Early-retirement wannabe

HappySeagull

Keep going Techno! Do the planning right, and you'll be able to do what I've done this morning - hand your notice in early! I'm 55 and a bit, and don't plan to take my FS pension until I'm 56, but it's great to be financially independent.
:beer:

atush

exil wrote: »

Haven't read the entire thread but having thought about early retirement myself I've found the main difficulties in planning are the factors beyond one's control:-
- how long are you going to live?
- what will be your state of health?
- how safe are the pensions and investments you have?
- will the government move the state pension goalposts yet again?
- will some unexpected event - death or disablement of a relative, collapse of one's business, loss of job - derail your finances before you get to your planned retirement date?

nevertheless it's better to plan than not to plan.

Many of these factors ARE in your control. You make LE decisions every day by the way you live your life. So, stop smoking, eat better, do exercise, lose weight. This would have a dramatic effect on your LE. With genetic screening, you can even make decisions that could improve LE against future illnesses.

The safety of your pensions can be affected by what you invest in (although they are all equally 'safe' from being defrauded). So do review them and move to less volatile investments in the run up to retirement.

You cannot affect future govt decisions, apart from exercising your right to vote (as opposed to not voting and sitting at home complaining).

Unexpected events can be mitigated in part by planning for the future via insurance, and saving harder outside of pensions for future emergencies.

ozzage

This is truly a great thread with many great posts over the last two years.

As a 38yo I'm traditionally a long way from retirement but the topic has recently started to interest me greatly

Unfortunately, being somewhat of a later starter, while many of you my age have children at school and soon going to uni, and mortgages with just a few years to run, we have a 3 month old daughter and rent with no mortgage at all!

Still I can invest, and do so, as much as I can. We're actually saving for a deposit in parallel and have a good chunk but are in two minds about whether we actually want to buy (we're somewhat nomadic and aren't really sure where we want to live! And here in London where we are now it's just ridiculously expensive).

It's frustrating seeing those deposit funds earning below inflation when they could have been benefiting from the recent market increases but such is the lot of the indecisive.

I'm aiming for financial independence before 50 (preferably in ten years at 48) but the plans are woolly due to our indecision about property ownership and country of residence.

I have a "number" based on current expenditure, but how realistic is it, given the unknowns of children/education costs etc? Do I WANT to fund university? Do I WANT to help with deposits? Only time will tell and if I do then plans must change.

I include London rent in my "number" now, and I figure that if we buy and then commit to paying it off in ten years (possible, I think) then our reduced required pot size (no rent) will compensate for the money being put into the mortgage instead of our pot. If we move somewhere cheaper then we're further in front.

There are many on here with a lot of knowledge who are clearly on top of the various resources on the net, but I'd like to offer two links which I find great:

http://the-military-guide.com/2011/01/03/how-many-years-does-it-take-to-become-financially-independent-2/

That link really drives the numbers home. As has been mentioned before, it's all about the spending levels. The savings are a side-effect of that.

http://www.mrmoneymustache.com/2013/02/22/getting-rich-from-zero-to-hero-in-one-blog-post/

Mr Money Mustache is somewhat of a hero. His blog is full of wonderful posts, but this is a good introduction to what he's on about. Again, it's about spending more than anything else, but also realising that it's not SPENDING which makes somebody happy, so it's not a case of "frugal" OR "happy".

Also: those "ordering books" based on what you've read in this thread. I hope you mean "loaning them from the library" or at the very least "buying them 2nd hand"!

AlwaysLearnin

You may also enjoy this, by someone that's 'done it':

http://simple-living-in-suffolk.co.uk/2013/03/so-how-did-this-early-retirement-lark-work-out-in-the-end/

beansy

HappySeagull wrote: »

Keep going Techno! Do the planning right, and you'll be able to do what I've done this morning - hand your notice in early! I'm 55 and a bit, and don't plan to take my FS pension until I'm 56, but it's great to be financially independent.
:beer:

Wonderful, congratulations.

Is your FS paid in full at 55 without any reduction and if so how many years service do you have at such a young age, LOL?

What are your plans between now and taking your FS and then until you receive your SP??

My OH is in the dilemma that he is just under 55 and can't get his FSP without a hit until 65. He currently has 25 yrs service and contributes to an AVC which can be used to buy into the FSP scheme. His original plan was to take his FSP at 55 before they moved the goalposts and look for a p/t job as his FSP isn't going to be great.

Not very happy in his job (although he loves his work and gets on really well with the people offsite he provides a service too) but he has lost the confidence to apply elsewhere (which would do him the world of good) but that's a long story!

pauler

Your best bet is to research the market. see who offers the highest interest get your pension started as soon as possible and let it grow. To retire early you'll need about a £400,000 of a pension to get a return of £1000 pound a month. If you already have a pension your best bet would be to transfer to a high interest Scheme and let it grow. But make sure their LEGIT.

HappySeagull

beansy wrote: »

Wonderful, congratulations.

Is your FS paid in full at 55 without any reduction and if so how many years service do you have at such a young age, LOL?

What are your plans between now and taking your FS and then until you receive your SP??

My OH is in the dilemma that he is just under 55 and can't get his FSP without a hit until 65. He currently has 25 yrs service and contributes to an AVC which can be used to buy into the FSP scheme. His original plan was to take his FSP at 55 before they moved the goalposts and look for a p/t job as his FSP isn't going to be great.

Not very happy in his job (although he loves his work and gets on really well with the people offsite he provides a service too) but he has lost the confidence to apply elsewhere (which would do him the world of good) but that's a long story!

Thanks beansy!

For info, I've got nearly 25 years service, so 25/60ths of final salary. Taking it at 56 incurs a 4 year penalty, so about 20%. That's quite a hit, but getting it early means it will be many years before I'm down on the deal.

Wife is 5 years older and already drawing a reasonable pension, but we'll need to be careful with expenses before she gets her State Pension in a couple of years.

We also have savings (no kids, mortgage paid off when wife was made redundant) and AVCs - though I do regret not paying in more AVCs each month over many years. I'll take the AVCs as a useful lump sum, but the full monthly income on my pension. Will also get a lump sum from our mortgage endowment in 7 years, but my SP is a long way away!

We've sold the house (STC) and are moving down to Cornwall. When we get there, I'll be doing ad-hoc part-time work, some for an ex-colleague with his own business.

Spent most of yesterday discussing all this with colleagues, and was surprised at the level of ignorance about pensions and retirement planning, even though most of them are over 50 - and we work for a bank, and most of them hate the job! At the end of the day I felt like a financial advisor. Early retirement is only possible with proper planning, but I wish I'd done more!

Marine_life

Techno wrote: »

We love skiing so the plan is to become chalet hosts at least for one season - pay is a relative pittance but it includes food, accommodation and most importantly lift pass - we'll see how it goes and if it's OK we may do it for a few years whilst still relatively fit and able so that just leaves 7 months per year to fund.

You know this is really interesting - I have always thought how much I woukd like to do that. In fact my nephew has done it and he threw in his boring job in the UK and now works as a van driver in the french alps - with of course lots of time for skiing.

Would be interested to hear how you get on with it.

Marine_life

Been away for a while but thought I would pop in.

Still plodding along towards a (potential) early retirement next year but two factors are making me now start to think seriously about my decision.

Firstly, things have changed significantly financially. My wife's mother has decided that she wants to start planning for inheritance tax (she's 75 at the moment) and want to sell her house and give the money to us. The idea being that we would then buy a new house with an annex for her. That effectively frees up all the funds we have invested in property and makes a very comfortable retirement possible.

Secondly, now that retirement is becoming a reality I am actually beginning to wonder whether this is what I want to do and whether giving up work is a big mistake.

Some more notes on this later

AlwaysLearnin

Thanks for the update Marine_life.

I've been watching this one with interest as early retirement, or at least getting out of the rat race, is something I'm looking to do myself. I'm personally looking to get out so that I can do something a bit more 'fulfilling' (be that family, charity, whatever), but guess that could be a romantic notion and you never know how you'll really feel until you're on the precipice of actually doing it.

I'm intrigued to know though; where does that mean you'll settle, as recall you were previously undecided.

All the best, whatever you decide.