Early-retirement wannabe

swedespeed

1) Who is aiming for early retirement (or who has retired early already)?

I am 32, aiming to have the option to retire at 50 if I wish but certainly by 55.

2) When did you begin planning and what drove the decision?

I began initial planning during my university years - so late teens, but it wasn't until my mid-20s that I started the process with any seriousness. Mainly driven by seeing my parents in a position where they would have liked to, but could not afford to retire.

3) What is the strategy for getting there?

Pay off the mortgage (done).
Earn as much benefits through my DB pension scheme as possible (doing).
Put as much as possible into tax efficient long term savings - SIPP, LISA, etc. (doing).
To ensure that I have enough available funds to see me from retirement until when my DB pension kicks in without having to take it early and suffer actuarial reduction (ongoing).

4) How much of a relative decline in income are you prepared to take / did you take?
What are your main concerns?

Quite a bit. We live on approx 1/3 of our current post-tax salary. The rest is pushed into savings, investments and pensions. I current monetary value, I would be fairly comfortable on an income of £25-30k per year after tax.

5) For those already in early retirement - how is it progressing? What have been the good and bad surprises (financial and otherwise)?

N/A!

atush

Paying off a cheap mtg early, over extra pension contributions isnt always the wisest choice.

Do you have kids? putting 3 thru university put us back a few years.

You are starting planning at the right time. and if you want to go early, then fill your ISAs and a DC pension. Dont waste your DB pension on lump sums and actuarial reduction.

swedespeed

Paying off the mortgage early was more about wanting to do so and not having any debts. It would have made far more sense, in hindsight, to invest the money!

We don't have children and never will.

At the moment we're putting £36k a year into SIPPS, LISAs (funds, not cash) and S&S ISAs. This is on top of a DB pension which I have planned to take from 68 (i.e. no actuarial reduction) and no lump sum either. :beer:

Broadsword

I retired at 65 and three months to maximise retirement income. The experience may not relate to your own. I was able to engineer that so I was made redundant as it coincided with a restructure that affected me. I might otherwise have continued to work and I enjoyed it. Retirement is not always as idyllic as it appears to be but in the early years we travelled extensively and helped my daughter, car, money towards home etc while she was at a local university. We also undertook challenging voluntary work, sometimes day and night being on-hand for those in dire need. Putting something back seemed right.

My strategy was to begin pension saving as early as possible, in my case 27, with my 5% maxed out with an employer 10%. In later years I added AVCs but then the pension scheme thought I'd be over-funded. The world changes and Gordon Brown's dividend changes and the later economy down-turn all had its effect. My advice for others is to expect the unexpected in your planning as world, national and life and family events can throw plans off course, as well as inevitable taxation changes. My perception is that things are going to get considerably worse in the future, than my early years of planning ever suggested.

My experience post-retirement, now 4 years on, has generally been good but more recent serious ill-health and possibly a very limited life-span beckons. For example my wife, younger than me, has given up work significantly early to care for me. That has changed all thinking as providing for her in life ahead becomes a priority. None of this was foreseen but the moral is, this is what can happen to well laid plans and prudent planning. Over-provide if possible and do not stop work too early if possible is my message.

happyandcontented

A succinct insight, but re not stopping work too early surely the diagnosis means that had you continued to work you would not have been able to enjoy the things you mention? I hope you have many years ahead of you, but if not, retiring early was a good decision.

Marine_life

Broadsword wrote: »

My experience post-retirement, now 4 years on, has generally been good but more recent serious ill-health and possibly a very limited life-span beckons. For example my wife, younger than me, has given up work significantly early to care for me. That has changed all thinking as providing for her in life ahead becomes a priority. None of this was foreseen but the moral is, this is what can happen to well laid plans and prudent planning. Over-provide if possible and do not stop work too early if possible is my message.

I think everyone who consciously thinks about early retirement has this conundrum i.e. retire early to try and maximise the benefits of being realtively young and healthy or hang on for another couple of years to add an additional layer of comfort.

Its not an easy decision but for a healthy 30-40 year old, ill health or (god forbid) an early death are such abstract concepts. I think its easy for us all to think in those years that we are invincible and imagine our 70 year old selves in our 30 year old bodies.

As I've got older, I'm increasingly aware that 'everything doesn't work as it once did', or when thing go wrong that it takes the body longer to repair. All these have been signals that its time to go. There are those who have followed this thread who would say we should have retired years ago but the timing would not have been right and we would have had to take a reduction in living standards to do it. Our choice - others would have chosen differently.

However, what's most important is to have a plan which gives you options. If you have worked hard and saved well there may be an option to retire early and having that option sometimes relives the stress that actually enables someone to continue working for a couple more years. The problem is that with university fees, high house prices and less generous pensions the margin of error has reduced significantly meaning people need to plan earlier. Good then that we have a millennial generation that wants to plan less!

AnotherJoe

Techno wrote: »

Hey, Marine Life we are going on the same day 😁 - from a 70 hour week to 2 days per week for the next year and then see what happens. Can. Not. Wait 😁😁😁😁😁😁

Make that three , but I'm going from 5 days a week to zero. mostly because i can financially, and also because i think even 1 day a week would make my time very restricted when it came to planning trips.

I dont want to have to think "oh i cant take that half price cruise leaving this Wednesday as I haven't booked the next couple of Fridays off". I regard myself as having booked 365 days off starting 1 July

ermine

AnotherJoe wrote: »

Make that three , but I'm going from 5 days a week to zero. mostly because i can financially, and also because i think even 1 day a week would make my time very restricted when it came to planning trips.

It does. I made that mistake for a while, helped some guys I knew out for about a day a week without jumping to that problem. After a while it gets a pain. There's a huge difference between working at all and not working. These days if I am going to tangle with work I want it to be one-off hit and run jobs, get in, do it, and then clear off. I don't mind an intensive stretch if it's interesting, but I absolutely do not want ongoing commitment.

OldMusicGuy

Marine_life wrote: »

Its not an easy decision but for a healthy 30-40 year old, ill health or (god forbid) an early death are such abstract concepts. I think its easy for us all to think in those years that we are invincible and imagine our 70 year old selves in our 30 year old bodies.

As I've got older, I'm increasingly aware that 'everything doesn't work as it once did', or when thing go wrong that it takes the body longer to repair. All these have been signals that its time to go. There are those who have followed this thread who would say we should have retired years ago but the timing would not have been right and we would have had to take a reduction in living standards to do it. Our choice - others would have chosen differently.

I can only agree. For me, it has been the last five years that have really changed my outlook. I've had a well paid, high pressure job for many years but had never given early retirement much of a thought. However since turning 55 (I'm 60 in a couple of months) I have found working in such an environment really taking its toll mentally and physically. I have realised that I do only have limited time on this earth and I don't want to spoil what time I have left by damaging my health even more by slaving my guts out for somebody else.

I had always assumed that I would work until about 65 and just have a small gap to state pension age. Keep working, keep saving. But now I am going to stop completely at 60 and my wife and I will have to make do with what we have at that age. No one can really tell you what "the number" is so we have decided to make do with what we have now (well by February next year) and enjoy what limited time we have left together. We can't wait.

chiefie

OldMusicGuy wrote: »

I can only agree. For me, it has been the last five years that have really changed my outlook. I've had a well paid, high pressure job for many years but had never given early retirement much of a thought. However since turning 55 (I'm 60 in a couple of months) I have found working in such an environment really taking its toll mentally and physically. I have realised that I do only have limited time on this earth and I don't want to spoil what time I have left by damaging my health even more by slaving my guts out for somebody else.

I had always assumed that I would work until about 65 and just have a small gap to state pension age. Keep working, keep saving. But now I am going to stop completely at 60 and my wife and I will have to make do with what we have at that age. No one can really tell you what "the number" is so we have decided to make do with what we have now (well by February next year) and enjoy what limited time we have left together. We can't wait.

Such a great approach - you can keep chasing the money but that cant buy you years of healthy living.