Early-retirement wannabe

theoldgreychap

Love this thread and have been a watcher for a while now. One aspect of early retirement I am interested in is the point at which others choose to downsize en route to early retirement. We are in a comfortable house in greater London with a mortgage which requires my ongoing employment to pay.

We have 2 children, the youngest plans to go to University in 4 years time at which point both my wife and I will be approx 56. The house will be far too big for us by the time we are 80, and yet is a great family house for us now - so there is a 'tipping point' somewhere!

We (probably) want to provide a family home for the young adults whilst still at University - but for how long? We are toying with the options of downsizing locally vs moving away from the London area. Either would allow us to own a nice home mortgage free (we have significant equity) and launch our retirement plans.

The moment we downsize after age 56 we should be able to retire which is a big incentive to move sooner. On the other hand we want the children to have somewhere they can call home to which they can return for a period - so would really value thoughts and experiences of others...

ex-pat_scot

theoldgreychap wrote: »

Love this thread and have been a watcher for a while now. One aspect of early retirement I am interested in is the point at which others choose to downsize en route to early retirement. We are in a comfortable house in greater London with a mortgage which requires my ongoing employment to pay.

We have 2 children, the youngest plans to go to University in 4 years time at which point both my wife and I will be approx 56. The house will be far too big for us by the time we are 80, and yet is a great family house for us now - so there is a 'tipping point' somewhere!

We (probably) want to provide a family home for the young adults whilst still at University - but for how long? We are toying with the options of downsizing locally vs moving away from the London area. Either would allow us to own a nice home mortgage free (we have significant equity) and launch our retirement plans.

The moment we downsize after age 56 we should be able to retire which is a big incentive to move sooner. On the other hand we want the children to have somewhere they can call home to which they can return for a period - so would really value thoughts and experiences of others...

Depends on your other financial priorities really.


There are a number of separate emotional, social and financial considerations at play here.


1. the financial. You say that you could retire at 56 if you downsize. Could you part-retire (eg part time work, consultancy) without downsizing?
Could you retire, using up pension funds first and then downsizing later to release equity once the pension funds run low?


2. the emotional. What will you do to the heart of your family if you move away when downsizing? It might be a mixed message you give to your youngest child if you sell up and move as soon as they are off to uni.
Do you dread the thought of boomerang children, or alternatively do you hope they come back for a while before settling down?


I'm in a very similar position in some respects: whilst my youngest will be leaving home to go to uni when I am 56, I am planning that I will be broadly financially independent at that point, and not have to rely on realising home equity in order to retire.
I'm a bit cautious about planning to retire immediately she leaves - I don't want to give the children the impression that I am /was only working in order to support them, and was suddenly free at last...


In other areas, I am in a very different situation. We live in the middle of nowhere, so I doubt any of the children will return to live with us once they go off to uni/ work. I suppose you and your spouse will have to decide whether you want to encourage and support them to use you as a base in early adulthood. Having a home where you do is very flexible in that respect - it would allow them a base in their fledgling careers with some element of stability. You could / should be charging them rent - perhaps that would be sufficient cash flow to allow you to retire?
Of you might want some space, peace and quiet!

uk1

To add to the previous post, I will add another consideration that should be in the pot.

We have a large main home and a second home which is a four bedroomed house. We bought the house partly with the idea of retiring there. However having used it for the last fifteen years we now realise that the very close proximity to other people has made it unsuitable as a place to retire. It has confirmed to us that actually we want to stay in our main home even though it is too big. Without the second home we wouldn't have known that.

My point in summary is take extra care to ensure that what in theory sounds like a great idea of trading down space, ensure as best you can that such an adjustment won't make you miserable.

If so, then there are other financial options if you decide to stay in your current home that may or may not be appropriate.

Jeff

bigadaj

uk1 wrote: »

To add to the previous post, I will add another consideration that should be in the pot.

We have a large main home and a second home which is a four bedroomed house. We bought the house partly with the idea of retiring there. However having used it for the last fifteen years we now realise that the very close proximity to other people has made it unsuitable as a place to retire. It has confirmed to us that actually we want to stay in our main home even though it is too big. Without the second home we wouldn't have known that.

My point in summary is take extra care to ensure that what in theory sounds like a great idea of trading down space, ensure as best you can that such an adjustment won't make you miserable.

If so, then there are other financial options if you decide to stay in your current home that may or may not be appropriate.

Jeff

Presume there wasn't sufficient room for the staff in the four bedder then!

uk1

bigadaj wrote: »

Presume there wasn't sufficient room for the staff in the four bedder then!

I got told off for trying to swing a cat. It kept thumping on the walls - the irritating complaining little moggy.

Jeff

Karmacat

Retiring to somewhere pretty isolated - both socially and professionally, I've come into contact with people who do exactly that, and as they age are regretting it *intensely* - there are no neighbours, not just for a chat and a bit of help, but also in times of real emergency. If you can only get out of your property by using the car, I think you're making yourself a hostage to fortune - plenty of people have to stop driving for health reasons while they're still sharp as whips mentally.

uk1 wrote: »

I got told off for trying to swing a cat. It kept thumping on the walls - the irritating complaining little moggy.

Jeff

Norty Jeff

:rotfl::rotfl::rotfl:

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gadgetmind

uk1 wrote: »

It has confirmed to us that actually we want to stay in our main home even though it is too big. Without the second home we wouldn't have known that.

We have some neighbours like that. They have *two* houses in France yet spend most of their time in their UK 5-bed family home with large gardens because it's in such a great spot.

gfplux

uk1 wrote: »

To add to the previous post, I will add another consideration that should be in the pot.

We have a large main home and a second home which is a four bedroomed house. We bought the house partly with the idea of retiring there. However having used it for the last fifteen years we now realise that the very close proximity to other people has made it unsuitable as a place to retire. It has confirmed to us that actually we want to stay in our main home even though it is too big. Without the second home we wouldn't have known that.

My point in summary is take extra care to ensure that what in theory sounds like a great idea of trading down space, ensure as best you can that such an adjustment won't make you miserable.

If so, then there are other financial options if you decide to stay in your current home that may or may not be appropriate.

Jeff

I agree. You may think you know what you want and what you will do when you retire, but sometimes you find you want something totally different AFTER you have retired.

Marine_life

uk1 wrote: »

It is a commonly held belief that money makes you happy, but I think we all know that it doesn't make you happy, it simply reduces or removes many of the things that make you unhappy.

I agree with the last part of that statement but probably not the first. I do think that there are some circumstances in which money definitely does make you happy (staying in a great hotel with fantastic food and wine for me) but you could tack onto that ...the best things in life are free (a hug from a child, the perfect early morning view). So maybe we could create a new phrase along the lines of "the best things in life are free...but having money certainly won't harm either" I would certainly subscribe to that one

uk1 wrote: »

What I think that I found which I find interesting is that the vacuum left when wealth removes some of those money problems is often replaced by other problems. One of the main shocks I have seen as a common problem is the surprise that many wealthy people find when having always believed that if they were rich then they would be happy, they subsequently discover it not to be the case and they become a bit confused. They basically ask themselves, "I worked so hard to achieve all this, but I am still unhappy, was all the sacrifices all worthwhile?" Often the process of becoming rich causes relationship problems and being rich makes making new genuine friendships more difficult. Wealthy people often find themselves more isolated than their poorer friends and are suspicious of new people they meet.

I think the problem is that the process and the jobs that make you well off are like a drug, they are all consuming and require a level of focus that can be to the detriment of everything else around it (family, friends etc). And like any drug it's difficult to give up, you no longer need the money but need the fix.

uk1 wrote: »

Many yearn for the past when they had less cash.

Not me. I've been poor and I've been well off and well off is many times better.

uk1 wrote: »

I have very firmly concluded that the luckiest ones are not the very poor or the very rich, but those that just have enough and know it.

I'm not sure about that one. The people I envy are those that have a very clearly defined purpose and ambition indeed I even envy those who have no purpose but are happy to potter away their days. They know who they are or who they want to be or they have reached the position they want to be in in life and now can relay knowing the job is done. I worry about having no direction and so its easier to sit drawing the pay check while figuring it out.

uk1

Marine_life wrote: »

I agree with the last part of that statement but probably not the first. I do think that there are some circumstances in which money definitely does make you happy (staying in a great hotel with fantastic food and wine for me) but you could tack onto that ...the best things in life are free (a hug from a child, the perfect early morning view). So maybe we could create a new phrase along the lines of "the best things in life are free...but having money certainly won't harm either" I would certainly subscribe to that one

I think the problem is that the process and the jobs that make you well off are like a drug, they are all consuming and require a level of focus that can be to the detriment of everything else around it (family, friends etc). And like any drug it's difficult to give up, you no longer need the money but need the fix.

Not me. I've been poor and I've been well off and well off is many times better.

I'm not sure about that one. The people I envy are those that have a very clearly defined purpose and ambition indeed I even envy those who have no purpose but are happy to potter away their days. They know who they are or who they want to be or they have reached the position they want to be in in life and now can relay knowing the job is done. I worry about having no direction and so its easier to sit drawing the pay check while figuring it out.

A nice post ... thanks.

I think we are actually saying the same thing ..... if you think about it ... in your example ... staying in a cheap and nasty hotel would make you unhappy ... and cash has removed what would make you unhappy! But I'm splitting hairs! To be more accurate I should have rather said in the context of this thread and the particular poster I was responding to, most people without cash believe that cash in itself makes an unhappy person happy but it doesn't necessarily seem to.

Many people who have made it do continue to work for the exact reasons you highlight, but there are as many it seems to me that have been so focussed that they simply have never learned to relax ... or stop. So for them, there is no alternative to work.

One of my friends who was a client, I use to take him and his partner with us on some of our overseas trips and he had never had a long lunch before he met me, whereas I could recall very few short lunches. The first time he had ever had a lunch hour that started at 11am and finished at 2am the following morning was with us.

Like you our great self-indulgence is luxury travel, and whilst I guess it is true to say it makes us happy, it has now simply become a minimum requirement and if we couldn't afford it at that level we simply wouldn't do it because it would make us very unhappy. Once you've eaten meat there is no going back if you get my drift. But I also get a lot of pleasure enjoying a level of luxury that would probably be unaffordable if I were paying what others are paying for the same experience. I have whilst planning our next trip, a couple of days ago realised that we cannot really justify the full JetQuay service at Singapore for our next trip, as they have put the prices up too far, and the idea of not having a buggy meet me at the airbridge, arrange to get my luggage collected from arrivals whilst they take us to the private CIP terminal for private immigration and customs, and limmo us to our hotel etc ..... well .... and not touch our luggage between Heathrow until the suite in Singapore, is a tough drop in service to swallow. There is no substitute for excess cash in that situation!

With respect to your last point, I think this is a real issue, particularly for those that are like us fortunate enough to retire very early. Finding yourself with lot's of leisure can be quite a shock.

Thanks,



Jeff