Early-retirement wannabe

jamesd

Marine_life wrote: »

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?

Depends what you'll do with the money. One P2P place is seeking expressions of interest to invest £8 million for a year at 1.5% a month for a one year term. It's already reached around £3 million with offers of around £15k per investor. It's a property investment deal secured on £25 million of land.

Other places routinely offer 12% (SavingStream, MoneyThing) or 10-14%+ Ablrate and a range of others. In the Eurozone there's Mintos paying 10%+.

Those are young places and today only Ablrate allows pension investments but all allow non-pension money and are for lending secured on physical property of some sort, at reasonable loan to value. You can do pretty well investing at 10% and up, the doubling times are impressive.

The big catch with the work pension deal may be that it is taxable, so a lot could be lost just to take the money, maybe enough to override the potential gains. A big solution to a big tax bill is to become resident in Portugal so you qualify for their 0% income tax rate on pension income, including pension lump sums. You don't have to stay in Portugal all the time, just long enough to become resident, then long enough to deal with local tax rules where the money is paid - the UK would tax it as normal if you returned within three years.

I doubt that the P2P rates will be sustained five years from now but today you can invest on five to seven year terms at 10-12% and that's pretty thoroughly decent. I do expect that the P2P rates will stay high enough for long enough to make the pension lump sum a good deal. Even more so if you combine P2P today with investing conventionally after the next big 20-40% stock market drop, to ride the recovery.

Marine_life

September bleeds into October and another birthday rolls around.

Its my birthday this month, I'll be 51. I was supposed to be retired by now but I'm still working. What on earth is going on?

Its funny but rather than things beginning to tail off at work and me taking a back seat, I've been getting busier and busier. I am absolutely sure that if the projects had not arrived as they have done that I would be now almost ready to go. But maybe sometimes things happen for a reason. The way things are going at the moment I will be busy until next March / April.

I'm actually quite enjoying it and maybe the desire to give up was driven by the fact for a while I was desperately bored. Well....not bored now.

We are moving house this month. After 16 years where we have been living we are now taking on two homes. Our permanent retirement home and a flat in the city. Will be very strange as I've never lived in a flat.

Hopefully now there are the beginnings of a plan which will see us retire at the end of June 2017. Are we now really on the road? watch this space!

jamesd

You're on the road and enjoying what's moving past but not quite sure yet which of the exits you'll take, ready though you are to handle whatever any of them delivers.

atush

I'm actually quite enjoying it and maybe the desire to give up was driven by the fact for a while I was desperately bored. Well....not bored now.

This is a big factor. 3/4 years ago, my husband was near your age and was desperate to retire- he hated working where he did. he knew we had to wait til at least this year, due to having twins at Uni. But he changed jobs a few years ago and he is far happier. So much so he didn't get upset when one of the twins went onto do further study and thus delaying him yet again.

So the quality of your work life is a huge driver.

torbrex

I decided to retire early purely based on the change in the law that allowed me to take my pension as a drawdown rather than an annuity.

I did not have a large pension pot, it was in fact 3 small pots that had been started at various times while in different jobs, none of which were going to give enough of an income if I had been forced to take an annuity (even if combined) that would have meant I could give up working to live.

Then came the change in the rules :T
I simply divided the size of my pot by the number of months that I wanted it to last and there was the income that I needed to cover all my monthly bills (including food and fuel).
The only other things I would need to find extra cash for would be for household repairs/decorating and a car if needed. As the mortgage was already paid off, I decided that the endowment I have running for that will then become my car and house fund, this left my investment in shares and my savings to cover any other eventuality.

I turned 55 last October and that was when my planning really started, although I had previously been contibuting to pension funds, they had been dormant for almost 4 years. I was still saving every month up until this point, nothing huge but at least there was a trickle still going in.
I contacted my fund holders but they refused to deal with me directly and I was forced to engage a financial advisor to facilitate my plan.
He took one look and confirmed it could be done the way I wanted so it was just a case of waiting until April this year for the rule change to come in and on 1st June the first of my fixed income was transfered to my account.

I still have a casual job (zero hours) but now I can pick the shifts that I want to do rather than HAVE to do, I limit them to 4/month maximum just to keep me honest.

LIG

wotsthat

Marine_life wrote: »

Its my birthday this month, I'll be 51. I was supposed to be retired by now but I'm still working. What on earth is going on?

You thought retirement was a solution to a problem you no longer have?

cathybird

Marine_life wrote: »

September bleeds into October and another birthday rolls around.

Its my birthday this month, I'll be 51. I was supposed to be retired by now but I'm still working. What on earth is going on?

Happy birthday Marine_life Is it soon? We must be very nearly the same age - my birthday is in October and I will be 51.

gadgetmind

torbrex wrote: »

I decided to retire early purely based on the change in the law that allowed me to take my pension as a drawdown rather than an annuity.

You haven't needed to buy an annuity since 2006.

Marine_life

wotsthat wrote: »

You thought retirement was a solution to a problem you no longer have?

Its very close

Unfortunately the (project based) job I work in is either running at 100 miles an hour (in which case you are screaming to get away because you are so desperately tired) or at a complete standstill where boredom sets in. its a horrible contradiction.

At the same time our profession is surrounded by a fear that maybe everyone is better than you (they're not) and its only moments before you are found out (you won't be).

But deep down is there a kind of sadistic pleasure in being hopelessly busy? Certainly the days slip by very quickly when there is lots to do.

I remember watching a documentary about Steve Redgrave when he retired from the Olympics and he was saying he can't actually just stop because his heart was so enlarged it would likely kill him. I'm not suggesting I'm anywhere near that league but maybe there is something similar with mental activity?

Who knows...but thanks for the observation :-)

Marine_life

cathybird wrote: »

Happy birthday Marine_life Is it soon? We must be very nearly the same age - my birthday is in October and I will be 51.

End of October...but I bet you look younger than me ;-)