Early-retirement wannabe

gadgetmind

Marine_life wrote: »

Well if your state pension won't cover your tax bill I would say you are in pretty good shape financially.

I'd be in even better shape if HMG weren't still going to insist on me being a net contributor to society even when at the pipe and slippers stage of life.

Oh, and they are now starting to threaten taxing pension contributions and/or castrating tax free lump sums.

JoeCrystal

gadgetmind wrote: »

Oh, and they are now starting to threaten taxing pension contributions and/or castrating tax free lump sums.

Even they were to do that, I am going to assume that by the time I retire (I am almost 26 years old so got quite some time to go!), they will be non existent. Beside, if they are going to change it, it will take years of consultation about it

Either way, people will have time to take advantages of it. Unless you are aged 55 after the date they change it then hard luck.

To be honest, I would not be surprised if they raise the age of taking pension from 55 to 60 and gradually make State Pension mean-tested.

Let say I like to think it is good idea to plan for the retirement without taking into account of state pension or any other government income/benefits.

Cheers

Joe

racing_blue

Hi all, I’m a financial planning ostrich just starting to pull his head out of the sand. I’ve read this whole thread twice in the last two days. And it’s an eye-opener to see these different perspectives from people at different stages- from old hands who have so successfully taken control of their financial futures, to those like me who are just beginning their long range planning.

The impression I’m left with is that retirement planning underpins all other sorts of financial planning, because it boils down to attempting to balance how one lives now with how one wants to live in the future. And as I have quite strong ideas about both, it is something I'm cracking on with despite being a relative youth of 38.

My wife and I both went straight from university to very different but equally full-on professional jobs, and have worked hard for 15 years. Through elbow grease and through being in the right place at the right time, we have done OK.

The rub is that our jobs are, in the words of another poster, “consuming”. This is not (currently) a bad thing, as we both (currently) get tremendous satisfaction from doing what we do and managing the stress is (currently) kind of a buzz. But 12 or 15 hour days are not unusual and a succession of colleagues have developed significant stress-related health problems in their 50s. We don’t want to follow THAT path.

The picture of Linton, with his fully adjustable yard arm, sitting by the side of his pool drinking G&T whenever he chooses is absolutely inspirational to me! We are keen cyclists and love the idea of having the freedom to head off on long cycle tours of Europe, Australia, Americas, and Asia. We also love the sea and although I have never sailed, I’d like to learn and to do some proper ocean crossings perhaps to the Azores or Bermuda. Our ideal retirement would be to a modest estuary fronting apartment (with fully adjustable yard arm) which we could lock up and leave and ride or sail away from at any given time. Who knows, if an old dog ever can learn new tricks perhaps I could pick up an instrument and join a band. We’d be free to support our children practically if not financially, and would find ways to get involved in their lives if they wanted us to. Catch up with friends for more than just a hurried weekend. Get stuck into some charity work. There’s such a lot to do, it feels that we’re going to need to get started right now!

My wife and I have talked about this over recent months and both come to the conclusion that, God willing, age 50 is when we will aim to make the big change in our lives. This would tie in with our youngest child leaving school and starting university, and our potential liberation from the routines which currently dictate the ebb and flow of each day. We would not stop work- not by any means- but we would simply be in a position to choose when and how to work from that point on. And work might be something very different.

We are fortunate to have a very good joint income and are not big spenders. But because of this we have never felt it a priority to be clever or organised with our money. Recently though, perhaps over the last 2 years, we have come to see how important being financially savvy is to our life plan and have started trying to martial things properly, and in particular to efficiently build up some capital both inside and outside of pensions. I made an appointment with a financial adviser, but felt he didn’t really get where I was coming from. Instead I have found many pearls of wisdom on MSE and elsewhere, and this thread is the best of the lot.

That's why I have joined today- I’ll post again with ideas and questions about the hows and whens, but before getting into all that first wanted to share my wider thoughts! Thanks for reading.

gadgetmind

racing_blue wrote: »

fully adjustable yard arm

I *love* this phrase!

because of this we have never felt it a priority to be clever or organised with our money. Recently though, perhaps over the last 2 years, we have come to see how important being financially savvy is to our life plan and have started trying to martial things properly, and in particular to efficiently build up some capital both inside and outside of pensions.

I can recommend you read "The millionaire next door" - it's a trifle out of date, and very American, but it does show what even those with good incomes need to do to accumulate wealth.

That's why I have joined today- I’ll post again with ideas and questions about the hows and whens, but before getting into all that first wanted to share my wider thoughts! Thanks for reading.

It was a pleasure to read your words and hear your thoughts, so please keep posting.

Marine_life

racing_blue wrote: »

That's why I have joined today- I’ll post again with ideas and questions about the hows and whens, but before getting into all that first wanted to share my wider thoughts! Thanks for reading.

Excellent post.

I can empathise quite strongly with you. My retirement planning has been pretty shocking and I have been rescued by having a decent disposable income which means I can now throw money at the "problem".

I guess my one uncertainty concerns the children, In that I want to make sure they a) are well taken care of b) do not have to start their adult lives with debt. That means supporting them both through university (hopefully).

If you are going to go at 50 you are going to need to work out what you will live on before your pensions kick in and how much you will need to live on (and I bet once you sit down and work out your regular outgoings it will scare the beejesus out of you.

Marine_life

ok, so thought I would have a little bit of fun and see how much I would like to spend in retirement - so here is my SOA, comments appreciated!

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Income from Employment (after tax). . . . . . . . . . . . . . . . . . . . . . . 0.00
Income from Self Employment (before tax). . . . . . . . . . . . . . . . . . . . 0.00
State Pension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Private Pension / Annuity Payout. . . . . . . . . . . . . . . . . . . . . . . . 0.00
Benefits (Inc. Child Benefit/Tax Credits & Income Support). . . . . . . . . . . 0.00
Income From Savings & Investments . . . . . . . . . . . . . . . . . . . . . . . 0.00
Gifts From Family / Friends . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Monthly Expense Details
In Your Home
Mobile Phone(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.00
TV Licence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.83
Internet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.00
Home Phone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.00
Cleaning Products/Cleaner . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00
Garden Maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.00
Household Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.00
Oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333.33
Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125.00
Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.00
Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75.00
Council Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150.00
Overdraft Cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Bank Account Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Home Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.17
Mortgage/Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Plumbing/Boiler Cover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
Mortgage Life Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Mortgage Payment Protection . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Life Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.00
Food and Household Shopping . . . . . . . . . . . . . . . . . . . . . . . . . . 300.00
Drinks for Home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.00
Motoring & Public Transport
Petrol/Diesel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250.00
Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Car Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175.00
Car Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.50
Car Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.00
Rail/Bus/Taxi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.00
Breakdown Cover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00
Debt Repayments
Credit Card Repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Hire Purchase Repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Personal Loan Repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Car Loan Repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Savings & Investments
Pension Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Buying Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Mini Cash ISAs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Lump Sum Saving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Regular Saving. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Family
Pet Food. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.00
School Trips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
School Meals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pocket Money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Nappies/Baby Extras . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Laundry/Dry Cleaning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.00
Children's Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Baby Sitting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Childcare/Play Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pet Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00
Travel Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
Entertainment
Satellite/Digital TV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.00
Family Days Out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Cinema/Theatre Trips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75.00
Books/Music/Films/Computers . . . . . . . . . . . . . . . . . . . . . . . . . . 75.00
Big Days Out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Shopping for Fun. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pet Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
Hobbies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
IT/Computing (eg Anti-virus etc). . . . . . . . . . . . . . . . . . . . . . . . 0.00
DVD Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00
Drinking Out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.00
Eating Out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.00
Clothes, Health & Beauty
Complimentary Therapies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Optical Bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
Haircuts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
Dentistry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Beauty Treatments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Healthcare Cashplans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Dental Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Private Medical Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 300.00
Fitness/Sports/Gym. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75.00
Work Clothes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
New Children's Clothes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
New Clothes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.00
Education & Courses
University Tuition Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
School Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Your Courses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Big One Offs
Funeral Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Wedding Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Sofa/Kitchen/TV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.00
Birthdays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Winter Holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166.67
Summer Holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 416.67
Christmas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125.00
Odds & Sods
Newspapers & Magazines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.00
Tax & NI Provisions (self-employed only). . . . . . . . . . . . . . . . . . . . 0.00
Regular Charity Donations . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Meals at work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Smokes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Coffees/Sandwiches/Snacks . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00

Total monthly income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Total monthly expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,955.17

susiejq

We have done a similar thing in that we are living off one income (mine) and saving our rental income and OH wages (which at the moment is very little). We are trying to save as much as possible to clear our mortage as it is clear that we cannot live on one income and pay a mortgage and our one income is about what will have in retirement income. There are lots of savings to be made and we may have to down size. We also have a child starting Uni in September who will need our financial support. We want to retire in 2 yrs when I am 60 and OH is 66 and it's all very sobering at the moment!

sleepless_saver

Marine_life wrote: »

ok, so thought I would have a little bit of fun and see how much I would like to spend in retirement - so here is my SOA, comments appreciated!


Oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333.33
Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125.00
Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.00

:eek: What are you heating?

goRt

sleepless_saver wrote: »

:eek: What are you heating?

Swimming pool?!?!?

Marine_life

sleepless_saver wrote: »

:eek: What are you heating?

Yes I might have overestimated that!