Early-retirement wannabe

AlwaysHappy

wow nearly retired 2004, those sums are interesting and shows what can be done. I have just stumbled onto this thread - think I need to get myself a spreadsheet and sit down with my calculator and a glass of wine to do a spot of number crunching!!

Marine_life

nearlyretired2004 wrote: »

OK here goes (sorry had several goes at formatting but still a mess!! )

Notes: Tesco credit card pays all food, drink and fuel - average £15 per day

Keeping mortgage because at a good rate (cost of mortgage minus interest earned by not paying it off = 25 pence per month!)

In addition I have (what I consider to be ....) a substantial sum which is generating the interest income - dont mind disclosing if it makes a difference to anyone..... This capital sum has only gone up since 2004

In a previous thread, someone (I think it may have been Linton?) Didnt believe my water bill - well, thats what it is !

I dont 'budget' for things like car MOT etc - just pay them when they need paying - others have criticised this approach, but it works for me !

Also below is only 'regular monthly' - does not include things like annual ISA interest, interest on reg savers etc.

If anyone wants any more, let me know!


Income

Pension 1 £777.13 ** Increase with RPI in April
Pension 2 £266.63 ** One-off increase in June
SIPP £122.55
£114.01
Interest (based on 31 day month)
Coventry £157.97
Newcastle £76.44
Abbey £73.72
FirstSave £53.40
FirstSave £48.11
Halifax £30.00

Total : £1,719.96

Outgoings

TV Licence £12.12
Council tax £188.00
Sky £28.00
Water £17.00
Mortgage £174.88
Tesco c/card £465.00
Mobile Phone £6.00
Landline £35.00
Gas/Electricity £88.00
Total : £1,014.00

ok, so I am intrigued.

Your expenses are pretty low but i don't see any discretionary expenses in there (the Caribbean holidays for example!). Where does that factor in? Also, what about things like maintenance, nights out etc?

Based on your interest income I am guessing you have something like 120 - 130k in savings?

nearlyretired2004

OK - as I said, I dont actually 'budget' for the one-offs such as MOT - and Caribbean holidays and ‘maintenance’ are in that category , we just pay them as they occur ..... Boring old f@£ts that we are ‘nights out’ don’t happen – we are very much stay-at -home types.

Since August 2010 ( a random date when I started to do month-on-month variation on our 'pot', 6 months before my main pension kicked in and 13 months before the other company pension......) ....the 'pot' has gone up by £24,000.

This includes a tax free lump sum coming in, of £26,000 in November last year BUT as a result of the tax free sum we then spent £8,000 on much needed new windows and doors – also since August 2010, we have paid for 2 Caribbean hols at £4,000 each, new carpets throughout the house and a few other one –offs, such as washing machines going ‘bang’........ so we have ‘recovered’ at least £14,000 of much-more-than £16,000 expenditure.

Acually my 'pot' is a rather bigger than you estimate (circa £250k not including the value of my SIPP or other pensions) , but probably not working as hard as it could be as we have it all in varying length cash deposits at between3.1% and 4.65% (and a few premium bonds!)

Also as also mentioned earlier the monthly interest amounts do not include ANNUAL ISA interest - and close on £50K is in ISA's .......

We thought we might need quick accessfor a move abroad but for various reasons this has been put on hold.... so havea meeting with IFA in the new financial year to review investments ....

tbm_2

racing_blue wrote: »

Do you have any other good book tips?

I can highly recommend Your Money or Your Life by Vicki Robin to anyone interested in early retirement or financial independence.

mickyrod

I started my planning around 5 years ago (Now 57). Created a spreadsheet with my expected pension income and outgoings. I then set up a sperate bank account and paid the difference between current income and pension into this. Have therefore lived off my pension income for the last 6 months. This has told me that I can live well off my pension. My retirement is now 1 month, 10 days, 15 hours away - Can't wait!

HappySeagull

Good idea, mickeyrod. I'm doing something similar, but it's based on predicted expenditure in retirement, rather than expected income (difficult to quantify, due to phased start of various small pensions for wife and myself). Adjusting known current expenditure, £24k-£26k seems enough to live on, so while I'm still working, the aim is to put all income beyond £2k per month into savings. When the pension incomes equal our outgoings, I'm off! Aged 55, with about 210 working days to go, I reckon...

Gatser

HappySeagull wrote: »

Good idea, mickeyrod. I'm doing something similar, but it's based on predicted expenditure in retirement, rather than expected income (difficult to quantify, due to phased start of various small pensions for wife and myself). Adjusting known current expenditure, £24k-£26k seems enough to live on, so while I'm still working, the aim is to put all income beyond £2k per month into savings. When the pension incomes equal our outgoings, I'm off! Aged 55, with about 210 working days to go, I reckon...

I like your style HappySeagull!
£24-26k is close to THE NUMBER feedback... it would be interesting to know the breakdown
I am doing the same income/expenditure balancing act at present and hence my other number...days to go! :T
Good Luck...

jimi_man

This is an excellent topic and one that has really made me think about planning a lot more. Having also read the Numbers thread it set me thinking about how much one needs in retirement. I guess my wife and I would probably like to finish working at around 58-60, which is about 12-14 years time, not sure if that qualifies as ‘early’ retirement! Anyway, here’s my ‘plan’!

I’m in a final salary pension which I get when I’m 51 and it’s about £30,000, which I believe is about £2100 a month. Wife will get a pension of about £12000 when she is 65, which equates to about £900 a month, which nets us about £3000 a month. The state pension adds another £10,000 or I would estimate, £700 net, though not until 67-68, so ending up with around £52,000 or net, £3700 a month which is fairly comfortable - from 65 onwards. All three pensions are index linked.

The difficulty is funding the period from 58-60 until 65 when my wife’s pension kicks in. To me the key seems to be to spend less, which in turn means more surplus. I have estimated our spend (number!!) to be about £23000, or £1900 a month. I would like at least a third extra on top of the spend, so another £600-£700 a month, taking the required sum to £2500. So £400 a month needed, which is £5000 a year. That works out at £25,000 to stop at 60, £35,000 to stop at 58. Though obviously, we may not actually use it all. Downsizing is an option, house is probably £450-500,000 so some scope there and that would also reduce bills possibly, however I’d rather not if I don’t have to. Going down to one car would probably save £200-250 a month overall. We have a couple of savings policies that pay out at 60, but would rather keep them so that we have some other savings as a backstop in case we have to use all the 25-35,000 for those 5-7 years.

Do these figures seem reasonable, though I realise that probably I’m the only one qualified to answer that! £35,000 in 12 years (till we are 58) is just under 3000 a year, or £250 a month. That seems possible, I was thinking of ISAs, both cash and stocks and shares, (that has exceeded my technical knowledge, though willing to read and learn!) as a convenient tax free way of saving. I realise that with growth it may make the figures smaller, though to be honest I took no account of growth when I worked it out and figured that it would be cancelled out by inflation. If there is a plus difference then we might be able to finish a bit earlier. I want to keep it reasonably flexible.

Happy to take any criticism or pointers in my plans.

YoungBusinessman

hugheskevi wrote: »

Should put it into a spreadsheet - they don't tick, and have some neat features...

For example, mine tells me I have 2,855 days left until my forecast retirement date.

But that is only 2,040 working days.

And if I strip out leave I will take in that time, that is a mere 1,778 days of actual work.

Which all sounded well and good and easily doable, until I considered that I cycle a 15 mile round-trip commute, so that's 26,670 miles of commuting left, more than enough to get to Sydney and back.

So quite literally some way to go for me

How have you set up a spreadsheet in such a way it has a countdown clock?

hugheskevi

How have you set up a spreadsheet in such a way it has a countdown clock?

3 cells:

Cell 1 - Your date of retirement (user entered date)

Cell 2 - Calculate working days left between now and date of retirement using formula =NETWORKDAYS(TODAY(),Cell 1)

Cell 3 [the count-down cell] - Take annual leave allowance. Divide that by 262 (number of working days in a year) and multiply cell 2 by that number, and then subtract current accrued leave.

You could do what cell 3 does in cell 2 if you liked by using the optional command within networkdays, and would do so if you had a count-down of less than a year. But given my countdown is over about 8 years or so (sadly, 1,755 actual days of going to work...) I make the separate calculation in cell 3.

Note you might need to enable analysis toolpak for networkdays function to work.