Early-retirement wannabe

Skibunny40

I'm firmly in the "he's real" camp!

I remember reading the blog he set up, maybe a couple of years ago?, about his travels when he really did retire - briefly, obviously! Surely no-one would go to that much effort to troll?

Regardless, I've found it fascinating to read a different perspective on what drives someone to work or retire. Best of luck Marinelife, whatever you end up doing!

hugheskevi

Time for another update, it being the end of the financial year. Quick recap, myself and wife now both aged 41, no children and no plans to have any, own home with mortgage, plan to retire around age 45, married 7 years (and still happily together despite all the financial abuse ). MSE seems to have cracked down on uploading pictures, so it is just a text update this year, no charts/tables/graphs.

2019 marks the 10 year anniversary of the first long-term financial plan I drew up. That plan was rather different to the current plan, but the key features were similar. The original plan involved buying a house, living and working in London for at least 10 years (the minimum I calculated would be needed for financial independence) and using a pension to pay off mortgage for tax efficiency. The latest plan involves paying off all debt before selling house in 2022 or 2023, spending about 3 years traveling the world before returning to UK and buying house to retire in.

The strategy to date has been heavily focused on pensions, to take as much advantage of DB pensions and higher rate tax relief as possible before one or the other ends. We have now accrued a total gross annual pension income (including full new State Pensions, which we would ensure we qualified for, eg, via Class 2 or 3 NICs) of £62,613 if we took all pensions at normal pension age, or £48,802 if we take our pensions with protected minimum pension ages at age 50 (which we plan to do).

Our current expenditure, excluding mortgage, pension saving, etc, which will not be present in retirement, is about £30,000 per year with a maximum in recent years of £35,000 so I am very happy that we have will have plenty of pension for retirement, especially as we are still accruing workplace DB pensions.

We have DC pensions of £210,838 which we plan to use for the period between age 58-68 (ie Minimum Pension age to State Pension age), along with the DB pensions we will commence at age 50. If Minimum Pension age isn't increased to age 58 I'd consider contributing more to DC, but otherwise I am happy with this amount.

If we were to retire immediately, we could afford to spend about £350,000 purchasing another property, and then live on an income of £24,500 p/a until age 58 when all pensions would be accessible. I think that would be doable, but we want to travel for a few years and would like a higher income, so plan to work for a few more years yet. Still, it is nice to know that retirement is just about viable.

If we were not going to travel, I would simply purchase our retirement house with a mortgage and repay it from pensions in future, thus enabling a more expensive property and higher annual income and so retire very soon, but travel complicates this strategy. It could perhaps be made to work, but not without risk and letting property when traveling, so although there are other possible options I am planning to be boringly conventional and just sell house when we go traveling and purchase retirement home outright.

There are also a few non-monetary considerations to ponder. We still have 3 parents alive, aged between 73-79. Currently they are all independent, albeit in varying degrees of health. It is a concern that our planned years of travel could coincide with ill-health/deaths so we want to keep things as flexible as possible to enable us to be able to deal with any scenario. It is likely we will get modest inheritances at some point, but I do not factor these into plans. However, that could either accelerate early retirement, or be something we may consider if offered redundancy and we were considering whether we had enough.

If either of us were to be offered redundancy, I think it would now be a very serious consideration and see how we could juggle everything to make it work. However, this is not very likely although things can quickly change. Certainly if this happened in a year or so that would be the trigger for early retirement.

More likely is that we either resign or take unpaid leave from our jobs when we depart. We wouldn't plan to return, but unpaid leave would retain valuable death and ill-health benefits (plus possibility of redundancy), so may as well use that rather than simply resign.

So the remaining time in work will be focused on paying off mortgage, contributing the maximum possible to ISAs and repaying 0% credit card debt. We already have plenty in ISAs to cover mortgage and credit cards, so these are not an issue and will simply use up surplus income after maximum ISA contributions. Most of our additional voluntary pension contributions have now ceased. I plan to pay off mortgage at end of fixed term in April 2020, which will just leave debt on 0% credit cards.

I expect at some point in the coming years, our workplace pensions will be reduced. At that point I expect us both to go part-time. We might go part-time before then, as there isn't much point in working full-time and paying higher-rate tax when we can work less hours for a slightly longer time and pay less income tax. We'll review this once the last of our additional voluntary pension contracts expires, sometime in early 2021.

I've decided not to expand my private consultancy business - it was fun setting it up, and I'll continue with existing clients, but will keep it just as a sideline. It gives an income of about £10-£15K each year, so it is a nice to have but I don't want it to become a chore or take up large amounts of time.

I'm increasingly focused on non-work things now, particularly running. I've reduced weight down to ideal running weight which is 20kg lower than my maximum weight about 4 years ago. My 5K PB time is now 20:05, so should be below 20 minutes in the next few weeks. I take far more pride in non-work achievements now, so have no concerns about missing work when we retire.

It is starting to feel a bit like the beginning of the end now, with key milestones in April 2020 (pay off mortgage) and early 2021 (pension voluntary contributions expire), after which it will simply be a case of retiring once I feel we have enough resources to fund all our plans. Combined with a high probability of part-time work from 2021, there isn't really so long left.

shinytop

Well done and thanks for the inspiring story.

VDOT47

Reading some of your plans makes me very envious, but also very determined to set in place our own early retirement plans!


I touched on these a month or so ago and received some good preliminary advice, so thank you.


I actually start a new job shortly, with a very decent pay rise from my current salary, so once I get settled there and know exactly what our new income is I will be able to sit down and fine tune my plans.


My dream retirement plan would be to be able to retire completely at 55 (or earlier!) but that is going to need a lot of hard work and good luck, so a more realistic goal is to be in a position to semi-retire at 55 and then retire fully at 60.

ratechaser

Well this one resonates a bit with me, given that I've just turned 46 (like the OP when the thread started), and definitely want to retire at 55 - that's assuming I'm still allowed to access my pension at that age.

But the reality is, what the hell am I going to do - I'm in a good job, the majority of my socialising is with colleagues, and the idea of playing golf to pass the time has zero appeal.

So I can see why, despite initial intentions, people end up falling into the trap of carrying on working. In my case it certainly won't be for genuine financial reasons, I don't have an extravagant lifestyle relative to my means - realistically I could liquidate assets and retire comfortably tomorrow. But what on earth would I do once I'd caught up with my box sets??

The 2 years I took as an 'extended sabattical' were quite an eye opener - volunteering was fun, not feeling knackered all the time was a bonus, and there were people I did genuinely enjoy spending more time with (yes, even the family...). But you really need a plan before you make that 'final' step out of work...

tigerspill

I have been planning retirement for 7 years now. Learning much from this forum.
My original target was my 52nd birthday - which didn't happen.
I have been accepted for a voluntary redundancy and am leaving at the end of April - 4 working days as I have leave. I am just 53 so missed my target by a year.
My OH will continue working for a couple of years.
We both have DB pensions which is good and we will have full SP (though we may have to pay a few years to make this up),
And we have arounf £700K in savings/incestments and DC pension pots.

We spend arounf £35K per year - I have tracked every single penny we spend in a spreadsheet singe 1/1/17.
We have bought and renovated our retirement home and will be moving in the summer when I hope to be mortgage and debt free.

I am a bit anxious anout what I will be doing come the winter, but couldn't stick my existing job any more.

New exciting beginnings.

Love this forum. informational and inspiring/motivating.

frugal90

Join your local u3a and get a membership at your local gym. That plus a bit of fun and winter sorted.

westv

frugal90 wrote: »

Join your local u3a and get a membership at your local gym. That plus a bit of fun and winter sorted.

The thìng with groups specifically for retired people is that the early retirer is very likely to be the youngest person there. Some will be fine with this but others may not.

Triumph13

I think Melanzana is right to think that ML is deluded, he's just wrong regarding what ML is deluded about. I believe ML's posts to be true, it's just the title that's a fantasy

cfw1994

ratechaser wrote: »

Well this one resonates a bit with me, given that I've just turned 46 (like the OP when the thread started), and definitely want to retire at 55 - that's assuming I'm still allowed to access my pension at that age.

But the reality is, what the hell am I going to do - I'm in a good job, the majority of my socialising is with colleagues, and the idea of playing golf to pass the time has zero appeal.

So I can see why, despite initial intentions, people end up falling into the trap of carrying on working. In my case it certainly won't be for genuine financial reasons, I don't have an extravagant lifestyle relative to my means - realistically I could liquidate assets and retire comfortably tomorrow. But what on earth would I do once I'd caught up with my box sets??

The 2 years I took as an 'extended sabattical' were quite an eye opener - volunteering was fun, not feeling knackered all the time was a bonus, and there were people I did genuinely enjoy spending more time with (yes, even the family...). But you really need a plan before you make that 'final' step out of work...

I understand this entirely!
I think it is a "mindset" thing.....now I am kind of approaching a time where I could afford to retire.....I appreciate my work (& in particular, colleagues & customers!) more than ever!

If I have a meeting in London, I will try to either meet some friends (outside work) for a beer in the evening, or perhaps visit a gallery for an hour - trying proactively to mix work with pleasure.
I've also started sending a 'mostly weekly' email (of things I've found funny that week) to friends & colleagues just to try to keep in touch *separately* to work.....whatsapp groups now contain work and ex-work folk. Gotta work on keeping those contacts alive, so when I do pull a trigger, I can more easily keep in touch with the ones I want to!!

BUT.....you had a 2 year sabbatical: I have't done that since I had 4 weeks off to go inter-railing in 1987.....maybe I need an extended break: there is a LOT I'd like to get done around our house, I suspect the first year of 'retirement' would fly past.
Maybe I need a sabbatical :rotfl: