Early-retirement wannabe
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Right now I'm happy to stay, so much so that just this afternoon I declined even hearing more details from a recruiter who contacted offering a higher salary. However for me the important thing is to have a plan and the option to leave should I wish to in the future rather than knowing I'll be stuck working right up until (or beyond) state pension age. You never know when your company might crash or a new manager you hate comes along forcing you to endure rather than enjoying work.
Same here. As a result of all that I have learned on this forum, plus other sources, in the last year or so I now know where I stand and what early retirement could mean in terms of future income. I am planning to carry on for another 9/10 years but that might change. I am now aiming for something, in terms of pension and investments, rather than just drifting along.I’m a Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
& Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
All views are my own and not the official line of MoneySavingExpert.0 -
Could anyone help with a future projection for early retirement?
Our NUMBER: £28k/annum in today's money
OHs DB pensions:
1x fs linked 80ths pension deferred, currently worth 10k/annum plus 3x LS, NRD 60
1x CARE pension, estimated value 18k if taken at SRA, no further contribution allowed after age 60
OHs SIPP currently worth £26k
My DB pension worth 2.5k/annum, NRD 65
SIPP worth 8k
Joint savings of 70k
Enough time for us to both earn full new state pension, even though we were both contracted out.
I'm 43 and OH is 42.
Where would we have to get to for DH to retire at say, 57?Save 12 k in 2018 challenge member #79
Target 2018: 24k Jan 2018- £560 April £26700 -
Obviously you need to up your DC pensions both of you. Beyween you, you only have 34k. I would want to see 200k.0
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thanks atush, so 200k plus inflation (shall I go for 3% annual?) in 15 years?Save 12 k in 2018 challenge member #79
Target 2018: 24k Jan 2018- £560 April £26700 -
Maths done. So £335000 (rounding up a bit). That's fine. I was guestimating at us having almost double that by then, so that's reassuring, thanks.Save 12 k in 2018 challenge member #79
Target 2018: 24k Jan 2018- £560 April £26700 -
Our NUMBER: £28k/annum in today's money
Based on Office for Budgetary Responsbility forecasts, long-term earnings growth is expected to be 4.3% and CPI 2%.
That will mean when you reach State Pension age, average full-time earnings are expected to be £49,942/annum in today's money.
If you target £28K/annum in today's money at age 68, your income will be less than 60% of average earnings at that time, compared to the c100% it is currently. That may mean your standard of living is lower than you expect.0 -
Thanks.
I think I have mis-worded.
I meant that I want to target the amount then, that will be equivalent to £28k now.Save 12 k in 2018 challenge member #79
Target 2018: 24k Jan 2018- £560 April £26700 -
but if they make allowance for inflation and are on tarhet to take it in todays money the increase of the "number" will be irrelevant since they made already provisions for it. They can check 5 yearly for example to fine tune it as well. Besides I personally have little faith in what "office for budget responsibility " says - the very name is telling that it is made to produce snoke and mirror lies convenient for governmentThe word "dilemma" comes from Greek where "di" means two and "lemma" means premise. Refers usually to difficult choice between two undesirable options.
Often people seem to use this word mistakenly where "quandary" would fit better.0 -
I meant that I want to target the amount then, that will be equivalent to £28k now.but if they make allowance for inflation and are on tarhet to take it in todays money the increase of the "number" will be irrelevant since they made already provisions for it.
Traditionally planning was simple due to final salary schemes - you automatically ended up with half or two thirds of whatever your earnings at retirement may be. Taking the example here, 28K in today's price terms is pretty much 100% of average earnings currently, but will only be about 57% of average earnings in 25 years time. In constant earnings terms, that £28K in today's price terms will have the purchasing power of about £16,000 at age 68 (in constant earnings terms).
Or to put it another way, that £28K in today's terms will roughly be what you would expect a full-time minimum wage earner to receive when the OP is aged 68. The question is whether someone planning a lifestyle based on current average earnings now will be happy to live on an a minimum-wage level lifestyle in the future.
Constant price terms and constant earnings terms both have their place, it is important to appreciate which is appropriate to use for different planning assumptions. Personally my household after-tax number based on current expenditure is slightly under £28K (aged 40). I plan to have a household income of £52,000 (in today's price terms) at age 68, which is £28K today in constant earnings terms at age 68.0 -
When my husband retired earlier this year he went from approx £37k to £19.5k per annum, which appears a massive drop.
However when we factored in him no longer paying NI Contributions and his 18% pension contributions he was only £600 per month worse off.
Plus there was a lot of savings in our outgoings on petrol and car parking for work and the usual incidental expenses such as work collections.
Rather than looking annual gross income it is more helpful to look at what the actual difference in net income will be.
Our plan for me to retire has been to massively increase my pension contributions so that I can consider retiring in 3.5 years at 55 years of age. I will drawdown my Defined Contribution pot to the personal allowance rate until my defined benefit pensions start at 60.
My only regret is it has took me to be 51 before I have even considered doing this.
Oh well better late than never.Money SPENDING Expert0
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