Early-retirement wannabe

gadgetmind

YoungBusinessman wrote: »

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

Put your retirement (or whatever) date in a cell, say A1, and then use -

="There are "&TEXT(A1-TODAY(),"####")&" days to retirement."

gadgetmind

hugheskevi wrote: »

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

Thanks, I didn't know about that function. My spreadsheet now tells me that I have 1655 days left, but who's counting?

YoungBusinessman

Can you guys check out my other posts in this board-see my post history, and let me know what use think.

hugheskevi

Can you guys check out my other posts in this board-see my post history, and let me know what use think.

Key points I took from them:

1. Net income of £30,000 p/a
2. Have own business
3. No partner (inferred, from SoA and no mention of partner/kids)
4. £30,000 business debt
5. Intention to buy house for own accommodation in about a year
6. Very low rent and outgoings currently
7. A somewhat expensive car (£6,500) compared to other outgoings

Thoughts on that...main thing is to maximise that income. From your posts, it looks like you have a decent grip on expenditure, but the income is quite low if you are going to save enough to fund early retirement.

As an idea, for every £100,000 you have at age 55, you could get an RPI-linked annuity of about £2,500 p/a (not that I would in any way recommend doing that, just to give an idea of scale).

Given your expenditure, I wonder why the emphasis on early retirement? Early retirement is a lifestyle choice, just as enjoying fine wines and expensive meals out is. There has to be a balance - no point in misery for 20 years just to achieve a few years off retirement if you don't have a particular reason for doing so. You don't say too much about lifestyle and preferences, so just something to consider.

I wonder what your plans are on marriage, kids etc - they can be seriously expensive hindrances to early retirement, both as they are expensive things in themselves (although can be another very helpful income stream and set of allowances) and come with 18+ year tied-in contracts with little scope for early release In your position, I'd be listing these things as key risks to your plan depending on your intentions.

YoungBusinessman

1) Net income of £30k is what i have achieved last financial year, this one could well be more. Iv started advertising and 5000 leaflet drop is away to start this week so income should increase by the end of June.
2) Correct, was looking into setting up as LTD company but cannot see any great personal benifits in doing so.
3)Long term partner, both still live with parents. No kids...yet.
4)As of right this minute business debt is at £27,500.
5)Buying a house,this is at least 12 months away. Will be buying with oh so only half costs. Will be looking at places between £110,000 upto no more than £135,000. Does this seem reasonable compared to my income?
6) Agree,very low so now is time to clear the debts
7)Have a van for business and car for personal. Can sell off car, this will generate a low 4 figure sum(maybe upto £1750)

I am looking into ways to maximise my income. This simply just means to take on as much work as possible. I am on contract work Mon - Fri so anymore work taken on will be in evenings and weekends. I worked long hours upto Christmas, things slowed a little since then but picking up now and im starting to advertise for first time. Starting with a 5k leaflet drop around my local area.

Only other ways i can think to try and generate more work is newspaper add(waiting to hear back for prices) and through social networking sites like Facebook. However i know when people add me all the time to promote their business and post all the time it can get irritating.
Any other suggestions? My work this far has all been word of mouth.

For early retirement its just alot of the older guys in my line of work run into serious health problems. I would like to get out before this happens.

Plan is most likely married in 3/4 years,kid to follow. Want to build up wealth and savings while having paid down mortgage a bit before then so oh can give up work for a year/18months for having kid then just go back part time for a while.

My hours im pysically doing my job right now at the contact are around 39 a week(dont have to work more) so this could easy double so income should rise accordingly. Work will slow over winter but i try to hold back money through summer to give a steady wage.

Iv not really long start out in my self employed venture, i have come along way since starting. Prices will slowly rise in time. The contact work has other workers in the job that are retiring in next 2 years so the extra work should come my way.

HappySeagull

Gatser wrote: »

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...

Hi Gatser,

Well, all my hopes and dreams are based on THE NUMBER, so here goes:

Property £5670 (House insurance, council tax, gas, electricity, water, etc)
Living Expenses £7572 (Food, drinks, clothing, etc)
Personal Expenses £1706 (Pets, dentist, healthcare, etc)
Travel £1432 (one car (excludes depreciation), bus, train, parking, etc)
Leisure £4516 (hobbies, holidays, eating out, etc)
Gifts £1385 (birthday, Xmas, charity
Insurances £2401 (Endowment)
Savings £0!
Total £24,685

The categories are based on our Financial Advisor's spreadsheet, and the amounts are based on actual expenses over the last three years, amended to reflect a change of lifestyle in retirement - it should be reasonably accurate!

hugheskevi

5)Buying a house,this is at least 12 months away. Will be buying with oh so only half costs. Will be looking at places between £110,000 upto no more than £135,000. Does this seem reasonable compared to my income?

Depends on partners income/assets. Joint income x2.5 is a rule-of-thumb, but that is cautious, especially with a decent deposit.

Personally I would consider it quite dangerous to buy somewhere with a partner without having previously lived together - I'd always want to rent somewhere and live together for at least 6 months to ensure that living together would be compatible.

As soon as you buy somewhere together, and certainly once married, you need to be doing joint financial planning. In particular, you need to ensure that your early retirement ambitions (and whatever you might do once retired) square with your partner's ambitions.

Worth noting that your expenditure will increase significantly once you move away from parents - but financial implications have to be balanced with getting on with your life. But the closer you get to a 25% deposit, the better your mortgage position will be.

Plan is most likely married in 3/4 years,kid to follow. Want to build up wealth and savings while having paid down mortgage a bit before then so oh can give up work for a year/18months for having kid then just go back part time for a while.

Going to need careful planning - marriage can be very expensive, as can moving into a new place, as you will probably end up doing a lot of decorating/improving when you move in, and will also need to furnish it all and bills will be much more than currently. You might find it hard to make significant improvements to wealth during the period, so imperative to plan carefully and realistically.

Marine_life

A quick recap on my early retirement journey.
My plan at the beginning of this thread was to retire at 50 and that is still the goal I am planning towards. I will be 50 in October 2014. My contract specifies that my notice period is 6 months from the end of the quarter in which I hand in the notice. Which means technically I could hand in my notice on April 1 2014. Discovering just over 6 months ago that I had cancer was a big shock but following an operation and a short burst of chemotherapy my last two checks have shown an all clear. The prognosis was in any event good but the waiting after every check is nonetheless a difficult time. Fingers crossed.
There are three things that keep coming back to me on my journey towards early retirement:
1. As a relatively high earner, some of the rules about the retirement income needed do not really apply (and it’s difficult to decide what rule I should be considering).
2. Mostly I enjoy the job although it is very stressful.
3. I am beginning to think more about what I will actually do when I finally hand up my calculator!
A number of those points are of course connected but let me come back to the plan.
I hope and expect that by my 50th birthday I will have:
a. Enough accumulated pension entitlements to give me a comfortable retirement; and
b. The more difficult bit, enough cash to tie me over between the day I retire and when the pensions kick in.
My pension plan assumes the following:
1. The key part of my pension is a non-contributory plan from my current employer. The key date for that is actually my 50th birthday as it’s at that day that my full entitlement to that pension (which would begin paying out at age 62) becomes effective. The difference between retiring one day before my 50th birthday and one day after is about €20,000 per year – so its worth the wait! All in all that pension is expected to be worth around €42,000 per annum in today’s money.
2. A residual of an old defined benefit scheme from my years in the UK again which would begin paying at 62. Worth around a further €15,000 in today’s money.
3. I have a full 30 years of state pension contributions (19 years in the UK and 11 years in Germany) which will give me the full state pension.
4. A deferred income pot (allowable in Germany) which would begin paying out at age 60. At age 50 I expect to have accumulated around €800,000 in that pot.
5. Various other odds and sods of pensions which collectively would be worth about an additional €5-6,000 per annum.
So I am happy with the pension arrangements and then comes the question of how much cash do we need to “survive” between retirement date and pension date. It’s a difficult question as at the moment with a mortgage and children in full time education our outgoings are very high. The mortgage will be paid off next year and (hopefully) one child will leave full time education and get a job but then there is the vexed question of how much discretionary expenditure will continue (and indeed will it increase?).
This brings me back to point 1 of my post – most early retirement plans tell people to plan based on their expectation of expenses as in normal living expenses but they don’t seem to take into account those who – like me – may decide to increase discretionary expenses! I may want to return to playing golf (which I gave up a number of years ago due to pressure of work). And what about travel? I have travelled a lot with work but I still have the desire to do a long trip across the southern hemisphere and then perhaps other trips through Canada and the Nordics. If you can’t do some of those things then what is it all for?
At this stage my best estimate is that we will still need around €75-100,000 per year to do some of those things but it still does not put us in the position we are today (which is not having to think about money at all). And what about the children? So far they are fully funded and we have paid all their school and university fees and bought cars etc. Now what happens if they need a house deposit – I expect we will want to help with that as well.
So, where does that leave us? From a cash perspective we expect to have around €1 million at 50 together with mortgage free property worth around €750,000. I would expect to downsize to a smaller property hopefully releasing around another €300,000. Which means €1.3 million to last 10 years – sounds a lot but maybe not too comfortable if we do all the things we want.
Delaying to 52 would increase that pot by at least €500,000 (as a result of both earnings but also of course two additional years of saved expenses). Fundamentally I guess it comes down to how I feel in two years and whether I have really just had enough of work. Therein is the big unknown. I see nobody in my position that moves to part time although there may be other options such as moving to another country or taking on a management role – but I haven’t really explored that yet.
Finally in this installment is the concern about suddenly switching off from a mentally challenging job. One which I enjoy most of the time – is that really what I want and would I be able to switch onto other more mundane things without driving myself (and my wife mad)? Is it possible to swap a full-on career for weeding and gentle golf? I’m not sure.
If the next two years pass as quickly as the last then decision time will be on us much sooner than we might think. Some might say my situation is a dilemma many would like to have but in some ways having choice is more difficult than having none at all. We are lucky and will never forget that.
Thoughts welcome!

System

I am perhaps unusual in having already retired once years ago, then resumed employed life, and now at 62 am in a position to decide when, if ever, and by how much, I retire, if I want to.

I gave up a dull administrative job in London aged 35 when the GLC folded, and took the opportunity to move to a much cheaper region of the country. I could buy a large house with land for less than the equity growth in my London house, so became mortgage free with a nest egg.

Later I took up work again, and currently run a business in conjunction with a fellow director. I have a substantial SIPP invested partly in the business premises. I can retire again if I want to, or stay on for ever.

In my first retirement I did up the house and a spare cottage, turned a field into park-like grounds, and pursued several hobbies. After/during that I married and raised a family. They are now progressing through their teens, so by perhaps 5 years time will have gone.By that time I might want to retire again. My general plan is a gradual retirement from the business as we find and train successors.

So since age 35 there has been no real change in my lifestyle, and I have had freedom to manage my work/life balance virtually as I wanted.

The important thing I think is to have "hinterland" - enough and wider interests so that no one aspect, particularly a job, becomes all-dominating. The dreariest scenario would be a lifetime spent in a boring job, longing for retirement, and then have nothing to fill it with.

Linton

You dont seem to have any real financial problems so my advice is limited to the decision on when/ whether to retire.

The first step is to get to the financial position that you know that you could retire whenever you want to. From my experience that in itself leads to a major reduction in stress - if you know you can stop work any time things get too much so the hassles of work become much less important.

Then I would say that you should only stop work when you know that you have had enough and you have planned what you want to do with the vast amount of spare time. A thought - if you dont need the money there are plenty of charities that are looking for part time competent and business-experienced trustees and managers.

You talk about more extensive travel - yes very nice, but is it something that will take up a significant part of every year for the next 30 years? Retirement isnt like a very long holiday, for example eating out every day in interesting restaurants is enjoyable for 2 weeks but after 2 months it might begin to pall.