Early-retirement wannabe

pension-newbie

Marine-life

That sounds like a very enjoyable retirement - although the poker (if online) will by my calculation be 99.999% automated bandits trying to steal your money and you!!

Good luck with it - but I would start golf now just to get you used to the disappointment and frustration before you retire

Gatser

Marine_life wrote: »

I've missed a few days so now it is only 1368 days to go

One of the topics I have been thinking about over the last few days (or rather have been since my wife gave me a jab in the ribs) is what will I do in retirement. I think she has the vision that I will become a couch loving beer swilling slob.

My current vision is that I might like to do something at least partially academic i.e. guest lecturing or doing some teaching of some sort. I currently teach a little as part of my day job so typically around 20 days a year. I have no idea to get into it once I leave work but that is probably something I can research over the next few year.

Secondly, plan to do lots of walking and sports, hopefully if my need holds up. I think I will also need to look at some non-impact sports, so I plan to start learning to sail this summer and I have always harboured a desire to learn golf.

Finally, I hope to play more poker (see my other thread). I am not sure whether I can legitimately call that a hobby. I do love to play and am reasonably good at it. Would be great if I could combine that with travel.......and maybe supplementing my retirement income on the side!

Other than that - I love to cook - but frequently even though we try and eat together as a family - midweek meals can be rushed. I will definitely spend more time cooking in retirement.

Anyway - it looks like my plans needs a non-financial component as well.

Yes...lets keep reducing THAT NUMBER!

I have had similar thoughts about the non financial aspects and its those that make the whole Retirement topic so exciting.
I do realise that I will probably need to work at it, to avoid the couch potato trap.... not easy on dark & dismal days!

I look forward to:
* Walking holidays (organising them) out of peak season
* Academic studies... I always enjoyed Geography/History but never got A levels in them.
* Teaching... but I do not have a degree...ummmm.....
* Volunteering
* Trying "different" jobs ... but need to research that.
* Cycling / Swimming
* Cooking (when I am allowed in the kitchen!)
* Watching all those films I have recorded on HDD!
* Internet trading
* Reading more/Learning more

...and there will be lots more.
I just CANNOT WAIT .... I like your idea of breaking down the "Days to go", so I know that by our summer hols there will only be 500 days to go!:T

jingleberry

I retired two years ago at 51. I had no idea whether I could afford to, so I began keeping records initially to give me a heads up if I needed to look for more income, and then to monitor my income and expenditure to see if my assumptions were remaining valid. My approach has been refined over the years – here are some of the principles – hopefully others may find this useful:
1. In my budget, I make a provision to allow for inflation on my savings. Initially I used the annual RPI figure, but I found this too volatile – it meant that the amount we had to spend was changing dramatically year on year. Now I use the average of all monthly RPI rates since I retired – this removes the volatility, smoothing out the inflation charge year on year.
2. I transfer a fixed sum every year to an emergency fund. I don’t physically move the funds, I just have a column in my spreadsheet. When an emergency occurs, I transfer the cost back to the main fund, so the amount I have for normal expenses is unaffected.
3. Similarly, I transfer a sum every year to a car fund. The amount I transfer is designed to let us change our car every six years.
4. The transfers to the emergency fund and the car fund rise each year in line with inflation.
5. My budget assumes that we are both already in receipt of state pension (net of tax). Since we have some years to go before state pension age, it follows that we are spending capital, in a controlled way, but I have calculated that we can live with this in the sense that our capital will not run out in the meantime. If we do not spend our capital in this way now, we will receive a substantial income boost when we reach state pension age, and I would rather have that income boost now.
6. Each annual budget aligns with the relevant tax year. This way, the relevant figures can feed straight into tax calculations.
7. Finally, a word about monitoring expenditure. I found it impossible to keep track of and categorise each item spent. Instead, I subtracted savings growth achieved during my last year in work from total income that year, to calculate total expenditure that year. From this, I subtracted all the large one-off items, and any expenses that would not be required post retirement. This gave me a value for general, unspecified, largely non-discretionary spend which I assumed would probably be required in the future. This value, adjusted for inflation, is the starting point for each years budget. By comparing expected income to expected regular non discretionary spend, I can calculate how much will be left over for discretionary spend and plan accordingly. Now that I have the system up and running I can repeat the calculation every year to see if expenditure is in line with expectations.

ffacoffipawb

3053 days to go to age 55 planned for me (3052 days in 15 minutes!)

Looking for £20k per annum from age 55 plus 2 final salary schemes paying £10k, todays money from age 60). TFC from age 55 will cover the shortfall to age 60.

That's the plan anyway, have £200k in a SIPP plus £2k a month going in.

Should just about make it.

Been mortgage free since age 36! Hence the healthy SIPP at age 46.5!

Marine_life

jingleberry wrote: »

I retired two years ago at 51. I had no idea whether I could afford to, so I began keeping records initially to give me a heads up if I needed to look for more income, and then to monitor my income and expenditure to see if my assumptions were remaining valid. My approach has been refined over the years – here are some of the principles – hopefully others may find this useful:
1. In my budget, I make a provision to allow for inflation on my savings. Initially I used the annual RPI figure, but I found this too volatile – it meant that the amount we had to spend was changing dramatically year on year. Now I use the average of all monthly RPI rates since I retired – this removes the volatility, smoothing out the inflation charge year on year.
2. I transfer a fixed sum every year to an emergency fund. I don’t physically move the funds, I just have a column in my spreadsheet. When an emergency occurs, I transfer the cost back to the main fund, so the amount I have for normal expenses is unaffected.
3. Similarly, I transfer a sum every year to a car fund. The amount I transfer is designed to let us change our car every six years.
4. The transfers to the emergency fund and the car fund rise each year in line with inflation.
5. My budget assumes that we are both already in receipt of state pension (net of tax). Since we have some years to go before state pension age, it follows that we are spending capital, in a controlled way, but I have calculated that we can live with this in the sense that our capital will not run out in the meantime. If we do not spend our capital in this way now, we will receive a substantial income boost when we reach state pension age, and I would rather have that income boost now.
6. Each annual budget aligns with the relevant tax year. This way, the relevant figures can feed straight into tax calculations.
7. Finally, a word about monitoring expenditure. I found it impossible to keep track of and categorise each item spent. Instead, I subtracted savings growth achieved during my last year in work from total income that year, to calculate total expenditure that year. From this, I subtracted all the large one-off items, and any expenses that would not be required post retirement. This gave me a value for general, unspecified, largely non-discretionary spend which I assumed would probably be required in the future. This value, adjusted for inflation, is the starting point for each years budget. By comparing expected income to expected regular non discretionary spend, I can calculate how much will be left over for discretionary spend and plan accordingly. Now that I have the system up and running I can repeat the calculation every year to see if expenditure is in line with expectations.

I hate it when someone sounds more sophisticated that I am!

I have started to track expenditure but TBH I am finding it difficult to get into the habit / rhythm of it. I guess its just practice. I have however mapped out total spend for the whole year and can see the buckets. That's maily the regular spend and I don't really have a view yet on the irregular spend - that is going to be my challenge for the next 12 months.

The encouraging thing is that most of the big buckets will begin to fall away over the five years up to the year when I plan to retire and at the moment I am basing my retirement expenses on current outgoings less the expenses that will fall away.

Our path between 50 and 60 (when my main pensions kick in) and will see us biting a big chunk out of capital. However, I do think we are being relatively conservative.

Marine_life

ffacoffipawb wrote: »

3053 days to go to age 55 planned for me (3052 days in 15 minutes!)

Looking for £20k per annum from age 55 plus 2 final salary schemes paying £10k, todays money from age 60). TFC from age 55 will cover the shortfall to age 60.

That's the plan anyway, have £200k in a SIPP plus £2k a month going in.

Should just about make it.

Been mortgage free since age 36! Hence the healthy SIPP at age 46.5!

Your post makes me happy......why? Because your 3052 days makes my 1367 days seem so much shorter.

Linton

Marine_life wrote: »

I hate it when someone sounds more sophisticated that I am!

I have started to track expenditure but TBH I am finding it difficult to get into the habit / rhythm of it. I guess its just practice. I have however mapped out total spend for the whole year and can see the buckets. That's maily the regular spend and I don't really have a view yet on the irregular spend - that is going to be my challenge for the next 12 months.

The encouraging thing is that most of the big buckets will begin to fall away over the five years up to the year when I plan to retire and at the moment I am basing my retirement expenses on current outgoings less the expenses that will fall away.

Our path between 50 and 60 (when my main pensions kick in) and will see us biting a big chunk out of capital. However, I do think we are being relatively conservative.

Expenditure tracking can be easy. What I do is to pay for everything above £10 with a debit card (or DDs where appropriate) and then download my bank statements into MS Money which can automatically categorise most items based on previous assignments.

MSMoney unfortunately is no longer available but I believe that other personal finance software, eg GNU Cash, can do much the same job.

cyclonebri1

Marine_life wrote: »

Excellent post - thats for the contribution.

Sick since 21? I am amazed you made it to 55! Well done!

Actually my wife has just gone back to work part time at 47 - now the kids have left home she was getting bored. So a little extra pocket money and a little less pressure on my earnings. When the day comes I will need to find a way to make sure she does not get bored.

That's what spurred me on. I had a chronic condition that at that time indicated I wouldn't live past 55, but that was 30 odd years ago and medical science advances, (as does my age), ;);):rotfl::A

Gatser

Marine_life wrote: »

Your post makes me happy......why? Because your 3052 days makes my 1367 days seem so much shorter.

3052 Work Days! That's nearly 13 years....

Hope you are not counting them down too often.
I do feel quite fortunate, thanks! :j

ffacoffipawb

Gatser wrote: »

3052 Work Days! That's nearly 13 years....

Hope you are not counting them down too often.
I do feel quite fortunate, thanks! :j

My 3052 was calendar days. Work and holiday days multiply by 5/7 to get 2180 work days.

Sounds better!

46.5 to 55 is 8.5 years.