Early-retirement wannabe

ally18

FatherAbraham wrote: »

Well, you've maxed out the UK basic state pension, once you got to 30 years. If you want to up that, you should consider moving to a job in another EU (actually, another EEA country might do) country, to start accumulating state pension bennies in that country.

Warmest regards,
FA

I will dream about it.

Many thanks

atush

I will look into the S&S isa aspect but I am dubious about this. I cannot afford to lose any money.

The problem is, you ARE losing money every day, on every penny you have in cash in accts paying less than alomst 4% (which don't exist) as with inflation running 2,5-3% you need to earn that plus more to pay BR tax to beat it.

Yes, you can lose on investments. But there are loads of different types of investments. The riskiest are single shares, and single funds in single countries.

To be less risky you look at collective funds (where 20-100 companies could be held in a fund), so that if any one company did badly/failed yo'd only lose a small %. Then you could look at not investing all in one market (ie UK) so that if one market dd badly and others did well. you'd still not lose out.

Not to mention, what are you getting on cash? One of my main collective funds (an Investment trust) is up over 35% this year. I could lose 10% tomorrow and still be up? Others are foing less well, in that they have grown 10-13%. Still far better than cash even if it dropped 5%.

There are good years and bad ones, but generally if you are investing for 10 years or more it is an upward trend, and will outperform cash.

So read up on the different types of risk. No one is saying to invest every penny, but i'd be investing some if you want to beat inflation.

What % is your mtg? And yes it should be paid off by retirement date but that doesn't mean you should JUST overpay it, I would invest alongside.

PS, you are gonna need a min of 35 years contribs to get full state pension after 2016, not 30

Marine_life

I wonder where the retirement journey is heading? It all seems as if its getting very close to becoming real. 2014 or 2015 is now pencilled in as retirement date. My 49th birthday was last month and soon we will be in December. Before you know it is will be next year and that is potentially retirement year. eeek.

We were out house-hunting at the weekend. As I mentioned a few posts back we went to look at our ideal house - it is close to perfect and now we have a big decision to make. We have been given two weeks to make the offer and my only concern is that it is just a little bit too early. I am concerned about not rushing things but also concerned about missing out and potentially the opportunity does not come back. Decisions. Decisions.

I've also been thinking that retirement calculators are rubbish (caveat: for all but the most simple cases) i.e. if you have a mixture of different plans and resources there is no other way to plan other than using a spreadsheet.....or does someone on here know differently?

I wonder whether like other people coming closer and closer to a set goal that the pressure of work starts to lift? A large part of wanting to retire early (for me and I am sure others) is about feeling trapped by financial commitments. Once the financial burden starts to fall away then the pressure starts to reduce as well. Am I tempted to spends another 2-3 years "enjoying" my job? I may very well be but lets see.

gallygirl

Marine_life wrote: »

Am I tempted to spends another 2-3 years "enjoying" my job? I may very well be but lets see.

Or are you making excuses Marine life .

Realistically, what are the chances of you finding another property which ticks all the boxes? Obviously there are lots out there, the question is how likely is it one will arrive exactly on cue?

Bigmoney2

Marine_life wrote: »

I wonder where the retirement journey is heading? It all seems as if its getting very close to becoming real. 2014 or 2015 is now pencilled in as retirement date. My 49th birthday was last month and soon we will be in December. Before you know it is will be next year and that is potentially retirement year. eeek.

We were out house-hunting at the weekend. As I mentioned a few posts back we went to look at our ideal house - it is close to perfect and now we have a big decision to make. We have been given two weeks to make the offer and my only concern is that it is just a little bit too early. I am concerned about not rushing things but also concerned about missing out and potentially the opportunity does not come back. Decisions. Decisions.

I've also been thinking that retirement calculators are rubbish (caveat: for all but the most simple cases) i.e. if you have a mixture of different plans and resources there is no other way to plan other than using a spreadsheet.....or does someone on here know differently?

I wonder whether like other people coming closer and closer to a set goal that the pressure of work starts to lift? A large part of wanting to retire early (for me and I am sure others) is about feeling trapped by financial commitments. Once the financial burden starts to fall away then the pressure starts to reduce as well. Am I tempted to spends another 2-3 years "enjoying" my job? I may very well be but lets see.

I know what you mean, my last few months were quite enjoyable, the pressure is off and you know there is an end in sight.
It is also a leap into the unknown, your at the edge but can you jump. Sounds like your getting a bit nervous about your lifestyle change.
Can't help with the house, I'm very indecisive, but grabbed my pension with both hands at 50, and have no regretts.

Goldiegirl

I'm now approx 1 year and 10 months from my projected early retirement date

At the present time I've no desire at all to carry on working any longer than that time.

But in my case, I won't be having any other huge life changes. I won't be moving house (well not for several more years), I only work two days a week now, so stopping work altogether won't be such a big change. I should end up with my current life - only better.

But if I was facing other big life changes, I think doubts would creep in, especially at the early age of 50. I'd think I would be asking 'is it too soon to jump?'

However, I don't think I'd be looking for the perfect retirement house this early - I'd probably wait until I had actually started the retirement, as I'd have much more time to do the looking

atush

I seem to recall this place is on/near a ski slope? Does it need work?

If so, just rent it out for this winter as ski season is coming up. You don't have to wrry abt wear and tear if you will be redecorating/renovating anyway?

Marine_life

So here we go a quick update....

We decided not to take the leap of the retirement home. It was / is a fantastic house but we are still a bit too far out to make the financial commitment. So we have decided to sit tight for a bit longer and be patient.

Having said that we have taken one big step towards the early retirement dream this week by writing out the biggest cheque we have ever written (well...a bank transfer actually)...when we paid off our mortgage for €325,000 :eek: . So we now have an asset worth around €650,000 which will (in part) fund our retirement spending once we do decide to take the leap. More importantly our bank account will no longer be drained by mortgage interest (we took our current mortgage out five years ago at an interest rate of over 4%) so that will be lots more money going into the retirement coffers.

Barring any unexpected events we are now rapidly closing in on the date when I could hand in my notice (1 April 2014) which with my notice period would take me up to my 50th birthday. However, I expect the most likely scenario is probably to hand on to my 50th birthday, go on a big holiday and then see where we feel after that i.e. we would likely look at 1 January 2015.

On a more general note I have been watching the news with interest this week about the changes to the pension age. Isn't it time government started adopting more flexible attitude to pensions that would enable people to make more informed decisions? i.e. why not give people the option to retire earlier by upping their contributions? i.e. by all means set an official age but then give people the option to retire earlier if they say up their contribution rate by 1, 2% of whatever? Do governments really believe that simply extending the official date will really change behaviours especially when people know that they will in any event recieve social security support irrespective of any official directive? Its time goverments starting dangling carrotts rather than using the stick all the time.

Freecall

Marine_life wrote: »

On a more general note I have been watching the news with interest this week about the changes to the pension age. Isn't it time government started adopting more flexible attitude to pensions that would enable people to make more informed decisions? i.e. why not give people the option to retire earlier by upping their contributions? i.e. by all means set an official age but then give people the option to retire earlier if they say up their contribution rate by 1, 2% of whatever? Do governments really believe that simply extending the official date will really change behaviours especially when people know that they will in any event recieve social security support irrespective of any official directive? Its time goverments starting dangling carrotts rather than using the stick all the time.

If you think back to the origins of pensions they were insurance policies against the risks off living too long. In modern times retirement has become seen as more of an extended holiday.

I think that over time the increasing state pension age will mean that it is viewed once again as an insurance for survival in (very) old age. When it reaches 70 or 75 or older it does not mean that people will routinely work until that age.

A culture of saving for your chosen point of retirement will emerge which, at the end of the day, has to be a healthy approach to life and will at the same time reduce the burden on the then taxpayers.

Marine_life

Freecall wrote: »

If you think back to the origins of pensions they were insurance policies against the risks off living too long. In modern times retirement has become seen as more of an extended holiday.

I think that over time the increasing state pension age will mean that it is viewed once again as an insurance for survival in (very) old age. When it reaches 70 or 75 or older it does not mean that people will routinely work until that age.

A culture of saving for your chosen point of retirement will emerge which, at the end of the day, has to be a healthy approach to life and will at the same time reduce the burden on the then taxpayers.

In Germany (where we live) the pension is viewed as a reward for a lifetime of hard work!

I think your comment "A culture of saving for your chosen point of retirement will emerge which, at the end of the day, has to be a healthy approach to life" is unfortunately wishful thinking - as we've seen over the last few years people seem to have been put off saving for pensions either because of the 'have it now culture' or because of the perception that pensions have for whatever reason been plundered either by the state or by the banking industry (both of which would not be entirely untrue). Combine that with reducing annuity rates and pensions seem to have become frankly poor value.

I think what we need in public pension is an element of certainty, security and, at the end of the day compulsion. Governments need to start (somehow) investing pension deductions in real assets which are protected and taken away from political interference.