconsider. Do others agree with this strategy?

3. I spend half my day chasing rates ! I have money invested (saved) at 6%, 5%, fixed rate at 4%, have maxed out three Lloyds Vantage at 4%, and between OH and myself have six Halifax Reward a/c's generating £30 after tax per month for just moving 1K between them....also have exposure to the markets with my SIPP invested in funds.



Linton - Not sure what happened. I did reply to your post but it's disappeared! will try again........

getmore4less

I think one key point is you net cash is only £100k with the mortgage debt

You might be better trying to get an offset then you can reduce the cost to nearer Zero or even make a profit if rates are kind.

Also the downsize move abroad, what about healthcare?

I think that needs doing sooner rather than later gives you time to check out the place while still fit and time to come back if you don't like it.

Where are you thinking, Caribbean since you holiday there, if somewhere else then change you holidays to that place.

We don’t tend to ‘budget’ for one-off costs such as holidays, but pay for them cash and recover using accumulated/forthcoming ‘surplus’. Hence the reason why with a monthly surplus of £240 (ish), over three years our cash has only gone up by £2000, not £7200

This asking for trouble you need to budget for everything otherwise you will end up with a big hole when an expense comes you forgot, what about the replacement car fund that probably need £500py?