Early-retirement wannabe

marathonic

I've seen a post on another forum I read where the poster breaks down his retirement into bite-sized chunks using his planned budget.

As an example, take a 4% drawdown rate. Your budget would be something like:


Expense Monthly Cost Required Pot
Mortgage Paid Off 0
Rates 100 30000
Electricity 40 12000
Oil 80 24000
Groceries 150 45000
Healthcare 250 75000
Broadband 25 7500
Mobile phone 10 3000
Presents 25 7500
Clothing 50 15000
House Stuff 36 10800
Insurance 20 6000
Toiletries/Haircuts15 4500
Sky/TV 40 12000
Entertainment 200 60000
Holidays 100 30000
Total 1141 342300


Not of much use but an interesting excercise. For retirement, the above looks at Sky as (sort of) a one of expense costing £12,000 as opposed to a £40 monthly expense.

You'd obviously need to increase the above figures to account for tax.

peterg1965

marathonic wrote: »

I've seen a post on another forum I read where the poster breaks down his retirement into bite-sized chunks using his planned budget.

As an example, take a 4% drawdown rate. Your budget would be something like:


Expense Monthly Cost Required Pot
Mortgage Paid Off 0
Rates 100 30000
Electricity 40 12000
Oil 80 24000
Groceries 150 45000
Healthcare 250 75000
Broadband 25 7500
Mobile phone 10 3000
Presents 25 7500
Clothing 50 15000
House Stuff 36 10800
Insurance 20 6000
Toiletries/Haircuts15 4500
Sky/TV 40 12000
Entertainment 200 60000
Holidays 100 30000
Total 1141 342300


Not of much use but an interesting excercise. For retirement, the above looks at Sky as (sort of) a one of expense costing £12,000 as opposed to a £40 monthly expense.

You'd obviously need to increase the above figures to account for tax.

That's certainly one way, and a novel one at that, of looking at retirement expenditure. Not one that makes a lot of sense to me. You could similarly argue and postulate that the State Pension takes care of life's essentials and anything else over and above that is for making life very comfortable and fun.

Not sure what £250 'healthcare' is (requiring £75k to fund it)? If its private medical insurance, surely someone who contemplates and actually buys that in retirement would not be budgeting in that manner!

marathonic

peterg1965 wrote: »

Not sure what £250 'healthcare' is (requiring £75k to fund it)? If its private medical insurance, surely someone who contemplates and actually buys that in retirement would not be budgeting in that manner!

It's just a random monthly figure plucked out of the air. I haven't looked into healthcare costs in retirement as such but, personally, it's something I'd like to overbudget for in retirement.

For example, there's nothing to say that, come retirement, I may suffer an illness for which traditional treatment is provided through NHS and more advanced treatments, with quicker recovery times is available privately. I'd like to have such options open to me in retirement.

That aside, the purpose of the above is more the methodology than the budget itself. It might provide insight as to the choices you make with your fund in retirement. For example, will I buy a small fishing boat and watch freeview or set aside £12,000 for a Sky subscription.

kidmugsy

cyclonebri1 wrote: »

in an ideal world where every one gets a fair share of the pot and has a guaranteed job until they decide to call it a day

It's called North Korea.

Jack_Griffin

Healthcare, dentist, optician, prescriptions (if under 60), all adds up.. seems sensible. Nothing in that budget for a car though

Maybe one day, if you live long enough, you'll need to pay for part time care help, cleaning or gardening..

cyclonebri1

kidmugsy wrote: »

It's called North Korea.

Wonder what the pensions are like??

Yes you make a fair analogy but I, like you, know that equality doesn't exist in society which was my whole point, society isn't fair, or more accurately, is simply not even.

Anyway back to the topic in hand, !!!! it up the wall isn't my view, neither is take it to the grave.

I'm trying to strike a medium and I'm doing fair enough measured against my plan.

This is not a one size fits all topic

Marine_life

Loets of interesting stuff above that I will come back to but.....

My main consideration these last few weeks has been thinking about where we will live when we retire. As some of you may have read from my various posts, we currently live in Germany and have done fo a few years.

We have been thinking about returning to the UK as that's where our children are / will be, but to be honest I think we have been away too long that I have really mixed emotions about it.

The other consideration is whether we want to move somewhere warm (canary islands, cyprus etc.) - a thought that comes to mind especially on these cold dark nights! But again, I don't want to go and live in some expat retirement enclave.

The downside of staying in Germany (and there are not many I have to say) is that healthcare costs are ridiculous. At the moment we pay around €850 a month which is manageable whilst working but will become prohibitive in early retirement. On the other side, health care is excellent and I expect we will need more of it as we age.

So we are leaning towards southern Germany or possibly Austria but I am sure we will waver between different options as we go through the next could of years.

Anyone had any thoughts on the subject?

kidmugsy

Marine_life wrote: »

Anyone had any thoughts on the subject?

My wife is firm: stay where your acquaintances are. You'll stay in touch with friends wherever you live but if you move you'll lose all your acquaintances.

P.S. moving to be near your children can be a mug's game - what do you do when they move?

Personal advice: try to live near an airport, and have as big a swimming pool as you can afford in your garden. That way you'll see plenty of the grandchildren.

Marine_life

kidmugsy wrote: »

My wife is firm: stay where your acquaintances are. You'll stay in touch with friends wherever you live but if you move you'll lose all your acquaintances.

P.S. moving to be near your children can be a mug's game - what do you do when they move?

Personal advice: try to live near an airport, and have as big a swimming pool as you can afford in your garden. That way you'll see plenty of the grandchildren.

I do think you are right about potentially living near the children being a mug's game. We are a nomadic family in that we don't feel a strong allegiance to any country in particular.

Like the tip about the swimming pool ;-)

gadgetmind

I like the tip about having a firm wife.:D