Early-retirement wannabe

gadgetmind

davidquizer wrote: »

I was a financial advisor for 20 years although that ended in 2000. I started planning 5 years before I finished

Wow, I'm blown away by how far in advance you professionals have every detail planned out!

Marine_life

justme111 wrote: »

On another hand people who earn 70 k and do not buy costa coffee often seem to lack empathy into how people who earn 20 k and buy costa coffee feel. Those 2 very different lifestyles; one thing is to decline what is seen as small luxuries if you could easily afford them and more and if you have realistic options that cost a lot of money - retiring early, doing expensive courses, sending children to private schools etc that you feel are worthwhile to contribute to using money saved from costa coffees. While for people on 20 k even if their whole life they do not touch a single coffee it would not make the above any more achievable. So they enjoy coffees instead.

I would say there a lot of people out there who don't achieve their potential because they aren't willing to change....for whatever reason. Maybe its the fear of losing a stable job, maybe its not being willing to change direction or move away from friends and family.

And you know what? There's absolutely nothing wrong with that.....

...provided it doesn't make you bitter.

...provided it doesn't make you angry at those who strive for early retirement.

There are a few people who achieve wealth through luck but there are many more who achieve it through hard work and more still who achieve it because at some point they took a risk ...and that risk paid off.

justme111

Agree with everything you say , absolutely.
It's just that both camps are somewhat sensitive with defensive positions triggered from the tiniest hint of : the retiree ones being envied and the costa coffee ones being judged and patronized.
At the end of the day it all does not matter , we die all and all self justifications and ego games look silly and sad from that perspective; nothing matters apart from being happy and making other people happy...
By the way , about potential - interesting question- is there an intrinsic value in reaching more of one's potential ( I do not mean material here; with material the answer is clear to me - there is value in material only through it facilitating other developments so no intrinsic value) with everything else in life being equal?

justme111

michaels wrote: »

The point is though that it is not £133pm more in retirement it is more likely being able to retire on an acceptable pension 12 months earlier.

I find I don't have enough time to watch all the TV/movies I would like to now so having a pay tv package on top would not 'add value' to my lifestyle. Mobile phone wise I get ulimited minutes and texts and 20gb of data which is way more than I need, when I am out of the house I am doing stuff so don't need oodles of data to watch stuff on my phone. My £100 handset is from China and is probably on a par with the iphone 8 (my battery and screen may be better) and it will do everything I need it to for 3 or 4 years because the memory is not capped.

Thus I value having 12 months more of my life not spent working much more than I do being able to watch game of thrones a few months sooner or having a phone that other people can know is expensive. Of course we each make our own choices on relative values.

Environmental considerations are also making me increasingly uncomfortable about 'disposable' consumption and even international travel which I used to enjoy but now think very carefully about the carbon footprint.

I can see your point and agree with a lot. It happened that for you tv subscription does not have any value - so it is for me as well but for my partner sky would be the last thing to go before bread as he is a keen football team supporter. Other people may have other benefits from it. Re phone - again, I am similar to you ( my line rental is £25/month though, where do you find £3:eek:) but many other people enjoy dealing with new technology and their lives would be poorer without it.

gilet_jones

Hello,
I'm reaching 55 and have a pension worth £14000. I don't want to leave it until retirement age and get dribs and drabs and would rather cash it and take the hit of a couple of thousand pound tax (I've only paid in £6000 so its still a win win).
My question is what are the steps to do this, has anyone encountered any problems? I have heard people cashing this amount in and HMRC think its a new monthly thing and so tax 12 x £20000 which you have to claw back. Another person has said draw £1 of it to get a certain tax code, and then withdraw the rest. I'm self employed. Any advice welcome.

Pennysmakepounds

gilet_jones wrote: »

Hello,
I'm reaching 55 and have a pension worth £14000. I don't want to leave it until retirement age and get dribs and drabs and would rather cash it and take the hit of a couple of thousand pound tax (I've only paid in £6000 so its still a win win).

Is that 14K pot value or 14K per year return?

atush

gilet_jones wrote: »

Hello,
I'm reaching 55 and have a pension worth £14000. I don't want to leave it until retirement age and get dribs and drabs and would rather cash it and take the hit of a couple of thousand pound tax (I've only paid in £6000 so its still a win win).
My question is what are the steps to do this, has anyone encountered any problems? I have heard people cashing this amount in and HMRC think its a new monthly thing and so tax 12 x £20000 which you have to claw back. Another person has said draw £1 of it to get a certain tax code, and then withdraw the rest. I'm self employed. Any advice welcome.

Is this your only pension? If so, what will you live on when you retire or do you plan on working forever?

Those few K of extra tax paid would be handier to have if it's your only pension

gadgetmind

gilet_jones wrote: »

Hello,
I'm reaching 55 and have a pension worth £14000. I don't want to leave it until retirement age and get dribs and drabs

If you leave it until retirement age, it will have continued to grow, and you can take it out in whatever chunks you please.

Why draw on it before you need it, particularly if it gives you a large tax bill? It's two years' of state pension, perhaps 3-4 by the time you get there, so could be a key part of early retirement.

Of course, your overall situation might be more complicated.

crv1963

gilet_jones wrote: »

Hello,
I'm reaching 55 and have a pension worth £14000. I don't want to leave it until retirement age and get dribs and drabs and would rather cash it and take the hit of a couple of thousand pound tax (I've only paid in £6000 so its still a win win).

If you don't need it now, I'd advise leave it where it is!

We looked seriously at what we have and how to make an earlier retirement work for us, starting two years ago as a bit of a pipe dream. Read widely, tested figures out here, tested a bit more and firmed up our plans. We intend going in another two possibly three years when we are 58 and 55 respectively.

We tracked down "lost" pensions and AVCs, got up to date values and were pleasantly surprised by the figures, worked out our own number and then worked out how much additional money we need to save to reach "the number" and when that will be.

So my advice is ask yourself how much do you need pa? When do you want it to start? Then look at planning to reach it. Look at what starts and when it starts.

Edit- don't worry about "dribs and drabs" they may be what tips the balance in your favour and you could depending on your circumstances make all the difference with these. Do not expect that spending will fall drastically as you age, I find that in my mothers case, my subsidising her pension income by 40-100 pm makes the difference between going from living to enjoyable- my subsidy is essentially her entertainment budget! She never expected to reach 80 and still do keep fit and trips/ days out all over the place!

VDOT47

Hi,


I've been reading this thread on and off for a year or so and it has really opened my eyes to the possibility of early retirement.


To answer the initial questions posed in the OP:
When did you begin planning and what drove the decision?
I suppose I have always hoped that I don't have to still be working right to into my late 60s. The idea that retiring by 60 (or even earlier) could be realistically possible has only really crystallised in my mind over the past couple of years as my career has progressed and salary has reached a level where decent amounts of savings each month can be funnelled into retirement planning.
The decision has been driven by realising that you only get one life, so I want to be able to hopefully give up sitting behind a desk all day when I am at an age where I can still be fully active and really enjoy retirement and do all the things that I want to do.
What is the strategy for getting there?
I want to be in a position at 55 where I can have the option to either work another 5 years if I want to, or alternatively reduce down/change career/do something different. I would then plan to completely retire at 60 (at the latest).
A mixture of pensions (mostly) but also paying off the mortgage early and hopefully freeing up some capital by maybe downsizing once child(ren) move out.
Short term, we want to move house in the next 2 years so at the moment all spare money is being thrown into easily accessible sources in order to pay for SDLT, estate agent's fees and moving costs. After moving (and replenishing our emergency pot to a decent level) the plan would be to seriously throw lots at pensions from age 40-55.
How much of a relative decline in income are you prepared to take / did you take?
We are planning for annual income of £30,000 in retirement (on today's figures and assuming that the mortgage is paid off). This would be a drop of about 50% of our current expenditure (mostly by no longer having to pay out for the mortgage each month).
What are your main concerns?
[/Funding the gap from 55/60 up to state pension age.
Understanding how pensions actually work!
That the government of the day might change the rules on pension tax relief, TFLS etc.
Unexpected illness or redundancy.B]

I have *lots* of questions regarding pensions as, despite being a relatively intelligent person in a professional job, I must confess to finding the ins and outs of it very confusing, in particular how you calculate the amount that your fund will allow you to drawdown once retired, but for the time being I'll leave this first post now and hopefully post again in the coming days with a few questions and some more details.

Thanks!