Early-retirement wannabe

gadgetmind

melanzana wrote: »

However, what I did was to cut down my hours at work for a year before going, my income on reduced hours was nearly the same as my pension would be.

That's also been my approach, though a recent bonus has seen my income rise but my pension to suffer a little as HMRC will be removing £20k from it in additional taxes.

gadgetmind

Terron wrote: »

I wouldn't have a large cash pot.

We're about 10% in cash currently, with the bulk of this is 4x NS&I linkers and the rest offsetting a small mortgage we took out to lend to daughter for a house. Yes, it's too much, but I don't want to let go of the linkers right now as they are irreplaceable.

Terron

gadgetmind wrote: »

We're about 10% in cash currently, with the bulk of this is 4x NS&I linkers and the rest offsetting a small mortgage we took out to lend to daughter for a house. Yes, it's too much, but I don't want to let go of the linkers right now as they are irreplaceable.

What does the cash do for you?

1. Earn an insignificant amoutn of interest
2. Provide for monthly expenses
3. provide for an emergency
4. Anything else?

2 is why I have a small cash balance .
If I had a sudden large bill (like for my car's last MOT) I would pay by credit card. anyway, so my credit card limit is myimmediate emergency fund,
I keep money invested in a S&S ISA. I can with draw from that in a few days over the phone, easily fast enough to be ready to pay a large credit card bill. In the mean time it has been earning on average for the past 9 years about 7%pa.

westv

But if you pay sudden large bills by cc that will still need to be paid off pretty soon after I would have thought so I don't really see the benefit of using them rather than directly from a cash float.

justme111

because you would have to have that cash reserve not earning you money in the meantime.

k6chris

Terron wrote: »

Anything else?

Yes, potentially as an opportunity to buy more shares at a lower entry cost when the inevitable 'significant pull back' comes. Not the primary reason but possibly a useful secondary reason (??)

westv

justme111 wrote: »

because you would have to have that cash reserve not earning you money in the meantime.

If the cash isn't already easily accessible don't you risk having to sell more volatile assets at completely the wrong time if a major expense comes along? Yes, you can defer slightly with a credit card but not for that long.

gadgetmind

Terron wrote: »

What does the cash do for you?

We always use full pension and S&S ISA allowances every year, and it's only recently that you can dip into a S&S ISA and then pay it back during the year. Until recently, we'd been paying into ISAs (nee PEPs) since late 80s and had never withdrawn a penny. We pulled down this year to help out relatives but it'll be back in before April 5th. (Fingers crossed, big time!)

What does it do for us? Well, it was there to avoid us needing to sell any assets at a low when close to retirement. It was also banged into the NS&I linkers when markets were dicey though we did put 2x as much into unwrapped equities. The linkers were a way of showing my wife that I'm not totally "all on black", particularly given that ISAs and pensions were (but aren't now) 90% in equities.

Um OK, what does it do for us now? Hard to justify and I need to sit down and write a full justification for my records some time, but not right now.

I plan to retire mid 2018 and am not doing anything hasty until relatives pay us back, S&S ISAs are refilled, and my 35+ year retirement plan is in place. Once I have pension PCLS, and am drawing down on pension, we certainly won't need as much cash on hand, that's for sure.

fatbeetle

gfplux wrote: »

Fitness and health!

.
In all the budgeting and spread sheets there should be a line that says HEALTH. Some people are naturally keeping fit and looking after themselves. Many don't give it any thought.
Spend money on health for both you and your partner. That may be simply gym membership but it can include Dental work, blood tests, regular visits to the Doctor for check ups. Etc, etc.
This post is not a lecture, just advise from an old geezer.

Amen to that!! I retired two days ago, at age 58, and I'm just back from my gym, going to be gradually building up the amount of exercise and self-maintenance I do.

Off to walk the dogs now!!

jamesperrett

gfplux wrote: »

Time takes it toll and my advise to anyone wanting to retire early or otherwise is not forget your body.

It isn't something I've particularly worried about although work paid for a seagoing medical every couple of years which hopefully would have picked up anything major.

However, since I retired early about 3 months ago, our 6 year old son has decided he likes cycling - not just around the local park but anything up to 14 miles at a time (on a level track)! This means that I either get to cycle with him or chase him on foot through the countryside which seems a good way to exercise.