Early-retirement wannabe

crv1963

Cosycat wrote: »

What an interesting thread. Knowing what to do with ones time seems like a key, but often overlooked element.

The Pre-Retirement Course I went on via work spent a lot of time looking at this. You go from spending a large chunk of your time in a role to having no defined role so need a plan to fill this void in a constructive manner.

Who is aiming for early retirement (or who has retired early already)? Me! I’m 38 and aiming to retire at 60.

Great that you are looking at this so sooon. I was 53 before I gave it any serious thought. Very late to the party!

When did you begin planning and what drove the decision?

Serious health issue prompted my journey- happily resolved now (health not journey- we're still on that!)

What is the strategy for getting there?
Paying AVCs to husbands DB pension. He is likely to reach max lifetime allowance in early 50s at which point that money will switch to my pension fund/ISAs. His pension will also give me a widows pension of 1/3 should he die before me.
Paying £600 per month to my employer pension (salary sacrifice, gets me max contributions from them)
Saving to ISAs and LISAs for both of us, at the moment £300 per month whilst building up emergency pot. Plan to increase this soon.
Overpaying mortgage to be mortgage free by 55, aiming for mortgage neutral with ISAs by 50. In Greater London so mortgage is :eek: this is a big challenge.
The pensions will give us a very healthy income aged 67. We may take my pension earlier (likely drawdown), but the actuarial reduction means it is not worth it for husbands DB pension. So the ISAs will need to plug the gap 60-67, this is now the focus.

I'd suggest look at building your pension pot up, ISAs are fed from taxed income, pension gets the tax relief and you can access them 10 years before SPA (although currently this hasn't been enacted). Also if it all goes pear shaped then creditors can't get your pension but can your ISAs.

How much of a relative decline in income are you prepared to take / did you take?
We are targeting 75% of current income in retirement. Definitely achievable at 67, will take serious saving and a dollop of luck to make it at 60. Our actual lifestyle works out at about 45% of income a year, so that is the baseline, but we would like to travel more and have a buffer.

Maybe reduce the savings rate and travel a bit more while you are young? The future can't be predicted and some places like the Maldives may even disappear! Don't forget to enjoy the journey, some find it hard to change from savers to spenders or wind down their pots- leaving happy heirs to go on a spending spree.

What are your main concerns?
Stock market performance, changes to pension rules. I’m working on the basis that the state pension will be means tested by the time I retire. Hopefully not though. Also job loss or redundancy and ageism in the workplace could cause an issue.

Hopefully pension wont be means tested- though I doubt the triple lock will last the next 30 years.

For those already in early retirement - how is it progressing? What have been the good and bad surprises (financial and otherwise)?
Can’t answer this one yet! The thread has been really useful to get me thinking about what I might want to do with my time though.

Time planning is key. One surprise others I know have had is they have no time they are so busy following their interests!

Unless you are chasing a lower LTV then inflation will reduce your mortgage over time so I'd over pay a bit for the psychological buzz but pile more into alternatives like DC pension or even ISA (I know what comment I made above about ISA vs Pension). Aim to pay mortgage at 60 when you actually retire, if you don't need to stay in the London area then you could sell up and move releasing cash for retirement.

Good luck.

Cosycat

Serious health issue prompted my journey- happily resolved now

glad to hear that, health issues can be very challenging and change how you view life. I doubt we would have given retirement so much consideration so early on were it not for health issues.

Maybe reduce the savings rate and travel a bit more while you are young? The future can't be predicted and some places like the Maldives may even disappear!

True, we have both travelled quite a bit already, and lived in other countries for work. There are four big destinations we hope to get to between now and retirement, all quite special holidays and we will factor them in to the plan. They are Japan, safari, Southeast Asia (Cambodia, Vietnam) and India (with Maldives probably) Other than that I’m happy pottering round Europe with the odd staycation to keep costs down. I’m envisaging travel in retirement to be rather different to travel now. More travel by rail and sea, and over longer periods of time. I’d like to keep my carbon footprint as low as possible. I’d love to hear if others have travelled differently without the time constraints of work.

Don't forget to enjoy the journey, some find it hard to change from savers to spenders or wind down their pots- leaving happy heirs to go on a spending spree.

this is excellent advice, and we will keep it in mind. Thank you

bugslet

Cosycat wrote: »

What an interesting thread. Knowing what to do with ones time seems like a key, but often overlooked element.

Who is aiming for early retirement (or who has retired early already)? Me! I’m 38 and aiming to retire at 60.

I'm 54 and I put notice in to my main customer two weeks ago tomorrow. That means I finish operations in April next year, followed by a few weeks of winding up the business.
When did you begin planning and what drove the decision?
Serious planning started this year. Prior to that we had spent time moving around for work, paying off student loans, getting on the housing ladder, and filling the emergency savings pot. This all took a little longer than expected as we had a few years of serious health issues, through no fault of our own. It is the health issues that mean we need to have the option of retiring earlier should we need to.

Never really had a start time, unless you call deciding that once I didn't enjoy work, I wanted to give up. My pension was the business and you could never predict how things were going to go.
What is the strategy for getting there?
Paying AVCs to husbands DB pension. He is likely to reach max lifetime allowance in early 50s at which point that money will switch to my pension fund/ISAs. His pension will also give me a widows pension of 1/3 should he die before me.
Paying £600 per month to my employer pension (salary sacrifice, gets me max contributions from them)
Saving to ISAs and LISAs for both of us, at the moment £300 per month whilst building up emergency pot. Plan to increase this soon.
Overpaying mortgage to be mortgage free by 55, aiming for mortgage neutral with ISAs by 50. In Greater London so mortgage is :eek: this is a big challenge.
The pensions will give us a very healthy income aged 67. We may take my pension earlier (likely drawdown), but the actuarial reduction means it is not worth it for husbands DB pension. So the ISAs will need to plug the gap 60-67, this is now the focus.

As before, it was a hope! I have always put a decent amount in for someone on a slightly above average wage. My savings are no more than a six months living fund. I will realise somewhere between 250- 450k when the business is finished. I can't plan exactly what I'll have until then. I'm fine with that, it's mild uncertainty.
How much of a relative decline in income are you prepared to take / did you take?
We are targeting 75% of current income in retirement. Definitely achievable at 67, will take serious saving and a dollop of luck to make it at 60. Our actual lifestyle works out at about 45% of income a year, so that is the baseline, but we would like to travel more and have a buffer.

Around 20%
What are your main concerns?
Stock market performance, changes to pension rules. I’m working on the basis that the state pension will be means tested by the time I retire. Hopefully not though. Also job loss or redundancy and ageism in the workplace could cause an issue.

None. Can't control stock markets, can't control the day I die. I don't mind trying to swing odds in my favour, but I'm not worrying about things, it's a waste of time. The thing that will mess plans up is something that blindsided you.
For those already in early retirement - how is it progressing? What have been the good and bad surprises (financial and otherwise)?
Can’t answer this one yet! The thread has been really useful to get me thinking about what I might want to do with my time though.

Good post. Hope everything works for you.

DairyQueen

Back on the forum after a couple of weeks' absence. As always, this thread is thought-provoking.

Another salutary lesson on how life can bite you on the bum in the lead-up to retirement....

Some on here may be aware of the various (money-draining) issues that the cold hand of fate has thrown in my direction in the last decade. These include: the mega-expensive dental work; OH's redundancy; requirement for me to retire early to help care for ageing, disabled parent; elder stepd's proclivity for expensive higher education; younger stepd's housing and wedding requirements and last, but not least, close relative's dire need for emergency financial support.

So, just as OH and I were licking our wounds and looking aghast at the depletion of our capital....

.... along comes our local planning authority and (according to our QC and solicitor) subjects us to their unlawful and biased support for the change of use of a neighbouring business property. Needless to say, we wholeheartedly agree with the legal team.

Two years and £53,000 later (and counting) we are forced to take the self-proclaimed,omnipotent planning authority to the High Court in a last-ditch effort to restore our home and sanity to its previous healthy equilibrium.

(sigh)

The moral of this tale? Never assume that the best laid plans of mice and men, etc., blah, blah, blissfully imagined when you were age 50, will actually work out.

I am 60 next year and sincerely hope that this defining birthday will put a full-stop on the most expensive decade of our lives.

On a lighter note...

I joined a beginner's Bridge tuition group in September. One of the two tutors is the only male (come on guys, this is a very social and challenging game!). Highly recommend.

I am also with those that prioritise their pets over their freedom. I have a nearly 18-year-old cat. He is a little doddery on his pins these days, and he is hearing impaired, but he deserves the best quality of life I can offer in his last years . At his age, the quality of his life depends on the quality of his care and this means I can no longer leave him to the vagaries of cat-flaps and neighbourly feeding regimes. The restrictions he places on my life are a small price to pay for the almost two decades of devotion and pleasure he has given. Wouldn't swap that experience for anything.

Next stop? Dog ownership. A rescue mutt (Heinz 57 variety) will do nicely.

justme111

DQ, I already remarked on your expenses before . I will try to paraphrase what I said back then : all of them are optional. You CHOOSE all of them because of the upsides those choices offer and because you can afford them . My conviction is that there will ALWAYS be calls on one's money like that just by the virtue of one having an option to use that money; ie those are not curved balls but the normal position of one with disposable income. So your hope that the next decade will be less expensive may not meterialise- opportunities to spend happen even quicker than funds do . Mind , I guess it depends on character - I remember some of the posters (was seashell one of them?) that have funds enough to cover their expenses like 5 times but still manage not to find what to spend them on:eek:

Sea_Shell

Burning a fair old hole in my pocket it is!!!!

Joking aside, the last couple of months on the ISA funds price is just pegging back our expectations at the moment. £20k wiped out (on paper) since end-September.

It may be that our financial "annus horibilous" (sp) is just around the corner....and naturally being a glass half empty person....it probably is!!

kidmugsy

justme111 wrote: »

those are not curved balls

Do people use this absurd Americanism because it's slightly saucy?

OldBeanz

kidmugsy wrote: »

Do people use this absurd Americanism because it's slightly saucy?

It is the beauty of English that it begs, borrows and steals words and phrases from other languages and cultures. The other option is to be French where the great and the pompous sit, deliberate and then tell you the French equivalent word to retain its purity. They refuse to acknowledge that it is no longer the Lingua Franca in the same way as English does not belong to the English.
Why would anyone think the term absurd.

Terron

OldBeanz wrote: »

Why would anyone think the term absurd.

I thought the term was "curve balls"

Googlies would be more English but possibly misleading out od context.

kidmugsy

OldBeanz wrote: »

Why would anyone think the term absurd.

It's absurd because it's borrowed from an American sport about which almost no Briton knows anything. Americanisms for new phenomena are fine by me, especially any from the age when American English often had a vigorous, terse beauty. But "curve ball" is mere affectation, rather like very old-fashioned people peppering their speech with Latin tags.