Early-retirement wannabe

kidmugsy

Marine_life wrote: »

My estimate is that this would produce a pre-tax value of around €750k so it seems like a monumentally bad deal - unless I'm missing something?

It's probably designed to appeal to somebody who wants to run away to Brazil with his mistress. Or is in lousy health. Or is a dolt.

atush

Marine_life wrote: »

For me the thing with money is not that I necessarily want to spend it, its that I absolutely don't want to have to think about it! I'm not sure if that makes sense but it seems like a lot of people who've posted on this thread have got themselves comfortable with their retirement budget by tracking their expenditure to a high degree of detail. I could do that (I'm an accountant after all) but it gives me no pleasure what so ever.

This is how I like to operate now. If I am doing the weekly shop, I have no budget. AS I dont need one. SO it doesn't matter how much I spend. But I do sometimes get very proud of myself when I underspend lol.

WE used to monthly budget and track all spending on quicken. But I gave up after a few years. Will probably do something on a spreadsheet the last year before retirement.

kidmugsy

We don't use a budget any more because our instincts are pretty frugal. But we have relaxed in one regard: if we buy some experimental new food and find we dislike it, we no longer heroically munch through it. Onto the compost heap it goes! High rollers, eh?

Goldiegirl

Marine_life wrote: »

For me the thing with money is not that I necessarily want to spend it, its that I absolutely don't want to have to think about it! I'm not sure if that makes sense but it seems like a lot of people who've posted on this thread have got themselves comfortable with their retirement budget by tracking their expenditure to a high degree of detail. I could do that (I'm an accountant after all) but it gives me no pleasure what so ever.

But how will you ever get comfortable with the idea of retirement living?


If this whole thread about your planning, modelling, spreadsheeting, projecting and pondering hasn't yet made you comfortable that you'll be able to live well in retirement, what will get you into that comfort zone?

goRt

Marine_life wrote: »

Interesting pension developments at work.

Our current defined benefit scheme has now closed to new joiners (no surprise there). It's non-contributory and the current benefit is worth around €48k per year, index linked with a two-thirds surviving spouse benefit. I would estimate equates to a pot of around €1.5 million i.e. it must be hugely expensive.

Anyway, one of the interesting development is that they will now allow retirees to take the whole Net Present Value of the pot as a (taxable) lump sum on retirement using a 4.5% rate of interest to calculate the current value. My estimate is that this would produce a pre-tax value of around €750k so it seems like a monumentally bad deal - unless I'm missing something?

HMRC values DB schemes at 20 times annual (for LTA).
Current transfer from DB to DC are 30-35 times.

That really is a poor deal

kidmugsy

goRt wrote: »

That really is a poor deal

You want to see a poor deal? See the article in this morning's Tel.

http://www.telegraph.co.uk/finance/personalfinance/pensions/11810055/I-cashed-in-final-salary-pension-for-272000.-Can-I-turn-it-into-1m.html

cathybird

For tracking expenditure in minute detail, can I recommend Money Dashboard? ... It automates the whole process, pretty much. It is read-only and as far as I can tell completely secure. It has greatly helped me. I don't work for them, btw!

Marine_life

Goldiegirl wrote: »

If this whole thread about your planning, modelling, spreadsheeting, projecting and pondering hasn't yet made you comfortable that you'll be able to live well in retirement, what will get you into that comfort zone?

Oh my gosh, well there's a question that could take a book to answer!

The simple answer is that we are already there in the 'very' comfortable zone with an annual buffer of around 50% of what I believe is a very reasonable annual spend. Even after that we would still have a remaining pot by the time our pensions start paying out of 10 years spending. So trust me, it's no longer about the money.

So if it's no longer about the money then what's it all about? Its all about the psychology.

A couple of things:

1. I'm in a job where the pay puts me in the top 1% of earners. Coming from a working class background I am acutely aware of the privileged position, what others would do to be there and what it would mean to walk away.

2. This sounds very poncy, but....well...I'm still not sure who I am! Am I the successful accountant or am I the person who like to grow a beard, wear shorts and tee shirts and stand around looking at the beauty of the world? If you're not sure who you are or more importantly who you want to be...then maybe remain as you are if who you are right now is a pretty good place to be.:o See I told you it was poncy.

There's no doubt that the more options you have the more difficult decision making becomes.

Goldiegirl

Yes, it is a huge thing to walk away from a decent job.

Even through my last job was only two days a week and not a mega bucks salary, and I was 100% sure it was time for me to stop work ..... It was still a big thing to tell my employer of my intentions to leave.

But a big relief when I finally told them, what a weight off my mind!

As for who you are.... If you're not sure, then I can't help you with that one:rotfl:

kidmugsy

Marine_life wrote: »

Am I the successful accountant ...

Philosophers might debate whether such a category exists. Can someone who has devoted his life to such essentially trivial pursuits as book-keeping and tax-avoiding truly be said to be successful? Obviously if you'd run a sweetie shop, you could be successful - you'd only have to look at the beaming faces of the children (and the local dentists). But an accountant?